The monopoly of foreign letters was by this time well establ

Produced by Simon Gardner, Adrian Mastronardi, The

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Transcriber's Notes

This is a Plain Text version. It uses the 7-bit ASCII character set.

Accented characters are represented as follows:

['a] indicates the acute accent

[e'] indicates the grave accent

[^i] indicates the circumflex accent

[:u] indicates the umlaut

The following are used to represent special characters and marks:

[~d] [~r] [~n] indicates a tilde above d, r, n

[p=] indicates a line below p

[=o] [=co] [=xon] indicate an overline above 1, 2 or 3 characters

[^p] indicates an inverted breve above p

[oe] indicates an oe ligature

[L] indicates the pound (Sterling) sign

[S] indicates the Section symbol

Italic typeface in the original is indicated with _underscores_. Bold

typeface in the original is indicated by UPPER CASE. Small capital

typeface in the original is indicated by UPPER CASE.

There are a large number of footnotes. These have been grouped together

at end of each chapter or major section in which they are referenced.

There are numerous quotations from documents in German, French and

archaic English which use many abbreviations, variant spellings and

inconsistent spellings. These are retained, except where obvious typo

corrections are listed at the end of this document.

* * * * *

STUDIES IN ECONOMICS AND POLITICAL SCIENCE.

EDITED BY THE HON. W. PEMBER REEVES, PH.D., _Director of the London

School of Economics and Political Science._

No. 50 in the Series of Monographs by writers connected with the London

School of Economics and Political Science.

THE DEVELOPMENT OF RATES OF POSTAGE

* * * * *

THE DEVELOPMENT OF

RATES OF POSTAGE

AN HISTORICAL AND

ANALYTICAL STUDY

BY

A. D. SMITH, B.Sc. (ECON.)

OF THE SECRETARY'S OFFICE,

GENERAL POST OFFICE, LONDON

WITH AN INTRODUCTION BY

THE RIGHT HON. HERBERT SAMUEL, M.P.

POSTMASTER-GENERAL 1910-14 AND 1915-16

LONDON: GEORGE ALLEN & UNWIN LTD.

RUSKIN HOUSE 40 MUSEUM STREET, W.C. 1

[_Thesis approved for the Degree of Doctor of Science_ (Economics) _in

the University of London_]

_First published in 1917_

(_All rights reserved_)

PREFACE

This study, which was prepared primarily as a Research Studentship

Report for the University of London, is intended to be a contribution to

the history of rates of postage, and an attempt to ascertain the

principles, economic or otherwise, on which they are and have been

based.

The Postmaster-General accorded me permission to consult the official

records at the General Post Office, London, and through this courtesy I

have been enabled to include a detailed examination of the economic

aspect of the rates in the inland service in this country, and to place

in the Appendix copies of some original documents which have not before

been printed. Without this permission, which I desire here to

acknowledge, it would, indeed, scarcely have been possible to undertake

the inquiry. It must be made clear, however, that the work is of

entirely private character, and cannot be taken as in any way expressing

the views of the British Postal Administration.

In 1912, as the holder of the Mitchell Studentship in Economics at the

University of London, I visited Ottawa and Washington; in 1913 I visited

Paris and the International Bureau at Berne; and in 1914, Berlin. I am

much indebted to the various postal administrations visited, to whom, by

the courtesy of the Postmaster-General, I carried official letters of

introduction in addition to my letters from the University, for

facilities to consult official papers relating to the subject of

investigation, and for assistance from members of the staff with whom I

was brought into contact.

The work was all but completed at the outbreak of war, but publication

has been unavoidably delayed. The overpowering necessities created by

the war have caused Governments again to look to postage for increased

revenue. Penny postage itself has been in danger in the country of its

origin. Various war increases of postage have already been made, both

here and abroad, and brief particulars of the changes in the countries

dealt with have been included. Further proposals for increasing the

revenue from postage will possibly be made, and I am hopeful that these

pages, in which the course of postage is traced, may then be found of

service.

For the privilege of numerous facilities in connection with my work on

the rates in this country I am indebted to Mr. W. G. Gates,

Assistant-Secretary to the Post Office; and for assistance in my

inquiries abroad I am indebted to Dr. R. M. Coulter, C.M.G., Deputy

Postmaster-General, Ottawa, and Mr. William Smith, I.S.O., at the time

of my visit Secretary to the Canada Post Office; to Congressman the Hon.

David Lewis, of Maryland, and Mr. Joseph Stewart, Second Assistant

Postmaster-General, United States Post Office; to M. Vaill['e], of the

Secr['e]tariat Administratif, Ministry of Posts and Telegraphs, Paris; and

to M. Ruffy, Director of the International Bureau, Universal Postal

Union, Berne.

I am especially indebted to Professor Graham Wallas for valuable

suggestions and advice.

A. D. SMITH.

LONDON SCHOOL OF ECONOMICS,

1917.

CONTENTS

PAGE

PREFACE v

INTRODUCTION xi

I. THE RATE FOR LETTERS--

Letter Post in England 1

Letter Post in Canada 37

Letter Post in the United States of America 59

Letter Post in France 78

Letter Post in Germany 97

II. THE RATE FOR NEWSPAPERS--

Newspaper Post in England 111

Newspaper Post in Canada 136

Newspaper Post (Second-class Mail) in the United States of America 148

Newspaper Post in France 164

Newspaper Post in Germany 173

III. THE RATE FOR PARCELS--

Parcel Post in England 183

Parcel Post in the United States of America 191

Parcel Post in France 204

Parcel Post in Germany 209

IV. MINOR RATES--

(i) Book Post 220

(ii) Samples 229

(iii) Commercial Papers 238

(iv) Postcards 241

(v) Rate for Printed Matter for the Blind 244

(vi) Minor Rates in the United States and Canada 244

V. LOCAL RATES 247

VI. INTERNATIONAL RATES--

(i) International Letter Post 263

(ii) International Parcel Post 277

VII. AN ANALYSIS OF COST--

Method 283

Cost 289

VIII. CONCLUSION 312

APPENDIX A--

I. RATES OF INLAND LETTER POSTAGE CHARGED IN ENGLAND, 1635-1915 336

II. FOREIGN RATES IN THE BRITISH SERVICE 340

III. THE THURN AND TAXIS POSTS IN GERMANY 349

IV. PARCEL POST IN CANADA 355

V. THE SUPPLEMENTAL SERVICES 357

VI. POST OFFICE REVENUE 358

VII. GRAPHS 368

APPENDIX B--

DOCUMENTS AND EXTRACTS ILLUSTRATING ASPECTS

OF POSTAL HISTORY--

(i) Ancient Posts 374

(ii) Nuncii and Cursores 377

(iii) Witherings' Scheme for the Reform of the Posts in England, 1635 378

(iv) The Monopoly and the General Farm of the Posts 380

(v) The English Post Office in 1681 384

(vi) The Cross Posts 388

(vii) The Early Posts in North America 391

(viii) The Clerks of the Road and the Transmission of Newspapers 403

APPENDIX C--

LIST OF AUTHORITIES 412

INDEX 425

INTRODUCTION

This book contains a collection of facts and an examination of

principles which will be of value to all students of the subject with

which it deals. It is more comprehensive than any book on rates of

postage yet published in the English language, or, I believe, in any

other. It is careful and unbiased, and although here and there some of

the author's conclusions may not meet with unanimous acceptance, they

cannot fail to stimulate useful discussion on a matter which is far more

important than is often realized.

The whole of our social organization has come to depend in large degree

upon the post. Commerce, in all its departments, relies upon it. All the

variety of associations which are, in their wide expansion, distinctive

of modern civilization and necessary to its life and energy--employers'

associations, trade unions, co-operative societies, friendly societies,

religious bodies, political and propagandist organizations of every

kind, local, national, and international--the whole nervous system of

the modern State, depends upon the quick transmission of information and

ideas; it would never have reached and could not maintain its present

development without cheap, reliable, and speedy means of communication.

The indirect effects of changes--even small changes--in the postal

system are often extensive and almost incalculable.

Where the State itself conducts an industry there is always a risk that

commercial considerations and fiscal considerations will not be

sufficiently distinguished. Charges may be fixed at a higher point than

is warranted by the cost of the services rendered. The surplus goes to

the national revenue. It is a tax, but a concealed tax, and in the case

of postal rates it is one of the worst kinds of tax, a tax on

communications. On the other hand, charges may be fixed at a lower

point than will cover the cost of the service. The deficit is a subsidy,

but a concealed subsidy. The halfpenny postage rate for bulky

newspapers, for example, or the extension of telegraph offices to rural

districts, may be socially useful, but they are unremunerative. The loss

that they involve to the Exchequer may be justifiable, but if so it

should be deliberately incurred. It should not be hidden in the profit

that is made on the letter post. Without a scientific examination into

the actual cost of each part of the postal and telegraphic service, and

into the precise relation of revenue to cost, the charges may include,

haphazard, an excess which is nothing but pure taxation, the expenditure

may include an addition which is nothing but pure subsidy, and neither

the administrator nor the taxpayer may be aware of the fact.

It is therefore one of the essential duties of the Post Office to make

such examinations, and of students or critics of postal affairs to check

or to supplement them. Mr. A. D. Smith has made a useful contribution to

the application, in this sphere, of the methods of science to the

conduct of industry; and since the postal service is the most

international of all forms of social activity, it may be expected that

his contribution will be of value, and will have its influence, far

beyond the limits of our own country.

HERBERT SAMUEL.

I

THE RATE FOR LETTERS

LETTER POST IN ENGLAND

In England the postal service, as an organized means for the carrying of

the King's despatches, dates back some four hundred years, and as a

recognized arrangement for the carrying of letters for the public, some

three hundred years. Before the establishment of a regular system of

posts, provision had been made for carrying the King's despatches by

special messengers, called _nuncii_ or _cursores_, attached to the royal

household.[1] Their function was naturally one of importance, and, from

early times, large sums were expended in their maintenance. They were

employed on the private and confidential business of the Crown and of

members of the royal household, and on affairs of State, both in England

and abroad, although their function was primarily to serve the

convenience of the King.

This was a system for the conveyance of official despatches only.[2] No

public provision was made for the conveyance of letters for private

individuals. Such letters were conveyed by servants, by special

messengers, or by the common carriers,[3] and there is evidence of the

existence of a considerable private correspondence in the frequent issue

of writs during the fourteenth and fifteenth centuries ordering

supervision of the traffic in private letters, the uninterrupted

transmission of which was a source of much anxiety to the Crown from

fear of the fomenting of sinister and treasonable plots against

itself.[4]

The establishment of the _nuncii_ or _cursores_ developed into a regular

system. On certain lines of road relay stages were set up, at which the

messengers might without delay obtain a change of horses, a system first

set up by Edward IV in 1482, during the war with Scotland.[5] Such relay

messengers were called "posts," a word borrowed from the French.[6] The

term was also applied to the line of route, and the expression "post,"

or "line of posts," was used to denote a route along which, at certain

stages, post-horses were kept in readiness for the use of the King's

messengers. Travelling in this way the messengers were able to cover a

hundred miles a day. The establishment of lines of regular posts became

a feature of the administrative system, and a special officer of the

royal household was appointed to control them.

The first recorded Master of the Posts was Brian Tuke, who held the

office in 1512. The posts, like the establishment of special messengers,

were maintained solely at the cost of the King. The master received a

salary from the King (which in a patent issued in 1545 is given as [L]66

13s. 4d. a year), and also the amount of his expenses incurred in

providing for the carrying of letters. The regular postmasters received

a daily wage from the King. On lines along which no regular post had

been established, but along which it might on occasion be necessary to

send special messengers, the townships were obliged to furnish horses

for the service of the messengers. Remarks in contemporary papers

suggest that no payment was made in such cases, but that horses were

supplied gratis for the King's service.[7] There is no record of the

early days of Tuke's tenure of the office of Master of the Posts; but in

1533 Thomas Cromwell complained to Tuke concerning the condition of the

posts, and the great default in the conveyance of letters.[8]

The posts were in many cases established on account of some special

circumstance, and were of a temporary character. The first regular

post--that established in 1482 during the war with Scotland--was, of

course, temporary; but at much later dates, when "ordinarie," or

permanent, posts had been established, such as the post from London to

Berwick and that from London to Beaumaris, it was still usual to

establish "extra ordinarie" posts "in divers places of the Realme" as

occasion might from time to time require, as, for example, during the

periods of the sovereign's progresses.[9]

The early posts had a second function, not less in importance than that

of providing for the conveyance of the sovereign's despatches, and

despatches sent on affairs of State viz. the provision of means by which

persons actually travelling on the business of the sovereign, though not

bearing despatches, might do so with facility. This second function,

the travelling post, continued until the eighteenth century. It is a

function which is essentially akin to the provision of a means of

intercommunication by means of letters. In many parts of the United

Kingdom, and also in other countries, the means provided for the

conveyance of the mail are still largely used by persons desiring to

travel.[10]

The use of the post-horses by ordinary travellers commenced at an early

period. In 1553, when the posts had been in existence only some fifty or

sixty years, a rate of a penny a mile for persons riding post was fixed

by statute.[11]

Great abuses grew up round the travelling post, or "thorough post," as

it was called.[12] Riders in post frequently failed to pay a reasonable

sum for the hire of horses; and since King's messengers, although

paying no fixed rates, obtained better accommodation than others, riders

in post travelling on their own affairs made no scruple to represent

themselves as travelling on public service. Orders directed against

these abuses were issued in 1603. Riders in post on the King's affairs,

with a special commission signed either by one of the Principal

Secretaries of State, by six at least of the Privy Council, or by the

Master of the Posts, were to pay at the rate of 2-1/2d. a mile for a

horse. All others riding post about their own affairs were to make their

own terms with the postmaster, and to pay in advance.[13] The net result

was that for all persons riding with the special commission a fixed rate

was payable in place of uncertain rates as hitherto, and the postmasters

were protected from being imposed upon by persons riding post on their

private business. Without the special commission it was useless to

pretend to be travelling on the King's affairs. By this proclamation the

postmasters were also given the exclusive right of letting horses to

travellers.[14] The wages of the postmasters in respect of the "post for

the pacquet" were a fixed sum per day, and a certain number of horses

had to be kept in readiness, in proportion to the amount of the wages

paid. As regards the service for the State, the system of posts was

therefore on a complete and definite financial basis. The rates for the

thorough post, although not in any way rates of postage in the modern

sense, were the first rates applied to the service of the posts (the pay

of the postmasters for the packet post being merely wages per diem), and

it was to them that the term "postage" was first applied. These rates

were in fact the original "postage."

The number of regular posts was in early times quite small.[15] In order

to provide a means of reaching other parts of the kingdom with some

degree of facility, the municipalities were required to maintain, or at

least provide when required, post-horses for the use of the King's

messengers.[16] Some municipalities made definite provision of horses:

Leicester, for example, maintained "certen poste-horses" (four in

number) for the service of the Prince; but if horses were not provided

voluntarily, the magistrates and constables were authorized to seize

them for the King's service wherever they could be found.[17] Many of

the posts continued for a long period to be of a temporary nature. Even

in the seventeenth century some which it might be thought would have

been important at any time, were regarded as extraordinary posts, and

were discontinued with the disappearance of the special circumstances on

account of which they had been established.[18]

A third function became attached to the posts, viz. the transmission of

private letters. As it is impossible to say at what date the posts began

to be used by ordinary travellers, so it is impossible to say at what

date they were first used for the conveyance of letters other than those

on the affairs of the King or of the State. The universities and

municipalities provided services for the carriage of their own

letters;[19] but from a very early period the posts were also made use

of for the conveyance of unofficial letters. The Master of the Posts

received no direct profit from the carrying of such letters,[20] but the

price paid to him for the office of Deputy Postmaster was probably

thereby increased.[21]

A Proclamation of 26th April 1591 prohibited the conveyance of letters

to or from countries beyond the seas by any person other than the

ordinary posts and messengers; and referred to previous similar

prohibitions. The object of this prohibition, which foreshadowed the

monopoly of the carriage of all letters, whether for places within the

realm or to or from foreign countries, was alleged to be the redress of

disorders among the posts in general, and particularly to prevent

inconveniences both to the royal service and the lawful trade of honest

merchants.[22] A Proclamation of 1609 repeated this prohibition.[23]

In 1626 a legal struggle was in progress between Matthew de Quester and

Lord Stanhope, both of whom claimed to hold a King's Patent conferring

the right to carry foreign letters.[24] This litigation led to laxity

and omission in the conduct of the foreign service, so that merchants

trading abroad were put to great inconvenience. In consequence, in

November of that year, the King granted the Merchant Companies

permission to arrange for the conveyance of their foreign letters by

their own messengers. The high authorities were disturbed by the grant

of this permission,[25] and in October 1627 it was revoked "upon

weightie reasons of State." Only the Merchant Adventurers were still

permitted to use their own messengers, and they and all other merchants

were required in times of war and danger to the State to acquaint the

Secretaries of State from time to time with what letters they forwarded

abroad.

The foreign post continued in an unsatisfactory state, and a

reorganization in accordance with a proposition submitted by the Master

of the Foreign Posts, Thomas Witherings, was notified in orders issued

on the 28th January 1633. In consequence of complaints, both of

Ministers of State and merchants, it was decided to send no more letters

by the carriers, who came and went at pleasure, but, in conformity with

other nations, to erect "stafetti," or packet posts, at fit stages, to

run day and night without ceasing. Under this new system the Foreign

Postmaster of England undertook, with the consent of the foreign

Governments, to provide "stafetti" for the conveyance of foreign letters

on the Continent, e.g. he arranged the "stafetti" between Calais and

Antwerp.

For the inland posts the financial arrangements of 1603 remained some

thirty years undisturbed, and notwithstanding that the posts were used

by travellers, and for the general conveyance of private letters, they

remained a charge on the King's revenue. In 1633 the deficit was some

[L]3,400, and in that year Witherings submitted a plan for the complete

reorganization of the inland posts.[26] The new system, which applied

only to the "post for the pacquet," was to be based on a definite scale

of charges. Previously, there had been no regular system of charging

letters carried for the public, and it is at this point that the modern

Post Office emerges. Up to this time the conveyance of letters for

private individuals, although it may have been a source of emolument to

the postmasters and couriers, was not recognized by the State as part of

the function of the service. Under the proposed system, a charge was to

be made for every letter or packet, varying in accordance with the

distance for which the letter or packet was conveyed, and its size. The

latter was to be graduated for light letters according to the number of

sheets, and for heavier letters and packets according to weight,

starting from the ounce. Here, therefore, is to be seen at the inception

of "postage" in the modern sense a definite distinction between the rate

charged on the ordinary letter, the weight and bulk of which are in

general insignificant, and that charged on the larger and heavier

packets of deeds, or what not, which might be forwarded by post.

The reform of the posts on these lines was carried out by Witherings in

October 1635, and constitutes a remarkable development of the Post

Office system. The rates of charge were as follow:--

-----------------------------------+--------+--------+--------

| | |

| Single | Double | Per

Distance of Transmission. | Letter.| Letter.| Ounce.

| | |

-----------------------------------+--------+--------+--------

| | |

Not exceeding 80 miles | 2d. | 4d. | 6d.

Exceeding 80 miles, not exceeding | | |

140 miles | 4d. | 8d. | 9d.

Exceeding 140 miles | 6d. | 12d. | 12d.

| | |

-----------------------------------+--------+--------+--------

The great change of 1840 modified this system only at two points, viz.

(1) uniformity of rate, that is, the elimination of the table of

distances from the rate-table, and (2) the introduction of the method of

charge according to weight for all letters and packets.

The monopoly of foreign letters was by this time well established, and

the reason for its existence well defined. A further proclamation of the

11th February 1637-8 again declared this monopoly, and proceeded to

declare a monopoly of letters between persons within the realm, the

second monopoly being justified, not on the ground of necessity in

order to guard the safety of the State, but on the ground that commerce

and correspondence within the realm would benefit.[27] The real

explanation of the new prohibition for inland letters was no doubt the

fact that Witherings had been appointed Master of the Inland Letter

Office for the purpose of bringing into operation his scheme for

reorganizing the posts, and it was essential to the success of the

scheme that he should have the sole right of carrying letters. There

was, of course, the political reason of danger to the State from free

and uncontrolled transmission of letters, but the feeling in that

respect seems not to have been so strong regarding the inland letters as

regarding the foreign letters. It developed later, however.[28]

In 1640 Witherings was displaced on some charge of maladministration,

and the office was given to Philip Burlamachi, a merchant of the City of

London. Witherings did not give up the office without a struggle. For

two years he strove to retain it, but without much success; and in 1642

he assigned his patent to the Earl of Warwick, who continued the

struggle. Burlamachi was backed by Edmund Prideaux, afterwards

Attorney-General. Into the merits or progress of the contest it is

unnecessary to enter. It will be sufficient to record that the Lords

espoused the cause of the Earl of Warwick and the Commons that of

Burlamachi; that the contest continued some two years; and that in the

end the Lords gave way, and Burlamachi continued Master of the Posts.

The office fell vacant in 1644, and Parliament appointed Prideaux to the

charge of the posts.[29] This task he entered upon with some

seriousness, and with considerable success. He extended the service, but

raised the minimum postage to 6d. From a report submitted by him to the

Council of State in 1649, it appears that he had established "a weekly

conveyance of letters into all parts of the nation," and that with the

moneys received as postage he had been able to defray the whole cost of

the postmasters of England with the exception of those on the Dover

Road.[30] At the time of his appointment the posts involved a charge to

the State of some [L]7,000 a year.[31] It might therefore be thought that

for Prideaux to be able to carry on the system, to give a despatch of

letters to all parts of the kingdom every week, and at the same time

make the proceeds of postage cover the whole cost, except for the Dover

Road, was a considerable achievement. The Commons were not, however,

altogether satisfied. The long disputes between the various patentees,

and their anxiety not to lose any part of the business of conveying

letters, made it evident that there was a profit other than the salary

paid by the King, notwithstanding that funds for the maintenance of the

posts were drawn from the Exchequer year by year. The office of Master

of the Posts was bought and sold. Witherings sold part of his wife's

estate to the value of [L]105 a year in land to obtain the office. The

deputy postmasters also bought their offices. And in 1642, by vote of

both Houses, Burlamachi had been required to give an account of the

_profits_ of the Letter Office. The Letter Office was in fact not on

the simple basis of payment by the messengers to the Master of Posts of

all receipts, payment by the Master of Posts from the receipts of the

ordinary fixed wages of the deputy postmasters (together with the cost

of special expresses) and of his own salary, and payment from the

Exchequer of the balance necessary to complete such payment. The deputy

postmasters took, and retained for their own use, the postage received

on private letters, paying a percentage to the Master of the Posts; and

they had also the monopoly, which was very lucrative, of letting horses

to travellers riding post. In view of these profits they were prepared

to purchase from the Master of the Posts the office of deputy

postmaster, and sums received from that source, together with the

percentage of the postage of private letters, constituted the emoluments

of the Master of the Posts, additional to his salary. The Commons, being

no doubt aware of this, concluded that there ought to be a net revenue

from the Office, and required Prideaux to pay the sum of [L]5,000 a

year.[32]

Witherings, who by some strange chance seems never to have been

altogether ousted from his offices, but to have retained that of Master

of the Foreign Post, died in 1651, and there were numerous claimants for

the succession to the office. The Council of State invited all persons

with claims to submit them, and in reporting on the claims, suggested

the farming of the Inland and Foreign Letter Offices. The question was

put to the House of Commons that the whole business be "recommitted to

the Council of State to take into consideration and present their

opinions to the Parliament how the same may be managed for the best

service of the State and ease of the people." The addition of the words

"by contract or otherwise" was suggested, and accepted by the House.[33]

The question was considered by a Committee, who, having found much

difficulty in dealing with the numerous claims in respect of the Foreign

and Inland Letter Offices, decided on the 7th November 1651, probably as

a way out of the difficulty, to recommend that the offices should be let

to farm. The matter was not hurriedly disposed of. On the 7th May

1653,[34] resolutions were passed by the House of Commons asserting the

State monopoly of the carriage of letters, and directing the Committee

appointed to consider the posts to fix rates for private letters, to

obtain tenders from persons for farming the carrying of letters, and to

recommend what annual sum in their opinion the State should require in

case it were thought well to let the posts to farm.

On the 30th June 1653 the Inland and Foreign Letter Offices were let to

John Manley at a rent of [L]10,000 a year,[35] and thus was instituted the

system of farming, which continued until 1677 as regards the main posts,

and until the late eighteenth century as regards the bye posts. The rent

continuously increased. Shortly after the Restoration it was raised to

[L]21,500 a year, and in 1667 to [L]43,000 a year.

The rate for a single letter, which had been raised by Prideaux to 6d.,

was in 1655 or 1656 reduced to 3d., owing to the efforts and competition

of Clement Oxenbridge and others, who established and maintained rival

services for the carriage of letters. These "interlopers" received scant

consideration from Prideaux, and the services which they had established

were suppressed.[36] In 1657 an Ordinance of the Commonwealth Parliament

further reduced the rate to 2d. for a single letter sent for distances

under 80 miles, and 3d. for distances over 80 miles. The rates were not,

however, as low as would appear at first sight. There is the difference

in the value of money to be allowed for; and there is the further

consideration that postage was not charged according to the direct

distance. All the post roads converged on London, and there were no

cross posts. All letters from towns on one post road for towns on

another post road must therefore pass through London, and all letters

passing through London were subjected to an additional rate of

postage;[37] that is to say, they were charged the appropriate rate in

respect of the distance to London, and then, in addition, the

appropriate rate in respect of the distance from London to destination.

The Ordinance of 1657 placed the Post Office system for the first time

on a statutory basis.[38] The objects for which such an Office was

required were given as three in number: first, to maintain certain

intercourse of trade and commerce; secondly, to convey public

despatches; and thirdly, to discover and prevent many dangerous and

wicked designs against the peace and welfare of the Commonwealth. In

1660 an Act of Parliament was passed, dealing with the Post Office.[39]

Essentially it was the Ordinance of 1657, passed as an Act to give it

legal validity under the changed order of things. The clauses relating

to the use of the Post Office as a means of detecting plots against the

State were included in a modified form, and this function was by no

means lost sight of.[40] During the excitement caused by the Popish Plot

it was freely exercised.

The general farm of the posts was abolished in 1677, and the

administration of the Office undertaken by the Government, except in the

case of the smaller branch posts, in regard to which the practice of

farming was even extended in the early years of the eighteenth

century.[41]

The revenue yielded by the Office continued to expand. In 1694 it had

reached [L]60,000; and when, for various reasons, but chiefly to provide

for the control of the Post Office in Scotland, which had been brought

under the English authorities by the Act of Union, a new Post Office Act

became necessary, the Ministers, involved in a protracted war, seized

the opportunity to obtain an increased revenue from the Office. Under

William III this had been thought of.[42]

The Act of 1711,[43] which remained for over fifty years the principal

Act relating to the Post Office, was to be an instrument of taxation.

For some fifty years the Post Office had been yielding a revenue,

constant and increasing, but nevertheless more or less fortuitous. Its

functions had always been defined as primarily to provide for the

transmission of letters, for the benefit of commerce, and for the safety

and security of the kingdom, by bringing all letters into "one Post

Office settled and established in this Kingdom," and conducted

immediately under the eye of the King's Government. The amount paid for

the farm had increased with the passing of the years, in measure with

the increase of the business of the Office--not by any change in the

scale of charges, which remained as fixed in 1660. Now, however, the

Office was made a financial instrument, the proceeds of which were to be

regulated by manipulation of the rates of charge. The results of the Act

of 1711 did not fulfil the anticipations of its framers. Provision had

been made for the disposal of that increase of revenue which was looked

for: "the full, clear, and entire Weekly Sum of Seven Hundred Pounds of

Lawful Money of _Great Britain_" was to be paid out of the revenues of

the Post Office "towards the Establishment of a good, sure, and lasting

Fund, in order to raise a present Supply of Money for carrying on the

War and other her Majesty's most necessary Occasions."[44] This [L]700 was

to be paid entirely from the proceeds of the increase in the rates. The

existing revenue of [L]111,461 a year was to be disposed of as

theretofore. All pensions and charges on the revenue were to continue,

and were to have preference over the payment of [L]700 a week. Of the

surplus over and above the [L]111,461 a year and the [L]700 a week,

one-third part was to be at the disposal of Parliament, the rest to be

paid into the Exchequer with the [L]111,461.

But the increase of revenue was so small that some of these provisions

remained for many years inoperative. The increase of rate was found

burdensome. Merchants resorted to every available means of avoiding the

additional expense.[45] A large clandestine traffic in letters grew up.

The very postboys were found carrying letters outside the mail for what

fees they could obtain. In 1710 the net revenue had been [L]66,822. In

1721 it was [L]99,784, an increase of [L]32,962. After the deduction,

therefore, of the [L]700 a week (or [L]36,400 a year), the payment of which

had preference over all other payments chargeable on the Post Office

revenue, excepting only the expenses of management, the actual net

revenue of the Post Office available for the purposes prescribed by the

Act was in 1721, [L]63,384, or less than the revenue of 1710 by [L]3,438.

The Act provided that one-third of the surplus of the yield of postage

over and above the sum of [L]147,861 ([L]111,461 plus the [L]700 a week)

should be at the disposal of Parliament for the use of the public; but

although the gross revenue had exceeded that sum, there was no surplus

for the use of the public, the explanation being that the sum mentioned

in the Act, viz. [L]111,461, was the amount of gross revenue, which could

only serve as a basis provided the cost of management remained

stationary. As a matter of fact, the cost so greatly increased that the

net revenue was not sufficient to provide the sum of [L]700 a week and

also a revenue equal to that obtained before 1711. As Mr. Joyce has

pointed out, the Treasury had confounded gross and net revenue.[46]

The essentially fiscal character of the rates of 1711 is evidenced by a

provision of the Act that from and after the 1st June 1743 the rates

charged under the previous Acts were to be restored.[47] But after 1743,

although they were without legal sanction, the rates of 1711 continued

in operation, and by an Act of 1763 they were made perpetual.[48]

The fifty years following the Act of the 9th of Anne were

uneventful.[49] The chief development was in connection with the cross

posts; a development which, although not having direct reference to the

question of the rates of postage, was yet of importance. At the

commencement of the eighteenth century the main system of the Post

Office still centred on London. All the main post routes radiated from

London, and the great bulk of the letters passing by post were either

for or from London, or passed through London. But there were, of course,

numbers of letters which were not sent to London at all: letters between

two towns on a post road, or letters between towns on different post

roads, which could be sent direct and not by way of London. These

letters were known as bye letters and cross post letters.[50] Since they

were not handled in London, the authorities had not the same means of

checking their numbers, and the postmasters' accounts of postage in

respect of them, as could be applied in London, and grave irregularities

arose. The revenue was continually defrauded by the failure of the

postmasters to bring to account the postage on such letters. No record

was made in respect of many of them, and their transmission became so

notoriously unsafe that illicit means of conveyance were constantly

resorted to. The matter was already so serious that a special clause was

included in the Act of the 9th of Anne, providing that for the

suppression of the abuse any postmaster found guilty of embezzling the

postage of bye or way letters should forfeit [L]5 for every letter and

[L]100 for every week during which he continued the practice.[51] Even

this penal clause was insufficient to check the abuse, as owing to the

unsatisfactory method of dealing with bye and way letters there was

small risk of detection in fraud.

In 1719 Ralph Allen, then postmaster of Bath, proposed to the

Postmasters-General that the management of the bye and cross post

letters should be leased to him for a term of years, and offered a rent

one and a half times as great as the revenue from the letters at that

time. The offer was accepted, and the lease, which in the first instance

was for seven years, was renewed from time to time. Allen, whose

discovery was merely that of a method of check on the receipts of the

postmasters from the bye and cross letters, was able to pay the rent

agreed upon, largely to suppress the illicit transmission of the

letters, and to make a handsome profit.[52] The chief importance of

Allen's work lies, however, not so much in the fact of his rendering the

bye and cross post letters subject to effective check, as in the fact

that in order to retain his lease he, on each occasion of renewal,

undertook the provision of additional facilities. By this means a daily

post was gradually extended to almost all the post routes.[53]

In 1765 the inland rates for short distances were reduced, and a new

standard of charge was introduced. Hitherto, all charges had been

regulated on a mileage basis. For short distances they were now based on

the number of post stages. For one post stage the rate was made 1d. for

a single letter, for a double letter 2d., for a treble letter 3d., and

for every ounce 4d.; for two post stages, 2d., and in proportion for

double, treble, and ounce letters.[54] The financial result of the

change was unsatisfactory.[55]

Up to this period the mails were carried by postboys riding horse.

Notwithstanding that on all the chief roads stage-coaches were running

more expeditiously than the post-horses, the Post Office kept to the old

way. The superiority of the stage-coaches as means for the conveyance of

letters was noticed by Mr. John Palmer, proprietor of the theatre of

Bath,[56] who was so greatly impressed with the fact that he devised a

complete and definite plan for the establishment of a system of mail

conveyance by coach. The cost of the riding post (boy and horse) was 3d.

a mile, and Palmer estimated that the change could be carried out

without involving any increase of cost, especially if, as he proposed,

the coaches carrying the mails should be exempted from toll. The

proposal was severely criticized by the district surveyors of the Post

Office, who reported on it.[57] At the Treasury, however, the proposal

met with a more favourable reception. Pitt called a conference on the

21st June 1784, and after hearing the explanations of Palmer and the

criticisms of the representatives of the Post Office, decided that the

plan should be given a trial. Accordingly, on the 2nd August 1784 the

first mail-coach ran. The experiment, which was conducted on the Bath

Road, proved successful, and the plan was rapidly extended throughout

the kingdom. The first coach cost 3d. a mile, the same rate as the

riding post; but ultimately the coaches proved to be cheaper than the

horse posts. In 1797 the rate was no more than a penny a mile.[58]

Almost simultaneously with the introduction of mail-coaches there was an

increase in the rates of postage, made solely with a view to increased

revenue.[59] The alteration was more or less fortuitous. In his Budget

of 1784 Pitt had proposed a tax on coals which had not been well

received, and the increased postage was substituted. Palmer is said to

have claimed the credit of suggesting the substitution.[60] If so, his

faith in his plan was abundantly justified. Notwithstanding the handicap

of increased rates, it was an unqualified success, and the effect on

the revenue was immediate and considerable.

At about this time several horse and cross post mails had been molested,

and it was desired, in response to a considerable public agitation, to

establish mail-coaches on the minor posts. This would have involved

heavy cost, and as an alternative Freeling (Secretary to the Post

Office, afterwards Sir Francis) suggested that only responsible persons

should be employed--at this time the post riders, in fact as well as

name, were in many instances mere boys--and that the riders should be

armed. In order to obtain funds to meet the cost of this scheme, the

rates of postage were again increased in 1797.[61] A further increase

was made in 1801 in order to-provide an additional contribution of

[L]150,000 a year to the Exchequer.[62] The new rates were elaborate and

complicated, comprising no less than thirteen rates for each class of

letter, according to the distance of transmission. Another increase

followed in 1805, when the Post Office was called upon to provide an

additional [L]230,000 a year.[63] This time the increase was made in a

very simple manner, viz. by increasing the rates of 1801 in every case

by 1d. for a single letter, 2d. for a double letter, 3d. for a treble

letter, and 4d. per ounce.

All these increases, made with the avowed intention of increasing

revenue, were successful in their main object. The net revenue, which in

1796 was [L]466,457, had risen in 1804 to [L]956,212, and in 1806 reached

the sum of [L]1,119,429. The fiscal results seemed, therefore, to justify

the Government in turning again and again to the Post Office when they

were hard pushed to find revenue. This must be the justification of the

further increase of 1812.[64] The rates then established were the

highest ever charged in England. The net revenue rose slightly after

their establishment, but never increased materially. These rates

continued in operation until 1839, when they were completely swept away,

and new rates based on principles fundamentally different were

established.

This was the system, due to Sir Rowland Hill, of uniform rates,

irrespective of distance of transmission, first introduced in the United

Kingdom in 1839, and since adopted throughout the civilized world, not

only for inland services, but for the international service.[65] The

story of the conception, advocacy, and adoption of uniform postage is

fully told by Sir Rowland Hill in his _History of Penny Postage_,[66]

and need be only briefly dealt with here. The plan itself is described

in the famous pamphlet, _Post Office Reform: Its Importance and

Practicability_, which was issued by Sir Rowland Hill in 1837.

The reform was directly related to the great reform movement in England

of the second quarter of the nineteenth century, and is a brilliant

example of the application of the deductive method in politics. Sir

Rowland Hill was a member of a Radical family, remarkable even in those

days for its zeal for reform. It was the ambition of all members of the

family to aid as far as possible the great movement; and all the

brothers interested themselves in the study of social and economic

questions, with a view to reform and improvement.[67] In the year 1835

there was a large surplus of revenue, and the brothers speculated on the

direction in which reduction of taxation might best be made.[68] Sir

Rowland Hill examined carefully the results of the financial reforms

which had been introduced in recent years, and found that the effect on

the revenue of reductions in the rate of tax showed very considerable

variations. While in some cases, as, for example, leather and soap, a

reduction of the duty by one-half had reduced the revenue by one-third,

a similar reduction of the duty on coffee had increased the revenue by

one-half. From this Sir Rowland Hill concluded that it was of the utmost

importance to select carefully the taxes to be reduced, and he cast

about for some guiding principle in the light of which the most suitable

tax for reduction might be discovered. This principle he deduced to be

as follows, viz. that the tax which most called for reduction was that

which had failed most to keep pace with the increasing numbers and

prosperity of the nation.[69] Tested in this way, the tax on letters

proved unsatisfactory. While in most other departments of the revenue

the preceding twenty years had been years of expansion and progress--as

might be anticipated during a period of peace following great and

exhausting wars--in the case of the Post Office the period had been one

of stagnation.

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