i ILLINOIS UNIVERSITY OF ILLINOIS AT URBANA-CHAMPAIGN PRODUCTION NOTE University of Illinois at Urbana-Champaign Library Brittle Books Project, 2019.COPYRIGHT NOTIFICATION In Public Domain. Published prior to 1923. This digital copy was made from the printed version held by the University of Illinois at Urbana-Champaign. It was made in compliance with copyright law. Prepared for the Brittle Books Project, Main Library, University of Illinois at Urbana-Champaign by Northern Micrographics Brookhaven Bindery La Crosse, Wisconsin 2019 S ........Vx^ae o^r >\ I ; ' ■•-• : " " '" ■v><-•: ;-:V /'..'.r.:-, Y/--- ' - -V _.•'' - '. ;'W- v Vv.'- • '"V -V:: : - ;.;. ■ \ ■„ :r. .> v>v^' , . ■- . ' .••'>"-"■•■•'*'■ - -- - ■• •- . . . '• i.'- ;.- ^ • • >: . '-■•■. > • • •„ ,-... .• -• ■•. .-•• ;• .- ;• : . . -• •;• • *.rv . <-•. •...•• ^ ■ .■ • - v- ; - , . ■ ° r.-.- .. .■■.-■ ■■ ;' .-.:■■■ ■•>-<■ ■• •■" •-. ... •/•••'■ ■:': - -j: i!- •- '.:■ -^v-: ■'■ -.-v. • -' "■■■-■. •. • . 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IS SPRUCE STREET. 1849.THE FINANCE OF CHEAP POSTAGE. i While the people of this country are beginning to inquire, why they can- liiot enjoy that blessing of cheap postage, which, they are told, has now for tien years produced so many benefits in England, the statesman who is calle4 to consider the subject in its details, and to be politically responsible for att its consequences, naturally raises the financial question—How will it pay f Having at hand a variety of statistical facts, which I have never seen brought together in one view, the idea occurred to me that a few tables could be pre- pared, which would be appropriate to the pages of the Merchants' Maga- zine, if you will give them place. The British Cheap Postage Act went into operation at the beginning of the year 1840. Prior to that time, for twenty years, there had been no ad- Vance in the post-office, notwithstanding the great advance in population, trade, and general intelligence. During twenty years, ending with 1839, the highest amount of gross receipts was, in that year, £2,390,763; and the lowest was in 1821, £2,038,706 ; a difference only £362,057. The ave- rage of the whole twenty years was £2,211,918 ; lite average of the first five years was £2,081,036, which was £130,882 less, and of the last five years was £2,334,134, which was £132,216 more than the general ave- rage. This shows that under the old system the average was wholly unaf- fected by the general progress of the country. The average receipts had in- o creased but 12£ per cent in twenty years. o The expenditures, though somewhat more fluctuating in particular years, were equally immovable in their general average ; the first five years giving M yearly £640,049, and the last £700,898—an increase of only 12£ per cent. The average expense of the twenty years was £686,616 ; the highest amount, £756,999, in 1839, and the lowest £615,981, in 1823. Of cpiirse the cost of railway carriages, and many other increased accommodations which have been introduced. If we average the increase of cost for the first year upon the increase in the number of letters, we shall find that each additional letter added just one farthing to the expenses of the department. A striking illustration of the- accumulative power of small profits on large business. The next table will show the amounts paid for government postage, the cost of conveyance of the mails by railroad, and the cost of the mail packet service. This latter is charged to the admiralty, and not to the post-office *, also, the number of newspaper stamps, and the amount of duty paid into the Treasury; but to balance this, the post-office receives nothing for carry- ing newspapers. Government Railway Packet Newspaper Years. postage. service. service. stamps. Duty. 183 9------------------------£44,277 ........................60,932,151 £244,416' 184 0................................90,761 £51,301 £417,744 59,936,000 252,348 184 1................................113,255 94,818 473,068 63,591,146 247,663 184 2................................122,161 77,570 560,413 65,767,035 253,779 184 3................................116,503 96,360 564,577 71,215,498 ...... 1844...............................109,232 89,809 554,197 ............... 1845................................101,190 179,257 655,418 ............... 1846.............................100,354 107,890 717,860 ............... 1847................................121,290 119,983 701,580 ......... ...... 1848..............................115,902 316,941 ........................... The increase of government postage the first year after the abolition of the franking privilege was 105 per cent; increased the eighth year to 142 per cent. The government postage increased 33 per cent in seven years after4 the first year of cheap postage. The cost of transporting the mails by railroad increased more than 519 per cent in eight years. The increase in one year, from 1847 to 1848, was 164 per cent. The increase in the cost of packet service in seven years is 68 per cent, which is greater than the ratio of increase of the general cost of manage-! ment. This confirms the idea that the increased expense is chiefly charge-The Finance of Cheap Postage. able to increased accommodation. With cheap postage, the increase of pub- lic accommodation naturally becomes the characteristic or predominant poli- cy of the department. In the first introduction of cheap postage, Mr. Rowland Hill, the projector, was sanguine in the belief that he had discovered a scheme for recovering two millions sterling of annual revenue, which, he maintained, had been sacrificed by the high rates of postage. But the experienced statesmen who a 'opted the system, had no such expectations. Mr. Goulburn estimated the pi ^bable loss of revenue at £500,000 to £1,000,000. Lord Ashburton be- lieved it would be equal to the whole net Revenue from the post-office. Mr. Francis Baring, Chancellor of the Exchequer, in introducing the bill, admit- ted that the loss would be " very considerable indeed." Sir Robert Peel said they were risking the loss of a million and a half of revenue, but that u it was impossible to exaggerate its benefits and " great social and com- mercial advantages would arise from the change, independent of financial considerations." The actual loss of net revenue was 68 per cent the first year. Last year's net revenue was £749,429. The great increase in the cost of management has kept the net revenue from increasing in proportion to the increase of gross receipts. It is now only equal to one-half the amount under the old system. STATISTICS OF THE AMERICAN POST-OFFICE FOR TEN YEARS. Years. Post-offices. Post-roads. Receipts. Expenses. Letters. Miles. 183 9........................12,680 133,999 «4,47*7,619 $4,654,718 ......... 184 0........................13,468 155,639 4,530,265 4,759.110 27,535,554 184 1........................13,682 155,026 4,379,317 4,567,228 ......... 184 2........................13,733 149,732 4,546,246 4,627,716 ......... 184 3.............13,814 142,295 4,295,925 4,374,713 24,267,552 184 4........................14,103 144,687 4,237,285 4,320,731 ......... 184 5...................14,183 143,844 4,289,841 4,320,731 ......... 184 6........................14,601 147,679 3,487,199 4,084,296 ......... 184 7................15,146 153,818 3,945,893 3,971,310 52,173,480 184 8....................16,159 163,208 4,371,077 4,326,850 58,069,075 In 1790 there were 76 post-offices, and 1,875 miles of post roads; the receipts for postage were $37,935, and the expenses only $32,140. In 1800 the post-offices were 903 ; miles of post roads, 25,315 ; receipts, $280,804. In 1808, during the embargo, the receipts fell short of the expenses by $2,264. In 1820 there were 4,500 offices, 67,586 miles of road; receipts $1,111,927; and for a second time the expenses were greater than the receipts. There have been only eight years since in which the receipts have exceeded the ex- penses. In twenty years, from 1820 to 1840, the post-offices were increased three- fold, the miles of roads more than doubled, and the receipts four-fold. From 1840 to 1848, the post-offices have increased 20 per cent, and the miles of post-roads only 5 per cent—the routes to Oregon and California not being yet included in the last returns. During fifty-nine years that the reports have been published, the receipts have been in excess thirty-eight years, and the expenditures in excess twenty- one years. The total excess of receipts is $3,774,058, and the total excess of expenditures, $2,665,165 ; showing that the post-office has netted to the general treasury a balance of $1,108,893, besides supporting itself, even through all the difficulties of the last ten years.0* The Finance of Cheap Postage, The receipts maintained, a general increase, corresponding with the growth and advancement of the country, until 1839 ; after this the growth was small to 1842, when the highest point was reached. The falling off from 1846 to 1847, the last year under the old postage, was nearly 6 per cent. The cessation of growth and actual decline was attributed to the increase of private mails. The decrease of receipts the first year of the reduced postage, under the1 act of 1845, was 19 per cent. The increase of the receipts in the second year of reduced postage, ov^r the first, was 13 per cent; in the third over the first, 25 per cent, showk^g, conclusively, that the same law of the increase of consumption by the -dimi- nution of price obtains in regard to postage here, which has been so signal- ly illustrated in the case of British postage. The expenses of the post-office were reduced 12± per cent, or one-eighth, from 1842 to 1847. This was owing to a more rigid economy, and better arrangement in the contracts for carrying mails. The increase of letters from 1842, the last return made under the old postage, to 1847, the first return under the reduced postage, is 138 per cent. How full of encouragement! In 1837, the number of letters paying postage was estimated by the then Postmaster-General, at 29,360,992. Instead of increasing, as it ought, at the rate of 4 per cent per annum, it diminished 17 per cent in eight years. The increase of letters last year, according to the returns, was 11 per cent. The increase of expenses, 10 percent. According to the estimates of the Department, if the post-office is to sup- port itself, it is necessary that letters should pay $2,650,000 ; to meet which sum, at two cents per letter, would require 132,500,000 letters—an amount which could not fail to be reached the third year, if not sooner. An appropriation of what the Government has already received from the post-office—$1,108,893—would meet all the deficiencies in the meantime. Those who have occasion to study minutely the subject of post-office ad- ministration in this country, will find instruction in the following detailed ac- count of the " charges of management" of the English Post-office, for the year ending 5th January, 1848 :— Salaries and allowances— To Postmaster General, officers, and clerks, and wages in the London, Edinburg, and Dublin offices................... £204,053 To deputy postmasters and agents...................... 242,394 To officers and carriers in the London district post-office____ 86,557 Poundage on the sale of postage stamps.................. 6,523 - £539,420 Allowance for special service and traveling.......................... 35,771 Conveyance of mails— Riding work and expenses in the United Kingdom......... 140,272 Conveyance by railways................................ 123,944 Mileage, guards, and other expenses of mail coaches....... 135,108 Tolls on mail choaches................................ 19,853 American colonies.................................... 35,140 London district post-office............................. 9,516 Postage through foreign countries....................... 34,039 Ship letter payments..........................................9,890 * - 507,773 Rents, taxes, and tithes........................................... 6,756 Tradesmen's bills, binding, repairs, &c................................ 30,031 Law charges..................................................... 11,011The Finance of Cheap Postage. 1 Stationery aid printing................................................£2,71 7 Postages........................................................................................22,473 Superannuation allowances.................................................13,054 AUowanees for loss of fees................................................................................14,057 Miscellaneous payments....................................................2,260 Total.................................................... £1,185,337 The amount of "salaries and allowances," in 1848, was £554,538 ; the "conveyance of mails" was £698,405, of which £316,941 was by railway. The total increase in conveyance is only £12,118, a little over 2 per cent; while the Increase on railway conveyance is £192,997, or 154 per cent. The average cost of the railway service for the last four years, is £181,018; in the preceding four years, £89,639. The cost has increased more than five- fold since 1840, not as the consequence of cheap postage, but from the ne- cessity of increased speed. ^|| \ COMPARISON OF THE BRITISH AND AMERICAN POST-OFFICES, REDUCING THE FORMER RETURNS \ TO FEDERAL CURRENCY, AT $4 84 TO THE £ STERLING. British. American. Gross receipts or income............... ......................$10,610,593 $4,371,077 Oost of management, or expenses......................................6,712,368 4,346,850 0ost of internal transportation............................................2,229,763 2,448,756 Cost of railway service........................................................*599,889 584,192 population served with mails............................................27,000,000 21,000,000 Square miles served with wants........................................116,000 1,199,000 Receipts from letter postage........................................$6,937,225 $3,350,000 Receipts from newspaper postage..........................................................767,334 The fact that with all our extent of country, (excluding the territories,) our cost of transportation is only $218,993, or less than 10 per cent greater than the British, and that our whole cost of management is less, by $2,385,518, or 35 per cent, shows how much more cheaply our government inanages its business, and proves, beyond a question, that cheap postage is as practicable here as there; and removes the only ground of argument against our adoption of the same rate of postage which has worked so well in the British experiment. The " Financial Question," therefore, in regard to the practicability of cheap postage must be considered as settled. From the best information, I am enabled to add two other circumstances, besides the immense increase of railway conveyance, in explanation of the increased cost of management of the British Post-office. One is, the very great multiplication of rural posts and sub-post-offices, for the accommoda- tion of titled and other influential individuals, where great expense is incur- red amidst a rural population that furnishes few letters except from a single family. The other is the great increase in the staff of the seven " District Surveyors," who in fact rule England and Wales, so far as concerns postal de- tails. Each rural post has to be surveyed, and a report made thereon, by a surveyor from London, at an expense of £10, or more, to obtain local infor- mation, which could be given as well by the postmaster of the next town. That's the way John Bull does his business. * The sum given in the second table above, which i8 from another Parliamentary return, would make the cost of railway conveyance $1,545,994.This book is a preservation facsimile produced for the University of Illinois, Urbana-Champaign. It is made in compliance with copyright law and produced on acid-free archival 60# book weight paper which meets the requirements of ANSI/NISO Z39.48-1992 (permanence of paper). Preservation facsimile printing and binding by Northern Micrographics Brookhaven Bindery La Crosse, Wisconsin 2019