A. D. Smith

“ Simplicity, afforded in a high degree by the uniform rate, facilitates the administration and practical conduct of Post Office business, and is, therefore, desirable, even if a little unjust. Complicated rates are an unfailing source of irritation to the public as well as a source of embarrassment to the staff, and there is not much doubt that one feature of the parcel post which commends it to the public favour is the simplicity of its rates. ”

“ But when the State has conferred on itself a monopoly of a business, it is evident that to charge the price which would bring in the largest profit would often be simply equivalent to laying a tax on the commodity. In this case, the price charged should only be such as would produce a rate of interest which would satisfy private individuals or joint-stock companies, supposing there were no monopoly. The rate of interest should be reckoned in relation to the actual market value of the property used, not in relation to what it may have originally cost the State. ”

“ 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. [Pg xii] 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. ”

“ He said: "A newspaper is merchandise, a letter is not. A letter simply conveys to somebody the views and thoughts of another. But newspapers are merchandise, and the publisher of a newspaper a manufacturer of merchandise which he sells. Now, I do not see any reason why this class of merchandise should not pay freight for its transportation as well as any other class of merchandise."—In Canadian House of Commons, 10th July 1900. ”

“ The cost which ought in strictness to be taken is the cost of the most economical private commercial undertaking which would provide an equal service if the monopoly of the Post Office were withdrawn:—
"I do not regard the greater part of the Post Office revenue as a tax at all. If all of it were earned by doing for the public on a large scale work that no private company could do as cheaply, because it would have to do it on a small scale, then I should say that none of the Post Office revenue was a tax. ”

“ The common mode of levying a tax on the conveyance of letters is by making the Government the sole authorized carrier of them, and demanding a monopoly price. When this price is so moderate as it is in this country under the uniform penny postage, scarcely if at all exceeding what would be charged under the freest competition by any private company, it can hardly be considered as taxation, but rather as the profits of a business ”

“ 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. ”

“ While thus confirmed in my belief that, even from a financial point of view, the postal rates were injuriously high, I also became more and more convinced, the more I considered the question, that the fiscal loss was not the most serious injury thus inflicted on the public; that yet more serious evil resulted from the obstruction thus raised to the moral and intellectual progress of the people; and that the Post Office, if put on a sound footing, would assume the new and important character of a powerful engine of civilization ”

“ To be properly remunerative to the State, as to a private individual, the price at which a commodity is sold must be sufficient to pay interest on the capital invested in the business, that is to say, to pay for the use of the property which must be used in producing the commodity, as well as to pay the more immediate cost of its production in wages and materials. ”

“ I found the way the people lived was entirely different from what I had anticipated, and no man who has simply lived in this country and has read in a general way about the conditions in Europe can appreciate how the people live in Europe without going among them and studying the subject. The business of Europe, while in the aggregate, of course, it is very large, as a matter of fact is a peanut business."—Hearings before the Sub-Committee on Parcel Post, Washington, 1912, vol. ”

“ Of the whole expense of conducting the postal services, the expense of the actual conveyance of a letter from place to place is not only small as compared with the cost of the terminal services of collection and delivery, but is actually so small in amount that no monetary system provides a coin of sufficiently small value to make its collection a practical possibility. ”

“ The problem of railway rates is a problem by itself, and stands as one of the most important of the unsettled problems of the day."—H. C. Adams, Science of Finance, New York, 1909, p. 280.
[644] "The cost of the service of transport for any given commodity cannot, under the varying conditions of railway operation, be even approximately calculated. The first insuperable difficulty is the division of the expenditure for any given work. ”

“ But the Post Office is one of those organizations in the case of which the normal influence of economic forces tends to exclude competition. Its operations are spread over large areas, and duplication of services over large areas would result in waste of effort and increase of expenses. Competing postal establishments would exhibit the same glaring economic waste as competing arrangements for the supply of gas, water, or electricity. The service thus almost certainly becomes a monopoly; and its nature makes the assumption of its management by the State advantageous. ”

“ And as it was the nation's business to establish the mail, it was equally the nation's business to pay the expense. No man can show how it is just and reasonable that the letters passing between Boston and New York should be taxed 150 per cent. to pay the expenses of a mail to Oregon on the pretext that the Post Office must support itself."—J. Leavitt, Cheap Postage, Boston, Mass., 1848, p. ”

“ Every experiment in the way of reduction which has been made by the Post Office has shown its fallacy; for every reduction whatever leads to a loss of revenue, in the first instance: if the reduction be small, the revenue recovers itself; but if the rates were to be reduced to a penny, revenue would not recover itself for forty or fifty years."—Abstract of Evidence of Colonel Maberly, Secretary to the Post Office, Third Report from the Select Committee on Postage, 1838, p. 18.
[82] Post Office Reform: Its Importance and Practicability, by Rowland Hill, second edition, London, 1837. ”

“ In any system of rates, therefore, which are accurately adjusted to the cost of the service, the rate of charge must increase considerably less rapidly than the increase in weight, that is to say, the rate would be degressive. ”

“ The Government acquires a large revenue, and the people do their business with greater ease, expedition, and cheapness than they would be able to do if no such tax (and of course no such office) existed."—Sir William Blackstone, Commentaries on the Laws of England, London, 1783, vol. i. p. 324.
"Nor, while the rates of postage are confined within due limits, or not carried so high as to form any serious obstacle to correspondence, is there, perhaps, a more unobjectionable tax."—J. R. McCulloch, Taxation and Funding, p. 320. ”

“ Books are heavier articles than laces or muslins, or many other fabrics, the conveyance of which enters largely into railway receipts. The Post Office having made book parcels profitable, may try to turn to account the conveyance of other, whether lighter or heavier, articles of trade. It might be thought advisable to carry a small valuable parcel to Aberdeen for 2d., a rate at which Railway Companies, having to pay interest on capital, certainly cannot hope to compete with a department which insists on the right of travelling on their roads at the mere actual cost. ”

“ Indeed, in some respects light letters are more easily and more rapidly handled than postcards. From that standpoint, therefore, there is nothing to justify the difference of 100 per cent. in the rate of charge, and the lower rate is an arbitrary concession. The logical ground for its existence is rather to be looked for in the familiar and generally accepted principle applied to the determination of transportation rates by railway, by road, or by sea, viz. charging "what the traffic will bear," or the variation of the rates according to the intrinsic value of the goods transported. ”

“ The men who are settling those countries are sacrificing their lives for a coming generation. I will not add to their hardships by taxing them four times as much as a citizen of the old States of the Union for a letter which shall give them intelligence of their friends left behind them, and shall chill that gush of feeling which will swell their bosoms, as they take possession of a letter that comes from their far-distant native land."—Mr. ”

“ La reception et la distribution des colis postaux dans les communes rurales est une de ces améliorations désirables.
"Il est inutile d'insister sur l'importance économique de cette question. Les colis postaux fournissent ou devraient fournir un moyen facile et rapide de transport à bon marché; ils devraient favoriser aussi bien les intérêts du commerce que ceux de l'agriculture. II s'en faut de beaucoup qu'ils rendent tous les services que l'on est en droit d'en attendre."—Ibid., Sénat, 1911, No. 189.
[435] F. Haass, Die Post und der Charakter ihrer Einkünfte, Stuttgart, 1890, p. 95. ”

“ From the financial point of view, the uniform rate is, moreover, inapplicable to any class of traffic not secured to the Post Office by monopoly, since private undertakings will always step in and take away the profitable sections.
For heavy parcels a uniform rate cannot be justified. There are, however, certain considerations not purely economic which may be held to justify a uniform rate for small parcels, especially if it be held that the State may conduct such a business for the advantage of the public, and abandon to some extent ordinary commercial balancing of cost and revenue. ”

“ Postal rates are simple, definite, and generally known; and every post office is a receiving agency. It is convenient to use the post, which offers the further advantages of quick transmission, and the greater degree of security attaching to a State institution. The line on which a postal service for small parcels can best be justified is that by the utilization of existing machinery for the disposal of additional traffic, not so large as to overburden or disorganize the practical arrangements, a useful public advantage can be secured without inordinate cost. ”

“ The Post Office in reality is neither a commercial nor a philanthropic establishment, but simply one of the revenue departments of the Government. It very rightly insists that no country post office shall be established unless the correspondence passing through it shall warrant the increased expense, and it maintains a tariff which has no accordance whatever with the cost of conveyance. Books, newspapers, and even unsealed manuscripts, can be sent up to the weight of 4 ounces for a penny ”

“ Payment is, moreover, in a large degree voluntary. The number of letters which a private individual must write, and cannot avoid writing, in the course of a year is very small. If he has anything of importance to write, he does not think a penny an excessive sum to pay for its transmission. If he has nothing to write, there is no law to compel him to pay postage. The profits of postage are, however, large; and the existence of the State monopoly, and the essentially fiscal character of the rates charged, should not be overlooked. ”

“ Though railway economists have endeavoured, by means various and ingenious, to allocate the different items of railway expenditure, they have been unable to determine such a relatively simple matter as the division between passenger and goods traffic, and though estimates have been formulated, many of the charges have been allocated to one head or another by arbitrary decision, and not as a result of positive knowledge."—Railway News, London, 6th September 1913, p. ”

“ In 1847 Sir Rowland Hill proposed the provision of special facilities for the transmission by post in the United Kingdom of books and other printed matter. He thought such a concession expedient as a matter of policy, especially in view of the "state of the public mind on the important subject of education." A low rate of postage would facilitate the transmission of scientific and literary reports and other documents "tending to the extension and diffusion of knowledge," and would be highly prized by the Literary and Scientific Societies, which were a feature of those days. ”