Part 3

This was the system, due to Sir Rowland Hill, of uniform rates, irrespective of distance of transmission, first introduced in the United Kingdom in 1839, and since adopted throughout the civilized world, not only for inland services, but for the international service.[65] The story of the conception, advocacy, and adoption of uniform postage is fully told by Sir Rowland Hill in his _History of Penny Postage_,[66] and need be only briefly dealt with here. The plan itself is described in the famous pamphlet, _Post Office Reform: Its Importance and Practicability_, which was issued by Sir Rowland Hill in 1837.

The reform was directly related to the great reform movement in England of the second quarter of the nineteenth century, and is a brilliant example of the application of the deductive method in politics. Sir Rowland Hill was a member of a Radical family, remarkable even in those days for its zeal for reform. It was the ambition of all members of the family to aid as far as possible the great movement; and all the brothers interested themselves in the study of social and economic questions, with a view to reform and improvement.[67] In the year 1835 there was a large surplus of revenue, and the brothers speculated on the direction in which reduction of taxation might best be made.[68] Sir Rowland Hill examined carefully the results of the financial reforms which had been introduced in recent years, and found that the effect on the revenue of reductions in the rate of tax showed very considerable variations. While in some cases, as, for example, leather and soap, a reduction of the duty by one-half had reduced the revenue by one-third, a similar reduction of the duty on coffee had increased the revenue by one-half. From this Sir Rowland Hill concluded that it was of the utmost importance to select carefully the taxes to be reduced, and he cast about for some guiding principle in the light of which the most suitable tax for reduction might be discovered. This principle he deduced to be as follows, viz. that the tax which most called for reduction was that which had failed most to keep pace with the increasing numbers and prosperity of the nation.[69] Tested in this way, the tax on letters proved unsatisfactory. While in most other departments of the revenue the preceding twenty years had been years of expansion and progress--as might be anticipated during a period of peace following great and exhausting wars--in the case of the Post Office the period had been one of stagnation.

Attention had already been directed to this fact by Sir Henry Parnell.[70] Between the years 1815 and 1835 the duty on stage-coaches had increased from [L]218,000 to nearly [L]500,000 a year. During the same period the revenue of the Post Office, both gross and net, had not increased at all--in point of fact, it had slightly decreased. If it had kept pace with the increase of population, the annual net revenue would have increased by half a million. If it had increased in the same proportion as the duty on stage-coaches, the revenue of 1835 would have exceeded that of 1815 by no less than [L]2,000,000. These facts convinced Sir Rowland Hill that a reduction of the rates of postage was urgently necessary; and apart from financial considerations, the moral and intellectual results which would follow a facilitation of intercourse appealed powerfully to a reforming Radical.[71] Having arrived at the conviction that the Post Office offered most scope for his zeal, he found no lack of material to work upon. A Commission of Inquiry into the Revenue Departments had reported on the Post Office in 1829. A Commission of Inquiry on the Post Office had been sitting for some years, and had made numerous voluminous reports. Sir Rowland Hill set to work to make a careful study of the information contained in these reports, and as the result of this study evolved a complete plan for the reform and reorganization of the whole Post Office system, a plan involving the transformation both of the theory of Post Office finance, and of the methods of practical working.[72]

His inquiries led him to examine the cost of the Post Office service as a whole, and its relation to the work performed by the Post Office in respect of individual letters, or, as he termed it, "the natural cost of conveying a letter."[73] The investigations and calculations made in this connection elucidated a fact of first importance, viz. that the cost of the conveyance of a letter from one town to another was exceedingly small, being on the average no more than nine-hundredths of a penny--in the case of a mail from London to Edinburgh the cost of conveyance was no more than one-thirty-sixth of a penny. This fact was developed. It was shown that not only was the cost for conveyance for the average of distance exceedingly small, but that it did not vary with the distance. The variation was rather in the inverse proportion to the number of letters enclosed in a mail.[74] Thus, while the average cost of the conveyance of a letter from London to Edinburgh was one-thirty-sixth of a penny, the cost of the conveyance of a letter for a shorter distance was often greater, owing to the small number of letters included in the mail. On these facts rests the whole case for uniformity of rate irrespective of distance:[75] and they are sufficient to demonstrate that the principle is fundamentally sound.

The proposal for a uniform rate was the outstanding feature of the plan, but there were others of importance. It was a chief merit that the plan might be introduced without causing any serious diminution of net revenue, and the object of the further proposals was so to modify and simplify the working methods of the service as to enable the increased traffic which a low uniform rate would inevitably bring into the post to be dealt with without a proportionate increase in working expenses.

A vast increase in the number of letters must occur if the revenue was to be maintained, and this increase was confidently anticipated. With the existing rates there was a very large clandestine traffic in letters outside the Post Office, and it was calculated that a low uniform rate would effect the complete suppression of that traffic, and attract all letters into the post. But in order to maintain the net revenue, it was essential to simplify effectively the methods of working. This simplification was to be secured by the introduction of the system of prepayment, and the principle of charging by weight.

Covers and sheets of paper bearing the revenue stamp already impressed were to be sold at all post offices. The postage label, which has become so characteristic a feature of post office business throughout the civilized world, was proposed as an expedient to meet a certain exceptional case. If any person bringing a letter to the post should not be able to write the address on the stamped cover in which the letter was to be enclosed, Sir Rowland Hill suggested that "this difficulty might be obviated by using a bit of paper just large enough to bear the stamp, and covered at the back with a glutinous wash, which the bringer might, by applying a little moisture, attach to the back of the letter, so as to avoid the necessity for redirecting it."[76]

Letters prepaid in either of these ways were to pass through the post as franks,[77] i.e. without change or record. By this method a great reduction in the work of the Post Office would be effected. Under the existing system it was necessary to record and charge forward on the postmasters all letters the postage of which was to be collected on delivery, and these letters formed the vast majority. All such labour would be dispensed with. The increase of the number of letters was to be further encouraged by the provision of additional facilities, such as the establishment of day mails and increased frequency of deliveries in towns.[78]

It has sometimes been thought that Sir Rowland Hill's theory included the proposition that the increase of the number of letters varied in inverse proportion to the reduction of rate effected, that is to say, that if the rate were reduced by one-half, the number of letters posted would be doubled; if the rate were reduced by two-thirds, the number of letters posted would increase threefold.[79] This is not the case. His estimate was that with the reduction of postage in the United Kingdom to the uniform rate of one penny, i.e. an average reduction of seven-eighths (from about eightpence), an immediate fourfold increase in the number of letters might be anticipated. This estimate was framed with regard to the circumstances existing in the United Kingdom at the time, and there is no other rule applicable to the relation between reduction of postage and resultant increase of postal traffic than that it is relative to the particular circumstances of time and place. Especially, it may be said, where postage is already low, further reduction is hardly likely to result in largely increased traffic.

In brief, Sir Rowland Hill calculated that by the adoption of his proposals for the modification of methods of working, the letter postage in the United Kingdom might be reduced to the uniform rate of one penny irrespective of distance, without causing loss to the net revenue of more than [L]300,000 a year.

The pamphlet, _Post Office Reform: Its Importance and Practicability_, in which the plan was embodied, was first issued privately in January 1837 for circulation in political and official circles, to which Sir Rowland Hill had access, partly through the celebrity of his family on account of their school system, but chiefly through his brother Matthew Davenport Hill, then a member of Parliament. In February 1837 the author was invited to give evidence before the Commissioners for Post Office Inquiry.[80] The proposals were not, however, viewed favourably by the Government, and were resolutely opposed by the Postmaster-General and many of the high authorities of the Post Office.[81]

Finding it impossible to impress the official mind, Sir Rowland Hill issued the pamphlet to the public,[82] and it met with immediate, widespread, and influential support. The Press, Chambers of Commerce, and other bodies actively supported propaganda for the adoption of the scheme.[83] Public meetings in support of it were held in all parts of the country, and numerous petitions in its favour were submitted to Parliament. So strong was the public feeling that in November 1837 the Government were constrained to appoint a Select Committee of the House of Commons for the express purpose of considering Sir Rowland Hill's proposals. This Committee took a vast amount of evidence. The contentions of Sir Rowland Hill were in the main sustained by this evidence, and the Committee recommended (but only by the casting vote of its chairman) the adoption of a uniform rate. They were not, however, satisfied that the net revenue would be maintained if the uniform rate were made as low as one penny, and they therefore recommended the rate of twopence.[84] The Committee reported in August, 1838, but no immediate steps were taken by the Government to carry out their recommendations. The condition of the national finances was not so healthy as in 1837, when the proposals were first broached, and they did not improve in the following years.[85] The doubt as to the financial result of the scheme therefore made its early adoption in the normal course unlikely. The reform was, however, warmly taken up by the Radicals,[86] and in 1839 party exigencies enabled them to insist on the introduction of uniform penny postage as the price of their support in Parliament.[87]

On the 10th January 1840, therefore, the reform was introduced.[88] The new rate was one penny for each of the first two half ounces, and twopence for each additional ounce. The results were disappointing financially. The reduction in net revenue in the first year was one million pounds sterling (from [L]1,500,000 to [L]500,000), instead of [L]300,000 as forecasted. The number of letters, also, was doubled only, instead of quadrupled (in 1839, 82 millions, in 1840, 169 millions). But the numbers continued to increase rapidly, in agreeable contrast to the stagnation under the old system. By 1847 they had quadrupled; by 1860 they had reached 564 millions; and the expansion has since been continuous.[89] The gross revenue of 1839 was equalled in 1850, and the net revenue of 1839 was reached in 1863. It has since gone on increasing. The plan was not an immediate financial success: neither was it a complete financial failure, as sometimes alleged.[90] The recovery of revenue was slow, but it was constant; and ultimately the plan has abundantly justified itself as a financial arrangement.

The changes in the British letter rates since 1840 have not been numerous or fundamental. The limit of weight for letters, viz. 16 ounces, fixed in 1840, was abolished in 1847. In 1865 the progression of weight and charge above one ounce was made a penny the half-ounce. In 1871 the rates were reduced. Letters up to 1 ounce in weight became transmissible at the penny rate; for the second ounce, and for every succeeding 2 ounces up to 12 ounces, the rate was made 1/2d.; and for letters weighing more than 12 ounces, 1d. the ounce, including the first ounce. In 1885 the rate of 1/2d. for every 2 ounces after the second ounce was continued without limit; and in 1897, on the occasion of the Diamond Jubilee of Queen Victoria, a further reduction of the rate for heavier letters was made. The scale of 1d. for the first 4 ounces, and 1/2d. for each succeeding 2 ounces, was then introduced. This method of effecting a reduction was dictated largely by a desire to simplify the rates of postage. It admitted of the abolition of the Sample Post, and of the Book Post (except as regards packets not exceeding 2 ounces in weight), and thus removed a source of confusion and loss of time both to the staff and the public.

In recent years postal traffic of all kinds has increased rapidly. The growth in numbers is shown by the following table:--

+----------------------- | Total number of Postal Year. | Packets dealt with in | the United Kingdom. -----------+----------------------- 1880-1 | 1,682,000,000 1890-1 | 2,623,988,000 1900-1 | 3,723,817,000 1905-6 | 4,686,182,000 1910-11 | 5,281,102,000 1913-14 | 5,920,821,000[91] -----------+-----------------------

The ordinary letter, however, remains the characteristic of Post Office business and the sheet-anchor of postal finance. The vast proportion in point of numbers still consists of packets of small weight.[92] In 1913-14, of a total traffic of some six thousand million packets (including parcels), nearly three thousand five hundred millions passed at the letter rate of postage (less than 14 per cent. of which exceeded 1 ounce in weight), one thousand millions at the postcard rate, another thousand millions at the 1/2d. packet rate (none exceeding 2 ounces in weight). The average weight of the two hundred million newspapers was just over 4 ounces, and of the hundred and thirty million parcels, some 2 to 3 pounds. Of the total traffic (including parcels), more than four thousand millions, consisting in general of ordinary letters and postcards, were under 1 ounce in weight; and of the remaining two thousand millions (including parcels) only some five hundred millions exceeded 4 ounces in weight.

The Post Office, in addition to its ordinary function of providing for the transmission of letters and packets, undertakes a number of subsidiary services. There are, of course, the telegraphs and telephones, the money order, postal order, and Savings Bank business, which have for many years been an integral part of the business of the Post Office. In recent years the Post Office has also undertaken the issue of certain local taxation licenses, and the payment of Old Age Pensions and Army Pensions. Now it has undertaken the sale of War Loan Stock, Exchequer Bonds, and War Savings Certificates. Apart from the telegraphs, telephones, and Savings Bank, however, these services form only a small part of the work of the Post Office. While the total cost of the ordinary postal services (i.e. excluding telegraphs, telephones, and Savings Bank) was in 1913-14 some [L]17,000,000, the cost of the subsidiary services was only about a million.

The staff of officers has increased as follows:--

+---------+---------+----------- Year. | Male. | Female. | Total. --------------+---------+---------+----------- 1880-1 | | | 80,000 1890-1 | 93,046 | 24,943 | 117,989 1900-1 | 137,807 | 35,377 | 173,184 1905-6 | 154,351 | 41,081 | 195,432 1910-11 | 166,073 | 46,741 | 212,814 1913-14 | 188,794 | 60,659 | 249,453[93] --------------+---------+---------+-----------

Concurrently with the increase of the number of officers, the rate of wages has been revised on several occasions, as the result of the recommendations of Parliamentary and other Committees appointed to consider the question of Post Office wages. The cost of the increases of wages which have been granted as the result of these revisions, calculated on the basis of the staff at the dates of the respective revisions, without allowance for subsequent growth of force, is some [L]3,674,950 per annum.[94] The increase of the number of officers has, of course, increased the ultimate cost of each successive improvement in pay and conditions of service.

The increased wages of the staff have naturally counterbalanced to some extent the economies resulting from the large increase of business. Since the first of these revisions, the Fawcett of 1881-2, the wages of the staff have absorbed a larger percentage of the total revenue of the postal services,[95] and the cost for staff per packet handled has increased from .288d. in 1880-1 to .329d. in 1890-1, and .418d. in 1913-14.[96] During the same period the cost of conveyance of postal packets has decreased from .131d. per packet other than a parcel in 1880-1, to .119d. in 1890-1, and .080d. in 1913-14.[97] The total cost of dealing with a postal packet other than a parcel has in recent years shown a small decrease. The cost in 1913-14 has been estimated at .520d.[98]

The gross revenue of the postal services, i.e. excluding telegraphs and telephones, has increased from [L]7,130,819 in 1880-1 to [L]9,851,078 in 1890-1, and [L]21,928,311 in 1913-14. The net revenue from postal services has increased from [L]2,720,784 in 1880-1 to [L]3,163,989 in 1890-1, and [L]6,642,067 in 1913-14. The expansion of net revenue has not kept pace with the increase in the total number of packets passing by post. Since 1880 the total numbers have increased some 3-1/2-fold, and the net revenue some 2-1/2-fold.[99] The relation between the gross revenue and the total expenditure on the postal services, which in recent years has not shown any large variation, fluctuates in the neighbourhood of 70 per cent.[100]

NOTE.--On the 1st November 1915, in order to secure increased revenue for war purposes, the inland letter rate was increased to the following:--

For packets not exceeding 1 ounce in weight 1d. For packets between 1 ounce and 2 ounces 2d. For every succeeding 2 ounces 1/2d.

Under the existing abnormal circumstances it is difficult to form a satisfactory estimate of the result of this increase. Numerous contrary forces are in operation. The growth of the Army and the dislocation of private business resulting from the war have had important effects on the number of letters posted. Large numbers of letters are exchanged with men in the Army, but, on the other hand, all letters from troops on active service pass free of postage. It has been estimated that in the first five months the new rates yielded an increased revenue of nearly half a million.--See Postmaster-General's statement, 3rd July 1916 (_Parl. Debates (Commons_), vol. lxxxiii. cols. 1231-2).

* * * * *

LETTER POST IN CANADA

When Canada came into British hands after the capture of Quebec, no postal arrangements existed in the province. The population numbered only some 60,000, excluding the Indians, and with so small a number spread over so vast a territory it was not to be expected that any Post Office establishment of the ordinary type could be maintained.[101] Very soon, however, the English merchants interested in the Canadian trade urged upon the British Government the necessity for a regular service from New York to Quebec, and in this they were supported by the Governor of the province. The Government instructed the Deputy Postmasters-General in America to take steps for the establishment of the post, and they accordingly proceeded to Quebec. There they met a young Scotsman, Hugh Finlay, who offered to conduct a regular post between Quebec and Montreal, undertaking all risks, for a commission of 20 per cent, on all revenue collected on the post,[102] and, in addition, a monopoly of licensing persons to provide horses and conveyances for the use of travellers--the old monopoly which had existed for so long in England as a source of emolument to the postmasters. Finlay contracted for the conveyance of the mail with a number of men, to whom he made over the exclusive right of furnishing travellers on the route. In addition to this privilege, these men, who were styled _ma[^i]tres de poste_, were remunerated by payment at the rate of 6d. a league (2d. a mile) for providing horses and carriages for the couriers. Between Quebec and Montreal, a distance of 180 miles, there were twenty-seven _ma[^i]tres de poste_ and two post offices, viz., Three Rivers and Berthier. On the whole route, which was not of the easiest, there was not a single inn; there were six ferries to cross, that at Three Rivers being three miles wide, and one near Montreal nearly three-quarters of a mile. There was a service twice a week in each direction, and the journey occupied about forty hours, the courier who left Quebec at five o'clock on Monday afternoon arriving at Montreal on Wednesday morning, and the courier leaving Montreal on Thursday evening reaching Quebec on Saturday morning.

The statutory authority for the establishment of posts in Canada, as in other parts of North America, was section 4 of the Act of the 9th of Anne. This Act, however, failed to prescribe for North America rates of postage for letters passing greater distances than 100 miles. Hence, for the post from Quebec to Montreal no legal rate was ascertainable. The rate actually charged was 8d. for a single letter, and so in proportion for double, treble, and ounce letters, which was not an excessive charge, seeing that the legal charge for distances up to 100 miles was 6d. for a single letter. It proved sufficient, however; the whole scheme was completely successful and greatly appreciated by the colonists. To link this local post with the service from England, the Postmasters-General at New York arranged a connecting post to run monthly in connection with the arrival and departure of the English packets. They realized that the number of letters likely to be carried by such a post would be small and would not yield a revenue nearly equal to the expenses, the more so as, in any case, a comparatively high rate of postage would be payable on account of the great distance, and in recommending its establishment, they suggested moderate rates of charge.[103]