The Development of Rates of Postage Part 12

With the establishment of rural mail delivery there arose a new demand for a parcel post. Persons living on the rural routes desired to take advantage of the new service for the delivery of small parcels of merchandise of all kinds, food-stuffs, tobacco, dry goods, etc., which they would order from the local store-keeper by post or by telephone.

The rate then payable on such parcels was the general rate for fourth-cla.s.s matter, viz. 16 cents a pound, which for parcels of goods of small intrinsic value was prohibitive. In response to this demand, the first definite proposals for a parcel post[417] were put forward by the department in 1904, when the establishment of a special rate of 3 cents a pound was suggested, with a maximum limit of weight of 5 pounds, for parcels from any distributing office for rural routes to any patron on the routes from that office. Such a rate "would be a great convenience to the patrons and become a source of revenue to the department." The rate of 3 cents was estimated to be ample remuneration in such cases, because there would be no expense for railway transportation, and as it would be merely employing a system already established, there would be no additional expense for delivery: the rural carriers could easily perform the service.[418] They had at first been allowed to carry express packages, but the privilege had been subsequently withdrawn. They were, however, still authorized by law to carry merchandise for hire, on behalf of patrons of the rural routes, and to carry pa.s.sengers. In general, their work for the Post Office only employed them to the extent of 30 percent, of their full capacity, and a large unutilized margin therefore existed.

The proposal was again advanced in following years. Postmaster-General Meyer interested himself in the question, and advocated in speeches in various parts of the country the immediate adoption of a parcel post system. In 1907 he suggested the introduction of a local parcel post service experimentally. He made at this time numerous treaties with foreign countries for parcel post services between those countries and the United States, at a general rate of 12 cents a pound. The result was that parcels could be posted at any town in the United States for transmission to places in, say, Europe or Australia, at the rate of 12 cents a pound, but could only be posted for transmission to another town in the United States on payment of a rate of 16 cents a pound. When this situation was realized, there was naturally a good deal of irritation, and the existence of such an anomaly was made an argument for a domestic service.[419]

The preferential rate obtained by parcels going abroad continued to be a strong argument in favour of a general parcel post, and members of Congress constantly referred to it in the discussions on the subject.

There was, moreover, and still is, an important body of opinion which goes much further than the advocacy of a parcel post system. In that view, the express companies are the enemy or, at any rate, the oppressive character of the express rates is viewed so seriously that no solution of the present difficulties of the country, and especially of the "high cost of living" problem, is thought possible short of a complete express service run by the general Government. Relief will only be found under some system which will bring the producer of the necessaries of life into direct relations.h.i.+p with the consumer,[420] in order that the enormous middleman's charges be eliminated and the consumer obtain the produce at a price not greatly above the actual cost of production. The railways refuse to handle s.h.i.+pments less than 100 pounds, and their minimum charge is 25 cents. The ordinary consumer who requires consignments of much less than 100 pounds' weight has no use for such a service. For s.h.i.+pments of less weight, the only service available is the express service, the minimum rate for which, in general 25 cents, is too great for farm products, which are usually of low value and could not bear a rate of 25 cents. The express service, which is restricted to the railway system, has, moreover, no means of reaching that vast body of the people, estimated at some 40,000,000, who are living on the farms, and who alone are able to supply the desired traffic in food-stuffs. The Government has in recent years, at heavy expense, extended to some 20 millions of people the benefits of free mail delivery, and the intention of the advocates of a Government express service, a "postal express," is that the State should take over the express companies, paying them fair compensation for their property, and work their service in conjunction with the rural mail delivery. By this means an extensive service could be provided at reasonable rates of charge.[421]

In February 1908 Bills were introduced in the Senate to increase the limit of weight of fourth-cla.s.s matter, and to provide a rural delivery parcel post for merchandise and other articles mailed on rural delivery routes. Legislation did not, however, result.

Meantime, the feeling in favour of a parcel post was spreading, more especially in the farming districts. In November 1911 a Sub-Committee of the Senate Committee on Post Offices and Post Roads was appointed to examine the practicability of establis.h.i.+ng a parcel post system. The Sub-Committee was appointed on a resolution of the Senate, moved by Senator Jonathan Bourne, Jr., the Chairman of the Senate Committee on Post Offices and Post Roads, and there is indication that the adoption of the system had already been practically decided upon, the real question before the Sub-Committee being that of its practicability as an immediate proposition. The Post Office representatives advocated a limited experimental introduction of parcel post on rural routes and in the city delivery offices. They were impressed with the radical differences between the United States and most other countries where parcel post was in operation, and hesitated to recommend the introduction of a general service. But the members of the Sub-Committee had in mind to introduce as soon as practicable a complete system by the method of enlarging the scope of the fourth-cla.s.s regulations and reducing the rates of postage. Numerous witnesses appeared before the Sub-Committee, representing general societies of business men, such as the National Dairy Union, the a.s.sociated Retailers of St. Louis, Me., and the Retail Dry Goods a.s.sociation of New York; educational or social societies, such as the American Library a.s.sociation, the Postal Progress League, and the Knights of Labour; farmers' societies, such as the State Granges and the Farmers' Educational and Co-operative Union of America.

Several farmers, lawyers, and other gentlemen appeared to give their own personal views. The chief opposition to the parcel-post came from the representatives of the retailers, who stand in constant fear of losing their business to the mail-order or catalogue houses. The business of these houses is very large, amounting in the aggregate to nearly $200,000,000 per annum, and there is perhaps some reason for the local merchants' apprehensions. The bulk of the mail-order traffic is, however, distributed as freight. But the country merchants were much alarmed, and there were doleful prophecies of the results of a parcel post. The local merchant was represented as the mainstay of the country-side. He it was who sustained the country town, which afforded so valuable a local market for the farmer. He it was to whom alone that same farmer could look for credit to tide him over bad times. He it was who made the country town a social centre where the farmer might come into touch with civilization and refinement. And on the continuance of the prosperity of the country merchant depended the continuance of the army of travelling salesmen, without whose patronage railroads would be driven to reduce the number of trains, hotels would go out of business, and throughout the country accommodation for travellers would be found extremely poor. In short, parcel post would reduce the country merchant to the same condition as the small shopkeeper in Europe; and the country towns would become mere hamlets and deserted villages.[422]

The parcel post was, of course, as likely in 1912 to prove a blow to the express companies as in the earlier years when they had so strongly resisted any proposal for its introduction. In face, however, of the strong and widespread movement in the country in its favour, they realized that they would be unable always successfully to resist its establishment, and no open opposition to the proposals of 1912 was encountered from them. They did not appear before the Senate Sub-Committee.

The Sub-Committee saw no insuperable difficulty in the way of introducing a general system at once. Moreover, they were impressed by the fact that a parcel post system was in operation in most other countries of the world, even in Australia, a country slightly larger in area than the United States and much more spa.r.s.ely populated, where the two factors which so radically distinguished the United States from most other countries in which a parcel post had been established were met with in even greater degree.

When the questions of the desirability and practicability of establis.h.i.+ng a system had been decided, there still remained the difficult and important question of the scheme of rates of charge on which the system should be based. Some of the witnesses before the Sub-Committee advocated a uniform rate, representing that a graduated rate was undesirable and would be unacceptable, as giving a special privilege to certain sections of the people. A more general opinion was that a flat rate would be unsound economically. With such a rate, the express companies would step in and take all the profitable traffic; and it would, moreover, be necessary to fix the rate so high as to render it prohibitive for goods of low value and for the purpose of moving traffic on the rural routes. In a country of vast extent the actual cost to the Government for the transportation of parcels of the same weight would differ widely in proportion to the distance for which they were conveyed in the mails, and the differences would be sufficiently great to render it easily possible to graduate a scale of postage approximately in accordance with the distance and the actual cost. The department estimated the cost of transportation for mail matter to be 132 cents for each 200 miles, and taking this as a basis, differential rates in respect of transportation were arrived at for a series of zones.

The charge for handling, i.e. for collection, delivery, administrative and all other incidental services, was calculated as an altogether separate item. The Sub-Committee had the evidence of Mr. John L.

Newbold, a gentleman of long experience in a transport business which dealt mainly with small parcels for delivery within the limits of the City of Was.h.i.+ngton, and was therefore in a high degree comparable to delivery service which would be performed by the Post Office in respect of parcels. Mr. Newbold offered to contract with the Government to handle all post parcels for delivery within the City of Was.h.i.+ngton at 5 cents a parcel, with a limit of weight of 25 pounds. Estimates by similar delivery companies in New York City indicated the cost to them of packages up to 25 pounds, which was a little over 5 cents per package. The department's estimate of the handling cost of fourth-cla.s.s matter showed a cost of a fraction under 3 cents for the first pound, with an approximate increase of 20 per cent. for each additional pound.

These data furnished a basis for calculating rates of postage, when the limitation of the zones had been determined, a matter of some little difficulty. The first, and most obvious, suggestion was that the zones should be reckoned as from each post office, but in view of the fact that there were some 60,000 post offices in the United States, grave practical difficulties would arise with a scheme providing for special rates from each post office. It was then thought the State might be adopted as the unit of area, but the States differ so widely in area that such a system would have resulted inequitably, giving equal postage charges for very unequal services. A citizen in Texas or New York State, for example, would be able to send his parcel many times as far as a citizen of Ma.s.sachusetts or Delaware. The same objection applied, though not in so great degree, to the county as a unit of area. Moreover, these units would be liable to arbitrary change. Failing the discovery of any satisfactory unit based on the political divisions, recourse was had to purely theoretical divisions, based on the imaginary lines of lat.i.tude and longitude. The actual degree parallels were rejected as the limits of the units of area because, within the quadrangle formed by them, there would be a maximum zone distance of some 80 miles; while at the same time, for transmission between two places perhaps only two miles apart but lying on different sides of the line, postage would be chargeable as for the second zone. This difficulty was overcome by an ingenious suggestion, which emanated from the department, to divide the degree quadrangles in four, that is, into squares of 30 minutes dimension, and to allow the sending of parcels at the first zone rate from or to places in every contiguous quadrangle.

Under this method, which was adopted, the United States is divided into 3,500 units of area, which are definite, never-changing, and practically uniform in size, the slight difference in area depending on the distance from the Equator being negligible. Each unit is given an index number, and all post offices in the unit have the same index number. Each unit has its own zone limits, which apply equally to every office in the unit. So that in order to discover for what zone postage is to be charged between two places, it is only necessary to ascertain what are the zone limits for the units of area in which the places are respectively situated. A simple reference to a guide showing in what unit of area the post office of destination falls, and a consultation of the zone map of the office at which the packet is posted, that is, a map showing the boundaries of each zone measured from the unit of area in which the office is situated as centre, gives in a very short s.p.a.ce of time the rate applicable to the parcel.

A simplification of rates and regulations is always attended by a diminution of the difficulties of administration, by economy of actual working, and by convenience to the public. In connection with the proposed parcel post the department, with these objects in view, suggested the abolition of the separate cla.s.s for printed matter, and its amalgamation with the parcel post matter, thus reducing the number of cla.s.ses of mail matter to three. The Chairman of the Senate Sub-Committee adopted this suggestion, and embodied it in the Bill which he prepared and introduced in the Senate on the 16th May 1912, retaining, however, a rate of 1 cent per ounce up to 4 ounces, in order to provide for circular matter which, under the third-cla.s.s rate, pa.s.sed at 1 cent for 2 ounces. This was apparently a doubling of the rate, but as the average weight of circulars is under 1 ounce, in actual practice the great bulk of them would continue to pa.s.s at 1 cent. This provision would, however, raise the rate on all catalogues and circulars weighing more than 1 ounce; and although 90 per cent. of the number of pieces of third-cla.s.s matter actually posted are under 4 ounces in weight and would have fallen under the proposed special rate, and 50 per cent. are under 1 ounce in weight and would have pa.s.sed for the same amount as under the existing third-cla.s.s rate, viz. 1 cent, this provision of the Bill was strenuously opposed by printers and catalogue houses. Not regarding the consolidation of the two cla.s.ses as in any way essential to the establishment of a parcel post system, the Senate Committee on Post Offices and Post Roads, when they came to consider the Bill, decided to eliminate that feature.

In general this Bill represented the conclusions of the Sub-Committee, and, apart from the foregoing change, was substantially accepted by the Senate Committee. The only other amendments made were an increase of the number of zones from six to eight, with the view of "protecting the local merchant in the field of his business," and a slight raising of the rates for the shorter distances, partly from a fear that the rates proposed in the Bill would not be self-sustaining, and partly from a desire further to protect the local retail merchant against the catalogue houses.

The essential provisions of the Bill, as thus amended, were embodied in the Post Office Appropriation Bill for the fiscal year 1913, were accepted by Congress, and became law on the 24th August 1912. The actual zones and rates fixed were as follows:--

First zone: All territory within quadrangle or unit of area and every contiguous quadrangle.

Second zone: All units of area outside the first zone within a radius of, approximately, 150 miles from the centre of a given unit of area.

Third zone: The same within a radius of, approximately, 300 miles.

Fourth zone: The same within a radius of, approximately, 600 miles.

Fifth zone: The same within a radius of, approximately, 1,000 miles.

Sixth zone: The same within a radius of, approximately, 1,400 miles.

Seventh zone: The same within a radius of, approximately, 1,800 miles.

Eighth zone: All units of area outside the seventh zone.

The rates were:--

On rural route: 5 cents for the first pound or fraction of a pound, and 1 cent for each additional pound or fraction of a pound.

Each additional First Pound. Pound.

First zone 5 cents. 3 cents.

Second zone 6 " 4 "

Third zone 7 " 5 "

Fourth zone 8 " 6 "

Fifth zone 9 " 7 "

Sixth zone 10 " 9 "

Seventh zone 11 " 10 "

Eighth zone 12 " 12 "

Although, of course, with the body of the people the main arguments had been the ordinary contentions of the advantage of such a system as providing a most convenient facility for persons in all parts of the States, and especially in the rural districts, whereby they would be able by the utilization of existing machinery to have articles of all descriptions brought to their doors, yet in Congress the argument was largely based on the possibility of finding in the parcel post a means of reducing the "high cost of living," a problem which is giving much anxiety to politicians in America. By means of the parcel post, producer and consumer are to be brought into direct relations the one with the other. All middlemen and their profits will be eliminated, and either the producer will get more for his products or the consumer will pay less--which of these will happen does not appear: probably in some degree both are hoped for.

The experience of England may not be any indication of what will happen in America. But it is certain that in England the produce sent direct from farm to consumer, whether eggs, b.u.t.ter, or poultry, is not obtained by the consumer at less cost than he could buy it in his own town. There is an advantage, but it rests solely in quality. The products obtained from the farm are more fresh, are probably better altogether, but the price is not less. In England these considerations have been sufficient to prevent the wholesale use of the parcel post for food-stuffs. It is, in fact, in general used for such traffic only by those people to whom a little extra expense is not an object of consideration. The conditions in America seem, however, to be substantially different from those in this country, and a large development of parcel post business of this character is antic.i.p.ated.[423]

On the 15th August 1913 the limit of weight was increased to 20 pounds in the local, first, and second zones; and on 1st January 1914 the limit in local, first, and second zones was further increased to 50 pounds, and in the remainder of the zones to 20 pounds. On the 16th March 1914 books and printed matter were admitted to the fourth cla.s.s, or parcel post, with a rate of postage of 1 cent for each 2 ounces up to 8 ounces, the ordinary parcel post pound rates to apply to packets exceeding 8 ounces in weight.

The service, as a whole, has been enormously successful. It is estimated that in the second year the post office was handling parcels at the rate of 800,000,000 annually, a figure which may be compared to its advantage with that for the United Kingdom. In the United Kingdom the annual number of parcels posted is some 130,000,000, say three per head of the total population as compared with eight per head in the new service in the United States.

PARCEL POST IN FRANCE

The conveyance of parcels of merchandise, which had been undertaken by the early posts in France, was abandoned to private enterprise in 1795.[424] When, therefore, proposals were made for the establishment of an international parcel post service, France was without an internal service of the kind. She became, nevertheless, a party to the Convention of 1880, which established an international service,[425] availing herself of the privilege reserved to those countries without an inland parcel post service, of arranging for their obligations under the terms of the Convention to be a.s.sumed by railway and steams.h.i.+p companies. A contract was concluded with the administration of the State railways, the six great railway companies, and the s.h.i.+pping companies in receipt of subsidies for the conveyance of mails, under which those bodies undertook to conduct a service on behalf of the postal administration in accordance with the provisions of the Convention. They were to receive in its entirety the prescribed territorial transit rate of 50 centimes on every parcel, but not the surtax of 25 centimes.[426] The payment of 50 centimes per parcel was to be divided by the companies among themselves if the parcel was conveyed by more than one party, and const.i.tuted the full remuneration for the entire service performed, including the customs formalities. The contracting companies were required to print at their own cost a list of places served, and to keep the list available for reference by members of the public.

The establishment of an international service of this kind necessitated the provision of facilities for the transmission of ordinary inland parcels within France.[427] The companies were accordingly required to undertake also the transportation of inland parcels upon their railways and the delivery of inland parcels in localities adjoining their lines under the same conditions and for the same remuneration as in the case of parcels in the international service. A difficulty existed in the fact that small parcel traffic (_l'envois par messagerie_) was subject to special taxation.[428] These taxes frequently exceeded the charge for transmission, and in some cases the value of the parcel itself. In order to encourage the use of the service, these taxes were reduced or modified by a series of laws at a sacrifice of revenue exceeding two and a half million francs a year. The service, which was established on the 1st May 1881, did not include the whole of France, but extended only to localities served by the State railways, the six contracting companies, and certain subsidiary companies which contracted for the business with the larger companies. The maximum limit of weight was fixed at 3 kilogrammes, and the rates of postage were 60 centimes for parcels transported from railway station to railway station, and 85 centimes for parcels delivered at the residence of the addressee. The service became immediately popular, the number of parcels posted during 1881 being at the rate of over half a million a month.

Soon after its establishment the service was extended to the smaller subsidiary lines, and to districts not served by railway. The latter extension, which it was not found easy to arrange, was provided for by introducing into the contracts for the conveyance of the ordinary mails in those districts a clause empowering the administration to require the contractor to convey post parcels for a remuneration of 15 centimes per parcel--the amount to be increased to 25 centimes for parcels delivered at residence.

The Lisbon Congress (1885) raised the limit of weight in the international service from 3 kilogrammes to 5 kilogrammes, but a corresponding increase was not made in the internal French service until 1892. The maximum limit of weight was raised to 10 kilogrammes in 1897, and the following rates of postage are now in operation:--

---------------------------------------------------------- Weight. Delivered at Delivered at Railway Station. Residence or Poste Restante.

--------------------+------------------+------------------ fr. fr.

Not exceeding 3 kg. 060 085 3-5kg. 080 105 5-10 kg. 125 150[429]

c.u.mbersome parcels are charged rates 50 per cent. greater than the ordinary rates.[430] Parcels redirected or returned to sender are subject to an additional rate of postage, and to a tax (_droit de timbre_) of 10 centimes.[431]

Parcels for despatch are accepted only at the railway stations or offices of the companies or by their agents. They are delivered at the stations of the companies or at their offices in towns or at the offices of their agents, to be called for, or they are delivered at residence; but the latter service is undertaken only when a delivery service organized by the companies, or their agents, for their own purposes already exists.

Parcels are accepted for localities not served directly by the contracting companies, but such parcels are conveyed only to the point served by railway nearest to the place of destination. It is left to the public to provide for their further transmission. In the case of parcels delivered only at the railway station, an advice of delivery is sent to the addressee by the company or their agents within twenty-four hours of the receipt of the parcel. This advice is sent by post, and the postage, 5 centimes, is recovered from the addressee. If parcels are not called for within eight days, the sender is asked to give instructions regarding their disposal.

The control of the service in districts served by railway rests entirely in the hands of the railway companies. The postal administration takes no part directly in its management, but co-operates with the companies by affording certain small facilities in regard to parcels. For example, on payment of the usual delivery fee of 25 centimes a parcel may be delivered from the railway station to the local post office, where it will be retained in the poste restante. In districts not reached by the railway or their agents, the management of the service falls on the postal administration. The service in such districts is, however, far from complete. There are in France some 36,000 communes, but the parcel post service extends only to some 12,000 railway stations, and only at about one-half of these can parcels be delivered at the residence of the addressee.[432] To a limited extent a service is given in certain localities not directly served by railway. In these cases, which are arranged only with the concurrence of the companies, the service is conducted by the ordinary road carriers.[433] The extension of the service in the rural districts is one of the problems which face the postal administration.[434]

A local parcel post service was established in Paris in 1881 by arrangement with the Compagnie des Messageries Nationales, but it did not prove profitable, and was discontinued in 1887. A new service was set up in 1890. The contractor is required to make two deliveries on week-days and one on Sundays and feast days (_les jours feries_), and to maintain an office in each arrondiss.e.m.e.nt. The system has, however, developed. Three daily deliveries are now given, and nearly 500 offices have been opened. The rate of postage is 25 centimes for parcels not exceeding 5 kilogrammes, and 40 centimes for parcels between 5 and 10 kilogrammes.