V LOCAL RATES

United Kingdom

Local postal services, providing for the delivery of local letters at reduced rates of postage, existed in the United Kingdom over a long period. The first service was established in London in 1680. Up to this time the business of the Post Office had been restricted to the transmission of letters between the post towns, and no rate of postage existed except in respect of letters sent over appreciable distances.[530] The idea of a local service seems to have originated with a Mr. Robert Murray; but the London local post was actually established by William Dockwra, "a merchant, a Native and Citizen of London, formerly one of his Majesty's Sub-Searchers in the Custom House of London." Other citizens of London were concerned in the undertaking, which was established without reference to the authorities of the Post Office, and was intended to be purely a private commercial undertaking.[531]

Under Dockwra's scheme London, with Westminster and the suburbs, was divided into seven districts or "precincts," in each of which was a "sorting house." Scattered over the City and suburbs were from four hundred to five hundred receiving houses for the taking-in of letters. Messengers called at the houses for letters every hour. Letters and parcels not exceeding 1 pound in weight or £10 in value were accepted and conveyed at the uniform charge of 1d., payable in advance.

The service was not restricted to letters for delivery within the London area and the surrounding district. Letters which were to be transmitted through the General Post[532] were accepted at any of the receiving offices, and conveyed to the General Post Office in Lombard Street; and letters received in London by the General Post were delivered by the penny post, if for places outside the General Post delivery.[533] This facility proved of much advantage to the public, and led to a large increase in the number of General Post letters. When well established, Dockwra's new system proved profitable and attracted the attention of the authorities of the General Post Office. They contended that the service was an infringement of the monopoly conferred on the Postmasters-General by the Act of 1660,[534] and in 1683, at the instance of the Duke of York, in whom were vested the profits of the General Post Office, an action was brought against Dockwra to restrain him from continuing a breach of the privilege of the Postmasters-General. Dockwra was ordered by the court to pay nominal damages, and was forbidden to continue his penny post.

The post was not, however, abolished, but was taken over and managed by the Postmasters-General. Although the service had been decided to fall within their monopoly, the rates charged rested on no legal authority. No statute authorized the conveyance anywhere of letters at the rate of 1d. No authority existed for any rate below the minimum General Post rate of 2d., under the Act of 1660, a state of affairs which continued until the passing of the Act of 1711. A penny rate of postage was then fixed for all letters "passing or repassing by the carriage called the Penny Post, established and settled within the cities of London and Westminster, and borough of Southwark, and parts adjacent, and to be received and delivered within 10 English miles distant from the General Post Office in London."[535] At first the service had included only the cities of London and Westminster, the borough of Southwark, and the immediate suburbs; but the residents in the neighbouring towns and villages, recognizing the advantage of the system, soon asked that it might be extended to include their respective localities, voluntarily agreeing to pay an additional penny on delivery, on each letter. This further charge was at first appropriated by the messengers as their remuneration; but as the amount received by them in this way was found to exceed what might fairly be regarded as reasonable wages, the second penny was in 1687 made part of the ordinary revenue of the Post Office. There was, however, no legal authority for the collection of this additional charge, which remained a voluntary payment until 1730.[536]

The limit of weight for packets sent by the penny post was also extended, parcels of considerable size and weight being accepted. The rate of postage, however, remained uniform at a penny. One of the charges against Dockwra in later years, when he was dismissed from the office of Comptroller of the Penny Post, to which he had been appointed under William III, was that he forbade the taking in of any but very small band-boxes, and all parcels over 1 pound in weight.[537]

The penny post was found to be a great convenience to Londoners and dwellers in the vicinity.[538] It facilitated both local intercourse and, through its connection with the General Post, general intercourse with all parts of the country. It was also advantageous in a way which was not satisfactory to the Postmaster-General. For some years before its establishment there had been much difficulty from the evasion of postage resulting from the illicit transmission of letters. Carriers, especially, made a business of the conveyance of letters. The difficulty had been so serious that in the reigns both of Charles II and of James II special officers had been appointed whose duty it was to search any person or vehicle suspected of carrying clandestine mails. The establishment of the penny post led to a very large development of this traffic. Previously, when the carriers arrived with the letters, there was no means at their disposal for effecting distribution and delivery within London, other than by themselves delivering the letters individually, or by employing special messengers, or, in the last resort, by employing the General Post, to avoid whose charge was the whole object of entrusting letters to the carriers. The penny post removed this difficulty, and the public were not slow to avail themselves of the opportunity afforded.[539]

The penny post did not, however, mark the limit of possibility in the way of cheap postal facilities. In 1708 Charles Povey established a halfpenny post in London, and found this low rate profitable. His undertaking, like that of Dockwra, proved to be an infringement of the monopoly of the Postmasters-General, and was suppressed within a few months, although Povey was very reluctant to discontinue his service.[540]

The London penny post was for a long period the only local post in the kingdom. Its advantages were, however, generally recognized, and the Post Office Act of 1765[541] gave to the Postmasters-General power to establish penny posts in any town where that course seemed to them expedient. Under this authority numerous penny posts were established in all parts of the country. As many as 202 such penny posts were established between 1830 and 1837. They were established only when it could be reasonably anticipated that the yield of the penny postage would cover the expenses of the service; but when once established they were not usually discontinued, even if the revenue fell below the expenses.[542] Like the London penny post, these local services included the area surrounding the town in each case. For transmission within a penny post area the rate of postage was 1d.; for transmission to another such area the general rate was charged in addition; and another penny was charged in respect of the second penny post.

The conveyance of parcels ceased in 1765. The Act of that year[543] forbade the transmission by the penny post of any packet over 4 ounces in weight unless it had passed, or was intended afterwards to pass, by the General Post. During all this period, however, the people of London enjoyed an efficient postal service which in point of lowness of charges was in advance of anything they have enjoyed since, unless the privileges of the postcard and the halfpenny post, that is, of a rate half the minimum (and only) rate of the penny post, can be set against the cheap transmission of considerable packages by the old service.

A further Act of 1794[544] empowered the Postmasters-General at their discretion to extend the limits of the post beyond the 10-mile circle prescribed by the Act of 1711. No additional postage was imposed on letters delivered beyond the 10-mile circle. Under the Act of 1730 the charge would be 2d. An additional rate of 1d. was, however, imposed on all letters posted within the extended limits and beyond the 10-mile circle; and also on all letters posted without the original limits of the penny post and delivered within those limits, i.e. the cities of London and Westminster, and the borough of Southwark, with their suburbs. By this Act prepayment of postage, hitherto compulsory in the penny post, was made optional.

An Act of 1801[545] raised to 2d. the rate for letters passing by the penny post, whether or not they were to pass by the General Post, within the original limits of the penny post. For letters passing by the penny post, posted or delivered outside the original limits, no additional rate was prescribed. The charge was already 2d.; and the rate of postage on letters passing by the London local post therefore now became uniformly 2d. Henceforward the service was known as the "twopenny post."

The Act of 1801 contained an important clause (clause 5) of general application, providing that the Postmasters-General might at discretion undertake the conveyance and delivery of letters "directed to persons abiding in towns, villages, and places (not being post-towns)," for such sums as might be agreed upon between the Postmasters-General and the inhabitants. Under this provision it was found possible to extend the service to a considerable number of places.[546]

An Act of 1805[547] imposed an additional charge of 1d., making 3d. in all, on letters sent by the twopenny post and not passing by the General Post, directed to or sent from places beyond the limits of the General Post delivery; and on every letter passing by the General Post and directed to places beyond the limits of the General Post delivery, and delivered by the twopenny post, an additional charge of 2d.[548] There were now, in reality, two local posts in the London area—the twopenny post, for letters transmitted between places within the limits of the delivery of the General Post; and the threepenny post, for letters directed to or sent from places within the limits of the local service, but beyond the limits of the General Post delivery. In 1831 the limits of delivery of the twopenny post were extended to include all places within a radius of 3 miles of the General Post Office; and in 1833 the limits of the threepenny post were extended to include all places beyond the 3-mile limit, and not exceeding 12 miles from the General Post Office.[549] No further modifications of importance were made before the establishment of uniform penny postage.

The introduction of a uniform rate of postage for the whole country of 1d., only half the lowest rate which had been charged in the London local post, obviously made unnecessary the continuance of that post, and also of the penny posts scattered up and down the country; or rather extended to the whole country the benefit of rates based on items of local cost only, since the system of uniform postage irrespective of distance rests on the recognition of the preponderating cost of the local or terminal services, and the relatively insignificant cost per letter of the service—conveyance from place to place—which depends on the distance of transmission.

Financially the London penny and twopenny posts were always successful. Under the penny rate the profits had approached half the gross receipts—in 1800 they were 43 per cent.—and under the twopenny rate at once rose to more than 60 per cent., in 1825 reaching 67 per cent. The net revenue, which in 1801 under the penny rate was £16,286, had in 1837 under the twopenny rate risen to £73,334.[550]

Canada

Special local rates have from quite early dates been in operation in America. If in England the lowest rate fixed for General Post letters had been found too high to afford reasonable accommodation for the public in London and other cities, it may well be imagined that the lowest rate in Canada, gauged as it was to the needs of a service which should cover a country of vast area and ill-provided with roads, would be found altogether high for local letters. Moreover, in most places no sort of delivery service existed. Local letters could only be placed in the post office to be called for by the persons to whom they were addressed. In Canada the actual cost of the conveyance of the mail was consequently disproportionately high compared with other expenses of the service, and the justice of a lower rate for such letters as obtained no benefit from that expenditure naturally suggested itself. The lowest rate fixed by the Act of 1765 for transmission within Canada of a single letter was 4d., and, rather than charge such a rate on local letters, the deputies in Nova Scotia allowed such letters to be deposited in the post office free.

At Confederation a special rate for local letters of 1 cent per ½ ounce was established. At this time there was still no authorized house-to-house delivery of letters in any part of Canada, and local letters were actually what they are always termed, viz. "drop" letters. They were letters dropped into the post office letter-box and handed out at the office to the addressee on application. When in 1875 delivery by letter-carrier was introduced in certain towns, the drop-letter rate was not disturbed. It was thought, however, that a postage charge of 1 cent was not sufficient to cover the cost of the service of delivery at the place of address, performed by an expensive establishment of letter-carriers; and in 1889, on that ground, though much against the wishes of the mercantile community, the rate was raised to 2 cents an ounce in cities and towns where the system of delivery by letter-carrier was established, the existing rate of 1 cent per ½ ounce being continued in other cities and towns.

The ordinary letter rate was still 3 cents. This change therefore left all local letters with a lower rate than ordinary letters.[551]

The 2-cent rate proved to be too high. Much dissatisfaction resulted, and evasions were constant. In defiance of the law, which conferred on the Postmaster-General the monopoly of the carriage of letters, merchants made arrangements for the transmission and delivery by their private messengers of their letters for local delivery. The evil assumed such proportions that the suppression of the private carriage of local letters was deemed out of question, and the Government concluded that the only satisfactory solution of the difficulty was the re-introduction of the general 1 cent drop-letter rate.[552] So great was the number of drop letters sent otherwise than through the Post Office that no actual loss of revenue was anticipated from a reduction of the rate, which should bring back those letters to the post. This anticipation was more than realized. In a very short time after the passing of the Act of 1898 legalizing the reduction to 1 cent, the gross revenue from local letters surpassed that obtained under the 2-cent rate.

France

In 1658 a local service (la petite poste) was established in Paris by M. Velayer. He obtained from the King the exclusive privilege of erecting letter-boxes, which were opened three times daily, in various parts of the city,[553] and set up an office in the royal palace at which tickets bearing the words "Port-payé le ... du ... de l'an 1653" might be purchased at the price of a sou. No money was paid to the letter-carrier by persons posting or receiving letters. A label was affixed to the letter, which was then delivered without further charge.[554] The service was not a success and was discontinued.

In 1759 a local postal service was re-established in Paris by M. de Chamousset. The new service was avowedly in imitation of the London penny post. The rate was 2 sous for a letter not exceeding 1 ounce in weight, delivered in Paris, and 3 sous if delivered in surrounding villages not served by the general post. This venture proved more successful than the earlier service of M. Velayer. At the outset it employed about two hundred men, and the profits for the first year were 50,000 livres. But its founder, M. de Chamousset, met with no better fate than Dockwra, the founder of its prototype. Such large profits could not escape the notice of the Government, and the service was taken over by the King, Chamousset being given a pension of 20,000 livres as its inventor.[555] The service was continued, and its success led to the establishment of similar local services in other towns—Bordeaux, Lille, Lyons, Nancy, Marseilles, Montpellier, Nantes, Rouen, Strasburg, etc.[556]

The ordinary letter rate in France remained at a moderately high level until a comparatively late date, and a special rate for local letters continued until 1878. In that year the ordinary rate for letters was reduced to 15 centimes, the level of the existing local rate, and since that time local letters have enjoyed no special privilege in France.

Germany

In Germany the delivery of local letters in towns was for a long period conducted as a private undertaking of the postmaster or letter-carrier. Between 1842 and 1852 it was made a branch of the general postal service, and the delivery charge (Ortsbestellgeld), which, in general, had been retained by the letter-carrier as wages, was, in the latter year, made payable to the general revenue. An arrangement was also made for the acceptance and delivery of local letters, at the rate of 1 sgr.[557] If the letters were called for at the post office (and the service of delivery at the house therefore not performed) the rate was reduced to ½ sgr.; and when one person posted as many as one hundred local letters at the same time, the rate for each letter was no more than 4½ pf. (reduced in 1860 to 4 pf.), including delivery at residence. When as many as fifty were posted at one time, the rate was reduced to ½ sgr. By a regulation of the 21st December 1860 the limit of weight for the single letter was, however, raised to ½ pound, and a rate of 2 sgr. imposed on heavier letters, but the rates were not otherwise materially changed. The law of 16th September 1862 abolished the delivery fee on ordinary letters. In 1865[558] the rate for local packets of printed matter was reduced to 4 pf.

When, at the foundation of the North German Union in 1867, the postal rates were reorganized, the question of the local rates proved to be one of some little difficulty, since the existing rates differed very considerably in the different parts of the Union. The Prussian rates were high as compared with the rates in some other States; and any rate which could be applied generally was likely to represent a considerable reduction of the Prussian rates, but a considerable increase of the rates in other States. The reorganization of the local rates was consequently delayed. After much discussion a new local rate for places in the former Prussian postal territory (excepting Berlin and Hamburg) was established:[559] for ordinary letters ½ sgr., for printed matter and samples ⅓ sgr. In Hanover the local letter rate was made ⅓ sgr.; in Brunswick ¼ sgr.; and in Cassel, Erfurt, Frankfort-on-Main, and Hamburg similar rates were established.[560]

From the 1st January 1875 a uniform rate of 5 pf. for local letters was introduced throughout the Imperial postal territory. The rate was irrespective of weight, but there was a maximum limit of 250 grammes. All other local packets (postcards, printed matter, and samples) were subject to the ordinary rates of postage. No special local rate was fixed for parcels: the lowest zone rate was payable, and was, of course, in effect a local rate. The general application of the new letter rate would, in certain cases, have resulted in increased rates, and in those cases (Constance, Darmstadt, and Karlsruhe) a rate of 3 pf.—the equivalent of the previously existing rate—was established. In Berlin, in view of the specially expensive arrangements for the delivery of letters, the rate of 10 pf. for local letters remained in force.[561]

For the delivery of local parcels no charge had previously been made beyond the rate of local postage, although in respect of all packets from outside a delivery charge was collected. From the 1st January 1875, however, local parcels were made liable to a delivery charge.[562] In general, the local rates introduced on the 1st January 1875 remained for more than a quarter of a century unchanged, but in course of time difficulties in their administration developed. The order of the 18th December 1874 had prescribed a special local rate for letters only; for all other kinds of postal traffic the ordinary rates remained applicable. Consequently, a local postcard was charged the same postage as a letter weighing 250 grammes; similarly the rates for printed matter or samples for local delivery were high when compared with the rate for local letters. Such rates were, moreover, anomalous when compared with the rates for long-distance traffic, which, for postcards, printed matter, and samples, were much less than for letters. In fact, for local delivery printed matter and samples had only to be placed in sealed covers in order to pass at the rate of 5 pf.

In many of the larger towns the delivery of local letters was undertaken by private enterprise at rates much lower than those of the Imperial Post Office. The undertakings secured a very large proportion of the local traffic, and found even these low rates very profitable. Moreover, the large increase in the number of post offices, and the withdrawal of numerous places from the areas assigned to certain offices, had led, in many cases, to great difficulties in deciding whether letters were subject to the general or the local rate of postage.[563]

The regulations governing local traffic were accordingly revised under the law of the 20th December 1899. Local rates were considerably reduced in amount, and were made applicable to all traffic passing between a town area and the neighbouring area (Nachbarorts-Verkehr),[564] by which the advantage of these rates was greatly extended. In order to enable the Post Office adequately to fulfil its public functions, as the phrase went, it was thought necessary, in view of the development of the private undertakings, to confer upon it the exclusive right to deal with local traffic. At first the proposal was to extend the monopoly only to closed letters, but the Reichstag widened the prohibition, and forbade private undertakings to conduct arrangements for the transmission of letters, sealed or unsealed, postcards, printed matter, or samples addressed to particular persons.[565]

The traffic left open to private enterprise, viz. the delivery of unaddressed open letters, parcels, newspapers, and magazines, was regarded by most of the proprietors as insufficient to warrant the continuance of their undertakings, and on the 1st April 1900 almost all the private establishments of this kind were discontinued. The proprietors were, however, compensated by the State for the loss of their profits.[566] The first undertaking of this kind had been established in Berlin in the 'seventies, under the title Brief- und Druckschriften-Expedition. Its success led to the establishment in Berlin and various other places of similar undertakings, some of which were profitable, but most of which were unsuccessful. The cheaper rates, however, attracted a considerable volume of traffic, and at the time of their suppression some seventy-seven such undertakings were in existence. Most of them were not of long standing, only fourteen of the seventy-seven having been founded in the 'eighties, forty having been founded in the years 1895-6-7, in a period of speculation resulting from the high dividends paid by the Berliner Packetfahrt-Aktiengesellschaft. The size of the undertakings varied largely. In some cases the whole business was conducted by the members of a family; in others as many as a hundred men were employed; and in the case of the Berliner Packetfahrt-Aktiengesellschaft the letter traffic alone employed a thousand men. The amount of traffic dealt with was considerable, and large additions to the postal staff were found necessary.[567] Some of the employees of the private establishments were taken over by the Imperial Postal Administration, and a sum of 1½ million marks was paid as compensation to employees who were not taken over.

Although special provision had been made in the statute with regard to the amount of compensation to be paid to the proprietors, the determination of the actual amount was a matter of some difficulty, owing largely to the unsatisfactory and unreliable manner in which the accounts of many of the undertakings had been kept.[568] In several cases also the owners asked exorbitant amounts.

After much negotiation the sum to be paid was finally decided. It amounted to some six million marks. In order to get rid of the private establishments for the handling of private letters, etc., the Imperial Administration therefore paid in all (i.e. including the compensation to the employees of the private undertakings) a sum of about 7½ million marks.[569]

The new rates were as follow[570]:—

(a) Letters—

Not exceeding250grammes in weight5 pf.

(b) Postcards2 pf.

(c) Printed matter—

Not exceeding50grammes2 pf.

50grammes to100"3 pf.

100"250"5 pf.

250"500"10 pf.

500"1,000"15 pf.

(d) Commercial papers—

Not exceeding250grammes5 pf.

250grammes to500"10 pf.

500"1,000"15 pf.

(e) Samples—

Not exceeding250grammes5 pf.

250grammes to350"10 pf.

(f) Mixed packages of (c), (d), and (e)—

Not exceeding250grammes5 pf.

250grammes to500"10 pf.

500"1,000"15 pf.

These rates applied throughout the Imperial postal territory, including Berlin, which thus for the first time obtained the advantage of local rates; and in 1902 they were extended to all places which had a post office for only part of the year, such as small watering-places, summer resorts, and beauty spots.[571]

The result of the reduced rates was not satisfactory financially. It was not, of course, possible to calculate with any exactness the actual cost of the service performed by the Post Office in respect of local traffic; but such estimates as the administration were able to make tended to show that the cost exceeded the revenue, and that the local business was therefore conducted at some loss.[572] Consequently, when in 1906 Imperial requirements made it necessary to obtain an increased revenue from the Post Office, the administration placed the burden on the local traffic, although not without some opposition in the Reichstag. On the 1st July 1906 the rates for local traffic, with the exception of the rate for local letters, were made the same as the general rates for transmission throughout the Imperial postal territory.

The rate for letters remained as formerly, 5 pf. for letters not exceeding 250 grammes in weight.[573]