PROGRESS AFTER 1859.
SAVINGS BANKS.
The plan of Post Office Savings Banks, already mentioned as having
been brought before the public and the Government most prominently by
Mr. Sikes, had, through the energetic efforts of Mr. Gladstone, been
provided for, in the year 1860, by Act of Parliament. It was speedily
brought into operation in England and Wales, and was extended early
in the following year to Scotland and Ireland. As this new department
was closely connected with the Money Order Office, its secretarial
management devolved, in the ordinary course, on my brother; who, before
proceeding to the work of organization, recommended that this should
be based upon the contract system; a measure which would have been
highly economical, but would obviously have involved the abandonment
of patronage. This recommendation, however, did not find favour with
the Postmaster-General, Lord Stanley of Alderley, and the department
was soon afterwards transferred to Mr. Tilley. Together with this
great measure of economy were rejected other means proposed by myself.
In short, operation was made so expensive, that while a money order
costs the department in issue or payment but three-halfpence, every
transaction in the savings bank, whether of deposit or withdrawal,
costs sevenpence.[220]
The full evil of such increase in current expense will appear when
it is considered what, under strictly economical management, these
savings' banks might become. Their chief avowed object is, and most
assuredly should be, to give the largest justifiable encouragement
to popular thrift; and to this, as I conceive, every other aim
should be completely subordinated. To this end it is important to
induce, by all reasonable means, the greatest amount of deposit, but
incomparably less important, if indeed at all desirable, to give more
than reasonable facility for withdrawal. Certainly there is no just
ground for extending and multiplying such facility at the expense
of the department; especially seeing that the necessary consequence
is a reduction in that rate of interest whose amount constitutes a
main inducement to depositors; so that the effect is to mulct the
steady depositors for the convenience of the more changeable. Had the
Post Office been able to offer the same rate of interest as the old
savings banks, its absolute security, combined with a reasonable and
inexpensive increase of facility for the transaction of business,
would not only have soon brought to it the whole actual amount of the
savings bank business, but in all probability would have so extended
that increase in thrift, which, with all defects, it has actually
produced, as to make it correspond with the hopes of the most zealous
advocates of the new scheme, and in particular of the benevolent
gentleman in whose earnest suggestion it took its rise. Before the
arrangements were finally adopted, I urged my views as to excess of
expense and consequent prejudice to revenue, in an elaborate letter to
the Postmaster-General. Some small change for the better was made, but,
high as the estimate still remained, it has been exceeded by the actual
expense, though the Annual Reports would seem to show otherwise.[221]
With all drawbacks, however, the institution may safely be pronounced
to be a great national benefit. The number of Post Office Savings Banks
in the United Kingdom by the end of the year 1861 was nearly four-fold
the maximum number of savings banks existing under the old system,[222]
and is now (1869) as high as six-fold.[223] It is important also to
observe that the number of small deposits is more than proportionately
increased; a fact obviously tending to show that this important means
of thrift has been made more available to that class in which economy
is at once most difficult and yet most desirable.
"'This gratifying result,' says the eighth Annual Report, 'is
doubtless attributable to the superior facilities given by the Post
Office banks; and especially to the fact that they are open daily
and for several hours, and that they are situated almost at the
door of the depositor.'"[224]
The new institution also proves very convenient to friendly societies,
charitable societies, and penny banks, which avail themselves of its
benefits in considerable numbers.
Fear had been expressed during the progress of the bill through
Parliament that the sub-postmasters would fail to carry out the details
of the measure; but it was found that--
"The postmasters throughout the country have lent themselves
cheerfully and readily to the work, and instead of merely carrying
out their instructions perfunctorily, and in ordinary course, have
exerted themselves to make known and to explain the advantages of
the Post Office Savings Banks, and to facilitate, so far as lay in
their power, the transactions of the poorer depositors."[225]
REGISTRATION.
In the year 1862 an important improvement was made in the matter of
registration. It may be remembered that my urgent advocacy of the
lowering of the fee from one shilling to sixpence, in opposition to
the opinion of Lord Lowther, appeared to be the immediate cause of my
dismissal from the Treasury by the Government of Sir Robert Peel.[226]
I had easily succeeded in obtaining that important reduction after my
appointment to the Post Office by the Government of Lord John Russell,
and the change had been followed by a large increase in the number of
registered letters, and a corresponding diminution in the amount of
loss by dishonesty or negligence within the Office.[227] Of course,
however, even the lower fee proved a stumbling-block to some persons,
and, notwithstanding all remonstrance from the Post Office, the
practice of sending coin in unregistered letters, though diminished,
was by no means extinct; so that losses were still reported; and, what
was far worse, sorters and letter-carriers were exposed to needless
temptation, and individuals of their number occasionally subjected to
undue suspicion. It was consequently resolved, with the sanction of the
Treasury, to make the registration of coin-bearing letters compulsory;
a double fee being charged where the duty was omitted by the sender;
while, to give a compensatory advantage, the registration fee was
reduced from sixpence to fourpence. Even with this mitigation, however,
there was considerable anxiety in the Department as to the light in
which compulsory registration would be viewed by the public; but Lord
Stanley of Alderley, then Postmaster-General, being anything rather
than deficient in courage, readily encountered the risk, and the result
justified his boldness; the speedy consequence being a large increase
in the number of registered letters, and a very great decrease in the
number of alleged losses. It may be added that the near approach to
absolute security obtained by registration was shown by the fact that
out of about nine hundred thousand registered letters posted in the
United Kingdom, whether for delivery at home or abroad, during the
latter half of 1862, the whole number lost was only twelve.[228]
PATTERN POST.
In the last year of this period the pattern post was established. This
was done at the express desire of the Postmaster-General. My own wish
was to make it part of that more extensive arrangement which I have
already mentioned under the name of Parcels Post; my chief objection
to the more partial scheme being the difficulty sure to arise as to
the definition of a pattern. As, however, I was not then in a state
of health to surmount immediately the many obstacles to the more
comprehensive scheme, and as Lord Stanley was impatient of delay, the
more limited plan was adopted and carried into effect.
PACKET SERVICE.
_Transference from Admiralty._
The last improvements of which I shall speak here are those connected
with the Packet Service. This service, it will be remembered, had,
under the management of the Admiralty, become a source of very great
expense; attributable partly to the fact of its extension, for
political reasons, very far beyond the requirements of the Post Office.
As this extension had ceased, it was desirable, as fast as possible,
to bring the expense within such limits as would render the service
self-supporting, and thereby relieve the British tax-payer from a
needless burden. Opportunity was given for such improvement by the
transference of the service from the Admiralty to the Post Office; a
change made in the year 1860. Of course progress could be but slow,
seeing that existing contracts had to be respected; but steps were
promptly taken to put the department in readiness for availing itself
of opportunities as they should occur. The secretarial charge of the
department was from the first placed in the hands of my brother, who
already had like charge of the foreign and colonial departments, and
had previously performed such secretarial duties relative to this
service as even then devolved on the Post Office.
_Improvement in Tenders._
His first move was, so to frame the tenders as, in effect, to analyze
the charges hitherto made in the gross; to show how much was demanded
for the main duty, and how much for its various adjuncts; and by this
means to ascertain how far the various details of any particular
service justified the expense of their additional maintenance. The
value of such analysis may be exemplified by stating that by abandoning
stipulations which were really of little or no practical utility,
either to the Post Office or to the public at large, we were able to
reduce the annual expense to the Home Government of conveying the mails
to and from Honduras from £8,000 to £2,000; eventually, indeed, to
£1,500.
_Discontinuance of Surveys._
A yet more important measure, however, as being even more general in
its operation, was to relieve contractors from the admiralty surveys
of the vessels, previously insisted upon, and to limit the demand to
a stipulation--under adequate penalties--that the mail service should
be regularly performed within a given time. It was not without much
difficulty that the sanction of the Postmaster-General was obtained to
so great an innovation. The measure, however, was in full accordance
with the spirit of Lord Canning's Report on the packet service; and,
before it was recommended, good assurance had been received that the
alterations required by the Admiralty, though often attended with heavy
expense, really tended to render the vessels employed less fit for
the performance of their special service. In short, the measure was,
practically speaking, carried into effect; and, so far as I can learn,
has never given rise to a single complaint. Its pecuniary benefit was
exemplified by a tender subsequently made for a particular service by
Sir Edward Cunard; the effect being to reduce the annual charge, in
this one contract alone, from £23,000 to £19,000, a rate of saving,
which, when applied to the whole cost of the packet service, would
amount to about £200,000 a year.
_Readjustment of Transmarine Rates._
Concurrently with these and other measures for reducing the cost of
the service, my brother sought to do something towards meeting its
inevitable expense by a moderate increase of postage in quarters
where the charges for conveyance were proportionately the heaviest.
Experience had shown that, where transmission necessarily occupies
a long time, increase of correspondence depends far less on lowered
rates than on increased speed and frequency of transmission. He felt,
moreover that it could not be just to call upon the British tax-payers
generally to pay exorbitantly for advantages specially appertaining to
the comparatively few persons who were directly interested in foreign
and colonial correspondence; that every branch of the postal service
ought to be self-supporting, and the false principle of protection
to particular interests entirely shut out. At the same time, to meet
the convenience of those who required cheapness rather than speed, he
proposed a concurrent reduction on all letters sent by ordinary trading
vessels; a mode of conveyance involving very little expense. A change
so doubtful of acceptance, though so sound in principle, Lord Stanley
of Alderley had the courage to adopt; and it received the cordial
approbation of Mr. Gladstone, then Chancellor of the Exchequer.
_Fiscal Benefits._
The effect of these combined measures is most strongly exemplified in
the service to the Cape of Good Hope and Natal; the loss on which was
reduced in six years from about £28,000 to about £5,400 per annum. In
short, I believe that the large annual loss involved in the foreign
and colonial packet service was actually reduced during the time
that the department was in my brother's hands by more than £200,000;
£100,000 being saved by reduced expenditure, and the like sum gained by
increased yield from the correspondence; while the cost to the British
taxpayer was further diminished by the extension of arrangements
previously adopted for calling upon the colonies, once exempt from all
expense of transmission, to bear their just share of the charge.
_Increased Punctuality._
Whilst thus successfully striving for increased economy, my brother
also took measures for improving the service. By a system of exact
accounts he obtained quarterly tables showing at a glance how each
line of packets stood with respect to punctuality, together with the
length of its quickest and of its slowest voyage; so as to have ground
of comparison with subsequent performances. He also introduced into
all new contracts a stipulation for penalties to be levied in cases of
over time. Lastly, while the Annual Report was in his hands, he was
careful that, whenever a service was performed with great credit, the
Postmaster-General's Annual Report should contain due notice of the
fact. The directors showed the value they attached to such recognitions
by quoting them in their reports to the shareholders. To complete this
matter, I may here state that so striking was the effect gradually
produced by these various measures, that, in the last quarter during
which the department was under my brother's superintendence, viz.,
that ending September 30th, 1867, there were, as I learn, only twenty
instances of a packet arriving after its time; while those of arrival
before time were no less than two hundred and twenty-seven.
_Large Expenditure Prevented._
The last great service performed by my brother in this department,
which, for the sake of completing the subject, I mention here,
consisted in the defeat of an attempt to draw the British Government
into the adoption of such changes in the Australian service as, without
any appreciable improvement in its efficiency, would have subjected
the mother country to an increased annual expense of about £114,000.
The proposal was drawn up with great art, and under show of certain
advantages, really aimed at diverting the main burden of expense from
certain of the colonies to the mother country. My brother, after a
careful consideration of the whole subject, prepared a minute exposing
the fallacies of the plan and justifying its rejection. This minute
being approved by the Postmaster-General of the day (the Duke of
Montrose), and confirmed by the Treasury, was sent out with but little
change in its words to the colonies concerned, where it appears to have
settled the question.
_Reward for Faithful Services._
This important minute was written in the year 1867, about three years
after my resignation. While, however, my brother was quietly rejoicing
at the success with which he had surmounted these serious difficulties,
and dwelling, perhaps, with some natural gratification on two recent
minutes in which the Duke of Montrose had recorded his satisfaction
with the financial results of the packet service during the time it had
been under his management, and with the state of perfection into which
that service had been brought; while, moreover, he was taking measures
for further improvements of great importance, for which opportunity was
rapidly approaching, through the termination of existing contracts,
a change was preparing which soon put all such thoughts to flight.
Will it be believed that in the course of the same year, nay, within
a few months from the date alike of the despatch to Australia and of
the Postmaster-General's gratifying minutes, the whole packet service
was withdrawn from my brother's charge and placed in other hands.
The motive assigned by his Grace was that Mr. Frederic Hill's views
were opposed to those of the Postmaster-General, Mr. Tilley, and the
Treasury. No positive act of opposition was alleged or even hinted
at, my brother's proceedings in the matter having been limited to
statements and arguments set forth in minutes to his Grace; while, to
judge by all his antecedents, he was ready, as indeed he was bound,
to obey any injunction, and to carry out any announced wish of his
official superior, however little these might be in accordance with
his own opinion. The consequences of the change, it must be added,
were far more speedy than satisfactory. Within a year, the cost of
the service, which under his management had been gradually reduced
by about £100,000, was augmented by little less than £300,000; and I
may add that but for such interposition as for a short time he was
still allowed to make, the increase, great as it was, would in all
probability have been greater still.[229]