CHAPTER VI REVENUES FROM PUBLIC INDUSTRIES 18. The Post Office. - The best-established and in many cases the oldest form of public industry is the postal service, which Adam Smith described as "the only mercantile project which has been successfully managed by every sort of government." The history and principles of administration of this branch of public business are thus discussed by President A. T. Hadley, of Yale University: 1 I. HISTORY The first extensively organized postal service was the cursus publicus of the Roman Empire. It was developed in connection with the system of Roman roads, and, like them, was primarily intended to subserve military and administrative purposes. It amounted to nothing more than a fully equipped set of relay stations for the rapid forwarding of official correspondence, not for the use of the general public. Traces of it survived the fall of the old Roman Empire, and lasted well on into the Middle Ages; but not as an institution with which modern postage can be shown to have any historical connection. The postal systems which sprang up in the Middle Ages were, as might be expected, not centralized, but in the hands of local organizations: commercial cities, universities, or orders of knights. The city post offices were the earliest organized, and in the time of prosperity of the Hanseatic League attained a high stage of development. Originally intended for purposes of trade communication between the guilds and merchants of Westphalia and those on the sea coast, they became an im 1 Reprinted, by permission of the author and arrangement with the publishers, from Lalor's Cyclopædia of Political Science, III, 306–310. Published by Maynard, Merrill, and Company, New York (1883-84). portant convenience to the general public of Northern Germany. The postal arrangements of the universities were developed in a similar way. First intended as a channel of communication between scholars and their homes, the same facilities were soon afforded to others who lived where they could avail themselves of them. The most important example of the third class was the postal service of the knights of the Teutonic order, extending over the northeast of Germany almost as widely as that of the Hanse towns over the northwest. At the end of the fifteenth century, as centralizing governments grew up and supplanted the feudal system, national postal service was attempted, and ultimately prevailed. In this, as in all other similar matters, France took the lead. The first steps were taken by Louis XI, and they were followed up by Charles VIII. The wars of the sixteenth century checked this development; but it was resumed under Louis XIII; and in 1681 was so far advanced that letter carrying was made a government monopoly, though largely controlled by private hands till the legislation of 1790. In England there are traces of a postal service and postal regulations going back to a very early time; but the organized business of letter carrying seems to date from the reign of James I. It was made a government monopoly by the legislation of 1649 and 1657, although the business was farmed out until 1709. In the countries ruled by the house of Austria, an international postal system was started under the administration of the Taxis family. At the beginning of the sixteenth century they established regular communication between Brussels and Vienna; soon a line was added to Milan and beyond, and not long after a further line to Madrid. In 1595 Leonard von Taxis received the office of postmaster general of the empire; and in 1615 this dignity was made hereditary. It was much harder to establish a monopoly here than in France or England, owing to the extent of ground to be covered, the full development of special postal services, and the weakness of the imperial authority. The nominal rights granted by the investiture could only be carried into effect by treaties with the individual states; and many of these preferred to maintain postal systems of their own. This was the case in Austria on the one hand, and in Brandenburg (and thus eventually Prussia), as well as many less important states of North Germany, on the other. The postal service of the Taxis family was thus chiefly exercised in the smaller states of Middle and Southern Germany, where it survived the fall of the empire, and lasted till 1866. A long time elapsed after the governments took control of the postal service before they made it efficient. The usefulness of the English post office dates from the year 1784, when measures of reform were introduced by Palmer, the postmaster general, with the warm support of Pitt. Previous to his time the mail conveyance had been infrequent, slow, irregular, and utterly unsafe. In the eight years of his tenure of office he doubled the frequency and speed of conveyance, and secured a reasonable degree of regularity and safety, chiefly by the substitution of coaches for single riders as a means of carriage. But, though the service was much improved, the rates continued exorbitant; so much so that a vast deal of private letter conveyance was done, in defiance of government rights. In the years 1830-35 the pressure in favor of low rates began to make itself felt; and the movement in this direction was ably headed by Rowland Hill, whose work on "Postal Reform, its Importance and Practicability" appeared in 1837. His proposal to reduce inland postage to about one tenth of its former figure was so sweeping as to cause a great sensation and not a little opposition; but the idea was carried out in 1840, and the example thus set by England was soon followed by the other civilized nations; though generally with gradual instead of sudden reduction. The bill which established penny postage also introduced the use of postage stamps. The idea was not a new one; abortive attempts to carry it out had been made in France in 1653 and 1758, in Spain in 1716, in Sardinia in 1819-36. But in connection with the reduced postage and increased correspondence which followed it, stamps proved of indispensable service; and the example of England in introducing them was, within ten years, followed by nearly all prominent states. In the years 1869–74 came the still further reduction in price effected by the use of postal cards, originating in Austria. The postal system of the United States dates from colonial times, being specially provided for in the postal act of Queen Anne's reign; and its character was not very distinctly changed by the separation, or by any causes other than the natural growth of the country. Before the passage of the act of 1845, inland rates varied from six to twenty-five cents a sheet. The act of 1845 provided for rates of five and ten cents, according to distance; and in 1847 stamps of these denominations were introduced. In 1851 postage for nearly all home letters was reduced to three cents.1 The detailed history of postal development in different countries offers so few peculiarities that it is unnecessary to treat them separately. Everywhere we have, first, gradual improvement of service; then, simultaneously, lowering of rates, equalization for different distances, introduction of postage stamps, abandonment of the sheet as the unit of charge, and substitution of a unit of weight, at first almost always somewhat below the present half ounce (fifteen grams) standard. By the year 1851 the postal legislation and policy of civilized nations, as far as concerns home correspondence, had approached near to its present shape. Not so with foreign correspondence. For a long time nothing was done to encourage that, even by those administrations that were anxious to extend home facilities. It was not until 1833 that a daily mail was established between London and Paris; and even then there was communication but twice a week with other parts of the continent. There were discriminating rates against foreign correspondence, which were sometimes almost prohibitory. The rate for a letter from London to Dover was 8d.; but if it was to be forwarded to France, the charge for the same part of the route in 1834 was Is. 2d.; if intended for Germany, Is. 8d.; for Italy, Is. 11d. The ship charge for carrying a letter to the United States was six cents, or 3d.; the rate charged by the British post office for delivering such a letter to the ship was 2s. 2d. For letters directed to Spain, it was the same; for those to Brazil the inland rate was actually 3s. 6d. The rates of other countries indicated a similar policy. As international correspondence increased, and with it the demand for more favorable terms, these high charges could not well be reduced without common action on the part of the two nations 1 Upon October 1, 1883, the rate was reduced to two cents. Ed. concerned. Hence resulted a number of postal treaties, among which may be mentioned, as leading ones, the system of treaties (1840-50) between Austria, Prussia, and the smaller German states many of the latter still represented by the heir of the Taxis family; also the series between France and England. Not the least important and delicate matter in some of these treaties was the provision concerning charges for letters in transit, to be delivered in some third country beyond. By means of these treaties the rates between the different nations of Europe were gradually reduced. Not so successful was the attempt to reduce them between Europe and America. The foreign postage policy of the United States had been for a long time exceedingly liberal, and it was only the conservatism of England that had prevented cheap postage between the two countries. Then at the time when England was making her postal reforms at home, steamships were taking the place of sailing vessels; and the subsidies which England wished to pay the steamship lines made her statesmen unwilling to reduce a postage rate which seemed to furnish such a suitable means of defraying the expense. Then came the adoption of the same system on the part of France, and attempts in the same direction in America; and every effort to support a subsidized steamship line lessened the strength of the demand for cheap transmarine postage. The United States rate for a considerable time was twenty cents, except where special arrangements provided otherwise; and these arrangements were apt to mean higher instead of lower rates. But with the abandonment of the Collins line of steamers, the United States again took strong ground in favor of lower rates; and, at its suggestion, a conference was held at Paris in 1863, relative to common action in the matter of international postage. This conference was only deliberative; it did not do away with the necessity of special treaties, though there was a continued lowering of rates in these. A similar conference, to be invested. with greater powers, was invited to meet at Bern, in 1873; but as France, on the ground of financial embarrassments, declined to take part, it was postponed and reconvened in September, 1874, when the leading nations were satisfactorily represented. In spite of some moderate opposition from France, which was hampered by its subsidy system of mail contracts, and in spite |