In contrast to the other Colonies, Western Australia made the decision to involve the private sector in the construction of the first telegraph lines in the Colony. The first line - from Perth to Fremantle was constructed by a private company called the Western Australia Telegraph Company which had been established by Edmund Stirling - the proprietor of the Perth newspaper The Inquirer and Commercial News.
Following the success of the Stirling- Fleming partnership in the Perth-Fremantle construction, a more ambitious private venture was planned. It was to be called The Electro-Magnetic Telegraph Company. A Board of Directors was appointed and shares were made available to private investors.
The Fremantle Herald of 25 February 1871 described the nature of the Company in terms of the Act as follows:
The Electro Magnetic Telegraph Act.
"It is probably known to most of our readers that a company has been formed and registered under the Limited Liability Act called the Electro-Magnetic Company for the purpose of erecting a line of telegraph from Perth to Narrogin, Pinjarrah, Bunbury, Bridgetown and Albany and from Perth to Guildford, Newcastle, Northam and York.
An epitome of the Company's Articles which have been submitted to and approved by the Council may be of interest to our readers. The Company undertake to erect a substantial single wire line of Telegraph through the above places, being about 400 statue miles, on condition that they are granted the exclusive right of such lines for a term of nine years and that the government will supplement the net earnings of the company by a half yearly grant of such sum as will, when added to the net earnings, pay 6 percent per annum on the subscribed capital; and this for a term of 9 years. The utmost amount however of such grant is not to exceed, in any one year, the sum of £700. When the net earning, in one year amount to such a sum as would pay £670 per annum, the government will have to supplement such sum by a grant which, when added to the earnings, will pay £870 per annum.
The telegraph stations are to be attached to the Post Office, or other convenient department, and all the Telegraph duties are to be attended to and performed at Govenment expense.
The Company, however, undertakes to keep the lines at all times in good working order and all supplementary grants are to cease should the line, through neglect or imperfection, be thrown out of working order for 20 consecutive days.
The scale of charges to the public are to be subject to the approval of Government and all messages on Her Majesty's Service are to be transmitted free of charge and take precedence.
At the expiration of nine years or at any time within its limits, the Company must be prepared to sell and transfer all the Telegraph lines to the Government at a fair and equitable valuation which however must not be less than the original cost outlaid by the Company in respect of the lines they have constructed.
We are exceedingly pleased to record the adoption of these articles by the Council, feeling confident that extended Telegraphic communication will prove the means of promoting the well being and prosperity of the colony".
About a year after the completion of the Perth-Fremantle telegraph line by the Western Australian Telegraph Company, the Perth Inquirer of 29 June 1870 noted:
"There appears in our columns to-day an advertisement which is to us of quite a novel character. A public company, "with a government guarantee on its capital", for the purpose of stretching over the colony one of the latest and greatest civilizers of the age, is assuredly something new. We believe it is the first time our local newspapers have left the colony with anything in them so like in its nature and character to our Australian neighbours. We heartily wish the Electro-Magnetic Telegraph Company every success, and its promoters all the credit they deserve.
We have no doubt whatever the capital will be subscribed long before September; indeed, we venture to say we could name a hundred people in the colony (and this work directly interests the whole colony) who are able and who, to benefit their own occupations, or as property-holders concerned in every such improvement, would raise the whole capital amongst them even without "a government guarantee" or the convenient arrangement for the payment of shares.
We think this project may be taken as evidence of what real good a liberal-minded Government is capable of effecting and how quickly progress may be made. We doubt not the work has been carefully considered, yet it is called into existence in one day by a resolution of the Council and in point of fact established, for beyond doubt the capital will be raised elsewhere, if not in the colony, and thus there remains but the matter of construction.
To have attempted the establishment of Telegraphic communication throughout the colony with independent offices and operators, as in the case of the Perth and Fremantle line, would at once have left us without a prospect of an early reproductive work. The arrangement for attaching the service to the Post Office Department not only gets rid of this drawback to self-support, but adopts the experience of the neighbouring colonies. All experience shows that, as in railway works, it is not the original cost, so much as the working expenses and annual up-keep which oppose the success in a financial aspect. Here the Company's project may be said to provide for a minimum expenditure with a maximum of receipts, for truly the cost of working materials and seeing to the property once erected, must be very insignificant indeed, whilst the attendance necessary in the Post Office Department should afford the best public convenience for the Telegraph business. No doubt it will be required to supplement the Department as the duties increase with increased business, but then the revenue will increase.
We cannot estimate the advantages too highly which such a Telegraph system will yield in the every-day life of the community. Business affairs of every kind must be facilitated by its agency, and our export trade greatly benefited. In social and domestic matters, accidents, sickness and deaths, there can be no question of its value and convenience. We believe that, next to Railways, the Telegraph is the one thing needed to consolidate our scattered interests, and yield us more combined strength for progress. In public affairs its value is perhaps more apparent - more especially on the eve of Representative Government, when members for the country districts will be required to absent themselves from their own affairs and homes, for the public interest.
We have seen the communication to the Government on the part of the Company submitted last February, but it is too lengthy for publication. In addition to the proposals for the Local System, it reviews all the different schemes put forward since 1859 for Telegraphic communication between Australia and England and shows conclusively that the only direct and proper course for Australian communication is by submarine cable to this seaboard, as proposed by the direct English and Australian Submarine Telegraph Company. It also advocates the expediency of connecting King George's Sound with Fremantle so that the shore-end of the cable may be laid at Rottnest, as pointed out to and approved of by the promoters of the Company in London.
The local traffic on the lines projected is estimated in detail at a very low rate, and yet it can show that the financial responsibility of the Government in the whole work may not exceed £100 a year at the outset. There is no doubt if the Company meets with the local interest it deserves and the Telegraph be brought into general use, the shareholders will receive the maximum dividend of eight per cent so long as the Government allows the property to remain in the Company's hands. It is satisfactory to know we can form a company and erect upwards of four hundred miles of substantial Telegraph, with sawn posts of jarrah, and complete in all its parts, for £12,000, and probably less, through the competition for contracts. The work is certainly proposed, as expressed in the prospectus "on economical principles". The section from Perth to Albany will give a very desirable appearance of colonisation to the mail road and will save us four days in the month in Intercolonial and European intelligence. This section is planned expressly for the ulterior object of Intercolonial communication and is to carry, we believe, a wire of the heavy gauge suited for an overland line or a submarine cable to South Australia. It will be worked on the principle known to electricians as "the closed circuit" which will enable any of the Police Stations to communicate with Perth from any point along the line by means of an instrument so small and portable, it may be carried in the pocket. The Southern districts are to have an independent line branching off the Sound Road at Karrogin, passing through Pinjarrah and extending to Bunbury, for the present. The success of the Company will be the means no doubt of Telegraph extension to Champion Bay and other districts of the colony, and assuredly it should receive support, no matter how small, from every one having the least interest in the progress and welfare of the colony".
The company designated to erect and maintain those lines was the Electro-Magnetic Telegraph Company. "In a population of less than 10,000 for the whole of the big centres of the colony (Perth counted roughly 4,000 souls), it was expedient to guarantee the due payment of interest on the paid-up capital of the company which was £ 12,000". This prompted the third reading of the Bill for the Electro-Magnetic Guarantee Act on 2 January 1871. On 1 February 1871, the Perth Inquirer noted that the Western Australian Telegraph Company was merged with the Electro-Magnetic Telegraph Company.
The Perth Inquirer of 5 October 1870 followed up on the share subscription after the closing date as follows:
"We are glad to learn that the Prospectus of this Company, supported by the Government, has been so well received throughout the colony. It may be taken, we think, as an indication of a very general desire for such works of progress and improvement as may be judiciously undertaken and accomplished. As a mere work, we shall see in this, though on a small scale, the effects of such public undertakings amongst a community — the employment of labour, the circulation of money and the remuneration of capital; and where all these are gained over a work which has as far as can be the almost certain prospect of being self-supporting, there is the positive gain in pursuing, like other colonies, the march of progress. We hope, once the projects of this Company are fully carried out, and we find ourselves on 'speaking terms' with the several districts of the colony, from Albany to Champion Bay, we may gather strength from our closer union, and accomplish greater things.
Here, as elsewhere, the Telegraph may concern the trading community chiefly, but none the less is such a means of communication a public convenience and benefit concerning every one, whilst it cannot fail being of good service in all public matters and in the administration of public affairs. Limited as our means and population are, Telegraphic communication adapted to our circumstances as in the scheme of this Company, should confer proportional benefits to larger and more opulent communities. It would, for instance, be a great public convenience at the present time to have our English news within an hour after the arrival of the packet at the Sound, and in the event of England being engaged in hostilities, the early tidings might be of some benefit to shipping even in our port.
As for public affairs, we have at least one instance on record where such means of communication from head-quarters would have nipped in the bud an unfortunate affair which culminated in a public loss of some £1,209. As the country progresses, and its several interests expand, the benefits of Telegraphic communication will of course be the more felt and the more important. It will be of great value, for example, between the ports when we have steam communication and passenger traffic on the seaboard and, from information received by last month's colonial mail, we believe this improvement will be introduced before many months are over, thanks to the zeal of the Colonial Secretary and local efforts.
Taking a matter-of-fact view of the introduction of a Telegraph system in the colony at the present time, the project is encouraged by the statistics of postal communication and revenue. According to the last return, our inland letters number 398,210 yearly and our newspapers 99,213 (before the repeal of postage); the inland postal revenue being £4, 590. And surely the Telegraph revenue is not over-estimated at £1,000 especially considering the intervals between the district mails. We learn that with such a revenue, our Telegraph system as planned by the Company, will be self-supporting, producing the guaranteed dividend to shareholders and its working costs besides giving its agency to the public service.
At the meeting of Directors on Wednesday last, the shares applied for were allotted, representing five eights of the required capital. The Company is thus established and prepared for the Act of Incorporation, which will be passed at the first sitting of the new Council, in terms of the pledge of the Government. This, strictly, is the first measure required to legalise the operations of the Company but we believe it is not contemplated, and it need not be imperative, to suspend the arrangements necessary for the construction of the work and opening it to the public within a reasonable time. For the present it is satisfactory to know we are prepared for action in an undertaking which, in addition to its public utility and benefit, must be regarded as the first step towards another of greater importance — telegraphic communication with the rest of Australia".
On 2 July 1871, Downing Street (in London) advised that Her Majesty would not be advised to exercise her power of disallowance with respect to the (29) Acts passed during the previous session of the Legislative Council of Western Australia. Act 13 was an Act "to guarantee the payment of interest upon the paid-up capital of the Electro-Magnetic Telegraph Company".
Weld's Government, by that Act, guaranteed interest at 6 per cent for nine years, according to earnings, not only on the original capital but also on the additional capital the company would need for a third line between Perth and Geraldton - provided that it was established within three years from the opening of the Perth-York and Perth-Albany sections These two lines were opened on 6 January 1872 and 26 December 1872 respectively.
At the Meeting of Directors in September 1871 to elect a Chairman to replace the late Major Crampton, Mr. Carr was chosen. To show the estimation in which the first Chairman of Directors was held, the following tribute, embodied in a resolution, was paid to his memory: "The Directors of the Company deeply deplore the decease of their respected Chairman Major Crampton - who, for the great interest he has taken in the Company from the first, and through his kindness of disposition, earned the esteem of all brought in contact with him."
Takeover of the EMTC.
Although the Electromagnetic Telegraph Company had performed its duties well in constructing the lines to York and Albany - especially because of the exceptional technical skill and leadership skills of James Fleming, the WA Government made the decision to follow the strategy implemented by all the other Australian Colonies and become responsible for all aspects of the telegraph service. The decision therefore meant taking over all the shares of the private Company. Indeed Governor Weld recommended to the Secretary of State to purchase all telegraph equipment from the Company. The Legislative Council had never discussed that proposal and were (justifiably) peeved.
The Editorial of the Fremantle Herald of 20 April 1872 noted inter-alia: "the proposed purchase of the Telegraph shares, is open to very grave objection when it is considered to what extent abuses might exist if the Government were owners of the only telegraph line in the colony. On this subject we shall have some startling revelations to make at a future time".
On 8 June 1872, The Fremantle Herald reported on a complimentary dinner given to Mr. M. Logue on Friday the 24th May by the electors of the Geraldton District as a mark of their esteem and approbation of him as their late representative in the Legislative Council. During his address, Mr. Logue said "You will see by the papers and despatches that it is the intention of the government to raise a Loan of about £30,000, £12,000 of which is to be expended in buying the Telegraph Company out, and £1,000 in making an addition to Fremantle jetty. The first is a very doubtful piece of policy and the second I believe is condemned by nearly every man in the colony. Now I do not see any necessity for raising a loan for these purposes, and if not for these there is no necessity to raise a loan at all, at all events for the present, as all the other works in the government programme can be constructed with money raised by the debentures secured on the general revenue".
The acquisition of the shares and responsibility took some time and the Electro-Magnetic Company continued to be responsible for line construction. For example, the Inquirer noted the following stories:
By 23 June 1873, the Assembly had been informed that the purchase of all shares had been completed.