The Sun.
London, England, 1868-08-07 00:00:00

master-General to acquire the telegraphs of the
kingdom, and that bill contained provisions most

inimical to their interests.

He was not going

to consider the question whether it was just to in-

terfere with private enterprise, nor whether it was
a right thing that the Government should have what

was virtually a monopoly of the telegraphs, because
Parliament had decided that question, and he should

therefore confine himself to a few words of expla-

nation as to the price they were to get for their pro-
perty. In the first instance, the promoters of the
measure urged that they ought to be satisfied with
the market price of their shares, and ten per cent.
additional for compulsory purchase, and, on the
broad principle that a thing was worth what it
would fetch. such an offer might at the first blush
appear reasonable, but in reality it was not
so. In order to have a market price,
there must first be a market, and there
were numbers of shares in that city in which there
were no dealings whatever, and for which
therefore there was properly no market price. Take,
for instance, a share in the New River Company,
which returne 1 its fortunate possessor £l,OOO a
year; there -were no dealings in such shares, and if
they came to be sold, the price must, of course, be
ruled by the necessity of the seller. In their own
stock the dealings were few and far between. Not
three per cent. changed hands in the course of a
year, and when a transaction took place, it was
generally a sale by executors, in consequence of a
death, and therefore the price of their shares in the
market was purely nominal. If their dividends
were honestly earned, £l7O, or thereabouts, could
not be the right price of their shares ; and
if they had accepted such an offer, it would
have been tantamount to admitting that their ac-
counts were not correct. If they were correct, £l7O
was not a right price ; if they they were not correct,
how was it that he and other directors held in their
hands close upon £140,000 of undivided profits?
(Hear, hear.) That was more than sufficient to pay
a whole year's dividend in advance, and therefore
he was perfectly justified in telling the Chancellor
of the Exchequer that their dividends at 10 per
cent. was as safe as his own at 3 per cent. Under
these circumstances it was not likely they should
accept the offer of 10 per cant. over and above
the market price, and they were requested by
the Post-office authorities to make some coun-
ter offer, which they di I. They stated that
the only true way of arriving at the value of
their shares was to take a certain number of
years' purchase., and they proposed to act on
the precedent Government had itself set in the
case of the Irish railways,* when they offered 25
per cent. purchase. Well, the Government was not
disposed to treat them as liberally as they had done
the Irish railways, and the negotiation appeared to
fall through ; but on the morning of the 26th June
he received a letter from Mr. Scudamore, submit-
ting a proposal for the acquisition of their pro-
perty, at twenty years' purchase of the present net
profits, and on the 30th of the same month he r..!-
plied accepting it in the name of
his, to
,brother directors. proposal,directors: The Act for that purpose
accordingly passed both Ilouses, and received the
royal assent. He hoped that no gentleman
would thiuk it necessary to discuss the terms
on the present occasion, whether they were satis-
fied with them or not, as they would have to
call a special meeting, at which they would
have to say whether those terms were to be ac-
cepted or not, and anything said by any one
now, whether on one side of the table or the other,
would be premature, and might be used against him
before the arbitrator. Me hoped, therefore, that no
one would try to dig. a pitfall for himself to tumble
into. (Hear, hear.) In the discussion that took
place in the House of Commons, those terms were
designated as extravagant and improvident by the
member for the City, Mr. Goschen ; but when a
gentleman deserted trade for politics, his figures
very often gave way to faction, and Mr. Goschcu's
real ajection to the bill was that it was brought in
by Mr. Hunt, and not by himself. Mr. Goschen be-
gan by stating that Mr. Scudamore was. over-san-
guine in his estimate of 6,009,000 messages a year,
and went into some figures to show that the number
in 1867 was only 5,500,000. Now they had not got
the full returns from the different telegraph compa-
nies to show the receipts of 1867, but they had
those of 1866, and in that year, exclusive of press
messages, of which there was an enormous number,
the messages amounted to 6,170,000. (Hear, hear.)
Their own returns for last year showed an increase
of 200,000, and the returns from other companies
shored the. usual average increase upon the pre-
vious year. There was, therefore, every reason to
suppose that the messages of 1867 out-topped
those of 1866 ; but he could explain the source of
the miscalculation. Mr. Goschen had taken the
gross money receipts of the various companies, and
then divided them by is. 11d., which he was pleased
to assume as the average price of a message.
But the true average price happened to be ls.
5d., so that the right hon. gentleman made a
miscalculation of 6d. upon every message ; but how
ho had arrived at a total of £5,500,000 he believed
even Mr. Bidder himself could not explain. The
right hon. gentleman next proceeded to value their
property in the same arbitrary way, assuming £l5O
as the market price of their shares, whereas he had
thought every man was aware that, up to the 24th
May last, the real market price was £172 10s. The
difference between those two prices, calculated on
the price of their stock, was £270,000 ; and with
10 per cent. additional for compulsory purchase,
£297,000, so that the valuation was less by this
amount than Mr. Scudamore's original proposal,
which they had refused without hesitation, and
which everybody stated to be grossly inade-
quate. (Hear, hear.) The right hon. gentleman
then asked, in a triumphant tone, who ever
heard of giving twenty years' purchase for an un-
dertaking which was making a net profit of 13
or 14 per cent.? Well, they did not want to
part with their undertaking. All that they asked
was to be left alone. But that was the price of-
fered them by those who were forcing them to
sell. (Hear, hear.) He would ask the right hon.
gentleman in return, who ever heard of compelling
people to sell their property, and then to take a
great deal lea than it Wag worth? (Rear,
•