The Development of Rates of Postage: An Historical and Analytical Study

Chapter XXVII: Appendix: C (5)

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[581] _Documents du Congr[e']s postal international_, Berne, 1874, pp. 41-2.

[582] R[e']glement de D['e]tail, secs. xi, xii and xiii, ibid., p. 158.

[583] "La Belgique occupe une position pour ainsi dire unique dans le monde. Plac['e]e au centre de la partie la plus riche, la plus active et la plus peupl['e]e de l'Europe, elle forme, en quelque sorte, le carrefour des grandes voies postales de notre continent. Il s'en suit que la Belgique rend de tr[e']s grands services [a'] tous les Etats de l'Europe, tandis qu'elle-m[^e]me n'a [a'] r['e]clamer que fort peu de services de ses voisins."

Belgium received 946,235 fr. net annually in respect of transit traffic, and the ratio between the transit services rendered by Belgium to other countries and by other countries to Belgium was 20 to 1.--_Documents du Congr[e']s postal international_, Berne, 1874, pp. 37-8.

[584] Ibid., p. 23.

[585] Changed in 1878 to "L'Union postale universelle."

[586] Those countries which were unable to adopt the metric system of weights were given liberty to substitute the ounce avoirdupois (28.3465 grammes), a half-ounce being reckoned the equivalent of 15 grammes, and 2 ounces the equivalent of 50 grammes.--_Documents du Congr[e']s postal international_, Berne, 1874, p. 66.

[587] "En acc['e]dant, disent-ils, [a'] l'Union postale, la France s'est impos['e] des sacrifices consid['e]rables dont elle a d'avance calcul['e] la port['e]e. Elle est pr[^e]te [a'] en faire de nouveaux aujourd'hui en vue de compl['e]ter la grande [oe]uvre de Berne; et, [a'] ce propos, M. Ansault a cru devoir d['e]clarer que les subsides accord['e]s [a'] des lignes de paquebots ne peuvent pas [^e]tre consid['e]r['e]s comme ayant un caract[e']re postal, c'est-[a']-dire, que l'on ne doit pas chercher dans le produit de la taxe des lettres une r['e]mun['e]ration de ces services, lesquels sont ['e]tablis principalement pour les besoins du commerce et de l'industrie, aussi bien que dans un int['e]r[^e]t politique. En proposant une taxe maritime de fr. 6.50 par kilogramme de lettres et de 50 ct. par kilogramme de journaux, le Gouvernement francais a eu en outre pour but de faire cesser une anomalie injustifiable aux yeux du public, [a'] savoir qu'une missive pour les Colonies francaises paie une taxe plus ['e]lev['e]e qu'une lettre pour la partie la plus recul['e]e des Etats-Unis d'Am['e]rique."--_Actes de la Conf['e]rence postale de Berne_, 1876, p. 29.

[588] Ibid., p. 30.

[589] Ibid., pp. 13, 14.

[590] _Actes de la Conf['e]rence postale de Berne_, 1876, p. 34.

[591] Thus in 1913-14 the number of foreign reply-paid postcards in the case of the United States was 130,596. The total number of foreign postcards posted in the United States in the same year was 42,252,570.

[592] "M. Buxton Forman, d['e]l['e]gu['e] de la Grande-Bretagne, ne voit pas l'utilit['e] de la mesure propos['e]e, qui, on son pays du moins, n'est pas demand['e]e par le public. Il serait d'ailleurs presque impossible [a'] l'Administration britannique d'y adh['e]rer...." The French view was stated by M. Ansault: "La modification demand['e]e ne r['e]pond [a'] aucun besoin. Les statistiques tenues en France t['e]moignent que le poids moyen de la lettre n'atteint pas 10 grammes; il reste donc une marge de 5 grammes avec le poids actuel. C'est largement suffisant; en augmentant cette marge, on risquerait de provoquer le groupement des lettres au d['e]triment de la recette postale."--_Documents du Congr[e']s postal de Washington_, 1897, p. 421.

In the same year the limit of weight for the single letter in the British inland service was raised from 1 to 4 ounces.

[593] _Documents du Congr[e']s postal de Rome_, 1906, vol. ii., p. 163.

[594] Ibid., vol. ii., p. 165.

[595] "Pour nous, le service gratuit est un r[^e]ve, un beau r[^e]ve, si vous voulez, mais que nous ferions bien, en gens pratique, de laisser aux r[^e]veurs."--A. B. Walkley, British Delegate, ibid., vol. ii., p. 106.

[596] _Documents du Congr[e']s postal de Rome_, 1906, vol. ii., p. 168.

[597] "The British Post Office itself is unable to agree with the New Zealand Government that the sacrifice of net postal revenue involved would be 'temporary in duration and inconsiderable in amount.'

"The experience of the British Post Office in connection with the Imperial Penny Postage Scheme shows that if the increased cost of dealing with increased quantities of postal matter be taken into account, as it should be, the department has not recovered, and cannot recover, the loss of net postal revenue involved by the reduction of the Imperial letter rate, which was estimated in 1898 at [L]108,000 for the first year.

"Recent calculations show that, in the case of a letter for a foreign country, the expense to the Exchequer can be taken at about one penny per half-ounce rate, and in the case of a letter for a Colony, where a long sea transit is generally involved, at about a penny farthing, excluding the heavy cost of subsidized packet service."--_Papers laid before the Colonial Conference, 1907: Memorandum by General Post Office_ (Cd. 3524), p. 499. It was estimated that the introduction of universal penny postage, together with the ounce unit (_vide supra_), would involve an initial loss of [L]610,000 a year. Ibid., p. 500.

[598] The United States, Australasia, and Egypt voted in favour of the universal penny rate. Canada, Great Britain, British India, and Japan abstained from voting. The remainder voted against the proposal.--_Documents du Congr[e']s postal de Rome_, 1906, vol. ii., p. 181.

[599] "Chaque jour de nouvelles difficult['e]s surgissent, soit dans les rapports du public avec les Administrations, soit dans les rapports entre les Administrations, sur la definition de l'['e]chantillon. Tel objet est admis dans un pays et refus['e] dans un autre. Ici, on repousse un article sans valeur, uniquement parce qu'il est entier et on en exige la d['e]t['e]rioration ou lac['e]ration; l[a'], au contraire, ce m[^e]me article passe sans observation, par la raison qu'il n'est suj'et [a'] aucun droit de douane. Cette derni[e']re doctrine paraissant la plus logique et la plus conforms [a'] l'esprit lib['e]ral de l'Union, qui ne saurait refuser au commerce des facilit['e]s compatibles avec les exigences du service, on a pens['e] que, sous la double r['e]serve d'une limite de poids de 300 grammes et de la prohibition des articles sujets aux droits de douane, il y aurait un simplification, profitable [a'] tout le monde, [a'] ['e]tendre la qualification d'['e]chantillons aux menus objets, m[^e]me entiers et non d['e]t['e]rior['e]s."--See M. E. Ruffy, _L'Union postale universelle: sa fondation et son d['e]veloppement_, Lausanne, 1900, p. 67.

[600] "La proposition d'['e]lever le poids des paquets de 3 [a'] 5 kilogrammes modifie notablement l'['e]conomie du projet; c'est la substitution d'un vrai service de messagerie au transport de simples colis postaux. Le Gouvernement anglais estime que le transport de paquets d'un tel poids est de domaine de l'industrie priv['e]e."--S. A. Blackwood, _Documents de la Conf['e]rence postale de Paris_, 1880, p. 60.

[601] "Si on transporte [a'] perte, plus le trafic sera grand, plus les d['e]penses augmenteront. II serait en d['e]saccord avec les vrais principes d'['e]conomie politique, d'entreprendre un service postal dont les frais p[e']seraient sur une autre branche de l'exploitation ou seraient [a'] la charge du Tr['e]sor. Un ['e]conomiste aussi distingu['e] que M. Fawcett ne pourrait admettre cette th['e]orie."--S. A. Blackwood, _Documents de la Conf['e]rence postale de Paris_, 1880, p. 60.

"M. G[:u]nther fait remarquer [a'] M. le d['e]l['e]gu['e] de la Su['e]de que le nombre des colis ['e]chang['e]s entre la Su[e']de et l'['e]tranger n'['e]tant pas tr[e']s important, son Administration aurait [a'] faire peu de sacrifices."--Ibid., p. 55.

[602] "Il para[^i]t de toute n['e]cessit['e] d'adopter un droit uniforme, car autrement, avec un tarif variable suivant le poids ou le lieu de destination, on aurait un service des messageries, avec de nombreuses taxes, gradu['e]es, et non plus un service tr[e']s simple de colis postaux."--M. le Pr['e]sident; ibid., p. 55.

[603] "Quant [a'] la taxe internationale de 50 centimes, sans addition possible, elle ne peut [^e]tre accept['e] par l'Administration britannique qu'elle constituerait en perte. La taxe devant [^e]tre partag['e]e entre l'['E]tat et les Compagnies, une somme de 50 centimes ne couvrirait les frais."--S. A. Blackwood, ibid.

[604] "Le commerce surtout vous saura le meilleur gr['e] d'avoir ['e]lev['e] jusqu'[a'] 3 kilogrammes le poids des petits colis transport['e]s par la poste, et d'avoir abaiss['e] la taxe [a'] un chiffre minime. Dans bien des cas m[^e]me, ce prix ne sera pas l'['e]quivalent des frais; et les Gouvernements qui consentent [a'] ce sacrifice m['e]ritent une gratitude toute particuli[e']re; je vous l'exprime ici bien volontiers et bien hautement au nom de la France, au nom de l'Europe et au nom de l'humanit['e], qui profiteront si largement du progr['e]s nouveau que vous venez de r['e]aliser."--M. Barth['e]l['e]my Saint-Hilaire, Foreign Minister of France, to the Conference; _Documents de la Conf['e]rence postale de Paris_, 1880, p. 180.

[605] The convention of Washington, 1897, defined cumbersome parcels (_colis encombrants_) as follows:--

"(_a_) Les colis d['e]passant 1 m[e']tre 50 centim[e']tres dans un sens quelconque;

"(_b_) Les colis qui, par leur forme, leur volume ou leur fragilit['e], ne se pr[^e]tent pas facilement au chargement avec d'autres colis ou qui demandent des pr['e]cautions sp['e]ciales, tels que plantes et arbustes en paniers, cages vides ou renfermant des animaux vivants, bo[^i]tes [a'] cigares vides ou autres bo[^i]tes en fardeaux, meubles, vannerie, jardini[e']res, voitures d'enfants, rouets, v['e]locipedes, etc.

"Les Administrations qui n'admettent pas les colis encombrants ont la facult['e] de limiter [a'] 60 centim[e']tres le maximum de dimension de ces objets. Les Administrations qui assurent des transports par mer ont aussi la facult['e] de limiter [a'] 60 centim[e']tres le maximum de dimension et [a'] 25 d['e]cim[e']tres cubes le volume des colis postaux destin['e]s [a'] [^e]tre transmis par leurs services maritimes et de ne les accepter au del[a'] de ces limites qu'[a'] titre de colis encombrants."--_Documents du Congr[e']s postal de Washington_, 1897, p. 887.

[606] Ibid. pp. 881-2.

[607] "M. Herman, d['e]l['e]gu['e] de la France, d['e]clare qu'il est impossible d'entrer dans les vues de l'Administration bulgare, laquelle semble ne plus tenir compte de l'id['e]e premi[e']re qui a conduit [a'] la cr['e]ation des colis postaux pour l'['e]change d'objets de petit poids, [a'] des prix tr[e']s mod['e]r['e]s. En cr['e]ant les colis postaux, les Administrations participant n'ont pas eu l'intention de faire concurrence aux compagnies de transport. Si les tarifs des articles de messagerie sont trop ['e]lev['e]s, ce n'est pas ['e]videmment [a'] l'Union postale de les diminuer."--_Documents du Congr[e']s postal de Rome_, 1906, Berne, 1906, vol. ii., p. 381.

[608] "Il n'y a aucun besoin ou avantage [a'] son avis, d'avoir une taxe uniforme pour les colis de m[^e]me cat['e]gorie de poids exp['e]di['e]s de diff['e]rents pays. Pour les lettres, cette uniformit['e] a l'avantage, pour l'exp['e]diteur, de conna[^i]tre, dans n'importe quel pays, le prix du port des lettres. Mais, pour un colis postal, l'exp['e]diteur doit toujours aller au bureau de poste pour y d['e]poser la d['e]claration en douane et, aussi, pour conna[^i]tre le tarif qui varie selon le nombre des pays et services interm['e]diares."--M. Kisch, Delegate for India, _Documents du Congr[e']s postal de Rome_, 1906, Berne, 1906, vol. ii., p. 391.

[609] "N'est-ce pas pr['e]cis['e]ment l'unit['e] de tarif qui caract['e]rise le colis postal? Elle est tr[e']s appreci['e]e du commerce dont elle facilite les op['e]rations. Si l'on entre dans la voie de la taxation au poids, comme pour les articles de messagerie, ce sera un recul."--M. Mazoyer, _Documents du Congr[e']s postal de Rome_, 1906, Berne, 1906, vol. ii., p. 393.

[610] The analysis relates to the British inland service in 1913-14.

[611] The number of packets sent at the blind post rate is very small comparatively (some 300,000 a year), and those packets are therefore not considered separately.

[612] In general, for any supplemental service an additional fee is charged, the only exceptions being that, in the case of a packet sent at the letter rate of postage, if the person to whom it is addressed cannot be traced, the packet is returned to the sender without charge; and that under certain conditions the address written on any packet (but not the name of the person to whom it is addressed) may be amended, and the packet sent forward, without payment of additional postage. Parcels are forwarded to a second address in this way free of charge only when the first address and the substituted address are within the delivery of the same post office, or are within the same "town delivery area." In certain circumstances the Post Office itself undertakes to amend the address and forward packets in this way free of charge--that is to say, to "redirect." These are, however, minor services, and apply only to a small fraction of the total number of packets posted. For example, the actual proportion redirected is as follows:--

Per cent. of
Total Number posted.
Letters 2.2
Postcards 4.0
Halfpenny packets 2.0
Newspapers 1.7

The service of free redirection applies to all classes of packets; but for the return to the sender in case of non-delivery of postcards, halfpenny packet, or newspapers, an additional rate of postage is charged, and the packets are only so returned when they bear on the outside a written or printed request for return in case of non-delivery. This inquiry relates only to the cost of the simple transmission and delivery of the packet, and consideration of all other services, such as registration or express delivery, is excluded.

[613] In London there are the following divisions:--

(1) "Short Letters" (including postcards and a large proportion of the halfpenny packets). Halfpenny packets which are of such size as to admit of handling with the short letters are referred to as "short halfpenny packets."

(2) "Long Letters" (for the most part letters of foolscap size).

(3) "Circulars" (that is, packets sent at the letter rate or by the halfpenny packet post, posted in large numbers at one time and generally of uniform size but which cannot conveniently be dealt with at the ordinary letter-sorting frames).

(4) "Packets" (that is, packets which are bulky or of irregular shape and cannot therefore be sorted at the ordinary sorting frames).

(5) "Newspapers."

[614] Divisions 2 and 3, and divisions 4 and 5, described in the preceding footnote, being combined.

[615] The postman does not rely on his memory to discover at which houses he has packets to deliver. Usually he reverses in the bundle of letters that letter for delivery next preceding a packet. A complication is thus introduced in the preparation of the short letters for delivery.

[616] 2 & 3 Vict., cap. 98 and 56 & 57 Vict., cap. 38.

[617] In recent years the stamping at the office of receipt has been to a large extent dispensed with.

[618] In addition to these principal operations there are certain minor operations. The packets are in general sorted on frames, from which they are collected at intervals and taken to the despatching table for enclosure in the mail-bags. Here the short letters, etc., are tied in bundles (as explained above), and in many cases a label is affixed, on which the name of the office of destination is written by the despatching officer. Next a letter bill is prepared. On this are entered particulars of the mail and of registered letters. The bundles of letters, etc., the loose packets, the registered letters and the letter bill (to which are tied all packets which are insufficiently prepaid and are to be charged on delivery), are enclosed in a mail-bag on which is stencilled the name of the office of destination, and in some cases particulars of the route to be followed. The bag is then tied, sealed, and sent forward. The despatch of each bag is recorded, as is the receipt of each bag from another office.

The opening of bags at the office of receipt also comprises a distinct series of operations. First the letter bill is obtained and examined. The receipt of the registered letters and charged packets is verified, and the letters and packets are withdrawn for special treatment. The bag is then emptied on the "opening table," reversed, in order to ensure that no packets are overlooked, and the contents distributed for sorting.

[619] See _infra_, p. 297 (from _Postmaster-General's Report_, 1913-14, Appx. N).

[620] Cf. _supra_, p. 285.

[621] See _The Post Office, an Historical Summary_, London, 1911, p. 11.

[622] There is practically no short-distance newspaper traffic, and it is probable that, on the average, newspaper packets undergo one more intermediate handling than packets sent at the letter rate. In the absence of precise information, no adjustment of the relative cost for sorting has been made on this account. The result will, therefore, be slightly to the advantage of the newspaper packets.

[623] It has been estimated at .075d. per letter.

[624] Cf. _supra_, p. 158.

[625] See _supra_, p. 127, n. 2, and _infra_, p. 334.

[626] In this number 35.5 million undelivered packets and 124.5 million redirected packets are included twice. The service performed in respect of both these classes of packet is, however, at least twice as great as that performed in respect of an ordinary packet; and as it is desired to estimate the cost of the normal service, no adjustment of the numbers is made on this account.

The total number actually delivered was 3,477,800,000, but of these, 162.3 millions were foreign and colonial letters. As the number of foreign and colonial letters despatched (184.3 millions) exceeds the number received, and a foreign or colonial letter received plus a foreign or colonial letter delivered may be taken as equivalent to an inland letter fully dealt with, the number delivered in the United Kingdom has been adjusted by adding half the difference between the number of foreign and colonial letters despatched and received respectively.

[627] Number of postcards delivered, 926.5 millions.

Number of foreign and colonial postcards delivered in the United Kingdom, 23.3 millions; number despatched, 18.8 millions.

[628] Number of packets actually delivered, 1,172.3 millions.

Number of foreign and colonial packets of printed matter, commercial papers, and samples received, 44.7 millions; number despatched, 122.9 millions.

[629] Number of parcels delivered, 132,700,000. Number of foreign and colonial parcels received, 1,991,975; number despatched, 3,917,860.

[630] This definition indicates the strict nature of "forward" packets. In practice it is, however, impracticable to divide postal packets precisely on these lines, and the actual statistics of "forward" packets are not exactly accurate. The practical division approximates, however, to the line of the exact division.

[631] Adjusted to allow for the fact that two men are needed to work the machine-stamp. The cost of the machine-stamp itself is a negligible item.

[632] For the relative cost of delivery the same rates are taken as for the cost of sorting. There are no data on which any actual comparison can be based, but it is obvious that the same features, viz. irregularity of shape and size, which lead to differences in the cost of sorting lead to similar differences in much the same degree in the cost of delivery.

[633] The average weight of letter packets not exceeding 1 ounce is 0.357 ounce. The average weight of all letter packets is 0.747 ounce. In the case of packets between 1 ounce and 2 ounces the average weight is assumed to be 1.4 ounces; and 2.6 ounces in the case of those between 2 ounces and 4 ounces.

Of ordinary letter packets, 86.34 per cent. do not exceed 1 ounce in weight, 5.25 per cent. are between 1 ounce and 2 ounces, and 4.53 per cent. are between 2 ounces and 4 ounces in weight.

The average weight of a postcard is 0.142 ounce, of a halfpenny packet 0.498 ounce, and of a newspaper packet 4.264 ounces (97.57 per cent. containing only one newspaper, average weight 4.159 ounces; 2.43 per cent. containing two or more newspapers, average weight 8.461 ounces).

[634] _Life of Sir Rowland Hill and History of Penny Postage_, vol. i., p. 249.

[635] Sir Rowland Hill was strongly of opinion that the use of the railway increased the cost of conveyance of mails (_Life of Sir Rowland Hill and History of Penny Postage_, vol. i., pp. 329 and 412). The cost of conveyance by stage-coach from London to Edinburgh was, according to Sir Rowland Hill, about 1/36th of a penny per letter, and less for the whole country (ibid., vol. i., p. 249; _Post Office Reform: Its Importance and Practicability_, pp. 18-19). The cost of conveyance by railway at present averages for the whole kingdom about .05d. per letter.

[636] An important fact in this connection is that the service is adjusted to the circumstances of the respective countries. Thus, in England and France, provision is made for the delivery of letters at every house in the country, while in the United States and Canada there is in general no house-to-house delivery in rural districts. Until recently there was no rural delivery service of any kind in the latter countries. Letters could be obtained only at the rural post offices. And the system now being introduced provides only for delivery into roadside boxes at the points on the rural deliverer's route nearest to the house of the addressee. Such adjustments, of course, materially affect the cost and profit of the service.

[637] E.g. the war increases in the United Kingdom and in other countries. The point is further considered in the Appendix "Post Office Revenue," _infra_, p. 358 ff.

[638] Graphically, the variation of the number of letters with changes in the rate of postage would be represented by an asymptotic curve.

[639] It appeared in the English letter rate of 1885, but disappeared with the changes of 1897. It has been reintroduced into the letter rate with the war changes of November 1915, and the result is an awkward scale.

[640] This point is dealt with more fully in connection with the parcel rate.

The whole question of subsidiary rates is dismissed by Bastable with the following:--

"One of the principal distinctions now turns on the character of the articles transmitted. Circulars and postcards would not bear the same charge as ordinary letters. The transmission of newspapers gives a yet smaller fund of utility on which to levy a tax, and is affected by the competition of carrying agencies. The result is seen in the lower halfpenny rate."--C. F. Bastable, _Public Finance_, London, 1903, p. 208.

[641] In England two-fifths of the total number of postal packets pass at a halfpenny.

[642] The concession of specially low rates for these classes of packets has given rise to a noteworthy general line of division between postal packets. All packets passing at privileged rates must obviously be subject to examination and check by the Post Office in order to ensure that the privilege is not abused, a necessity which leads immediately to the principle of the "open" post, as contrasted with the "closed" post, the ordinary sealed letter packet. The difference in charge is not, however, based on the consideration that the packets are open to inspection. The effect is in the reverse direction. The view of practical officers is that, other things being equal, the treatment of a packet sent by the Open Post is more expensive to the Post Office than its treatment if sent by Letter Post.

The requirement is imposed in order that compliance with other conditions may be ensured. In none of the five countries are ordinary letters allowed to pass at postcard rate if merely enclosed in open covers. But a printed circular letter, if sent in a sealed cover, would lose its claim to the privileged rate.

[643] "Fixing a railway rate is, in one word, an art--not a science, and it is an art which, in Bagehot's phrase, must be exercised 'in a sort of twilight, ... in an atmosphere of probabilities and of doubt, where nothing is very clear, where there are some chances for many events, where there is much to be said for several courses, where, nevertheless, one course must be determinedly chosen and fixedly adhered to.'"--W. M. Acworth, _Elements of Railway Economics_, Oxford, 1905, p. 73.

"The problem of railway rates has not, like that of postal charges, passed beyond the domain of current discussion. This is in part due to the fact that railways are universally regarded as a source of profit, to companies when privately owned, to the State when public property; but it is in larger measure due to the fact that the social significance of railways is not yet clearly understood. The problem of railway rates is a problem by itself, and stands as one of the most important of the unsettled problems of the day."--H. C. Adams, _Science of Finance_, New York, 1909, p. 280.

[644] "The cost of the service of transport for any given commodity cannot, under the varying conditions of railway operation, be even approximately calculated. The first insuperable difficulty is the division of the expenditure for any given work. Though railway economists have endeavoured, by means various and ingenious, to allocate the different items of railway expenditure, they have been unable to determine such a relatively simple matter as the division between passenger and goods traffic, and though estimates have been formulated, many of the charges have been allocated to one head or another by arbitrary decision, and not as a result of positive knowledge."--_Railway News_, London, 6th September 1913, p. 396.

[645] "Though all the rates must be so fixed as to pay all the expenses both of construction and working, separate rates cannot be fixed according to cost of individual service or even according to the average cost of services to traffic in the same group. For in the first place the cost of the service cannot be ascertained. And secondly, if it could be ascertained, it would be of no use as a standard. To charge the average cost would be to drive away a large portion of the traffic and so increase almost proportionately the average cost of the remainder. This increase would then drive away a fresh portion, and so once more increase proportionately the cost to that still remaining. And so on."--W. M. Acworth, "The Theory of Railway Rates," _Economic Journal_, London, 1897, p. 324.

[646] "The process is in practice worked out as follows. First comes classification. The whole of the commodities known to commerce are entered on a list divided into classes, eight in number here, six in France, and about ten in number in the United States. To each class belongs a normal scale of rates, ranging, let us say, from 3/4d. per mile in the lowest to 4d. per mile in the highest. The classification undoubtedly takes account of greater or less cost of carriage to the companies, arising out of the differences of packing, liability to theft or damage, proportion of space occupied to weight, etc. But it is safe to say that its main principle is, the more valuable the commodity, the higher the rate it can afford to pay."--Ibid., p. 325.

[647] "Historically this theory has been recognized and approved by English legislation from the time when Adam Smith applauded the equity of statutory turnpike tolls at the rate of one shilling for a light carriage and eightpence for a heavy dray, through the whole long series of Canal Acts and Railway Acts, down to the elaborately careful revision of the railway companies' charging powers in the series of Provisional Order Confirmation Acts dated 1891 and 1892. The opinion of modern economists all over the world as to the justice of the underlying principle may be conveniently summarized in a sentence borrowed from the first annual report of the American Interstate Commerce Commission: 'With this method of arranging tariffs little fault is found, and perhaps none at all by persons who consider the subject from the standpoint of public interest.'"--Ibid., p. 317.

[648] "One great element of the reform introduced by you in the postage was, that there should be one uniform rate throughout?--Yes, it was proposed with a view to simplification, but the principle has been carried to an extent that I did not contemplate, and did not recommend."--Evidence of Sir Rowland Hill, _Report of Select Committee on Newspaper Stamps_, 1851, Question No. 1945.

[649] In the same way that the soap-makers of Port Sunlight secured a large sale by the simple expedient of refraining from varying the price of their tablets of soap with the variations in the cost of raw materials, making the adjustment in the weight of the tablets instead of in the price; and for the same reason that many people prefer restaurants widely known and with numerous branches, not always because the charges are less, but because it is well known what the charges and what the service obtained will be.

[650] In the United Kingdom less than 50 per cent. exceed 2 pounds in weight, and not more than 1 per cent. exceed 10 pounds. The proportion for short-distance parcels is much less, and the proportion for foreign parcels is very much greater, over 15 per cent. being above 10 pounds in weight.

[651] Even in the London postal area, which is of considerable extent, the local traffic is quite small, amounting to some four or five million parcels only per annum in a total traffic of some 130 millions.

[652] I.e. the actual cost incurred by a Government in providing packet services, not the amounts paid to intermediate countries as "transit rates" under the International Convention.

[653]

Total area of Europe 3,800,000 square miles.
" " United States (with Alaska) 3,600,000 "
" " Canada 3,700,000 "

Of the total area of Europe, Russia accounts for some 2,100,000 square miles.

[654] E.g. the transportation of Indian mails through France and Italy. For this service a special train in each direction between Calais and Brindisi is provided by the French and Italian Governments, and the payment made by the British Government in respect of the service is much in excess of the ordinary transit rates fixed by the Postal Union Convention.

[655] The following particulars relate to the British Packet Service in 1860:--

------------------------+-----------+-----------+------------+----------
| Contract | Other |Sea Postage.| Profit or
Packets. | Payments. | Payments. | | Loss.
------------------------+-----------+-----------+------------+----------
| [L] | [L] | [L] | [L]
Dover and Calais } | 18,600 | 4,100 | 79,000 | + 56,300
Dover and Ostend } | | | |
Peninsular | 5,000 | 800 | 4,000 | - 1,800
North American | 189,500 | 400 | 112,000 | - 77,900
West Indian } | | | |
Pacific } | 293,500 | 8,900 | 103,600 | -198,800
Brazilian } | | | |
West Coast of Africa | 30,000 | -- | 4,500 | - 25,500
Cape of Good Hope | 38,000 | -- | 9,300 | - 28,700
Australian | 90,200 | 4,300 | 30,300 | - 64,200
East Indian | 163,000 | 17,300 | 111,000 | - 69,300
| | | |
On the whole service } | 827,800 | 35,800 | 453,700 | -409,900
the figures were } | | | |
------------------------+-----------+-----------+------------+----------

--_Annual Report of the Postmaster-General_, 1860, Appx. H, pp. 34-7.

[656] In 1860, when the total number of foreign letters was very much less than at present, the cost of the British foreign packet service was some [L]860,000, and in 1913 the cost had fallen to some [L]700,000.--_Annual Reports of the Postmaster-General_, 1860, pp. 34-7; 1913-14, p. 51.

[657] _Vide supra_, Chapter VI.

[658] E.g., parcel mails are not forwarded by the train between Calais and Brindisi run specially for the Indian mails. Parcels are, it is true, forwarded to America by the Cunard packets which carry the letter mails, but this arrangement is due to special circumstances. The Cunard line, being heavily subsidized (with other than Post Office ends in view), is required to carry all mails tendered. Otherwise it might be found economical to send parcels by slower cargo boats.

[659] _Wealth of Nations_, ed. 1904, vol. ii., p. 303.

[660] "The business being one which both can and ought to be conducted on fixed rules, is one of the few businesses which it is not unsuitable to a Government to conduct."--J. S. Mill, _Principles of Political Economy_, London, 1871, vol. ii. bk. v. chap. v. [S] 2.

"It is clear that the restriction put upon the liberty of trade by forbidding private letter-carrying establishments is a breach of State duty. It is also clear that were that restriction abolished, a natural postal system would eventually grow up, could it surpass in efficiency our existing one. And it is further clear that if it could not surpass it, the existing system might rightly continue; for the fulfilment of postal functions by the State is not _intrinsically_ at variance with the fulfilment of its essential function."--Herbert Spencer, _Social Statics_, London, 1910, p. 120.

Professor Cannan sums the matter up from the point of view of modern opportunism:--

"Much too great importance is commonly attributed to this part of State action: the sale of commodities. We may be sure that if the State had not happened to undertake the business of carrying letters, some private organization would have been established for the purpose. Whether it would have done the work better or worse than the present State Post Office does it, is a question which we have no means of answering. So, too, on the other hand, if the State in this country had undertaken the provision of railways, we should have had a railway system of some sort; it might have been a better or it might have been a worse system; whether it would have been better or worse would have depended on the wisdom of those who had the largest share in devising and extending it, and who these persons would have been, and what their wisdom would have been, we have no means of telling."--Edwin Cannan, _Elementary Political Economy_, London, 1903, p. 132.

[661] "Before the rise of the economic schools that opposed industrial action on the part of the State, the method of public postal service was firmly established, and was seen to give, on the whole, sufficiently satisfactory results. It, therefore, escaped the hostile criticism that economists freely bestowed on the less efficient public departments."--C. F. Bastable, _Public Finance_, London, 1903, p. 208.

[662] "He was always eager to improve the mail service to remote towns; and would observe that one good result of State management was the consideration of out-of-the-way places. A private management, he said, might probably have introduced a halfpenny post in London, and have left the country worse served than at present."--Leslie Stephen, _Life of Henry Fawcett_, London, 1885, p. 438.

[663] "The Post Office is properly a mercantile project. The Government advances the expense of establishing the different offices and buying or hiring the necessary horses or carriages, and is repaid with a large profit by the duties upon what is carried. It is perhaps the only mercantile project which has been successfully managed by, I believe, every sort of Government. The capital to be advanced is not very considerable. There is no mystery in the business. The returns are not only certain but immediate."--_Wealth of Nations_, ed. 1904, vol. ii., p. 303.

[664] _Vide supra_, p. 26.

[665] In the United Kingdom the expense incurred in providing specially for the disposal of parcels in this way often exceeds the total amount of the postage paid on the parcels.

[666] In the United Kingdom, horse-posts or cycle-posts are in general provided in view of the length of the route to be traversed, rather than in view of the weight of traffic to be carried.

[667] The need for such a separation between ordinary letters and packets of appreciable weight is felt even in regard to the letter post itself. In England, the extension of the weight limit for penny letters, and the reduction of the rates for the heavier letters, has led to serious practical difficulties and has impeded smooth and rapid working. In the larger offices the letter post traffic is dealt with in two divisions: (1) the lighter, homogeneous traffic, the light letters and postcards; and (2) the heavier packets, and packets of irregular shape (p. 285). In France, the extension of the maximum limit of weight gave rise to similar difficulties; so much so that the question of establishing a separate slower post for such packets has been seriously considered. In Paris, at the present time, there is a completely separate indoor and outdoor staff for the newspapers and packets.

[668] It is only necessary to glance into a van containing railway parcels in order to realize how impossible it would be to apply to such packages the usual postal method of enclosure in sacks; and conveyance _[a'] d['e]couvert_ by railway companies on behalf of the Post Office would give rise to obvious practical difficulties. In Germany and Switzerland postal parcels are so despatched, but the railways are State-owned in those countries, and the service is in many respects a railway service.

[669] The railways frequently establish receiving offices in various parts of a town. The services necessary for the conveyance of parcels from these offices to the railway stations are not, however, comparable with the services for closed parcel mails between the post offices and the stations, but rather with the services between branch post offices and the chief post office. The service from the chief post office to the railway station is a further service.

[670] In France heavy parcels are not accepted at post offices, but must be taken to a railway station. _Vide supra_, p. 206.

[671] The general proportion of parcels to letters for the United Kingdom as a whole is 1 in 40; but on some of the remoter rural routes the proportion of parcels frequently rises to 1 in 20, and sometimes to more than 1 in 10.

[672] _Vide supra_, pp. 190 and 219.

[673] The naval operations during the present war in regard to neutral mails have brought out clearly the essential distinction between letters and parcels. The arguments as to the customary inviolability of mails have been based on the idea of free communication. But parcels containing goods, possibly contraband, e.g. rubber, obviously cannot claim the privileges of communications, and the right of sea-power to interfere with parcel mails has been admitted. "The Government of the United States is inclined to regard parcels post articles as subject to the same treatment as articles sent by express or freight in respect of belligerent search, seizure, and condemnation."--United States Note to Great Britain, 10th January 1916.

[674] For particulars of other Acts relating to packet postage, and of Acts relating to Ship Letters, and to rates of postage within Ireland, see Schedule A of 1 Vict., cap. 32. Rates for transmission within Ireland were also fixed by 1 Vict., cap. 34 ([S] 4).

[675] _Vide supra_, p. 6, n. 1.

[676] Ibid., p. 7.

[677] _Calendar of State Papers_ (_Domestic Series_), 1625-6, p. 523.

[678] H. Joyce, _History of the Post Office_, p. 12.

[679] H. Scobell, _A Collection of Acts and Ordinances_, London, 1658, p. 513.

[680] H. Joyce, ibid., p. 72.

[681] Ibid., p. 73.

[682] H. Scobell, ibid.

[683] _Historical Summary of Post Office Services_, London, 1911, p. 47.

[684] The number of letters still handed in to the General Post Office was, however, quite considerable. Thus, in 1686, 60,447 ship letters were received.--_Vide_ H. Joyce, ibid., p. 74.

[685] _London Gazette_, No. 3247, 21st-24th December 1696; cited H. Joyce, ibid., n. 2.

[686] 9 Anne, cap. 10, [S] 16.

[687] H. Joyce, ibid., p. 329.

[688] Act of 39 Geo. III., cap. 76, [S][S] 1 and 2; H. Joyce, ibid.; J. C. Hemmeon, _History of the British Post Office_, p. 124.

[689] H. Joyce, ibid., p. 330.

[690] 54 Geo. III, cap. 169.

[691] H. Joyce, ibid., p. 362.

[692] Ibid., p. 363; 55 Geo. III, cap. 153.

[693] The Marquis of Clanricarde.

[694] "The principle upon which the postal communication between England and the Australian colonies has latterly been conducted is, that a postage of 6d. for a single letter has been charged, of which 4d. was understood to represent the sea rate, 1d. for collecting or delivering a single letter in any part of the United Kingdom, and the same in any part of the colonies; so that the whole cost of sending a letter from any part of the United Kingdom to any part of the Australian colonies, or _vice vers[^a]_, should not exceed 6d.

"As the whole cost of the packet service has hitherto been borne by the Imperial Government, the portion of the postage which represented the sea service has been accounted for to the Home Post Office, so that of the 6d. charged, 5d. has been appropriated to England, and 1d. to the colony receiving or despatching the letter, as the case might be."--_Second Report of the Postmaster-General_, London, 1856, p. 66.

[695] Cf. H. Joyce, ibid., pp. 138-9.

[696] Cf. note 1, opposite.

[697] 18th Report, 1829, and 22nd Report, 1830.

[698] _Historical Summary of Post Office Services_, p. 52.

[699] _Historical Summary of Post Office Services_, p. 55.

[700] "The advantage of Imperial unity, which was held in 1898 to justify the sacrifice of revenue incidental to a measure calculated to bind together the United Kingdom and her possessions beyond the seas, cannot, of course, be urged as a plea in favour of universal penny postage; but apart from all other arguments for and against the proposal, the decisive consideration is that the British Government are not at present in a position to bear the very heavy loss that would be involved in the reduction of foreign postage from 2-1/2d. to 1d."--_Papers laid before the Colonial Conference_, 1907; _Memorandum by General Post Office_ (Cd. 3524), p. 500.

[701] H. von Stephan, _Geschichte der preussischen Post_, Berlin, 1859, p. 3.

[702] "Kommt es doch vor, dass ein Bote eines deutschen Reichsf[:u]rsten ausser dem Botenlohn noch eine besondere Verg[:u]tung beansprucht, weil er auf dem Botengange gleichzeitig einige Schweine f[:u]r die Herrschaft nach dem Bestimmungsort hat treiben m[:u]ssen. Da diese Begleitung auf kein besonders lebhaftes Gangtempo schliessen l[:a]sst, so d[:u]rfen wir es dem Garzonus nicht verdenken, wenn er die deutschen Boten zum Wetteifer mit ihren Collegen im alten Persien ermahnt, deren Geschwindigkeit Xenophon in der Kyrop[:a]die mit dem Fluge der Kraniche vergleicht."--Ibid., p. 15.

[703] Ibid., p. 4.

[704] B. E. Crole, _Geschichte der deutschen Post_, Eisenach, 1889, p. 214.

[705] "Die Vereinigung Oesterreichs mit den Burgundischen Niederlanden ruft die erste Reichspost, die Vereinigung von Brandenburg, Preussen, Cleve und Hinterpommern unter einem Scepter die erste Brandenburgische Staatspost hervor."--H. von Stephan, op. cit., p. 5.

[706] F. Ohmann, _Die Anf[:a]nge des Postwesens_, Leipzig, 1909, pp. 49, 86, and 92.

[707] "(1) Die Unterhaltung solcher Boten lange Jahre vor Errichtung der Posten [:u]blich gewesen; (2) dem Taxis w[:a]re nur das Post-, nicht das Botenwesen zu Lehen gegeben; (3) es w[:u]rden ihnen (den Boten n[:a]mlich) viele Waren und Kostbarkeiten anvertraut, welche sie [:u]berliefern und daf[:u]r stehen, welches wieder der Postillone Werk nicht sei; (4) die Posten dienten wohl zu Briefen, nicht aber zu Bestellung anderer Sachen, also k[:o]nnten Posten und Boten wohl nebeneinander bestehen."--Imperial Rescript of 1686, given by Beust, Teil 1, s. 149 ff; cited F. Haass, _Die Post und der Charakter ihrer Eink[:u]nfte_, Stuttgart, 1890, p. 93.

[708] "For very good and potent reasons, especially on account of the troublesome war, as also for the purpose of obtaining good and reliable information about the Turks, the hereditary enemies of the whole of Christendom, and other potentates, adjacent to the Empire, in order that the Emperor, the King, and other potentates may exchange their correspondence."--Dr. Joseph R[:u]bsam, _L'Union postale_, 1892, p. 126.

[709] "Es lag allweg 5 Meil wegs ein Post von den andern, einer war zu Kempten, einer zu Bless, einer an der Bruck zu Elchingen und also fortan imerdar 5 Meil wegs von einander und must allweg ein Pot des andern warten, und so bald der ander zu ihm ritt, so bliess er ein h[:o]rnlin, das h[:o]rt ein bott der in der Herberg lag und must gleich auf sein. Einer musste all Stand ein Meil, das ist 2 Stund (wohl f[:u]r den Fussg[:a]nger berechnet) weit reiten, oder es ist ihm am Lohn abzogen, und musten sie reiten Tag und Nacht."--"Memminger Chronicle," cited F. Ohmann, _Die Anf[:a]nge des Postwesens_, Leipzig, 1909, p. 102.

[710] Dr. Joseph R[:u]bsam, ibid., p. 157.

[711] Ibid., p. 127.

[712] "Contrary to what was usually the case with the postal arrangements in antiquity and the Middle Ages, the institution founded by Francis von Taxis, though chiefly intended to serve the purposes of the State, assumed from its very beginning a character of public utility and political economy, for it was at the disposal of anybody wanting a rapid, cheap, and safe means of conveyance for his letters."--Dr. Joseph R[:u]bsam, ibid., p. 128.

[713] Ibid., p. 130.

[714] Von Beust, cited H. von Stephan, op. cit., p. 6.

[715] B. E. Crole, _Geschichte der deutschen Post_, Eisenach, 1889, p. 201; H. von Stephan, Geschichte der preussischen Post, Berlin, 1859, pp. 6-10.

[716] Proclamation of 6th November 1597; B. E. Crole, op. cit., p. 205.

[717] An account of the struggles between the Taxis family and the princes is given in Crole's _Geschichte der deutschen Post_ (Part III, chaps. iv. and v.).

[718] "Trotz der Ausdehnung der Taxis'schen Posten im 'Reich' h[:o]rte das Botenwesen in den einzelnen L[:a]ndern und in den Reichsst[:a]dten keineswegs auf sondern entwickelte sich fort und fort und hatte seine Botenmeister, auch Postmeister und andere Bedienstete."--B. E. Crole, op. cit., p. 213.

[719] Ibid., p. 231.

[720] E. Gallois, _La Poste et les Moyens de Communication des Peuples [a'] travers les Si[e']cles_, Paris, 1894, p. 94.

[721] B. E. Crole, op. cit., p. 247.

[722] The territory of the Taxis posts shrank between the years 1790 and 1811 from 3,922 square (German) miles to 745 square (German) miles, and a number of territorial posts took the place of the Imperial posts. In 1810 there were no less than 43 of these territorial posts.--_Die Brieftaxe in Deutschland_, Freiburg im Breisgau, 1862, p. 4; C. F. M[:u]ller, _Die F[:u]rstlich Thurn und Taxis'schen Poster und Posttaxen_, Jena, 1845, p. 7.

[723] Oskar Grosse, _Die Beseitigung des Thurn und Taxis'schen Postwesens in Deutschland_, Minden in Westf., 1898, p. 33.

[724] C. F. M[:u]ller, op. cit., p. 13.

[725] The rates for a letter weighing 1 loth (1/2 ounce) were:--

D: Rates established 18th December 1824.

E: Rates established 1st October 1844.--Ibid., pp. 9 and 39.

[726] K. A. H. Schmid, _Zur Geschichte der Briefporto-Reform in Deutschland_, Jena, 1864, p. 36.

[727] Oskar Grosse, _Die Beseitigung des Thurn und Taxis'schen Postwesens in Deutschland_, pp. 98-9.

[728] Ibid., p. 47.

[729] Ibid., p. 66.

[730] The conditions were in many respects similar to those obtaining in the United States. _Vide supra_, p. 191.

[731] "In England you have thickly congested rural districts, large towns every few miles, and tremendous cities: in Canada you have a population of less than 8,000,000 spread over a vast area, with few cities or large towns, and with vast spaces that must be traversed where no population exists.... We are giving, as compared with England, a flat rate in an area twice as great as Britain gives parcel post, and where all the conditions are much less favourable."--Hon. L. Pelletier, _Parl. Debates, Canada_ (_Commons_), 4th June 1913.

[732] _Canada Official Postal Guide_, 1917, pp. 27-8.

[733] Such improvements as the introduction of letter-cards, reply-paid postcards, etc., afford conveniences to the public, but they have little bearing on general questions of rates of charge. The number of such articles passing by post is insignificant in comparison with the total postal traffic.

[734] Thus, in the United Kingdom, the number of letters registered in 1913-14 was .68 per cent. of the total number posted. The total cost of the supplemental services, including registration, insurance, and express delivery, was in 1913-14 only about a million, out of a total cost for all postal services of over [L]17,000,000 (_Annual Report of the Postmaster-General_, 1913-14, p. 92).

[735] "In the present century the Post Office has assumed three new functions--the transmission of money, and telegrams, and the custody of savings. These are alike only in requiring a widespread system of branch offices."--A. M. Ogilvie's article on "The Post Office" in R. H. Inglis Palgrave's _Dict. Political Economy_, London, 1899, vol. iii. p. 175.

"The so-called 'Post Office' is in fact a collection of different, though connected, industries."--C. F. Bastable, _Public Finance_, London, 1903, p. 206.

[736] See H. R. Meyer, _Public Ownership and the Telephone in Great Britain_, New York, 1907.

[737] "To-day, State ownership is the general rule over Europe, and only in America is there private ownership on a large scale. It is significant that the first seizure of this monopoly of the State was in France, on the simple ground that it was not safe to allow so important a device to be in other than the hands of the State. In 1837 a law was passed making every kind of telegraph a State monopoly. This was due to Napoleonic influence. It was not until 1870 that the British Government claimed the monopoly."--John Lee, _Economics of Telegraphs and Telephones_, London, 1913, p. 2.

[738] "No man can feel a more intimate conviction than I do that, whatever our financial difficulties may be, we must not take measures to meet them which should bear upon the comforts of the labouring classes.... Well, then, I must, with my sense of public duty, abandon the idea of raising a revenue from the Post Office."--Sir R. Peel, 11th March 1842, _Parl. Debates_ (_Commons_), vol. lxi. col. 434.

"If, therefore, it should also happen that it (the penny) is the best rate adapted ultimately to produce the largest amount of money profit, such a coincidence would be the result of _accident, not of design_."--_Report from Select Committee on Postage_, 1843; evidence of Sir Rowland Hill, Answer 74.

"The Post Office, and, since the fall in silver, the Mint, both produce in England a net revenue, but the yield of revenue ought to be considered as purely incidental if not accidental."--J. Shield Nicholson, _Principles of Political Economy_, London, 1901, vol. iii. p. 372.

As a war measure the United Kingdom has now increased the rate on letters over one ounce in weight. Such letters are, however, only a small proportion of the total number of letters posted (_vide supra_, p. 33). Canada has imposed a war tax of one cent on all letters, and on postcards (_supra_, p. 57).

[739] _Vide_ Alfred Marshall, _Principles of Economics_, London, 1907, vol. i. p. 124.

"If I put a letter in the pillar-box rather than walk half a mile to deliver it by hand, it is clear that I value the service at one penny at least, and if its true value is to be taken at less than a penny, it must be assumed that some one would have carried the letter for less than a penny if the Post Office monopoly had been absent. But to deal thoroughly with this question it would be necessary to enter on a discussion of the Austrian theory of value and Marshall's conception of 'consumer's rent.'"--E. Cannan (_Memoranda on Classification and Incidence_, p. 163).

[740] "Notre syst[e']me fiscal demande aux imp[^o]ts indirects la plus grande partie de nos recettes budg['e]taires. Les allumettes sont lourdement tax['e]es. ['E]crire une lettre est, malgr['e] tout, moins indispensable [a'] l'homme qu'allumer du feu. Tant que les objets de premi[e']re necessit['e] sont frapp['e]s, il n'y a pas raison d['e]cisive pour refuser de laisser pr['e]lever sur les correspondances de toutes sortes un imp[^o]t indirect, qui appara[^i]t, dans les ['e]critures budg['e]taires, comme un exc['e]dent de recettes des Postes, T['e]l['e]graphes, et T['e]l['e]phones sur leurs d['e]penses.

"Si l['e]gitimes que soient en principe les b['e]n['e]fices de l'['E]tat-postier, tenons pour certain que le public, [a'] moins de quelque catastrophe impr['e]vue, ne permettra pas de les accro[^i]tre beaucoup, et que les Ministres de Finances de demain auront beaucoup de peine [a'] conserver le peu qui leur en reste."--_Rapport portant fixation du Budget g['e]n['e]ral_, Chambre des D['e]put['e]s, Session 1909, No. 2767.

[741] "The widest division of public revenue is into (1) that obtained by the State in its various functions as a great corporation or 'juristic person,' operating under the ordinary conditions that govern individuals or private companies, and (2) that taken from the revenues of the society by the power of the sovereign."--C. F. Bastable, _Public Finance_, London, 1903, p. 158. Of. C. C. Plehn, _Introduction to Public Finance_, New York, 1909, p. 79; E. B. A. Seligman, _Essays in Taxation_, New York, 1913, p. 400, et seq.; see also Bastable, op. cit., p. 156.

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The Development of Rates of Postage: An Historical and Analytical StudyChapter XXVII: Appendix: C (5)

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