The Development of Rates of Postage Part 20

and in the case of those packets which pa.s.s through more than one office there are, for every such office, the additional operations of sorting and conveyance.[618]

The bags are conveyed between the various post offices by mail-van (horse-drawn or motor), by mail-cart, by railway, or in a few cases by carrier-cycle, tricycle, or motor-cycle.

The vans, carts, or cycles of course convey the bags from office to office, but when the bags are sent by railway it is necessary to provide for their conveyance to and from the railway stations. This is largely done by mail-van, mail-cart, or carrier-tricycle; but in a great number of cases throughout the country, where only two or three small bags are concerned, their conveyance between the station and the post office is provided for by cycle postman or "runner" service; that is to say, the bags are fetched or taken by a postman or porter.

COST

In order to ascertain the cost of dealing with postal packets of the various cla.s.ses, the relative cost, and the actual cost, of the various operations must be ascertained, and all general charges apportioned.

The cost of the "postal" service, shown in Table B,[619] i.e. the cost of the whole of the services controlled by the Post Office, less the cost of the telegraphs and telephones, may be grouped, as shown in Table C, under the following main headings:--

(1) Cost of Staff, (2) Cost of Conveyance of Mails, (3) Cost of Buildings, (4) Cost of Stores, and Miscellaneous Expenditure.

STAFF

Since parcels are, to a considerable extent, dealt with separately, it has been possible to estimate the relative cost of the manipulative services in regard to parcels on the one hand, and all other postal packets (letters, postcards, halfpenny packets, and newspapers) on the other. The ratios of cost are shown in Table D, and the total cost of the manipulative services in respect of parcels calculated on this basis is shown in Table F.

No similar ratios of relative cost have been estimated in regard to the various cla.s.ses of packets other than parcels, since they are dealt with together, and it is necessary, therefore, to ascertain the actual cost for staff under the various headings of collection, stamping, sorting, and delivery. As regards collection, it is difficult to discover a basis on which a computation of the relative cost for the different cla.s.ses of packets may be made, because the cost varies greatly, not only as between each cla.s.s, but from place to place, in regard to any particular cla.s.s of packet. Many of the ordinary letter packets are posted in large numbers at head post offices, and in respect of packets so posted there is no cost of collection. Light letter packets and halfpenny packets (especially halfpenny packets) are, moreover, handed in at post offices in considerable numbers for prepayment of postage in cash. In that case the cost of subsequent handling is slightly reduced, because under the regulations for such prepayment the packets must be tied in bundles with the addresses in the same direction, that is to say, the operation of facing must be performed by the person who posts the packets. Against this, however, must be set the very considerable expense incurred both in towns and rural areas for the collection of ordinary light letter packets, postcards, halfpenny packets, and newspaper packets from posting boxes, and the cost of van services, which are frequently provided for the collection of letters from business premises. Very little of the cost of these services can be attributed to the heavier letter packets, which are to a large extent handed in at the post office counter to be weighed. This involves considerable expense, which corresponds to cost of collection, and may be dealt with under that heading. The best estimate that can be made is that the cost of collection per packet is approximately the same in all cases.

Facing and stamping may be regarded as one operation, the one being really preparatory to the other. Here there is less difficulty. The relative cost per packet may fairly be taken as the ratio of the time taken in performing the operation in the case of each cla.s.s of packet.

In regard to facing and stamping, and also in regard to sorting, the letter packets proper, that is to say packets sent at the ordinary letter rate of postage, fall in general into three cla.s.ses according to the facility with which they can be handled, viz. (1) "short letters,"

(2) "long letters," (3) "letter packets" (that is, the bulky packets sent at the letter rate).[620] In order to complete the calculation, the number of packets which fall respectively into these three cla.s.ses must be estimated.

It has been indicated that the actual division is made according to the size and shape of the packets. The division corresponds approximately with variation in weight. Few packets weighing more than 3/4 ounce would come within the cla.s.s of short letters, that is, of letters which can be dealt with at the ordinary sorting frames; but as there is no a.n.a.lysis of the number of packets of less than 1 ounce weight, there is no alternative to the adoption of 1 ounce as the limit of this cla.s.s.[621]

The effect of this is slightly adverse to the short letters and favourable to the heavier packets. As between long letters and the heavier packets the limit is less definite. In many cases packets of the same weight fall into one or other cla.s.s according to their size or shape, but the mean weight of such indeterminate packets is roughly 4 ounces, and that weight is adopted as giving the mean upper line of division for long letters.

In Table H are shown the relative rates of stamping and sorting for each of the various cla.s.ses of packets.

The proportionate cost per packet of stamping and of sorting, based on the rates shown in Table H, is given in Table J.[622] The actual cost is shown in Table L.

As regards the cost of delivery some difficulty presents itself. Letter packets, postcards, halfpenny packets, and newspaper packets are, in all cases, taken out for delivery by the same postman, and it is not possible, therefore, as with stamping and sorting, to ascertain the rates of work for the various cla.s.ses of packets. But the features in the different packets which lead to differences in the rate of sorting, viz. weight and irregularity of shape and size, lead also to differences in the time taken for delivery. In practice the postman makes a division of the packets; and the time occupied in the delivery of the bulky and irregular packets is greater proportionately, as compared with the time occupied in the delivery of ordinary letters, than is the time occupied in sorting. It is not possible, however, to estimate with any degree of exactness the relative amount of time actually occupied in delivering packets of the various cla.s.ses, and for the division of the cost of delivery (Table J) the rates adopted for the division of the cost of sorting are taken. This method favours the bulky and irregular-shaped packets.

CONVEYANCE

The cost of conveyance of letter mails by railway forms by far the greater part of the whole cost of conveyance. The cost of conveyance of letter mails by road and sea, estimated on such data as are available, is shown in Table M. As the total cost of the conveyance of mails is known, the total cost of the conveyance of parcel mails can be ascertained (Table M). The best basis for division of this cost is the gross weight of the various cla.s.ses of packets. Payment is made purely on a weight basis in respect of the conveyance of a very large proportion of the mails, and, so far, division on the basis of weight is correct. But payment for the conveyance of a proportion of the mails is made on the basis of the cost of providing for the conveyance, and more or less independently of the weight carried. This applies in the case of mail-carts, motor-vans, or special trains which do not carry a full load. The amount paid in such cases is a single sum, calculated, so far as letter mails are concerned, without reference to the fact that postal packets of different cla.s.ses are to be conveyed--without indeed, in some cases, much reference to the fact that any given quant.i.ty of mails is to be conveyed. In the absence of an a.s.signed basis of payment which can be used to divide such sums, the division between the various cla.s.ses of packets is made in proportion to the total weight of each cla.s.s. In Table N is shown the division of the whole cost of conveyance of letter mails between the various cla.s.ses on this basis.

GENERAL CHARGES

Separate statistics are obtainable (Table B) in regard to (_a_) buildings and office fittings, and (_b_) stores, but no exact estimate can be made of the cost of administration and accounting.

The cost for buildings and office fittings is divided as between parcels and other packets on the basis defined in Table D; and as between the various cla.s.ses of packets other than parcels, on the basis of the gross weight of the packets (Table O).

The cost for stores, including the small sum under the heading "Miscellaneous Expenditure," is similarly divided as between parcels and other packets. As between the various cla.s.ses of packets other than parcels, the cost is divided on the basis of simple numbers (Table P).

The cost for administration and accounting, which is comparatively small,[623] cannot be stated exactly. It is contained in the total cost of staff (Table C), and is consequently divided between the various cla.s.ses in the same proportion as the cost of the manipulative staff.

Tables A to Q show the complete calculation.

Table Q shows the final result, which is that the average total cost of dealing with postal packets is as follows:--

For an ordinary letter-- d.

Under 1 ounce .382 Over 1 ounce, under 4 ounces .747 Over 4 ounces 1.404 For an average letter packet .457 For a postcard .353 For a halfpenny packet .432 For a newspaper packet 1.063 For a parcel 7.091

For the letter packets under 1 ounce in weight, for those between 1 ounce and 4 ounces in weight, for the halfpenny packets and for the postcards, the estimated average cost will be approximately the actual cost per packet; but in the case of letter packets over 4 ounces in weight and newspaper packets, the variations in weight and convenience of handling are considerable, and there will be an appreciable variation for individual packets above and below the estimated average cost. The cost will vary with the weight and size (but not proportionately), and the deviation will be greatest in the case of the heavier packets, since with both these cla.s.ses the average weight of the great bulk of the packets is less than the general average. Of all letter packets, postcards, halfpenny packets and newspapers, the number exceeding 4 ounces in weight forms less than 10 per cent. With so small a proportion of heavy packets the result may be taken as almost exact in the case of the lighter packets. It is not in excess of the actual cost, because the calculation, taken as a whole, is bia.s.sed in favour of the heavier packets.

The resultant figures are figures of average cost. They represent the cost of those packets in each cla.s.s in respect of which the average amount of service is performed, and not exceptional cases, as when packets travel over very long distances, or when a packet is redirected or returned to the sender, in which latter cases obviously double the normal service is performed.

The calculation is approximate in that at certain points it has been necessary to frame estimates on imperfect data. This is inevitable in dealing with a service conducted over a large area and under diverse conditions.[624] In general the manner in which the result is affected by the use of imperfect data has been indicated. These variations have been borne in mind throughout, and, as their effects are produced in varying directions, the combined effect is not such as to invalidate the results arrived at.

The result suggests the following conclusions:--

(1) That no cla.s.s of packet sent at the letter rate of postage involves a loss to revenue;

(2) That there is a large profit on ordinary light letters;

(3) That in the case of packets of the weight of about 4 ounces the profit is less, but is still appreciable;

(4) That there is a considerable profit on postcards;

(5) That there is a profit on the halfpenny packets;

(6) That there is a heavy loss on the newspaper packets, averaging nearly 1/2d. per packet;

(7) That as regards packets other than parcels, the principle of uniformity of rate, irrespective of distance, is well founded. The cost of conveyance (.07d. per packet) is still, in the phrase of Sir Rowland Hill, "not expressible in the smallest coin";

(8) That as regards the cost of conveyance there is no case for a reduced rate of postage for local letters;

(9) That as between local letters and other letters there is appreciable difference in the cost of handling, but this difference would not be sufficient to justify a discrimination measurable in coin;

(10) That the parcel post is conducted at considerable loss. If the cost be taken, as shown in Table L, at 7091d. per parcel, the loss is on the average almost 2-1/4d. per parcel, or nearly 1,250,000 on the total number of parcels dealt with in 1913-14. The matter is, however, complicated by the question whether a strictly mathematical proportion of the total expenses of the Post Office can fairly be charged against the parcel post.[625]

TABLE A

TOTAL NUMBERS DEALT WITH IN THE UNITED KINGDOM, 1913-14.

+-------------------+----------------------+ Letters 3,488,800,000[626] Postcards 924,250,000[627] Halfpenny Packets 1,211,400,000[628] Newspaper Packets 207,100,000 Parcels 133,663,000[629] +-------------------+----------------------+ Total 5,965,213,000 +-------------------+----------------------+

TABLE B

STATEMENT OF EXPENDITURE IN THE YEAR 1913-14 IN CONNECTION WITH THE POSTAL SERVICES, INCLUDING MONEY ORDER AND POSTAL ORDER BUSINESS, BUT EXCLUDING POST OFFICE SAVINGS BANK AND GOVERNMENT ANNUITY BUSINESS.