Chapter IX: Introduction (6)

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

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

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

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

The other recommendation of the Penrose-Overstreet Commission, viz. that further statistics should be obtained with regard to second-class matter, was also adopted by Congress, and the statute authorizing the Commission on business methods also authorized the taking of statistics of the weight, number of pieces, and average haul of all classes of mail matter, separately, and the average load of all cars by which it was forwarded by railway.[343] With the statistics so obtained as a basis,[344] the department undertook the task, which, as stated by the Commission of 1906, had previously been impossible of performance, of calculating the actual working cost assignable respectively to the various classes of mail matter. A Committee, which was appointed in October 1908, and reported in November 1909, arrived at the conclusion that the cost of dealing with second-class mail matter was about 9 cents a pound. The whole subject was before the Committee on the Post Office and Post Roads of the House of Representatives in January and February 1910. Many representatives of the publishing interest attended and gave evidence, and the department's calculations were subjected to examination and criticism.[345]

Congress and the Executive were still, however, unable to arrive at a satisfactory conclusion on the question, and on the 4th March 1911 a joint resolution of Congress authorized the appointment of a further Commission on second-class mail matter, this time not a Congressional Commission. A judge, the president of a university, and a business gentleman were appointed to the Commission, which held sessions in New York in the latter part of the year, and took evidence from the Post Office department and representatives of the publishing interests. They found that the data available were insufficient to enable them to determine the total cost to the Post Office of the services performed in respect of second-class mail matter; but they were able to estimate the cost in regard to certain items of the expenses of the Post Office. The cost under those headings, which must, of course, be less than the total cost, they found as 5-1/2 cents a pound for ordinary paid-at-the-pound-rate matter and 5 cents a pound for free and transient matter.[346] That part of the general expenses of the service which the Commission were unable to assign satisfactorily between the various classes of mail matter was estimated by the Post Office department to amount to over 2 cents a pound for second-class mail matter.[347] On this basis, of course, a heavy increase in the rate of postage would be warranted; but in view of the uncertainty of the effect of the competition of the express companies which would result from a large increase in the rate of postage, of the fact that the publishers' business established in faith of constancy of the postage would seriously suffer from such a sudden increase, and of the well-known policy of encouraging distribution of educational literature,[348] the Commission hesitated to recommend any large increase, and contented themselves with recommending that the rate be raised from 1 to 2 cents a pound.

Given that the actual cost of the handling and transporting of second-class mail matter is on the average 9 cents a pound (regarding which the department is quite satisfied) and a rate of postage for such matter of 1 cent a pound, the department has, on the face of things, a strong case; and it is not necessary to ascribe other motives in order fully to explain and justify the course it has adopted. But the publishers felt that they were not favourably regarded by the Republican Administration. They claim, and the claim is admitted in influential quarters immune from pressure from them, that they are largely responsible for the establishment of the insurgent wing of the Republican party, whose action against the late Administration proved so disastrous to the fortunes of the party. In the course of these political activities they have made enemies; and they conclude that in the Republican party, many of whose members have been disgraced, if not indeed driven from public life, there has arisen a strong feeling against the publishers. The activity of the department against the second-class rate is alleged to have begun after the publication of articles in the magazines exposing the corruption in the cities, and incidentally reflecting on members of the Republican party. Moreover, the department's most drastic recommendations have been directed not against second-class matter as a whole, but against the periodicals; and they have been made under the guise of preventing, as contrary to the intent of the statute, the dissemination at the second-class rate of vast quantities of advertising matter. Thus, the department has recommended that that portion of periodicals which consisted solely of advertising matter should be charged at a higher rate than the rest of the publication (which would be allowed the second-class rate), while nothing at all was proposed as regards ordinary newspapers, a discrimination which cut the publishers of the periodicals deeply.

The representations of the Post Office department, extending over some twenty years, and of most decisive and emphatic character, have not yet succeeded in obtaining legislation for the reform of the second-class mail scheme; but some few years back the department arrived at the conclusion that the authority of the existing law was sufficient to enable the more flagrant abuses to be checked, if not eliminated. A series of rulings were thereupon promulgated, and by this means some of the worst abuses have been removed, such as, for example, the transmission as second-class matter of "libraries," issued as periodicals. These rulings were resented by the publishing interests, with whom it was a source of great complaint that the interpretation of the statute defining second-class mail matter was left to arbitrary decision by officials of the department.[349] The intense feeling in America against any sort of bureaucracy, and especially against a bureaucracy of the central Government, leads to a natural jealousy of the exercise of this power, and as a remedy the suggestion was advanced that provision should be made, first, for questions of the interpretation of the Act to be decided in the first instance by a permanent Commission located at Washington, on which the publishers should be represented; and secondly, that there should be an appeal from the decisions of this Commission to the ordinary courts of justice.

The department admits that its position with regard to the interpretation of the statutes is unsatisfactory. Under the existing system, all manner of questions are asked regarding the private business of the publisher, and the decisions from Washington are often delayed.[350] But as against the contention of the department, which was for an amendment of the law, the publishers contended that the law, while no doubt not altogether perfect, was in the main sound and just, and the rate of postage of 1 cent a pound was as great a boon as was ever conferred by Congress. They denied that it was in any sense a subsidy.[351] They also denied the existence of a deficiency, and contended that so far from its being true that the Post Office business involved a loss, there was each year a profit of millions of dollars. This result they arrived at by estimating the cost to the Post Office of the distribution of Government free matter, and the cost of the rural free delivery, which they added together, setting the total against the deficit shown in the published accounts of the department. By this means a balance of profit was obtained for each year. The estimated postage payable at the usual rates in respect of the free matter was of course an item legitimately to be added to gross revenue; but it was doubtful whether the cost of the rural delivery service could be deducted from gross expenses, as the publishers insisted, on the ground that the service was "extraordinary."

The publishers made a further allegation. At that time the express companies cut even the very low existing cent-a-pound rate on second-class mail matter for short distances, and if that rate were raised the range of their competition would be extended. With a 2-cent rate a much greater proportion of the traffic would inevitably fall to them. This would, of course, be very advantageous to the companies, to whom, as to railways, any increase in the volume of traffic handled would be welcome. These express companies had for many years been faithful supporters of the Republican party, and behind the suggestion to increase second-class rates the publishers were convinced there was a desire on the part of the leaders of the party to reward their faithful allies.[352]

But perhaps the chief contentions of the publishers, which the Post Office was bound to some extent to admit, and would in any case find it difficult to meet, were the claim that newspapers create a vast quantity of first-class mail; and the claim that since the payment made to the railway companies in respect of the transportation of the mail is based on a sliding scale, decreasing as the volume of traffic increases, the weight of second-class matter brings down appreciably the rate actually to be paid.

Some who appeared before the Commission of 1911 were inclined to go beyond these general contentions as to the relative claims of second-class matter, and to assail the whole administration of the department from the economic standpoint; challenging especially the relations with the railway companies, and arguing that the payment made for the conveyance of mails was not equitable when compared with the charges made by the companies for similar services performed for the express companies.

Notwithstanding these contentions, there can be no question that the transmission of the second-class mail at the present rates involves the department in heavy loss; and that Congress, not unaware of this, attaches importance to the advantages which a low rate for such matter confers. The Commission were satisfied on both points. It is, however, doubted by many whether the effect of this privilege has been altogether salutary from the educational point of view. It has encouraged to an almost incredible extent the publication of periodical magazines, and many of these magazines are of a high order of merit as periodical publications. The United States leads the world in the publication of this kind of matter.[353] But the reading matter which is found in these publications is to a large extent light and trivial. The publication of serious intellectual works has shown little advance in recent years,[354] and there is a fairly widespread feeling in America that the two developments are connected. But that is a matter difficult to determine.

In any case, many people are proud of the development in periodicals, and the department, in spite of its efforts, has so far failed to secure any increase of rate. Although the Postmaster-General and the President[355] adopted the recommendations of the Commission of 1911, and urged their consideration on Congress, Congress has not taken action, and has, indeed, forbidden the department to extend certain arrangements for the use of freight trains for the transmission of second-class matter, whereby a saving of expense could be secured, a phenomenon probably explicable by the constitution of American politics.[356]

* * * * *

NEWSPAPER POST IN FRANCE

In France, printed matter, whether issued periodically or otherwise, seems always to have enjoyed a lower rate of postage than the written letter. Before the Revolution there was diversity of practice as regards the rate of postage charged on newspapers. Some privileged papers paid only 5 or 6 deniers the sheet, while others paid 8 deniers. All the rates were purely arbitrary. When the Committee on Public Taxation of the National Assembly considered the question of fixing the rate for newspapers, they considered not only how to regularize the rate, but also whether they could raise it. Viewed from the economic standpoint, the rate was thought by some to be inadequate.[357] The Committee was satisfied that not only would the new rates cover the cost of the service, but that there would also be a slight profit, although they felt it would not be proper, or even possible, to make that part of the business of the Post Office a really lucrative source of revenue.[358]

The decree of 17-22 August 1791 established the rate of 8 deniers per sheet for daily newspapers (and other daily publications), and 12 deniers per sheet for other periodical publications. Pamphlets or unbound books were charged a sou the sheet. Bound books were not allowed to pass by post. It is unlikely that these rates were remunerative. They were modified several times during the next few years; but although the modifications were in the direction of increase, the rates for newspapers still compared very favourably with the rates for letters.[359]

A law of 6 messidor, an IV (1795), established a rate of 5 centimes for newspapers and other periodical publications delivered in the place of publication, and 10 centimes for all other destinations; but this discrimination was removed by the law of 4 thermidor, an IV, which substituted a general rate of 4 centimes the sheet. An attempt was made by the administration to raise the rates on newspapers and books. As regards newspapers the proposal was, however, rejected by the Conseil des Anciens.

In 1796 a new rate for newspapers and other periodical publications was established, viz. 4 centimes for each sheet. For other printed matter the rate was fixed at 5 centimes per sheet.[360] This law failed to prescribe the limits of size of the sheets according to which postage was to be charged, an omission supplied by an ordinance of the 5th March 1823, which fixed the dimension of the sheet at 24 centimetres by 38. The newspapers interested tried to resist this restriction, contending that the ordinance was illegal, because the laws of 1796 prescribed no limit and the Government could not impose one by ordinance: for such a purpose a new law was necessary.

The law of the 27 frimaire, an VIII (17th December 1799), had established a scale of charges according to weight, and the rates were fixed according to the distance actually traversed, under the arrangements then existing. This restriction, which was unfortunate, because the services existing during the Revolutionary period were not of a character to serve as a basis for the future, was felt to be onerous, and numerous complaints were lodged by communes which felt themselves placed under a disadvantage.

In 1827 the rates were revised and placed on a more stable basis.[361] The principle first established in 1791, of charge according to the distance between two places reckoned as the crow flies, was re-established; and a provision was inserted in the law to meet the difficulty which had arisen as to the legality of the ordinance of 1823, purporting to fix the size of the sheets on which the postage on printed matter was calculated. Postage on newspapers and periodicals was made 5 centimes for each sheet of 30 square decimetres for all destinations; but the charge was reduced by one-half for newspapers and periodicals circulated within the department where they were published, the reduced rate being established with the view of protection of the country Press, whose subscribers were in general local, against the competition of the Parisian Press. In 1830 the rate of 5 centimes the sheet for newspapers and other periodical publications was reduced to 4 centimes. The rates of 1827 remained otherwise unchanged.

In 1850 the newspaper tax and the postage were assimilated--that is to say, newspapers were subjected only to one tax, and payment of that tax secured the right of transmission by post. The tax was at the rate of 5 centimes per sheet of 72 square decimetres or less for newspapers published in the departments of Seine and Seine-et-Oise, and 2 centimes for those published elsewhere. All newspapers on which a tax of 5 centimes was paid, were entitled to free transmission by post throughout France. Those on which a tax of 2 centimes was paid, were entitled to free transmission by post within the department in which they were published and the adjoining departments. In order to obtain transmission by post throughout France, an additional sum of 3 centimes per paper must be paid on these latter newspapers.[362] The Minister of Justice, in introducing the measure in the National Assembly, explained that it would serve a double purpose: on the one hand it would give an increase of revenue of some six millions a year; and on the other it would safeguard society against detestable doctrines, because it would fall specially on those evil newspapers and books[363] which were circulated at a low price in town and country, propagating prejudices and error, exciting the passions and corrupting the conscience of the public.[364]

Louis Napoleon Bonaparte, in 1852, desirous that there should be no obstacle in the way of his ultimate assumption of absolute power and the Imperial crown, issued a decree further restricting the Press in France. The publication of newspapers or periodicals dealing with political or economic questions, unless authorized by the Government, was forbidden; and the rates of postage in force prior to the law of 1850 were imposed on newspapers, in addition to the tax imposed by that law.[365] The same principles led to the discrimination introduced in 1856 between political and non-political papers. The former were subjected to a higher rate of postage than newspapers of a non-political character, because the Government felt it to be necessary that there should be some moderating influence to check the effect of political journals in times of intense political excitement, and adopted this expedient.[366]

The rates for printed matter had for a long period caused considerable confusion, and given rise to many complaints from members of the public. They were still determined according to the linear surface of the sheets, a method which was found to cause considerable embarrassment and difficulty in its practical application. To all other classes of postal traffic the more logical and more convenient principle of charge according to weight had already been applied, and in 1856 this principle was applied also to printed matter of all descriptions. Weight was made the basis of the charge, without reference to superficies or to distance, except that for political reasons the privilege of half-rates for newspapers circulating in the department in which they were published was continued.[367] The reduction of the actual rates made by this law was slight, and was estimated not to have any appreciable effect on the total revenue. In any case the question was "regarded less from the financial point of view than from the point of view of the satisfaction which it would give to the needs of commerce and industry and of private intercourse in general."[368] The new rate was 1 centime for each 10 grammes, with a minimum of 4 centimes for political, and 2 centimes for non-political newspapers.

This reduction of rate, together with the reduction for other printed matter, for samples, and for commercial papers, resulted in a large increase in the number of bulky packets sent by post. In order to ensure prompt delivery, it was found necessary in Paris to separate to some extent the letter-post traffic from the traffic sent at the lower rates, and the principle of providing a separate staff of postmen for the delivery of newspapers, magazines, samples, etc., was introduced.[369] The application of this principle has since been extended, and the two kinds of traffic are now dealt with in Paris altogether separately, by separate staffs of officers.

The newspaper rates were next revised in 1878. The discrimination between political and non-political newspapers was abolished, but the privilege accorded to local newspapers was continued. The new rates were:--

1. Two centimes for the first 25 grammes and 1 centime for each
further 25 grammes or fraction of 25 grammes for newspapers
published in the departments of Seine and Seine-et-Oise and
circulating outside the department where published; and for
newspapers published in other departments and circulating outside
the department where published and the adjacent departments.

2. One centime for the first 25 grammes and 1/2 centime for each
additional 25 grammes or fraction of 25 grammes for newspapers
published in the departments of Seine or Seine-et-Oise and
circulating within the department where published.

3. One centime for the first 50 grammes and 1/2 centime for each
additional 25 grammes or fraction of 25 grammes for provincial
papers other than those of Seine and Seine-et-Oise, circulating
within the department where published or adjacent departments.

The existing rate for inland newspapers, which is based on the law of the 16th April 1895, is as follows:--

Two centimes for each copy up to 50 grammes, and 1 centime for each
25 grammes or fraction of 25 grammes above 50 grammes.

Only half these rates is charged when the papers circulate within the department in which they are published or the adjacent department.

In 1908[370] the rates in respect of newspapers sorted and bundled according to the offices of destination and the post routes, were reduced to 1 centime for the first 50 grammes and 1 centime for each additional 25 grammes or fraction of 25 grammes--half this rate being charged for papers circulating within the department of publication or the adjacent departments.

The value of a centime is roughly one-tenth of a penny. It is hardly necessary, therefore, to point out that these rates are divorced entirely from economic considerations, and are to be explained only on political and administrative grounds.[371] It has been estimated that in 1895 the loss on printed matter of all kinds was 36 million francs.

In France, as in other countries, the privilege of transmitting periodical publications at a specially low rate of postage was much availed of for the transmission of advertising matter, of publications which were essentially of the character of catalogues or prospectuses rather than newspapers properly speaking. A law of 1908,[372] passed with a view, among other things, of minimizing this abuse of the privilege, restricted the application of the reduced rate to publications issued not less frequently than once a month. The new regulation had good results, restricting, as was desired, the number of periodical publications not legitimately entitled to the privilege. It had also a result which was regarded by Parliament as undesirable: it shut out from the privilege the numerous quarterly journals of scientific and learned societies.[373]

By the same law the minimum rate of postage for small packets of printed matter sent under loose band, the _imprim['e]s non urgent_, was raised from 1 centime to 2 centimes. The result of this was a little unsatisfactory. In order to evade the higher charge, advertisers took to printing in newspapers, circulating at 1 centime, announcements formerly sent out separately as loose leaflets, a man[oe]uvre which struck doubly: not only was the legitimate rate of postage evaded, but instead of dealing with the matter as non-urgent at its convenience, the Post Office was obliged to treat it in the same way as all other newspaper matter--that is, to give it the benefit of equal treatment with matter sent at the letter rate.

NOTE ON SUPPLEMENTS.

A decree of the 24th November 1860 gave to the two Chambers the constitutional right of discussing the policy of the Government at home and abroad, and as a natural corollary of this it was desired to secure the untrammelled publication and distribution of reports of the debates. This was attained by exempting from postage the supplements of journals when they were devoted entirely to the reproduction of the official reports of the proceedings of the Chambers, the _motifs des projets de lois_, reports of parliamentary commissions, or official documents deposited by the Government at the office of the Chambers.

The Press law of the 11th May 1868 extended the exemption to supplements devoted to the extent of one half to the publication of reports of parliamentary debates or documents, but only on condition that the supplements contained no advertisements. The privilege was continued by the law of 1878.[374] In order to obtain the privilege the supplements must be printed on sheets detached from the main publication, but they must be enclosed with the publication. They must not exceed in size that part of the paper subject to postage, and if sent separately, they are liable to postage at the ordinary rate. In 1869 the official reports of parliamentary debates were exempted from postage when sent by the printer to the editors of country papers, or by those editors to their subscribers, if enclosed with the local paper.

M. Jaccottey's view is that in order to conform to the spirit of the law, the rate for periodicals ought to be confined to newspapers and other periodical publications devoted to letters, science, and arts; and that it is an abuse of the privilege that commercial advertising should avail itself of the privilege by, say, publishing at regular intervals successive editions of library catalogues, or by borrowing the titles of illustrated journals, their outside covers, and the methods of distribution, and inserting in them prospectuses which are not of the nature of periodicals.[375]

Ordinary supplements may be enclosed in newspapers. They are weighed with the paper, and postage is charged according to the total weight. If sent separately, they are regarded as a number of the paper, and postage is charged accordingly. In order to obtain the benefit of the privileged rate, all supplements must bear printed indication of the fact that they are supplements, and must bear the title and date of the main paper.[376]

These definitions were amplified by the administration in 1896 by an instruction (No. 468) which provided that detached advertisement sheets of any sort, issued exceptionally (feuilletons, fiction, stop press news, late articles, pictures, artistic engravings, or others), which are the genuine production of the publication, whatever the size and shape or pagination, ought to be regarded as fulfilling the conditions prescribed by law for supplements and to be admitted to the privilege of the reduced rate.

* * * * *

NEWSPAPER POST IN GERMANY

From the time of their first publication in Germany, newspapers have been distributed through the post. Little is known of the precise arrangements under which they were at first transmitted, but there is no doubt that they were accorded privileged conditions as compared with ordinary letters. The postmasters were themselves largely interested in the publication of newspapers.[377] By 1712 the conduct of newspaper businesses by postmasters had become recognized as a common and long-established arrangement.[378]

The distribution of the newspapers was largely made through the post, and a rate of charge, built up of two elements, came into existence. The first element was the "discount" (_der Rabatt_). This was a payment made by the publisher to the postmaster as remuneration for the work of the latter in connection with the posting and despatch of the papers and the collection of subscriptions. This discount was arranged between the postmaster and the publisher, and generally took the form of a fixed percentage proportion of the published price (_Erlasspreis_). The second element was the "percentage" (_die Provision_). This was in addition to the published price. It was collected from the addressee, and belonged partly to the postmaster at the place of destination and partly to the postmaster at the place of publication.[379] The rates were fixed by the postmasters at their discretion, and gross irregularities and anomalies in the rates resulted. Public complaint arose, and it was found necessary for the State to assume control of the traffic and fix definite rates of charge. This course was first adopted in Prussia in 1821, when the following rates were established[380]:--

4 pf. for each whole sheet of the primary publication (_Hauptblattes_)
2-1/2 pf. " half " " " "
1-1/2 pf. " quarter " " " "
1-1/2 pf. " whole " supplement
1 pf. " half " "

This method of charge did not, however, prove altogether satisfactory, because the term "sheet" was not defined with any degree of precision. It was thought that a better basis for the rate might be found in the price at which the newspapers were sold to the public, because, it was argued, the price must stand in exact proportion to the number and size of the copies, and also to their real value. Accordingly, in 1848 the rate was fixed generally at 25 per cent. of the published price.[381] At a somewhat later date this rate was reduced to 12-1/2 per cent. of the published price in the case of newspapers appearing less frequently than four times a month.[382] In 1871 the minimum yearly rate payable in respect of any newspaper was fixed at 4 sgr.[383]

The application of this tariff resulted in many cases in considerable discrepancies between the amount charged and the service rendered. The improvements in the manufacture of paper and in the methods of printing, particularly the introduction of the rotary press, had cheapened the processes of production, and led to a great expansion of the newspaper trade. With this expansion came a more than proportionate expansion of the business of advertising. The result was that, as in England and America, the newspapers increased in bulk; but so far from there being a corresponding increase in price, there was in point of fact a very considerable decrease. Moreover, advertisements became a more important source of revenue than the subscriptions themselves. A rate of charge based on the selling price, which might have been reasonable when newspapers were produced under the old conditions, was totally inapplicable under the altered circumstances.[384]

The financial results proved extremely unsatisfactory. From the causes indicated, the average weight of the individual copies of newspapers continued to increase, while at the same time the price (and with the price, the postage) continued to decrease.

In 1897 the administration of the Imperial Post Office estimated that the total cost of the transmission of newspapers by post in Germany, for staff, post offices, transport, equipment, etc., was 6,178,362 M., or about 66/100 pf. per copy.[385] The number of newspapers transmitted by post in Germany was at that time about a thousand millions annually, and the total postage received in respect of them was less than 5 million M., or on the average about 1/2 pf. per copy;[386] in the case of a number of papers the postage was as little as 1/12 pf. per copy.[387] The annual loss to the administration on account of the newspaper traffic was therefore on the average 16/100 pf. per copy, or a total of about 1,600,000 M. a year.

For many years the question was before the Budget Commission of the Reichstag, and a change soon followed the publication of this estimate. New rates, based on entirely new principles, were established in 1899.

When the Act establishing the new rates was in preparation, the Imperial Post Office administration based their proposals mainly on the principle that the charges should cover the cost of the service rendered.[388] The original proposals to the Reichstag were accordingly calculated to secure an increased revenue of 1-1/4 million M. The Budget Commission, however, so modified the proposals as to reduce this amount to 300,000 M., and further modifications were made in the Reichstag itself, with the result that under the new rates the administration was left to work with an even greater loss than formerly.[389]

The large publications of the great cities, supported as they were to a large extent by the advertisements they carried, had obtained a wide circulation, to the prejudice of the provincial Press.[390] With a view to affording some measure of protection to the provincial Press as against the Press of the large cities, proposals were made in the Reichstag for the adoption of a zone rate for newspapers on the ground that the cost to the Post Office for distributing newspapers at great distances was appreciably greater than the cost of distribution in the case of newspapers sent short distances only, and that a zone rate would therefore be just.[391] The authorities were not, however, prepared to adopt this proposal, which they characterized as retrograde and unnecessary.[392] They considered that if the rate were raised for the longer distances the traffic would be taken away from the Post Office by private enterprise, and if the rate for the shorter distances were further lowered, the revenue from newspapers would be still further, and undesirably, reduced.

The new scheme of rates of 1899 was based on three considerations: the length of time covered by the subscription, the frequency of issue, and the weight of the newspaper; and the rates were reckoned in the following way:--

(_a_) Two pf. for each month of sending.

(_b_) 15 pf. yearly for papers appearing once weekly or less
frequently, and 15 pf. yearly more for each further publication
weekly.

(_c_) 10 pf. yearly for each kilogramme of the yearly weight,
subject to a free weight of 1 kilogramme yearly for each of so many
editions as the rate (_b_) is applied to.[393]

The weight for any year was to be fixed according to the actual weight of the numbers of the paper during the previous year, and for new publications the rate was to be applied quarterly on the basis of the weight of such numbers as had appeared. The publisher was required to deposit with the Post Office a complete copy of each issue for the purpose of calculating the weight charge.

Financially, the result of the rates has been unsatisfactory; the amendments of the proposals of the postal administration which were made by the Reichstag could hardly have had any other effect. From the year 1871 to the year 1902 the increase in the number of newspapers was 508 per cent. (1871, 202-4/5 millions; 1902, 1,157 millions), but the increase in newspaper postage was only about 378 per cent. (1,760,326 M. in 1871 and 6,659,735 M. in 1902); and if the cost of the service remained approximately the same as in 1897, which there is little reason to doubt, the loss to the administration was about a million Marks.

In the case of a number of papers a higher rate of postage became payable; but in the case of some of the expensive illustrated and scientific publications the new rate represented a considerable reduction. Thus, in one case, the rate became 2 M. 9 pf. instead of 96 pf. yearly, while in another the rate was reduced from 7 M. 20 pf. to 50 pf. yearly.[394]

But the reduction of rate did not represent the whole disadvantage. The greater part of the issue of illustrated and scientific journals and trade papers had formerly been distributed through the ordinary channels of the publishing trade. Now that the postage rates were in many cases so largely reduced, it became cheaper in those cases to distribute a larger number by post, and this course was naturally adopted. Increase in the number sent by post in such circumstances simply resulted in increased financial loss.

An indication of the extent of the privilege which the newspapers enjoy as compared with other printed matter may be obtained by comparing the revenue which was actually obtained from the newspapers with the revenue which would have been obtained from the same number of packets of ordinary printed matter of similar size and weight. In 1900, in the inland service in Germany, some 440 million packets of ordinary printed matter were transmitted, and the postage on them amounted to 21,133,499 M. If the 1,150 million newspapers had yielded postage in the same proportion, they would have brought in a revenue of some 55 millions of Marks, whereas in actual fact they yielded only some 6-1/2 millions.[395]

The present rate rests on the two grounds of frequency of issue and weight of copies. It is therefore in practice more difficult to apply than the former rate based simply on the price, since the weight factor is variable and requires exact determination in every case. Moreover, the Reichstag forbade rounding up of the weight, which would be essential if a rate in even pfennigs were to be ascertained. The calculation of the actual rate must be carried to the second decimal place in pfennigs, and a rounding up of broken pfennigs is permitted only at the final settlement for the regular subscription period. This complexity has, of course, added largely to the cost of administration, without a corresponding increase in revenue.

It is anticipated that with the growth of the newspaper traffic the loss to the postal administration will tend to increase rather than to diminish. There is, however, no disposition to restrict the privilege accorded to newspapers. The attempt made by the administration in 1899 to secure an increased revenue from them was, as explained, frustrated by the Reichstag. Since 1852 the Post Office has held the monopoly of the distribution of political newspapers, and the general advantage resulting from such an effective control of the dissemination of public intelligence no doubt explains the continuance of so favourable and unremunerative a rate.[396]

NOTE ON DELIVERY FEES FOR NEWSPAPERS.

House-to-house delivery of newspapers was introduced in 1828, the lowest charge (i.e. in addition to ordinary postage) being 30 pf. quarterly.

In 1872 a uniform delivery fee was fixed for town and country. For papers appearing weekly or less frequently the charge was 15 pf., for papers appearing two or three times weekly 25 pf., for papers appearing four to seven times weekly 40 pf., and for papers appearing more frequently than seven times weekly 50 pf. quarterly. The system of charging delivery fees has been continued, and those at present in operation are:--

For
each copy
monthly
(_a_) For newspapers delivered less frequently than
once a week 2 pf.
(_b_) " " once a week 4 pf.
(_c_) " " twice a week 6 pf.
(_d_) " " thrice a week 8 pf.
(_e_) " " four times a week 10 pf.
(_f_) " " five times a week 12 pf.
(_g_) " " six or seven times
a week 14 pf.
(_h_) " " eight times a week 16 pf.
(_i_) " " nine times a week 18 pf.
(_k_) " " ten times weekly 20 pf.
(_l_) " " eleven times weekly 22 pf.
(_m_) " " twelve to fourteen
times weekly 24 pf.
(_n_) " " fifteen times weekly 26 pf.
(_o_) " " sixteen times weekly 28 pf.
(_p_) " " seventeen times weekly 30 pf.
(_q_) " " eighteen times weekly 32 pf.
(_r_) For official gazettes 2 pf.[397]

The delivery fees are collected in advance for the complete subscription period. In 1910 the amount collected for delivery in towns was 19,604,234 M., and for delivery in the country districts 5,770,896 M.

NOTE ON SPECIAL SUPPLEMENTS.

Special advertisement supplements were permitted to be sent by post together with newspapers by the order of 30th September 1871. These supplements in form or character must not be similar to the main newspaper. They must not be printed at the same office, and no charge might be made for their insertion. A special supplement must not exceed one sheet and must not be bound. The newspapers in which they were inserted must bear a notification to that effect in a prominent position. All copies of the supplement must be submitted to the Post Office and the postage paid in advance. They were then stamped at the office of posting, and if not posted within three days the postage might be forfeited. The rate for each supplement was 1/12 sgr.[398]

The number of such supplements was not as great as was anticipated, the chief reason for which was that the postage was still too high and the regulations too complicated.

In 1873 the rate was reduced to 1/2 pf. for each copy, with a reduction of 50 per cent. when as many as 7,200 copies were posted at the same time. The obligation to submit all copies to the Post Office for stamping, and the requirement to post them within three days thereof, were at the same time removed, and the simple obligation to give previous notice of posting substituted. The obligation to indicate on the newspapers that a special supplement was enclosed was also withdrawn.

In 1874 the regulations were further relaxed. Special supplements were allowed to be printed at the same office as the newspaper, and charges for the advertisement might be made.[399] The limit of size was extended to two sheets, at which it remains.[400]

In 1900 (20th March) the rate was changed to 1/4 pf. for each 25 grammes weight for each supplement. The number of special supplements in 1910 was 214 millions.

* * * * *

III

THE RATE FOR PARCELS

PARCEL POST IN ENGLAND

The London Penny Post established by William Dockwra in 1680 was in some degree a parcel post, but throughout the country no sort of parcel post service existed until the introduction of the regular system in 1883. The weight limit for packets sent by Dockwra's post was at first fixed at 1 pound, but it was afterwards extended.[401] The Penny Post was employed to such an extent for the transmission of bulky packets and parcels that delivery was retarded, and it was found necessary to reduce the number of such parcels. The privilege of sending parcels even of 1 pound weight was accordingly withdrawn in 1765.[402] The letter rate charged by the ounce was sufficiently high to restrict effectively the number of packets of large size entrusted to the post.[403] In their Report of 1797 on the Post Office, the Select Committee on Finance recommended a reduced rate for the heavier packets and small parcels, in order to encourage their transmission by post, but the suggestion met with no favour.[404] For many years afterwards the official view was that it was desirable to confine the post to light packages, and that any increase in the number of heavy packets would disorganize the service, which existed to provide for the expeditious transmission of light letters. Its arrangements had been made with this object, and to load it with a large number of heavy packets would be subjecting it to an unfair strain, under which it would inevitably break down.[405] So long as the delivery of parcels is provided for by foot (or cycle) post, it is impossible to raise indefinitely the limit of weight for individual parcels.

The establishment of the Book Post in 1847 was, of course, a step in the direction of a general Parcel Post. The Post Office having by this means become the carrier of small parcels containing goods of a certain class, the demand for a post for parcels of any kind of goods was inevitable. In the 'sixties there was considerable agitation for extended parcel post facilities. The familiar argument was advanced that the Post Office had already an establishment for the collection and delivery of letters in some twelve thousand districts, and that this establishment might be used, to the great advantage of the public, to afford any additional services within its capacity; that, as all the main establishment charges were paid--rent, salaries, etc.--an additional service could be rendered without adding proportionately to the expenses. It was urged also that the sample post rate was too high and was fenced by troublesome regulations; that the book rate was also too high; that there was no reason why the book trade should be favoured; that in respect to the mass of the people the charges were so high as to impose on the transmission of small articles the same sort of prohibition that was placed on the transmission of letters under the old postal system; that a comprehensive system could not be carried out by the railways until the railways would co-operate; that even if the railways did co-operate they had not means at their disposal equal to those of the Post Office; that a parcel post system was already in operation in several continental countries; and that, in fine, by the establishment of a similar service in this country an immense boon would be conferred on the public.

The Post Office was, however, not favourably disposed towards the idea. It was proposed to meet the agitation to some extent by reducing the rates of postage on the heavier letters, and thus to carry small parcels under the guise of letters. This proposal was not, however, carried through. In 1871 the rates for letters of medium weight were reduced, but those on letters above 12 ounces were retained at a height which could only be regarded as prohibitive.[406]

The public agitation in favour of a parcel post service continued; and when in 1878 a large number of the railway companies announced that they proposed to convey small parcels over any part of their lines at low uniform rates, attention was called to the fact in the public Press, and suggestions made that the Post Office should co-operate by undertaking the delivery of the parcels. The official view was now somewhat more favourable to the idea. An international parcel post service had been established in 1880 in connection with the Universal Postal Union, and this fact had strengthened public opinion in favour of a parcel post service in this country. It was recognized that such a service would afford undoubted advantages to the public, especially in rural districts. It would provide facilities which private enterprise had not seen fit to undertake. It would provide a service reaching to all parts of the country, for which there was no other equally suitable machinery.

The Post Office could not, however, in establishing a parcel post service, act as freely as in its arrangements for the conduct of the letter service. The conveyance of the parcels from place to place was likely to prove a serious undertaking, and for such conveyance the Post Office was dependent on the railway companies. In the case of letter mails the cost for conveyance is a very minor part of the total expenses of the service, but when negotiations with the railway companies were begun it was soon found that such would not be the case with parcel mails. The companies, regarding the parcel traffic as to a large extent their own proper business,[407] were not disposed to agree to easy terms, and there was the further difficulty that numerous companies had to be satisfied, since it was desired to establish the system under an agreement which should include all the principal companies.[408] From the first, the question of the remuneration of the companies was approached from a point of view totally different from that in which their remuneration for the ordinary letter mails was regarded. Letter mails are conveyed as entities, and the company have never been concerned with the number of letters enclosed in the mail or the amount of postage paid. They arrange for the conveyance of a given number of mails, and are remunerated accordingly. But with parcels the question was approached as one for the determination of just remuneration of the companies for conveying, not mails containing parcels, but single parcels. And the question to be settled was what proportion of the postage paid on the individual parcels should go to the companies. In view of the heavy expenses of every description which would be incurred and of the large number of heavy letters which would be transferred to the parcel post, causing a considerable reduction of revenue, the Post Office declined to accept less than half the total receipts, and after some demur the companies agreed. The rates of postage proposed were two in number--for parcels not exceeding 2 pounds in weight, 6d.; for parcels not exceeding 4 pounds in weight, 1s.

Difficulties arose subsequently as to the amount of freedom of action to be left to the Postmaster-General and the duration of the agreement. The first proposal was for an agreement in perpetuity, and the draft agreement gave the companies what was called a "partnership interest" in the parcel post business. It was, however, regarded as essential that the parcel post business should be no less under the control of the Postmaster-General than the existing letter post, and that, on the expiration of any agreement made with the railway companies, the statutes relating to the conveyance of letter mails by railway should apply to parcel mails.

After the failure of the first scheme, negotiations with the railway companies were suspended, but the public agitation for a parcel post was daily gathering strength, and in February 1882 the Postmaster-General again approached the companies. The new proposals were somewhat different from those originally made. A scale with four rates (3d. for 1 pound, rising to 1s. for 7 pounds) was now suggested by the Post Office, largely in deference to the strong disposition of the railway companies in favour of an increased number of rates. The low initial rate of 3d. for 1 pound was now proposed on the ground that a large proportion of the business to be done would be between the large towns and the rural districts. For the development of such business a low initial rate was essential; and as such parcels would not be likely to be to any large extent railway borne, the Post Office would obtain almost the whole of the proceeds of the postage. It was, moreover, now taken into reckoning that a considerable increase in the number of letters would result, since numerous communications relative to parcels posted would pass, and the revenue would thus benefit indirectly. The letter service would benefit, too, in other ways: it would be relieved of heavy packages; and the existence of a parcel post service would justify the provision of more efficient services in rural districts. The rates proposed were in general very much higher than those at the time existing in Germany, France, Switzerland, and Belgium, and they were estimated to yield a profit.