Part 12

During the period of free transmission, which continued some seventeen years, the number and gross weight of newspapers sent through the post increased enormously, and the privilege was considerably abused. Numerous publications were constantly appearing demanding free transmission, and in many cases they were of very questionable character; that is to say that, while conforming to the letter of the requirements of the law, they were often not genuine newspapers at all, but mere vehicles for the distribution of trade advertisements. The vast increase in the cost of dealing with the quantity of newspapers sent through the mails became a question for serious consideration. Heavy demands were being made by the railway companies for increases in the amount of their remuneration for the conveyance of mails, on the ground of the increase in tonnage due to the very large numbers of newspapers being sent. The actual statistics of the Post Office traffic in Canada are illuminating on this point. In 1897 the total weight of newspapers passing in the mails was 16,500,000 pounds, and the estimated number of newspapers 175,000,000. For the same year the total number of letters passing through the post was 123,000,000, and their total weight 5,000,000 pounds.[322]

In 1898 the Canadian Government desired to reduce the internal letter postage, which still stood at 3 cents, to the almost universal rate of 2 cents;[323] but the loss of revenue which such a reduction would entail was so great that they were driven to seek fresh revenue to meet the deficiency. In view of the abuses of the newspaper privilege, and the generally unsatisfactory position which had developed, this was thought to be a suitable occasion for the reimposition of postage on newspapers.[324] The rate proposed was 1/2 cent a pound. Opposition to the change was made on the same grounds as in 1867: that newspapers were the real educators of the people, that the dissemination of intelligence, particularly of political intelligence, was of the utmost importance, and that no impediment should be put in the way of their freest possible distribution.

The great necessity for a new source of postal revenue made it impossible, however, to continue the free privilege in its entirety, and the 1/2-cent bulk rate was carried. The free privilege was continued for local papers distributed within a radius of ten miles, in order to enable the country papers to compete with the papers of the large towns. The country papers are very jealous (and perhaps somewhat fearful) of the great city papers, although the telegraph has given the country papers an advantage in point of time. This is of great value in a country of enormous distances--especially in the case of daily papers--but is yet not of vital importance in the case of weekly newspapers, which do not rely so much on late news. The competition of the weekly papers of the great cities is severe; and the radius of competition even of their daily papers is considerable. The letter-carriers of Ottawa were at that time daily engaged in carrying free enormous quantities of newspapers published in Montreal or Toronto.[325]

The rate fixed in 1898 was not intended to be permanent; and in 1900, when the revenue had become sufficiently buoyant to warrant the step, a Bill was introduced to reduce the postage on newspapers to 1/8 of 1 cent a pound for transmission in the province or territory of distribution. The general purpose of the Bill was to reduce the rate for limited distances, and the province or territory was adopted as the most convenient unit of area. Newspapers were being posted literally by the ton, and the department thought it unreasonable to convey car-loads of such mail from ocean to ocean for the same rate as for any shorter distances within a province.[326] The Bill passed the Lower House, although it was severely criticized as introducing the vicious principle of provincial legislation; and "a serious aggravation of the tyrannical injustice" was that a distinctive tax would be placed on city publications, while preferential privileges would be given to country newspapers.[327]

The Postmaster-General explained that with a bulk rate it was possible to make nice distinctions of rate in regard to distance travelled, which would be quite out of the question with a rate such as that for letters charged separately on each individual item; the charge for the transportation of a letter for a short distance would be so small that no division of coin could be found to correspond to it, but with matter mailed by the ton and wagon-load, and paid for by the ton and wagon-load, the charge could well be adjusted for distance: but he admitted that he had made no calculation as to whether the 1/8 cent a pound would cover the cost of newspapers within the bounds of each province.[328] The Bill was rejected by the Senate on account of the undesirability on general political grounds of introducing any sort of distinctions based on the provincial boundaries.

The proposal was revived in another form in 1903. It was then proposed to reduce the postage to 1/4 cent a pound on newspapers when the distance of transmission did not exceed 300 miles. The Postmaster-General said definitely in Parliament that the rate would not cover the cost, and, further, that the reduction would involve a loss of revenue of from $50,000 to $75,000 a year on a total revenue from newspapers of from $100,000 to $125,000.[329] The reduction was carried; and in 1908 the reduced rate of 1/4 cent a pound was extended to all newspapers passing within the Dominion, when posted in bulk. The privilege is availed of by the publishers of many periodicals which are virtually nothing more than advertising media; but this abuse has not assumed serious proportions, and with the finances of the department in a flourishing state, it has not been felt necessary to curtail the privilege, although it involves great loss.[330]

* * * * *

NEWSPAPER POST (SECOND-CLASS MAIL) IN THE UNITED STATES OF AMERICA

A system for the distribution of newspapers by post, analogous, though not identical, with that which grew up in Great Britain, existed from an early period in America. There the privilege of franking newspapers was a perquisite, but it was not the perquisite of one officer, as in England. All postmasters exercised the privilege as part of their general privilege of franking all their correspondence, the arrangement being part of their emoluments as postmasters; and post-masterships were much sought after by newspaper publishers, who were thereby enabled to obtain free of charge the advantage of the distribution of their publications by what in most cases was the best, if not the only, available means.

The most notable example was Benjamin Franklin, who was for nearly forty years connected with the Post Office in North America, first as Postmaster of Philadelphia, and afterwards as joint Postmaster-General for the northern part of North America, and who, throughout this period, was able to circulate his publications by post free of charge. The Post Office, especially in regard to the exercise of this privilege, is regarded by Americans as having been an important factor making for a general understanding between the colonies, and a conception of the possibility of common action.[331] As early as 1757 the Crown authorities in the colonies were looking with a jealous eye on the unrestricted distribution of newspapers, and were contemplating measures for preventing the dissemination of objectionable ideas.[332]

As the friction between the colonies and the Mother Country grew in the years that followed, the Crown postmasters became more and more active in their endeavours to hamper the distribution by post of newspapers which published improper intelligence, or proclaimed improper political doctrines. In 1774 Franklin was dismissed, and his dismissal has been ascribed to a desire to impede the distribution of his publications.[333]

There is no doubt that the Crown authorities attempted through the postmasters to prevent the distribution of colonial newspapers, and it was this action which led in the first instance to the suggestion for the establishment of an independent American Post Office.[334] The resolutions of the Continental Congress by which the American office was established in 1775 did not provide for the transmission of newspapers. Nor does the ordinance of the 21st October 1782 prescribe any rates for their transmission; but licenses the postriders to carry them, presumably outside the mail, the charges made by them for the service to be retained by the riders as a perquisite.

The statute of 1792 first fixed rates for newspapers, as follows: 1 cent a copy when sent for distances less than 100 miles, and 1-1/2 cents a copy when sent for distances greater than 100 miles. This charge was opposed in Congress, and efforts were made to legalize free transmission by extending, so as to cover the transmission of newspapers, the general privilege of franking conferred by the Bill on members of Congress, on the ground that as the Government of the country was a government of opinion, which always depended ultimately on the suffrages of the people, much greater reliance was to be placed on the confidence of the people than on any other circumstance. Such confidence could only result from the fullest information, which the people had a right to expect, not only as regards the actions of the Government but as regards the principles on which they were grounded.[335]

Some members were disposed to approach the question from the financial side, and contended that the rates proposed were not sufficient to discharge the expense of the service. The middle way between economic rates and free transmission was finally adopted.

An Act of 1794 amended the rates on newspapers and provided a further special rate for magazines and pamphlets. Newspapers might now pass from any one place to any other within the same State for 1 cent; magazines and pamphlets at 1 cent a sheet for distances not exceeding 50 miles; 1-1/2 cents a sheet for distances over 50 miles and not exceeding 100 miles; and 2 cents a sheet for any greater distance. A suggestion was made in Congress to reduce the newspaper rate to half a cent for distances not exceeding 100 miles, and 1 cent for any greater distance; on the ground that it was desirable to encourage the distribution of newspapers from the seat of Government and the large towns, since such papers must contain more complete information than the country publications, which could only publish selections from the metropolitan papers. There was, however, a feeling that country papers performed a useful function and should be encouraged.

The rates on magazines were altered in 1825 to 1-1/2 cents a sheet for any distance not exceeding 100 miles and 2-1/2 cents for any greater distance, when published periodically and sent to subscribers; and 4 cents on each sheet for distances under 100 miles, and 6 cents a sheet for any greater distance, when not published periodically. In 1845 the free privilege for newspapers was first introduced, those of not more than 1,900 square inches in size, posted by the editors or publishers, being allowed to pass free within 30 miles of the place of publication. Smaller newspapers, if conveyed more than 30 miles, were charged the rates fixed by the Act of 1794 (which had been re-enacted by a statute of 1825); and newspapers of greater size were charged a uniform rate of 2 cents without regard to distance. Pamphlets, magazines, periodicals, and all printed or other matter, were to be charged by weight: 2-1/2 cents for the first ounce, and 1 cent for each additional ounce or fraction of an ounce, without regard to distance.

The free privilege for local newspapers was withdrawn in 1847, except as regards copies exchanged between publishers. The latter privilege was continued from a desire to assist the country publisher, who seems always to have had friends in Congress, and who was in the habit of obtaining much of the information published in his papers from the great Atlantic cities, and other large towns which were centres of political or other interests. The free privilege was not long withheld.[336] An Act of 1851 again extended it to all weekly newspapers sent from the office of publication to _bona fide_ subscribers within the county where published, provided the newspaper did not exceed 3 ounces in weight; with a scale of postages graduated according to distance for papers sent out of the county where published. A graduated scale for pamphlets, periodicals, magazines, and all other printed matter, was also established by this Act. In the following year a rate of 1 cent was fixed for each newspaper, periodical, unsealed circular, or other article of printed matter, not exceeding 3 ounces in weight, sent to any part of the United States; and for every additional ounce or fraction thereof, 1 cent additional. In 1861 the rate of postage on any newspaper, periodical, unsealed circular, or other article of printed matter, not exceeding 3 ounces in weight, conveyed over the overland route between any State or Territory east of the Rocky Mountains and any State or Territory on the Pacific, was made 1 cent. The letter rate between the same areas was 10 cents per 1/2 ounce.

A statute of 1863 classified mail matter, defining three groups. Newspapers, magazines, and pamphlets fell into the second group, which comprised all printed matter issued at stated intervals, but different rates were fixed for different sections of such matter. On printed matter issued weekly and sent to regular subscribers, the rate was 5 cents a quarter for publications not exceeding 4 ounces in weight, with an additional rate for every additional 4 ounces or fraction thereof. If issued seven times a week, the rate was 35 cents a quarter for every 4 ounces. If issued less frequently than weekly, the charge was 1 cent a copy not exceeding 4 ounces in weight, and small newspapers might be sent in packages and charged the same rates by weight. On transient[337] second-class matter, and miscellaneous matter of the third class--the third class included all other printed matter--the rate was fixed at 2 cents for each 4 ounces or fraction thereof.

The rates of 1863 were slightly modified in 1872, and a local delivery rate of 1 cent was established for newspapers. Two years later a new method of charging postage on newspapers and periodicals posted by publishers or newsagents was introduced. Instead of being charged on each individual packet, postage was to be charged on the gross weight of the newspapers posted by a publisher, irrespective of the number of separate packets to be handled. The rate was 2 cents a pound on newspapers and periodicals published weekly, and 3 cents on those issued less frequently than once a week. These rates only applied to such newspapers and periodicals as were mailed from a known office of publication, or news agency, to regular subscribers or newsagents, and did not apply to those for local delivery. By a statute of 1876 publications designed primarily for advertising purposes, or for circulation free, or at nominal rates, were made third-class matter, and thus excluded from the privilege. In 1879 the present rate of 1 cent a pound (bulk rate) and a revised classification were established. Matter was admitted to the second class on the following conditions:--

_First._--It must regularly be issued at stated intervals as frequently as four times a year, must bear a date of issue, and must be numbered consecutively.

_Second._--It must be issued from a known office of publication.

_Third._--It must be formed of printed paper sheets, without board, cloth, leather, or other substantial binding, such as distinguish printed books for preservation from periodical publications.

_Fourth._--It must be originated and published for the dissemination of information of a public character, or devoted to literature, the sciences, arts, or some special industry, and having a legitimate list of subscribers; _provided_, _however_, that nothing herein contained shall be so construed as to admit to the second-class rate regular publications designed primarily for advertising purposes, or for free circulation, or for circulation at nominal rates.

In 1894 the privilege was extended so as to include under certain conditions the periodical publications of benevolent or fraternal societies; and again in 1900, to include the periodical publications issued by State departments of agriculture.

It was provided by the statute of 1879 that a supplement may be enclosed with a second-class publication, without subjecting it to extra postage, provided that it is germane to the publication which it supplements, that is to say, is matter supplied in order to complete that to which it is added or supplemented, but omitted from the regular issue for want of space or time, or for greater convenience. It must, however, in every case be issued with the publication.

Since the establishment of these conditions and rates, there has been a steady and growing increase in the amount of second-class matter sent through the mails. In 1879, under the old rates, the total weight sent at the pound rate was 51,125,500 pounds. In the following year the total weight was 61,822,629 pounds; and by 1910 the total had increased to 817,772,900 pounds, that figure representing an increase of no less than 94,539,718 pounds on the total for 1909.

During the whole of this period the accounts of the Post Office in the United States had in two years only (in 1882 and 1883) shown a surplus of revenue over expenditure. In view of the vast quantity of matter sent in the mails at very low rates, the question naturally suggested itself whether, seeing that it was necessary year by year to call on the public treasury for funds to meet the deficiency in the Post Office accounts, it would not be practicable, and equitable, to obtain an increased revenue from this class of traffic. The fact that considerable abuses of the second-class mail privilege had grown up made consideration of the question the more necessary.

Periodicals obtained so great a privilege as compared with ordinary books, that publishers sought devious ways to obtain the advantage of the pound rate. Books termed a "library" were issued periodically, with a frequency sufficient to meet the requirements of the Act, numbered in series, and devoted to literature or science; were issued from a known office of publication, and with a list of subscribers. Complying thus with all the requirements of the Act, there seemed no ground on which these publications could be refused admission to the second-class privilege, and they were accordingly entered. The practice grew, and a multitude of libraries, comprising books on every conceivable subject, were distributed through the mails as second-class matter. The Act permitted the posting of sample copies, and as no limit to the number of such copies was fixed, the mails were burdened with vast quantities of sample copies of publications which, while complying with the letter of the statute, as did the "libraries," were in reality mere advertising media. The subscription list was extremely small in comparison with the number of sample copies sent out, and in many cases the subscriptions had been obtained by the offer of premiums at least equal in value to the subscriptions. Another abuse appeared. Under the law, copies of newspapers and periodicals mailed under the second-class privilege which were found to be undeliverable were, when returned to the publisher, liable to postage at the rate of 1 cent for each 4 ounces; but newsagents had the right to send second-class mail to one another, and in order to avoid the higher rate on returned copies, the publishers arranged a scheme by which the copies were returned by one newsagent to another newsagent whose office was near by the publisher's office. These abuses assumed such proportions that in 1889 the Postmaster-General, Mr. Wanamaker, brought them to the notice of Congress and asked a remedy. Nothing was done, however. In 1892 Mr. Wanamaker again complained of the same gross abuses, and especially of the book abuse, which had then become, he said, "a practice of so long standing that it has crystallized into law, allowing to paper-covered books which are simply numbered, and dated, and designated as periodicals, though in reality not so, the privileges of genuine periodicals."[338] He also attacked with vigour the sample-copy abuse.[339]

Several Postmasters-General caused estimates to be made of the actual cost to the Post Office of the handling and transmission of the second-class mail. An estimate made in 1894 indicated the cost of transportation for all mail matter as 8 cents a pound, and on that basis second-class matter at that time involved a loss of nearly 17 million dollars for transportation alone. In 1897 the total loss on account of the second-class mail was estimated at 26 million dollars. A further estimate made in 1901 indicated that the cost of transportation of second-class matter was at least 5 cents a pound, and that the cost of handling was a further 2 cents, giving a total cost of 7 cents a pound on matter for which postage at the rate of only 1 cent a pound was paid.[340]

In 1905 Postmaster-General Cortelyou submitted an estimate which put the loss on second-class matter at some $27,000,000 a year; and he recommended that the whole question should be considered by Congress, and a law enacted which should simplify the tests by which mail matter was classified.

These vigorous and oft-repeated recommendations of successive Postmasters-General, though not resulting in legislation, at length achieved a result in the appointment in 1906 of a joint Commission of Congress on second-class mail matter. The Commission held meetings in New York, and took evidence from the Post Office department and from representatives of each national organization of publishers in the United States. Their report, presented in January 1907, was in no sense conclusive. Their chief difficulties had arisen from the impossibility of obtaining from the department any statistics as to the cost of mail matter class by class--a difficulty which is inherent in Post Offices conducted on the modern system of accounting for postage of all classes by postage labels of the same type, and handling all classes of matter promiscuously; and their chief recommendations were that the department should take fresh statistics with regard to all mail matter,[341] and make an analysis of operating expenses with a view to apportionment between the various classes of mail matter. The Commission was so dissatisfied with the department's position with regard to the ascertainment of a proper division of the total expenses, that they recommended the appointment of a further Commission to examine thoroughly "the whole business system" of the Post Office, and particularly to determine, if possible, firstly, the actual cost of all the postal services; secondly, the proper apportionment of that cost between the various classes of mail matter; and thirdly, what modifications of the system of bookkeeping and accounting were desirable.[342]

By a statute of the 2nd March 1907, Congress authorized the appointment of a joint Commission "to make an investigation into the business system of the Post Office and postal service." The same gentlemen who had composed the Commission of 1906 were appointed to the new Commission, but its labours led to no practical result.