The income received by the Post Office for the fiscal year 1906-07 from the London and provincial exchanges and trunk-line business was £908,246, working expenses, £456,459, balance for depreciation, interest, etc., £451,787, leaving a balance of £19,061 over and above an estimated amount of £432,726 for depreciation and interest at three per cent on the capital expenditure. The London exchange, with a gross income of £330,512, showed a surplus of £25,586 over and above depreciation fund and interest on capital expenditure, the provincial exchanges a deficit of £15,758, and the trunk lines a surplus of £9333. The number of subscribers to the Post Office provincial exchanges (excluding Glasgow and Brighton) was 10,010. Including the Glasgow subscribers (11,103) and the Brighton subscribers (1542), the total was 22,655. Arrangements were then being made for local intercommunication between subscribers of these exchanges and those of the company in the same places. Hull and Portsmouth were the only towns maintaining municipal telephonic systems in 1907, Hull having 2128 telephones in use and Portsmouth 2553. The number of telephones in the London Post Office telephone service was 41,236, including 425 public call offices. The agreement of 1905, providing for similar rates in the provinces between exchanges of the Post Office and those of the company, was followed after considerable discussion by the announcement of the adoption of a new scale in May, 1906. The rates are now based on the principle of a measured service under which each subscriber pays according to the quality and quantity of the service desired. He may contract for any number of calls from four hundred upward, and he may share a line with another subscriber at a reduced rate, or he may rent a line for his own exclusive use.[841] [841] _Rep. P. G._, 1905, app., pp. 90-92; 1907, pp. 21-23, 93. CHAPTER XII CONCLUSION The important points in the history of the British Post Office are necessarily somewhat obscured by the great mass of less important characteristics which accompanied its development. Organized at the beginning of the sixteenth century as a means for the conveyance of state letters, its messengers, by tacit consent, were allowed to carry the letters of private individuals. The advantage so afforded for the control of seditious correspondence led to the monopolistic proclamations of the closing years of the sixteenth and the opening years of the seventeenth century. Before 1635 the state obtained no direct revenue for the conveyance of private letters. The messengers or postmen who were supposed to be paid by the state, derived the larger part of their income from the postage on these letters and from letting horses to travellers.