telegraph revenue, and the failure to appreciate the possibilities which the new system of communication was capable of offering. The companies, restricted as they were to local areas, could not offer any means for communication between these areas, since special permission had to be obtained for the erection of trunk lines. The Government offered to provide these on condition that a direct payment of £10 a mile per double wire and one half the revenue over that sum should be paid for their use, but this offer the companies naturally refused to consider. The Lancashire and Cheshire Company proposed to fix their trunk-line charges so low as to pay expenses only, but they were informed by the Government that they must charge 10s. a mile annual rental. In addition, they were not allowed to charge less than 1_s._ at their call offices, the then prevailing fee for a telegram. A few trunk lines, it is true, were constructed by the Government and rented to the companies, but they were quite insufficient to satisfy the demand. In London, the United Telephone Company was not allowed to extend its system beyond the five-mile radius without special permission and the payment of an increased royalty. In addition, the companies had no way-leave powers, but had to depend upon the good will of householders to fly their wires from house-top to house-top, with the result that in London there was a ridiculously large number of exchanges. Finally the companies were restricted to connecting subscribers with the exchange or their place of business, and, although messages could be telephoned for further transmission by the telegraphs, there was not that close connection between the telephonic and telegraphic systems which might eventually have led to the mutual advantage of each. Moreover, in 1882, the Government announced that they would grant no more licences unless the subsidiary companies agreed to sell to them all the instruments they wished, the intention probably being for the Government to supply instruments to companies which would establish exchanges in real competition with the United Telephone Company. Since the subsidiary companies could not supply these instruments without the consent of the parent company, the only result was still further to restrict telephonic development.[827] [827] _Rep. P. G._, 1883, p. 6; 1885, p. 9; 1886, p. 10; _Rep. Com._, 1898, xii, 383, pp. 3, 57; 1895, xiii, 350, pp. 1-6; _Parl. Deb._, 3d ser., cclxxii, col. 712; cclxxxviii, coll. 1056-57, 1060-61; cclxxxix, coll. 82.