Six million pounds was the sum first voted by Parliament for the purchase of the telegraphs, and this was practically all swallowed up in compensation. The Electric and International Company received £2,938,826; the Magnetic Company, £1,243,536; Reuter's Telegram Company, £726,000; the United Kingdom Company, £562,264; the Universal Private Company, £184,421; and the London and Provincial Company, £60,000. But large as these amounts were, they only made up about one-half of the expenditure which the government had to incur, and the total cost ultimately reached the enormous sum of eleven millions. Some idea of the manner in which the extra five millions was expended may be gathered from the fact that between October 1869 and October 1870, about 15,000 miles of iron wire, nearly 2000 miles of gutta-percha-covered copper wire, about 100,000 poles, and 1,000,000 other fittings were purchased and fixed in position, 3500 telegraph instruments and 15,000 batteries were acquired, and about 2400 new telegraphists and temporary assistants were trained. The total expenditure was so vast that the Treasury eventually took fright, and in 1875 a committee was appointed 'to investigate the causes of the increased cost of the telegraph service since the acquisition of the telegraphs by the State.' This committee found that the following were the three main causes of the increase: The salaries of all the officials of the telegraph companies had been largely increased after their entry into the government service; the supervising staff maintained by the State was much more costly than that formerly employed by the companies; and a large additional outlay had been forced upon the government in connection with the maintenance of the telegraph lines. 'It would not,' they say in their report, 'be possible, in our opinion, for various reasons, for the government to work at so cheap a rate as the telegraph companies, but ... a reasonable expectation might be entertained that the working expenses could be kept within seventy or seventy-five per cent. of the gross revenue, and the responsible officers of the Post-office telegraph service should be urged to work up to that standard. Such a result would cover the cost of working, and the sum necessary for payment of interest on the debt incurred in the purchase of the telegraphs.' In regard to this question of cost, Mr Baines most truly remarks that the real stumbling-block of the Department was, and still is, 'the interest payable on £11,000,000 capital outlay, equal at, say, three per cent, to a charge of £330,000 a year.'