Chapter XIII: Introduction (10)

The contracting parties undertook to provide a mutual service for the interchange of parcels not exceeding 3 kilogrammes in weight. Liberty of transit was guaranteed throughout the territory of each contracting country, and for transit services the respective countries were to be remunerated as follows: The administration of the country of origin was required to pay to the administration of each other country concerned in the transmission, and to that of the country of destination, 50 centimes for each parcel in respect of land transit. In cases where a sea transit was involved, the sum of 25 centimes for each parcel was payable on sea routes not exceeding 500 nautical miles; 50 centimes for routes between 500 and 1,000 nautical miles; 1 fr. for routes between 1,000 and 3,000 nautical miles; 2 fr. for routes between 3,000 and 6,000 nautical miles; and 3 fr. for all routes exceeding 6,000 nautical miles. The rate of postage was based on the foregoing payments, and amounted to as many times 50 centimes as there might be administrations concerned in the transmission, with the addition of all rates for sea transit, and with the reservation that each country might charge an additional 25 centimes (raised in certain cases to 50, to 75 centimes, or to 1 fr.). In addition, the country of destination might charge a delivery fee of 25 centimes. It was not anticipated that these rates would in all cases be sufficient to cover the expenses of carrying on the service, but the general advantages were regarded as adequate compensation for any monetary sacrifice which might be entailed.[604] Any administration which did not at that time conduct a parcel post service was authorized to arrange for the international service to be undertaken on its behalf by railway and steamship companies.

At the Lisbon Congress in 1886 the maximum limit of weight was raised to 5 kilogrammes, at which point it remains, and special rates were established for parcels which, on account of their size, shape or fragility, were inconvenient for transmission.[605] Such parcels, which had previously been excluded altogether from the service, were now admitted, subject to a rate of postage 50 per cent. greater than the rate on ordinary parcels.

At the Congress of Washington in 1897, power to charge special rates was given to the administration of British India, viz. a rate not exceeding 1 fr. for land transit, a surtax not exceeding 1 fr. 25 on each parcel posted or delivered in British India, and a scale of rates graduated according to weight on all parcels posted in British India, provided that the average receipt of the Indian administration did not exceed 1 fr. 75 for each parcel.[606] The special transit charge was abandoned at the Rome Congress of 1906.

No changes of importance were made at the Rome Congress of 1906. Several proposals in regard to the maximum limit of weight were discussed. The Bulgarian delegates proposed an increase of the maximum to 50 kilogrammes, but the proposal found no support.[607] The Swiss delegate proposed an increase to 10 kilogrammes. This met with some support; but in view of the practical difficulties which would have been imposed on certain administrations in dealing with parcels of so great a weight, the proposal was negatived.

The Indian delegate proposed the insertion of a provision enabling any country to charge postage on parcels originating in that country according to a scale of weights of its own choice, in substitution for the existing single rate.[608]

The general proposal was rejected,[609] but a clause was added provisionally according to India the faculty of applying to parcels posted in India a tariff graduated by weight, provided the mean of the rates was not in excess of the normal rate of the Union.

The land transit rate remained unchanged, viz. 50 centimes for each country participating in the territorial transit.

Russia was given power to collect a transit fee of 1 fr. 25 per parcel in respect of both Russia-in-Europe and Russia-in-Asia, separately; and Turkey to collect a transit rate of 1 fr. 25 on a parcel sent across Turkey-in-Asia. Owing to the undeveloped state of the transport services in Persia, that administration was empowered provisionally to decline the transport of parcels for and from other countries.

The maritime transit rates were reduced to the following:--

25 centimes for transits not exceeding 500 nautical miles
50 centimes " 500-2,500 " "
1 fr. " 2,500-5,000 " "
1-1/2 fr. " 5,000-8,000 " "
2 fr. " exceeding 8,000 " "

For parcels not exceeding 1 kilogramme the transit rate should in no case exceed 1 fr.

* * * * *

VII

AN ANALYSIS OF COST

METHOD

The Post Office[610] performs but one service in respect of the ordinary postage paid on a packet, under whatever rate or regulations the packet is posted. Whether the packet be a letter, a postcard, a halfpenny packet, a newspaper packet or a parcel,[611] the service performed in respect of the ordinary postage is simply to transmit the packet without delay to the place of its address.[612]

There are, of course, several intermediate stages in the progress of the packet from the place of posting to the place of delivery. Under the most favourable circumstances, as in the case of a letter from one small town to another small town for which there is a direct mail, the packet is handled two or three times by various officers; and in many cases, as with the letters from a suburb of one large town to a suburb of another large town, or to a place in a rural district or vice vers[^a], as many as ten or twelve times.

Although the character of the service to be performed, viz. transmission to the place of its address, is identical in every case, the character of the packet naturally has considerable influence on the nature and cost of handling at the various stages, and the methods adopted in dealing with the packet. But the operations are in essence the same, and the chief difference is in the amount of time occupied and the nature of the office fittings employed.

This variation of cost and method does not correspond with variation in the rate of postage paid on the packets. Except in the case of parcels, all distinction on the basis of rates of postage disappears once the sorting office is reached.

In regard to the chief indoor operations there is, except at the smallest offices, complete separation between packets sent by parcel post and all other packets; but parcels are in some cases taken out with other packets for delivery at the same time and by the same officer. Except in rural districts they are, however, generally taken out separately for the first morning delivery, and frequently for the last evening delivery. Speaking broadly, there is as regards delivery, as for other operations, essential separation between parcels and all other classes of packets.

In regard to packets other than parcels, the chief, and in many cases the only, separation in actual handling is as between those packets which can be passed through the stamping machine and those which cannot; and between those packets which can conveniently be dealt with at the ordinary letter-sorting frames, and tied in bundles for enclosure in the mail-bags, and those which on account of their irregular size and shape are sorted at pigeon-hole frames, and cannot be tied in bundles, but are forwarded loose in the mail-bags. The dividing line is almost identical in both cases, and is determined by the size and shape of the packet. In the largest offices more divisions are made, in some cases as many as five.[613]

The more usual number is three, "short letters," "long letters," and other packets.[614] The division of the packets is made in all cases, not with reference to the various rates of postage under which the packets may have been posted, but with the view simply of securing that packets of the same shape and size shall, as far as possible, be brought together, and their subsequent handling thereby facilitated.

In cases where there are four or five such divisions of the packets, the separation is likewise made from considerations independent of the rates of postage, although it happens that, as a rule, a large proportion of the packets posted under a given rate fall into a certain group. Thus all postcards fall to be handled with the short letters; all newspapers fall to be handled with the heavier packets sent at the letter rate; and a large proportion of the halfpenny packets, viz. the short halfpenny packets, fall to be handled with the short letters.

There are in general three methods of handling. The sorting is done either at the ordinary open frames, or at the newspaper frames, or directly into the mail-bags, the two latter methods being alternative. Short letters are dealt with at the ordinary sorting frames. Long letters (which include a large proportion of "circulars") are dealt with in some cases at the ordinary frames, and in some cases at the frames provided for the larger packets (the "newspaper" frames). All other packets are dealt with at the newspaper frames, or are sorted directly into the mail-bags in those cases where frames for hanging the bags are provided. Stamping is performed either by hand or by machine.

When first brought into the sorting office the packets are placed on an open table, and the ordinary letters, circular letters, and postcards are arranged in order with the addresses in the same direction, or, as it is termed, "faced." Simultaneously, all other packets are picked out for treatment separately. The postage labels affixed to the letters and other packets are then obliterated with a dated stamp. After stamping, the letters and packers are taken to the respective sorting tables, where they are separated (in one or more operations) into groups corresponding to the various towns to which they will be despatched. Before enclosure in the mail-bags, all short letters, postcards, and short halfpenny packets, and some of the long letters, are tied in bundles, other packets being sent loose.

From the first office of destination many of the packets are sent forward to another office, since it is naturally not possible always to enclose a packet in a direct mail-bag for the town to which it is addressed. These packets are resorted and despatched. The letters, etc., for immediate delivery do not require to be faced, as they are received in bundles, in which they are arranged with the addresses in the same direction. But, except when received for the first morning delivery, letters are stamped to show the date and time of receipt, after which they are sorted in the order of delivery, and delivered by the postmen.

In the delivery of the packets one division is made, viz. between the short letters, postcards, and short halfpenny packets, which are tied in bundles; and the letter packets and halfpenny packets of irregular size and shape, and the newspapers, which are carried loose in the delivery bag. The postman takes out of his bag a bundle of letters, etc., from which he delivers in order. These have been sorted up in the order of delivery at the sorting office, so that no time is lost in finding the proper letter for delivery. It is not possible, however, to arrange the irregular-shaped packets in this manner. When the postman has such a packet to deliver, he has first to find it among those in his bag. He then frequently finds that it is too large to be put through the letter-box, and further time is lost in gaining the attention of the householder.[615]

There is, therefore, in the matter of delivery, a heavy balance against the heavier and more bulky packets, as compared with the short letters, postcards, and short halfpenny packets.

As regards the actual transmission from post office to post office, there is only one real division of the whole of the packets, viz. that between the parcel post on the one hand, and the whole of the remaining classes of packets on the other. In a number of cases separate mails are made up for newspapers and large packets; but compared with the total number of mails, the number of such separate mails is small, and the arrangement may be regarded as exceptional. In a considerable number of cases, however, packets sent at the parcel post rate are enclosed in the same mail-bag with packets sent at other rates. The arrangement is made somewhat extensively for mails from a post town to subordinate and other small offices in the immediate neighbourhood, but only exists in those cases where the number of parcels to be enclosed is small. As in every case where on the average as many as eight parcels are available at the time of despatch a separate mail may be made up, the arrangement does not exist extensively between any large centres with any considerable traffic; but it has been extended in recent years, and the total number of parcels forwarded in this way forms an appreciable proportion of the total number of parcels sent by post. There is in these cases, so far as mails conveyed by railway are concerned, complete separation in regard to one important element of cost, viz. the cost of conveyance. Separate payment for the conveyance of parcels is made under the arrangement established by the Parcel Post Act; while comprehensive payments are made for the conveyance of all other packets, arranged by negotiation with the individual railway companies or, failing agreement, fixed by the Court of Railway and Canal Commission in the manner prescribed by statute.[616]

The handling of a postal packet from posting to delivery therefore comprises the following operations in order:--

Collection,
Facing,
Stamping,
Sorting,
Conveyance,
Stamping,[617]
Sorting,
Delivery;

and in the case of those packets which pass through more than one office there are, for every such office, the additional operations of sorting and conveyance.[618]

The bags are conveyed between the various post offices by mail-van (horse-drawn or motor), by mail-cart, by railway, or in a few cases by carrier-cycle, tricycle, or motor-cycle.

The vans, carts, or cycles of course convey the bags from office to office, but when the bags are sent by railway it is necessary to provide for their conveyance to and from the railway stations. This is largely done by mail-van, mail-cart, or carrier-tricycle; but in a great number of cases throughout the country, where only two or three small bags are concerned, their conveyance between the station and the post office is provided for by cycle postman or "runner" service; that is to say, the bags are fetched or taken by a postman or porter.

COST

In order to ascertain the cost of dealing with postal packets of the various classes, the relative cost, and the actual cost, of the various operations must be ascertained, and all general charges apportioned.

The cost of the "postal" service, shown in Table B,[619] i.e. the cost of the whole of the services controlled by the Post Office, less the cost of the telegraphs and telephones, may be grouped, as shown in Table C, under the following main headings:--

(1) Cost of Staff,
(2) Cost of Conveyance of Mails,
(3) Cost of Buildings,
(4) Cost of Stores, and Miscellaneous Expenditure.

STAFF

Since parcels are, to a considerable extent, dealt with separately, it has been possible to estimate the relative cost of the manipulative services in regard to parcels on the one hand, and all other postal packets (letters, postcards, halfpenny packets, and newspapers) on the other. The ratios of cost are shown in Table D, and the total cost of the manipulative services in respect of parcels calculated on this basis is shown in Table F.

No similar ratios of relative cost have been estimated in regard to the various classes of packets other than parcels, since they are dealt with together, and it is necessary, therefore, to ascertain the actual cost for staff under the various headings of collection, stamping, sorting, and delivery. As regards collection, it is difficult to discover a basis on which a computation of the relative cost for the different classes of packets may be made, because the cost varies greatly, not only as between each class, but from place to place, in regard to any particular class of packet. Many of the ordinary letter packets are posted in large numbers at head post offices, and in respect of packets so posted there is no cost of collection. Light letter packets and halfpenny packets (especially halfpenny packets) are, moreover, handed in at post offices in considerable numbers for prepayment of postage in cash. In that case the cost of subsequent handling is slightly reduced, because under the regulations for such prepayment the packets must be tied in bundles with the addresses in the same direction, that is to say, the operation of facing must be performed by the person who posts the packets. Against this, however, must be set the very considerable expense incurred both in towns and rural areas for the collection of ordinary light letter packets, postcards, halfpenny packets, and newspaper packets from posting boxes, and the cost of van services, which are frequently provided for the collection of letters from business premises. Very little of the cost of these services can be attributed to the heavier letter packets, which are to a large extent handed in at the post office counter to be weighed. This involves considerable expense, which corresponds to cost of collection, and may be dealt with under that heading. The best estimate that can be made is that the cost of collection per packet is approximately the same in all cases.

Facing and stamping may be regarded as one operation, the one being really preparatory to the other. Here there is less difficulty. The relative cost per packet may fairly be taken as the ratio of the time taken in performing the operation in the case of each class of packet. In regard to facing and stamping, and also in regard to sorting, the letter packets proper, that is to say packets sent at the ordinary letter rate of postage, fall in general into three classes according to the facility with which they can be handled, viz. (1) "short letters," (2) "long letters," (3) "letter packets" (that is, the bulky packets sent at the letter rate).[620] In order to complete the calculation, the number of packets which fall respectively into these three classes must be estimated.

It has been indicated that the actual division is made according to the size and shape of the packets. The division corresponds approximately with variation in weight. Few packets weighing more than 3/4 ounce would come within the class of short letters, that is, of letters which can be dealt with at the ordinary sorting frames; but as there is no analysis of the number of packets of less than 1 ounce weight, there is no alternative to the adoption of 1 ounce as the limit of this class.[621] The effect of this is slightly adverse to the short letters and favourable to the heavier packets. As between long letters and the heavier packets the limit is less definite. In many cases packets of the same weight fall into one or other class according to their size or shape, but the mean weight of such indeterminate packets is roughly 4 ounces, and that weight is adopted as giving the mean upper line of division for long letters.

In Table H are shown the relative rates of stamping and sorting for each of the various classes of packets.

The proportionate cost per packet of stamping and of sorting, based on the rates shown in Table H, is given in Table J.[622] The actual cost is shown in Table L.

As regards the cost of delivery some difficulty presents itself. Letter packets, postcards, halfpenny packets, and newspaper packets are, in all cases, taken out for delivery by the same postman, and it is not possible, therefore, as with stamping and sorting, to ascertain the rates of work for the various classes of packets. But the features in the different packets which lead to differences in the rate of sorting, viz. weight and irregularity of shape and size, lead also to differences in the time taken for delivery. In practice the postman makes a division of the packets; and the time occupied in the delivery of the bulky and irregular packets is greater proportionately, as compared with the time occupied in the delivery of ordinary letters, than is the time occupied in sorting. It is not possible, however, to estimate with any degree of exactness the relative amount of time actually occupied in delivering packets of the various classes, and for the division of the cost of delivery (Table J) the rates adopted for the division of the cost of sorting are taken. This method favours the bulky and irregular-shaped packets.

CONVEYANCE

The cost of conveyance of letter mails by railway forms by far the greater part of the whole cost of conveyance. The cost of conveyance of letter mails by road and sea, estimated on such data as are available, is shown in Table M. As the total cost of the conveyance of mails is known, the total cost of the conveyance of parcel mails can be ascertained (Table M). The best basis for division of this cost is the gross weight of the various classes of packets. Payment is made purely on a weight basis in respect of the conveyance of a very large proportion of the mails, and, so far, division on the basis of weight is correct. But payment for the conveyance of a proportion of the mails is made on the basis of the cost of providing for the conveyance, and more or less independently of the weight carried. This applies in the case of mail-carts, motor-vans, or special trains which do not carry a full load. The amount paid in such cases is a single sum, calculated, so far as letter mails are concerned, without reference to the fact that postal packets of different classes are to be conveyed--without indeed, in some cases, much reference to the fact that any given quantity of mails is to be conveyed. In the absence of an assigned basis of payment which can be used to divide such sums, the division between the various classes of packets is made in proportion to the total weight of each class. In Table N is shown the division of the whole cost of conveyance of letter mails between the various classes on this basis.

GENERAL CHARGES

Separate statistics are obtainable (Table B) in regard to (_a_) buildings and office fittings, and (_b_) stores, but no exact estimate can be made of the cost of administration and accounting.

The cost for buildings and office fittings is divided as between parcels and other packets on the basis defined in Table D; and as between the various classes of packets other than parcels, on the basis of the gross weight of the packets (Table O).

The cost for stores, including the small sum under the heading "Miscellaneous Expenditure," is similarly divided as between parcels and other packets. As between the various classes of packets other than parcels, the cost is divided on the basis of simple numbers (Table P).

The cost for administration and accounting, which is comparatively small,[623] cannot be stated exactly. It is contained in the total cost of staff (Table C), and is consequently divided between the various classes in the same proportion as the cost of the manipulative staff.

Tables A to Q show the complete calculation.

Table Q shows the final result, which is that the average total cost of dealing with postal packets is as follows:--

For an ordinary letter-- d.
Under 1 ounce .382
Over 1 ounce, under 4 ounces .747
Over 4 ounces 1.404
For an average letter packet .457
For a postcard .353
For a halfpenny packet .432
For a newspaper packet 1.063
For a parcel 7.091

For the letter packets under 1 ounce in weight, for those between 1 ounce and 4 ounces in weight, for the halfpenny packets and for the postcards, the estimated average cost will be approximately the actual cost per packet; but in the case of letter packets over 4 ounces in weight and newspaper packets, the variations in weight and convenience of handling are considerable, and there will be an appreciable variation for individual packets above and below the estimated average cost. The cost will vary with the weight and size (but not proportionately), and the deviation will be greatest in the case of the heavier packets, since with both these classes the average weight of the great bulk of the packets is less than the general average. Of all letter packets, postcards, halfpenny packets and newspapers, the number exceeding 4 ounces in weight forms less than 10 per cent. With so small a proportion of heavy packets the result may be taken as almost exact in the case of the lighter packets. It is not in excess of the actual cost, because the calculation, taken as a whole, is biassed in favour of the heavier packets.

The resultant figures are figures of average cost. They represent the cost of those packets in each class in respect of which the average amount of service is performed, and not exceptional cases, as when packets travel over very long distances, or when a packet is redirected or returned to the sender, in which latter cases obviously double the normal service is performed.

The calculation is approximate in that at certain points it has been necessary to frame estimates on imperfect data. This is inevitable in dealing with a service conducted over a large area and under diverse conditions.[624] In general the manner in which the result is affected by the use of imperfect data has been indicated. These variations have been borne in mind throughout, and, as their effects are produced in varying directions, the combined effect is not such as to invalidate the results arrived at.

The result suggests the following conclusions:--

(1) That no class of packet sent at the letter rate of postage
involves a loss to revenue;

(2) That there is a large profit on ordinary light letters;

(3) That in the case of packets of the weight of about 4 ounces the
profit is less, but is still appreciable;

(4) That there is a considerable profit on postcards;

(5) That there is a profit on the halfpenny packets;

(6) That there is a heavy loss on the newspaper packets, averaging
nearly 1/2d. per packet;

(7) That as regards packets other than parcels, the principle of
uniformity of rate, irrespective of distance, is well founded. The
cost of conveyance (.07d. per packet) is still, in the phrase of
Sir Rowland Hill, "not expressible in the smallest coin";

(8) That as regards the cost of conveyance there is no case for a
reduced rate of postage for local letters;

(9) That as between local letters and other letters there is
appreciable difference in the cost of handling, but this difference
would not be sufficient to justify a discrimination measurable in
coin;

(10) That the parcel post is conducted at considerable loss. If the
cost be taken, as shown in Table L, at 7.091d. per parcel, the loss
is on the average almost 2-1/4d. per parcel, or nearly [L]1,250,000
on the total number of parcels dealt with in 1913-14. The matter
is, however, complicated by the question whether a strictly
mathematical proportion of the total expenses of the Post Office
can fairly be charged against the parcel post.[625]

TABLE A

TOTAL NUMBERS DEALT WITH IN THE UNITED KINGDOM, 1913-14.

+-------------------+----------------------+
| Letters | 3,488,800,000[626] |
| Postcards | 924,250,000[627] |
| Halfpenny Packets | 1,211,400,000[628] |
| Newspaper Packets | 207,100,000 |
| Parcels | 133,663,000[629] |
+-------------------+----------------------+
| Total | 5,965,213,000 |
+-------------------+----------------------+

* * * * *

TABLE B

STATEMENT OF EXPENDITURE IN THE YEAR 1913-14 IN CONNECTION WITH THE POSTAL SERVICES, INCLUDING MONEY ORDER AND POSTAL ORDER BUSINESS, BUT EXCLUDING POST OFFICE SAVINGS BANK AND GOVERNMENT ANNUITY BUSINESS.

[L]
(a) Salaries, Wages and Allowances 10,538,318
(b) Rent, Rates, Office Fittings, Water, Light and Heating 268,981
(c) Conveyance of Mails (excluding Payments to Foreign and
Colonial Administrations):--
[L] [L] [L]
By Rail--
Ordinary Postal Packets 1,292,460
Parcels 1,197,037
--------- 2,489,497
By Road 662,010
" Packet 890,530
--------- 4,042,037
_Less_--
Contributions received towards the cost of Packet
and Mail services _130,335_
--------- 3,911,702
(d) Purchase of Stores and Uniform Clothing 452,065
(e) Manufacture of Stamps, etc. 128,000
(f) Travelling, Law Charges, and Incidental Expenses 180,527
(g) Estimated Rental Value of premises belonging to
the Post Office used for Postal purposes 278,344
(h) Estimated Pension liability for the year 1,169,406
Amount expended by other Government Departments in
respect of various services rendered, viz.:--
[L]
(i) Maintenance and Repair of Buildings 160,200
(j) Rates on Government Property 95,676
(k) Issue of Postage Stamps 22,193
(l) Stationery, Printing, etc. 112,308
(m) Cost of Audit (Exchequer and Audit Department) 3,612
------- 393,989
(n) Net Revenue contribution to the Exchequer
for the year 6,143,459
-----------
[L]23,464,791
===========

--_Annual Report of the Postmaster-General_, 1913-14, Appx. N, p. 92.

TABLE C

STATEMENT OF EXPENDITURE, SUMMARIZED AND ADJUSTED.

ITEMS IN TABLE B. NET COST.
(a) and (h) STAFF, [L]11,707,724.
_Deduct_-- [L] [L]
(1) Officers in charge of Eastern Mails 1,000
(2) Post Office Agencies Abroad 17,000
(3) Cost of Services to other Departments} 516,789
(4) " Money Order Service }excluding 156,000
(5) " Postal Order Service } Postage 530,000
(6) " Registration and Insurance Service 264,000
(7) " Express Delivery Service 52,000
(8) " Private Boxes and Bags 41,000
(9) " Cash on Delivery Service, Reply Coupons,
Certificates of Posting, Late Fee
Services, etc. 50,000
---------
_Proportion allocated to Staff_ 1,444,264 10,263,460

(b), (g), (i), and (j) BUILDINGS, [L]803,201.
_Deduct_--
In respect of (3), (4), (5), (6), (7), (8),
and (9) above 96,587 706,614

(_c_) CONVEYANCE OF MAILS, [L]3,911,702.
_Deduct_--
(1) Packet Services outside the United Kingdom 582,935
(2) Conveyance of Mails across Panama 2,931
(3) Receipts from Foreign Countries for
Land Transit 51,000
--------
636,866 3,274,836
(_d_), (_e_), (_k_), and (_l_) STORES, [L]714,566.
_Deduct_--
In respect of (3), (4), (5), (6), (7), (8),
and (9) above 86,938 627,628
(_f_) and (_m_) MISCELLANEOUS 184,139
-----------
Total [L]15,056,677
===========

TABLE D

COST OF STAFF AND BUILDINGS.

In the examination of proposals for revisions of staff and accommodation at post offices, the whole work of the offices is reduced to a common denominator for each chief division of the work, and is stated in terms of that denominator.

Thus all indoor work is reduced to and expressed in terms of units representing the work in connection with 1,000 letters posted and delivered, the term "letter" in this connection covering all packets sent by post other than parcels. There are no ratios for the separate classes of "letters."

All outdoor work is reduced to and expressed in terms of a unit of 1,000 letters (posted and delivered), i.e. the complete service.

For office accommodation the unit is 1,000 letters posted or delivered, whichever is the greater number at the office in question.

Certain ratios are taken for the expression in terms of letters of the various divisions into which the work performed by the post office falls.

As between letters and parcels the ratios are as follow:--

UNITS RATIOS.

--------------------------------------------------------
| VALUE IN LETTERS.
+-----------------------------------------
| Indoor | Outdoor | Office
| Work. | Work. | Accommodation.
--------------+--------+---------+-----------------------
Letter posted | 3/5 | -- } | { 1 (whichever is the
" delivered | 2/5 | 1 } | { greater traffic)
" forwarded | 1/3 | -- | 1/2
" collected | -- | x | --
| | |
Parcel posted | 6 | -- | 6
" delivered | 6 | 10 | 6
" forwarded | 4 | -- | 6
" collected | -- | 10x | --
--------------+--------+---------+-----------------------

1,000 letters (weekly) = 1 unit of postal work.

For each unit of work so determined there is a corresponding normal cost.

For indoor work the normal cost is approximately [L]15, for outdoor work [L]22 10s., and for office accommodation [L]2 10s., per annum.

Since the unit to which a certain normal cost is allowed is built upon calculations which give a parcel a definite relative value as compared with a letter, the ratios show the relative cost to the Post Office of a letter and of a parcel.

TABLE E

RELATIVE COST OF STAFF FOR LETTERS AND PARCELS.

It is estimated that on the average more than half the total number of letters are not sent forward direct to the post office of destination, but are forwarded from the office at which they are posted to an intermediate office; that is to say, more than half the total number of letters travel in two mails, and incur a handling at an intermediate office. The handling at that office is termed "forwarding." The letters are termed "forward letters."[630] Expressed in another way, the estimate is that all letters are forwarded, on the average, in 1.6 mails.

It is estimated that on the average a greater proportion of parcels travel in this way in two mails. The actual estimate is that a parcel travels in 1.8 mails.

Hence--

Total handling of 1 letter = 1 letter posted + 1 letter delivered + 0.6 letter forwarded.

Total handling of 1 parcel = 1 parcel posted + 1 parcel delivered + 0.8 parcel forwarded.

Now a letter forwarded = 1/3 letter posted and delivered (Table D).

And a parcel forwarded = 1/3 parcel posted and delivered (Table D).

Hence total handling of 1 letter = 1.2 letter posted and delivered.

And total handling of 1 parcel = 1.26 parcel posted and delivered.

The ratio between the total cost of handling (indoor) of 1 letter and the total cost of handling (indoor) of 1 parcel is therefore--

1.2 x 1 : 1.26 x 12 = 1 : 12.6.

The normal unit cost for indoor work is [L]15 (approximately).

For outdoor work the ratio is 1: 10, and the normal unit cost [L]22 10s.

The ratio for all indoor and outdoor services is therefore approximately 1: 11.

* * * * *

TABLE F

ACTUAL COST OF STAFF FOR LETTERS AND PARCELS.

The total cost of handling a parcel is 11 times the total cost of handling a packet other than a parcel (Table E).

In 1913-14 the total number of parcels dealt with was 133,663,000 (Table A).

The cost of handling these parcels was equivalent to the cost of handling 133,663,000 x 11 = 1,470,293,000 packets other than parcels.

In 1913-14 the total number of packets other than parcels dealt with was 5,831,550,000 (Table A).

And the total cost of staff engaged in dealing with all packets, including parcels, was [L]10,263,460 (Table C).

Hence the total cost of handling 133,663,000 parcels was

[L]10,263,460 x 1,470,293,000/7,301,843,000 = [L]2,066,642.

And the total cost of handling 5,831,550,000 packets other than parcels was [L]8,196,818.

TABLE G

ANALYSIS OF COST OF STAFF.

LETTER MAILS.

_Total Cost_, [L]8,196,818.

The handling of postal packets falls into the following groups of operations:--

(_a_) Collection and delivery,

(_b_) Facing, stamping, and sorting,

(_c_) Administration and accounting.

The cost of administration and accounting when reduced to the individual packet is extremely small. In general also it varies to some extent with the size of the packet. Thus the newspaper packets and the halfpenny packets, which are considerably heavier than the ordinary letters, notoriously involve more difficulty and expense in administration; and the postcard, the lightest postal packet, notoriously involves least difficulty and expense in administration. Parcels undoubtedly involve much more expense for accounting than any other class of packet; so that if the expense for administration and accounting be divided in the ratio adopted for sorting, stamping, collection, and delivery, which also depends largely on the weight of the packet, no appreciable error is introduced. No attempt is made, therefore, to isolate the expense for administration and accounting.

The total cost of collection and delivery is estimated to be double the total cost of facing, stamping, and sorting.

The cost of delivery is estimated to be four times the cost of collection.

The cost of sorting is estimated to be four times the cost of facing and stamping.

The total cost of handling packets other than parcels (excluding cost of conveyance) = [L]8,196,818.

Hence--

[L]
Total cost of collection = 1,092,909
" " facing and stamping = 546,455
" " sorting = 2,185,818
" " delivery = 4,371,636
----------
Total [L]8,196,818
==========

TABLE H

RELATIVE RATES OF SORTING AND STAMPING.

----------------------------------------------------------------------
|Relative Rate |Relative Rate
| of Stamping. | of Sorting.
---------------------------------------+--------------+---------------
Ordinary Letter Packets-- | |
(_a_) not exceeding 1 oz. | 1,000 | 100
(_b_) over 1 oz., not exceeding 4 oz.| 75 | 75
(_c_) over 4 oz. | 75 | 60
Postcards | 1,000 | 100
Halfpenny Packets | 750 | 90
Newspaper Packets | 80 | 70
---------------------------------------+--------------+---------------

* * * * *

NOTE I. The rates both as regards stamping and as regards sorting are not actual but relative rates. In both cases the handling of an ordinary light letter is taken as the standard with which the rate of handling other articles is compared. The table is intended to indicate, e.g., that if in a given period of time 100 ordinary light letters would be sorted, only 75 letters weighing between 1 ounce and 4 ounces, or only 90 halfpenny packets, would be sorted in the same period; or if in a given period of time 1,000 ordinary light letters would be stamped, only 75 letters over 1 ounce in weight, or only 80 newspapers, would be stamped in the same period. All that is aimed at is the normal relative rate of sorting for each class of packet. It is not necessary to ascertain the normal absolute rate.

* * * * *

NOTE II. _Rates of Stamping._--In determining rates of stamping, a serious complication is introduced by the use of machines (both hand and power) at many offices for stamping certain classes of packets. In London, where approximately one-third of the total number of postal packets is posted, power machine-stamps are employed, except at a few of the sub-district sorting offices, at which hand machine-stamps are still employed. There are a few of the smaller offices at which all the stamping is done by hand, but the number of such offices and the number of packets so stamped is negligible. The power machine stamps at rates varying from 12 to 16 times as great as that of an officer stamping by hand; the hand machine stamps at a rate about ten times as great.

Power machine-stamps are in use in the provinces in towns in which approximately a quarter of the total number of postal packets is posted.

Hand machine-stamps are in use in other towns in the provinces where approximately one-twelfth of the total number of postal packets is posted.

In the remaining towns there is hand stamping only.

The foregoing estimates give an average rate of stamping throughout the kingdom for those classes of packets which are of a size and shape to pass through the machine-stamp, where available, of about ten times as great as that of an officer stamping by hand.

This figure must now be applied to the various classes of packets shown in the table, in conjunction with the rates of hand-stamping for such packets as cannot be passed through the machine-stamp.

(_a_) Practically all letters under 1 ounce can be passed through the machine-stamp if available. Hence the rate for this class is ten times the rate of hand-stamping.

(_b_) None of the second or third classes of packets can be passed through the machine. Further, these packets are of irregular shape and are therefore much less convenient to deal with than ordinary letters. The rate of hand-stamping is therefore only about three-fourths the rate for ordinary letters.

(_c_) All postcards can be passed through the machine-stamp if available. The rate is therefore ten times the rate of hand-stamping.

(_d_) A large proportion of halfpenny packets cannot, on account of their size and shape, be passed through the machine-stamp, and the figure for the machine-stamp must be considerably reduced for these packets. The nearest estimate that can be formed for these packets is 7.5 times the rate for hand-stamping.

(_e_) Newspapers cannot be passed through the machine-stamp, but in a number of cases the wrappers are taken to the post office before the newspapers are enclosed in them for cancellation of the postage stamps (in order to secure a prompt despatch when the newspapers are actually posted). The rate for such stamping is slightly greater than the rate of hand-stamping for ordinary letters. On the other hand, the rate of stamping newspaper packets is not more than two-thirds the rate of hand-stamping ordinary letters. The nearest estimate that can be formed for all newspapers is that the rate of stamping is four-fifths the rate of hand-stamping ordinary letters.

* * * * *

NOTE III. _Rates of Sorting._--(_a_) The average rate of sorting for ordinary letters is taken as the unit.

(_b_) The rate of sorting letters and the rate of sorting postcards may be taken as identical.

(_c_) Owing to the irregular shape of newspaper packets, and letter packets over 4 ounces in weight, the average normal rate of sorting must be taken as considerably less than that for letters.

Both classes are usually sorted at the packet tables and not at the ordinary letter frames.

(_d_) The letter packets between 1 ounce and 4 ounces in weight present some difficulty, since they include a considerable number of long letters, which are sorted at the ordinary letter frames at nearly the same rate as short letters, while the rest are sorted at the packet tables at about the same rate as the heavier packets. The figure should obviously be between (_a_) and (_c_).

(_e_) The halfpenny packets also fall into two classes: (1) those sorted as short letters, and (2) those sorted at the newspaper frames. A very large proportion fall into the second class, and the average normal rate of sorting, as in the case of the second class of letter packets, is intermediate between (_a_) and (_c_).

TABLE J

STAFF.

This table shows the relative cost per packet, based on the rates of work (Table H), the cost of an ordinary letter being taken as the unit.

-------------------------------------------------------------------------
| | Facing and | |
Description of Packet. |Collection.| Stamping. | Storing. | Delivery.
| | [631] | | [632]
--------------------------+-----------+------------+----------+----------
Ordinary Letter Packets-- | | | |
(a) not exceeding 1 oz. | 1 | 1 | 1 | 1
(b) over 1 oz., not | | | |
exceeding 4 oz. | 1 | 6-2/3 | 1-1/3 | 1-1/3
(c) over 4 oz | 1 | 6-2/3 | 1-2/3 | 1-2/3
Postcards | 1 | 1 | 1 | 1
Halfpenny Packets | 1 | 1-1/4 | 1-1/9 | 1-1/9
Newspaper Packets | 1 | 6-1/4 | 1-3/7 | 1-3/7
--------------------------+-----------+------------+----------+----------

* * * * *

TABLE K

STAFF (RELATIVE COST).

This table shows the ratios in Table J weighted according to the number of packets in each class.

---------------------------------------------------------------------------
| | Facing and | |
Description of Packet. |Collection. | Stamping. | Storing. | Delivery.
--------------------------+------------+------------+----------+-----------
Ordinary Letter Packets-- | | | |
(a) not exceeding 1 oz. | 1 | 1 | 1 | 1
(b) over 1 oz., not | | | |
exceeding 4 oz. | 0.113 | 0.755 | 0.151 | 0.151
(c) over 4 oz. | 0.045 | 0.299 | 0.075 | 0.075
Postcards | 0.306 | 0.306 | 0.306 | 0.306
Halfpenny Packets | 0.402 | 0.503 | 0.447 | 0.447
Newspaper Packets | 0.069 | 0.430 | 0.098 | 0.098
--------------------------+------------+------------+----------+-----------

TABLE L

STAFF (ACTUAL COST).

This table shows the ratios given in Table K applied to the total cost (Tables F and G).

-------------------------+----------+----------+---------+---------+---------
| |Facing and| | |
Description of Packet. |Collection| Stamping |Storing. |Delivery.| Total.
-------------------------+----------+----------+---------+---------+---------
Ordinary Letter Packets--| [L] | [L] | [L] | [L] | [L]
(a) Not exceeding 1 oz.| 564,811| 165,944|1,052,392|2,104,784|3,887,931
(b) Over 1 oz., not | | | | |
exceeding 4 oz. | 63,824| 125,288| 158,911| 317,822| 665,845
(c) Over 4 oz. | 25,416| 49,618| 78,930| 157,859| 311,823
Postcards | 172,832| 50,779| 322,032| 644,064|1,189,707
Halfpenny Packets | 227,054| 83,470| 470,419| 940,838|1,721,781
Newspaper Packets | 38,972| 71,356| 103,134| 206,269| 419,731
-------------------------+----------+----------+---------+---------+---------
Total | 1,092,909| 546,455|2,185,818|4,371,636|8,196,818
-------------------------+----------+----------+---------+---------+---------

TABLE M

CONVEYANCE.

_Total Cost of Conveyance of Mails within the United Kingdom_:

[L]
(a) For Conveyance by Railway 2,435,566
(b) " " " Road 662,010
(c) " " " Sea 177,260
----------
Total [L]3,274,836
==========

Of the payment for conveyance by railway, [L]1,238,529 is the cost of the conveyance of letter mails, and [L]1,197,037 the cost of the conveyance of parcel mails.

The payment for conveyance by road is, on such estimate as can be made, assignable in equal proportions between letter mails and parcel mails.

Of the payment for conveyance by sea, [L]150,000 is, on such estimate as can be made, assignable to the conveyance of letter mails.

The cost of the conveyance of letter mails is therefore--

[L]
By Railway 1,238,529
" Road 331,005
" Sea 150,000
----------
Total [L]1,719,534
==========

And the cost of the conveyance of parcel mails is--

[L]
By Railway 1,197,037
" Road 331,005
" Sea 27,260
----------
Total [L]1,555,302
==========

TABLE N

CONVEYANCE: ANALYSIS OF COST.

LETTER MAILS.

_Total Cost_, [L]1,719,534.

Cost of conveyance is assigned between the various classes of packets in proportion to the gross weight.

+----------------------------------------------------------------+
| Description of Packet. | Gross Weight. | Cost of |
| | [633] | Conveyance. |
+--------------------------+------------------+------------------+
|Ordinary Letter Packets-- | lb. | [L] |
| (a) Not exceeding 1 oz. | 67,200,000 | 437,734 |
| (b) Over 1 oz., not | | |
| exceeding 4 oz. | 41,700,000 | 271,600 |
| (c) Over 4 oz. | 54,000,000 | 351,700 |
|Postcards | 8,203,000 | 53,450 |
|Halfpenny Packets | 37,705,000 | 245,600 |
|Newspaper Packets | 55,192,000 | 359,450 |
+--------------------------+------------------+------------------+

* * * * *

TABLE O

BUILDINGS.

_Total Cost_, [L]706,614.

Twelve times as much office accommodation is required in respect of a parcel as in respect of a packet other than a parcel (Table D).

Hence--

The total cost of buildings may be divided as between parcels on the one hand and all packets other than parcels on the other hand in the ratio--

133,663,000 x 12 : 5,831,550,000

i.e. 1 : 3.6357

The total cost for buildings chargeable to parcels is therefore [L]152,428, and the total cost for buildings chargeable to other packets is [L]554,186.

The latter sum is assigned between the respective classes of packets in proportion to the gross weight of each class (Table N) as follows:--

Cost for Buildings.

Ordinary Letter Packets-- [L]
(a) Not exceeding 1 oz. 141,066
(b) Over 1 oz., not exceeding 4 oz. 87,536
(c) Over 4 oz. 113,356
Postcards 17,220
Halfpenny Packets 79,150
Newspaper Packets 115,858
--------
Total [L]554,186
========

This division gives an advantage to the light packets as compared with the heavier packets sent by Letter Post; but, as between parcels and other packets, an advantage is given to parcels (cf. _supra_, Table E).

TABLE P

STORES AND MISCELLANEOUS EXPENDITURE.

_Total cost_, [L]811,767.

As between parcels and other packets respectively, this amount is assigned on the unit basis, reckoning one parcel equivalent to twelve other packets (Table D).

As between the various classes of packets other than parcels, the amount is assigned on the basis of simple numbers.

Ordinary Letter Packets-- [L]
(a) Not exceeding 1 oz 328,857
(b) Over 1 oz., not exceeding 4 oz 37,251
(c) Over 4 oz 14,779
Postcards 100,904
Halfpenny Packets 132,254
Newspaper Packets 22,610
Parcels 175,112
--------
Total [L]811,767
========

This method gives an advantage to the heavy packets.

TABLE Q

TOTAL COST.

--------------------+---------+-----------+----------+-------+---------+------
| | | | | | Cost
Description of | Staff. |Conveyance.|Buildings.|Stores,| | per
Packet | | | |etc. | Total. |Packet
--------------------+---------+-----------+----------+-------+---------+------
Ordinary Letter | | | | | |
Packets-- | [L] | [L] | [L] | [L] | [L] | d.
(a) Not exceeding |3,887,931| 437,734 | 141,066 |328,857|4,795,588| 0.382
1 oz |
(b) Over 1oz., not | | | | | |
exceeding 4 oz.| 665,845| 271,600 | 87,536 | 37,251|1,062,232| 0.747
(c) Over 4 oz. | 311,823| 351,700 | 113,356 | 14,779| 791,658| 1.404
| | | | |---------|
All Letter Packets | ... | ... | ... | ... |6,649,478| 0.457
| | | | |=========|
Postcards |1,189,707| 53,450 | 17,220 |100,904|1,361,281| 0.353
Halfpenny Packets |1,721,781| 245,600 | 79,150 |132,254|2,178,785| 0.432
Newspaper Packets | 419,731| 359,450 | 115,858 | 22,610| 917,649| 1.063
Parcels |2,066,642| 1,555,302 | 152,428 |175,112|3,949,484| 7.091
--------------------+---------+-----------+----------+-------+---------+------

VIII