Introduction 7 



it inexpedient to go, as the telephones they used, owing to patent 

 complications, were costing from 2o/. to 257. each, and were difficult 

 to procure even at those prices. At the first annual meeting (Feb- 

 ruary 1883) after the reduction, the Dundee and District had only a 

 balance of 4oo/. to the good, which was carried to a reserve fund ; 

 but in February 1884, after nearly two years' experience at 5/. 105-., 

 it declared a dividend of 10 per cent, per annum, besides adding 

 .200/. to the reserve fund. In February 1885 the dividend was 

 5 per cent, and 2oo/. to reserve. But this victorious career pro- 

 ceeded but a little further, as the National made up its mind that 

 the speed at which the Dundee Company was ruining itself was 

 not rapid enough, knowing besides, from its own experience, now 

 of considerable duration, with a 5/. rate, that the 5/. los. of the 

 opposition was sufficient, and more, to permit it to live and 

 prosper ; and so made an offer to buy the Dundee Company, 

 which was ultimately accepted. At the final meeting the chair- 

 man congratulated the shareholders on having received an average 

 dividend of 9 per cent, per annum for the four and a quarter years 

 of the company's existence, and on the return of their capital 

 with 40 per cent, by way of bonus. That was how ruin had 

 spelled with them ! 



On its side the National had not done badly. It professed to 

 have lost the difference between the original rate of 2o/. and the 

 fighting rate of 5/. : but that was no real loss, since its subscribers 

 at 2o/. would have been very few, while, as matters stood, its 

 exchange had grown out of all knowledge. After the purchase 

 the combined systems numbered some 1,200 subscribers, and 

 constituted together the largest exchange in the United Kingdom, 

 excepting, perhaps, London. Subsequently, when the rate was 

 put up to io/., it dwindled away to about half. This great increase 

 in Dundee showed, as it did afterwards in Manchester, under the 

 Mutual Telephone Company, that a 5/. rate taps a class of sub- 

 scribers which cannot afford, or will not give, 8/. or io/. for the 

 accommodation. In Dundee a considerable number of small 

 shopkeepers, grocers and others, came on at 5/. and went off 

 when the rate was increased to io/. ; in Manchester numbers of 

 packing-case makers, sign-writers, plumbers, &c., who had never 

 thought of joining the National exchange at io/., subscribed to 



