Our Postal Deficiencies
WHEN Sir Rowland Hill first proposed the penny postage and reforms in the postal system of England, a noble lord, then Postmaster-General, referring to his plan, remarked: “ Of all the wild and visionary schemes I have ever heard of, it is the most extravagant.”
At that time the annual delivery of letters in the British Isles was eightytwo millions and a half, yielding on the average nearly twenty-five cents each, and costing for transmission nearly two thirds of that amount; and the idea of reducing the rate to a penny, or two cents, a letter, with any hope of covering the expense, seemed to be preposterous. At length, however, after long discussions, the measure was adopted, and with remarkable success; and the success of the reduction has led to other important results not then contemplated, and to improvements which appear to be progressive.
At first, there was a great decline in revenue, but letters have annually increased under the new system, and in 1867 rose to the number of 774,831,000, or to forty-six letters on the average from each inhabitant, nearly tenfold the number before reduction. England is enabled by the returns to pay to railways alone, of which she has thirteen thousand miles, two millions eight hundred thousand dollars for transmission of letters.
Induced by this success, Parliament then engrafted upon the system the carriage of books and parcels of moderate size, and these rose during the last year to the number of one hundred and two millions.
The next step in the progress of the post-office was the establishment, in the chief offices, of agencies for the transmission of money by orders from one part of the kingdom to any other, in small sums, the charge for the transfer of each sum ranging from six to twelve cents. This measure has been alike successful. The money-order offices have increased to thirty-six hundred, and are found in all the principal towns and villages ; and the funds they transmit, sent with perfect safety, have grown to ninety millions of dollars yearly.
After this advance, it soon became apparent that the public required further facilities. Funds were often sent in small sums from the country to the towns, for friends to deposit in savings banks, by persons who could not leave home for the purpose, and this was attended by inconvenience and occasional loss. It was difficult, too, for depositors at a distance to withdraw their funds. To obviate these evils, it was determined to make the chief offices depositories for savings, and this measure was successfully adopted. Under this system funds were received in small sums from the humbler classes, at the low rate of two and a half per cent interest, under a national guaranty of principal and interest, and these funds were transmitted to London for investment in the public stocks.
By the contract with the depositors, the government reserves for its risk and charges the excess over two and a half per cent, and pays the depositor both principal and interest at any postal bank.
These banks now number thirty-six hundred and twenty-one, and hold in deposit fifty millions of dollars, annually increasing at the rate of fifteen per cent, and their operations result in profit to the government. But there are other benefits. The depositors in the savings banks of England, who exceed two millions two hundred thousand in number, if we include all, become interested in the public stocks and in the stability of government, and many a stream and rivulet of the country pours its contribution into the coffers of the state, and funds which would have remained dormant or idle, attracted by the national guaranties and the great facilities thus brought home to the people, are utilized and made subservient to the public wants at extremely low rates of interest; while the depositor places his funds beyond the reach of accident, and renders them productive, until he requires them, and can then command them on a day’s notice.
The success of the savings banks has paved the way for another step onward. It was found that many artisans and laborers desired to insure their lives by frequent payments, or to purchase small annuities as a provision for old age. They would trust the state with their funds, but were unwilling to trust companies or individuals for long terms of time. It was the interest of the state to avert pauperism and provide for age, and it was ascertained that it could command rates more than commensurate with the risk, and it allowed the postal banks to issue small annuities and policies of insurance, and has already received from this source more than eight hundred thousand dollars, which has been placed in government stocks.
More was yet to be done ; letters were despatched annually from England, first by sailing packets, and then by steamships, to all parts of the globe, and the post-office was obliged to negotiate for their transmission ; this suggested to the state the policy of using its receipts from ocean postages and surplus income for subsidies, to establish lines of fast steamers to all the countries engaged in commerce with England. This was the most important measure of all. England, by the payment of one or two dollars per mile for each mile run by the steamer, not only gave despatch to her mails, but enabled her steamers, that could cover their expense by freight and passengers, to pay large dividends and build new steamships by the subsidies.
Thus she not only expanded her commerce and her tonnage, but, by an average payment of four millions of dollars yearly, has supplied herself with at least half a million tons of steamships, well manned and officered, which in peace extend her commerce, and in war become transports, despatch frigates, and thunderbolts of war. She has thus made the department her chief navy agent, more efficient than the admiralty itself.
Accustomed as we have been here to see men advanced to office for political services, and to see these services rendered by men who engage in politics after failing in other pursuits, our first inquiry as to these novel measures is, What has been their pecuniary result ? and we learn with pleasure that these measures, so beneficent, so widely ramified, so conducive to the comfort and convenience of the people, have been crowned with success.
Each department of the post-office exhibits large profits. The gross income exceeds twenty-three million dollars, and the net income of the department has risen from $1,735,000 in 1857 to $7,106,000 in 1867, or four hundred per cent, after deducting ail expenses for the collection, carriage, and delivery of letters and parcels, all expenses for money orders, for banks, insurance, annuities, and mail subsidies, — an unprecedented success, in the highest degree encouraging both for the future of England and for the future of our own country, whose attention has been diverted from these subjects by the insurgent States.
But England has not paused in her progress. Thus far telegraphy has been confined to private companies, and has gradually increased, until it now sends six million messages yearly in the British Isles. These companies, after extending their wires to most of the important towns and villages, and establishing in some of them three competing offices where one might suffice, have recently combined to raise their rates ; and now the average charge for transmitting messages amounts to forty-six cents per telegram; and while the British post-offices exceed ten thousand, the towns and villages provided with telegrams are less than one seventh of that number.
The post-office has won the confidence of the people. The Chamber of Commerce of Edinburgh, and the associated Boards of Trade, and many leading merchants of England, have petitioned Parliament to empower it to assume all the telegraph lines of the kingdom ; and after several elaborate reports and estimates from commissioners and officials, a bill has been carried through the principal stages in the House of Commons providing for the purchase of all the lines in the kingdom, and the reduction of the charge for all telegrams to a uniform rate of twenty-four cents for each message of twenty words, beside the address, with an addition of ten cents for ten words or less added to the message.
It is proposed also to connect the wires with the post-offices in all towns and villages whose population exceeds two thousand, and that each post-office and each pillar-box should be made a depository for telegrams to be written on paper bearing a twenty-four cent Stamp, and addressed to the nearest telegraph office, to be transmitted free from any further charge for transmission or delivery within post-office limits.
It is also proposed, as a further facility, that a book shall be published yearly, and sold for sixpence, containing a list of all post and telegram offices ; and that, when a telegram is addressed to a town not reached by the wires, the telegram, on its arrival at the end of the wire, shall be sent free of postage by the first mail, or, if stamped express, shall be sent on by a special messenger.
Thus the state is bringing telegraphy home to the people, giving facilities for the most rapid interchange of thoughts and desires, providing new safeguards for life, promoting human happiness, advancing commerce and public improvement. It is the ambition of England to be foremost among nations in placing on a proper footing the department of the electric telegraph, as she has already presented to mankind a perfect system of postal communication.
Shall the United States, which invented the steamship, which first made electricity useful, which established between Baltimore and Washington the first line adapted for the transmission of messages, resign to England the supremacy in both steamships and telegraphy ?
The United Kingdom has now sixteen thousand miles of telegraph lines, with seventy-seven thousand miles of wire, which have cost on the average, with their instruments and wires, about $750 per mile of telegraph line, or $150 per mile of wire. These have earned, on the average, about five and a half per cent; and the nation proposes to assume them at twenty years’purchase, or at twenty times their annual net return, after making reserves for deterioration.
In order to determine if it is the policy of the United States to assume the lines of America, let us glance at the facts and arguments that have led to this action of England.
Our first inquiry is, Can telegraphy, like the postal system, be intrusted to government ? Upon this point the Report of the Edinburgh Chamber of Commerce in favor of the sale of the telegraphs to government deserves our notice.
“The time has passed,” says the Report, “ when every action of government was looked upon with suspicion. It is now admitted to be an organization capable of the most valuable uses ; its members are not suspected of speculating in stocks or produce, and its servants are believed to be as trustworthy as those of any great public company or association. The public would implicitly trust its messages as well as its letters to them. We know that, for some years after the reduction of the rates of postage, there was a diminution of net revenue, but that loss has been more than recovered, and we know how widespread has been the benefit resulting from that great measure. It has been objected that the analogy between the postal and telegraphic system is not complete, and that a low tariff for telegraphic messages would not be successful, because these have to be sent separately and singly, while letters are carried collectively. This is a reason why telegrams cannot be carried so cheaply as letters, but the increase of price necessary on that ground is easily calculable. By the adoption of improved apparatus, the time and expense required for this part of the work have already been greatly reduced, and will, no doubt, be still further reduced, when some of the more recent inventions have been brought into practical application ; and, low as are the rates of postage, it must be borne in mind that each letter has to be sorted, weighed, stamped, and delivered singly. The obstacles which stand in the way of government assuming the control of telegraphic communication are comparatively few and unimportant. No powerful opposing interest, like that of the railway companies, has yet arisen, nor would any enormous capital require to be dealt with.”
In some of our cities — Boston, for instance — the post-office is admirably organized, with its pillar-boxes, messengers, and six deliveries daily, with its well-patronized money-order office, and other improvements. It our system as a whole is not perfect, if improvement is too much dependent on political changes or services, let us at once adopt the system so ably recommended by the Hon. T. A. Jenckes of Rhode Island, and make choice and promotion dependent on education. Let us, when candidates are recommended by legislators, subject them, as they do in England, to a rigid examination, and make the office a road to preferment, and dependent on good behavior only.
Under such an act as Mr. Jenckes presents, the United States, with its energetic people and high cultivation, can make telegraphs and its post-offices at least equal to those of Europe.
The estimates submitted to the British Parliament by the post-office are based upon the present number of telegrams sent annually in the United Kingdom, which amount to six millions. It is computed that the reduction of charge from an average of forty-six cents per message to twenty-four cents for twenty words will increase these messages to eleven millions annually. As some telegrams will exceed twenty words, the average return is set at twenty-eight cents per message, and the annual revenue at $3,200,000.
It is estimated, from the experience of Belgium, that the present expenses will be increased but one third by an increase of eighty-five per cent in messages, attended by the abolition of some six hundred duplicate offices, and will not, after the combination with the postoffice, exceed $ 2,100,000, thus leaving a margin of $1,100,000. This will exceed the interest on the expected cost of fifteen millions of dollars by six hundred thousand, and will furnish an ample margin and reserve for future expansion. The estimate may be considered reliable, as the calculations of the department are made with great caution.
The British Parliament have not been led to this important step by the success of their postal reform, and their combination of banks, insurance, annuities, and postal orders with the mails alone, but by the success of the best governed countries of Europe, — Belgium, the garden of Europe, a land blessed with free institutions, and the Swiss Republic.
Belgium, under the wise administration of Leopold, took the initiative in national railways, and, a third of a century since, built lines uniting her chief cities and connecting with the great lines of France and Germany. She did this at the national expense, and borrowed the money on a long term of years at less than four per cent. Her lines were planned and constructed with skill and sagacity, and the lowest rates of freight and fare were adopted, under which her large iron and woollen manufactures have been developed, and her exports and imports increased more than tenfold. Such was her success, that, on the accession of the new king at the close of 1865, her rates, then the lowest in Europe, were again reduced more than a third, with further benefit to the revenue ; and in a few years they will, with their present success, defray the whole original cost and interest. She has pursued the same liberal policy with respect to telegraphy. Some seventeen years since she constructed two thousand miles of electric lines, and connected them with two hundred and eighty-one of her chief post-offices.
The larger offices were kept open all night, the second class from seven A. M. until midnight, and the smaller offices from seven A. M. until nine P.M. Telegrams for many years were sent and delivered promptly at twenty cents per message of twenty words, beside the address, and with such success that the revenue met the interest and the entire cost of construction. One of the last measures of the late benevolent king was to sanction the measure presented by his minister for a reduction on inland telegrams from twenty to ten cents per message of twenty words ; and this liberal measure, far in advance of the legislation of all other countries, has resulted in profit. Little change was made in the charge for international or transit messages, like those between the United States and Canada, or between the Maritime Provinces and Canada, across our States ; and while these between 1865 and 1867 increased from 435,469 to 474,202, or less than seven per cent, the inland messages grew from 374,400 to 819,668, or one hundred and eighteen per cent. The average cost of each message, including inland transit and international, has fallen to fifteen cents, —five cents more than the average rate for the local message ; but as Belgium charges a little more for transit and international than for local telegrams, an average return of fifteen cents on all about covers the expenses, and the rapid growth of business is rendering the lines self-supporting, and will eventuate in profit.
Thus have the statesmen of Belgium promoted the social intercourse and home trade of nearly five millions of people, by bringing home to them the telegraph at rates less than half the former average postages of British and American letters.
This feat is one of the great achievements of the age, one of the great triumphs of modern science.
While in Great Britain there is at present but one telegram for one hundred and twenty-one letters, and in Switzerland one for sixty-nine, Belgium has one for forty-seven, and the disparity between telegrams and letters is fast diminishing.
The administration of Belgium, in their official report in 1866, remark that the telegraph yields some indirect revenue to the nation beside its direct returns. The different departments of the administration use the telegraphs gratuitously ; and out of 311,837 free official messages (one fourth of all the messages sent), but twenty-eight thousand were on account of the telegraph itself.
The public rarely avails itself of the night service ; and, to satisfy its real requirements, it would be sufficient to keep the four principal offices open until one A. M,
“For more than three years the inland messages have cost more than they have produced ; the net profit on the whole system being obtained from the compensation afforded by the international messages. In 1866 the loss on an inland message was increased ; and it may be asked, how it happens that, with this augmented loss, multiplied by a great number of transactions, there has been, or ever can be, an advantageous result. It is easy to answer this question.
“The general items, like the special items of cost, being divisible equally amongst all the units of work, it follows that every augmentation in the number of any one of three kinds of messages tends to reduce the cost of each unit of work, provided the expense be not augmented in a like proportion. Now, the cost of each unit of work being reduced by the remarkable growth in the number of inland messages, it follows that not only the average cost of an inland message, but the average cost of the international and transit messages also, has been reduced. Though it is true that, notwithstanding the reduction by one half of the tariff for land messages, a single year has not sufficed to reduce by one half the average cost of an inland message, it is also true that, but for the reduction of the inland tariff, and the extraordinary increase in the number of inland messages which has followed it, the cost of international and transit messages would have remained the same as in the preceding years, in spite of the reductions which have taken place in the tariff for such messages. There would have been less loss.on the inland service ; but, on the other hand, there would have been a smaller profit on the international service.
“ We may hope that the time is not far distant when we shall have a net profit in excess of that which we should have obtained through the ordinary progression of receipt and expenditure under the influence of the old inland tariff. The distinction which we have made between the present results of the inland traffic, and those of the international traffic, carries with it a valuable lesson. It imposes on the administration the duty of neglecting nothing that would tend to reduce the cost of the unit of work, of admitting no change that would tend to complicate the service, and of restraining within the limits of the actual requirements of the country the extension ot the system.
“ The telegraphic service, then, without burdening the public treasury, may henceforth spend annually the whole of its gross receipts, on condition that it does not exceed in its outlay on future extensions the profit which it has realized up to the present time. There is good reason to hope that it may do more, and that, without debarring itself from useful extensions, it may, by the development of its traffic, continue to maintain a position so satisfactory from a financial point of view.”
The capacity of the Belgian lines for transmitting telegrams is by no means exhausted. With the best instruments forty messages per hour may be sent easily on a single wire, and on the Belgian lines the average number of messages sent is still but one hundred and eighty-one a year per mile of telegraph, so that we may well anticipate future extension.
Switzerland is less populous than Belgium, having but two millions of people, although it had a few more miles of telegraph lines, namely, 2,130 miles of line with 3,717 miles of wire in 1865, in place of 2,000 miles of line and 5,395 miles of wire in Belgium, It has, however, a decided advantage for telegraphing, namely, less miles of railway, for this deficiency delays the transmission of letters.
Telegrams are not, like letters, despatched together, but are sent one by one in the order of their arrival; and when many messages, in the busy hours of the day, arrive simultaneously, or in case of any sudden accumulation, much time may be required for their transmission. Where railways exist and mail-trains are frequent, the merchant is tempted by their frequency and low rates of postage to resort to the first in preference to the telegraph; and doubtless the deficiency in railways has contributed to the use of the telegraph in Switzerland, where the Alps impede the progress of railways. Switzerland, too, in proportion to her inhabitants, has more offices than Belgium ; while the latter has but one office for sixteen thousand people, the Swiss Republic has one for every ten thousand, and, beside her two hundred and fifty-two offices, has twenty-eight places for deposit.
The uniform charge for transmission, from one part of Switzerland to another, irrespective of distance, is twenty cents per message of twenty words, with half a dime for a line not exceeding ten words more. This charge secures the prompt delivery of the message at the house of the person addressed, when that house is within three fourths of a mile of the telegraph office, without any further expense ; and if his residence is more remote, the writer is entitled to a special messenger at the rate of twenty cents for three miles’ distance, or in that proportion.
The Swiss system has another advantage, as money orders may be sent by telegraph, — an advantage due to the union of the post-office with the telegraph.
In 1867 the income of the Swiss lines from telegrams, drawn from 709,000 messages, had risen to $165,000, and the expenses amounted to but $ 150,000. There was in Switzerland in 1860 one telegram for eighty-four letters, and in 1866 one for sixty-nine letters only, while in the British Isles there was but one for one hundred and twenty-one mailed letters.
The great distinction between the British and the Swiss and Belgian systems is, that the latter have been planned and are conducted for the sole benefit of the public, while the former has been managed to subserve the interests of the stockholders more than those of the people ; though the cost of working and maintaining lines in the United Kingdom is less than it is in Belgium and Switzerland, and averages in the three countries but twenty-five dollars per mile of wire.
There is, therefore, no necessity of charging more for their use in the United Kingdom than on the Continent, on account of difference in cost. By the evidence submitted to Parliament, it appears that the lines of the Continent were all conducted by government at lower rates than those of the British telegraph. Among the papers submitted were two interesting letters from Sidney, Australia, addressed to Lord Stanley, the Postmaster-General, by Montefiore, the manager of the postal and telegraphic systems at Victoria. In these he urges the department to adopt measures that have proved successful in that colony, remarking that “ the telegraph, like the post-office, cannot be so well conducted by companies as by the government. The latter alone can enforce regularity in all its branches, can make them reach every district, and, when necessary, pass the frontiers, and is in the best position to make favorable arrangements with foreign states. Every argument in favor of the control of the post-office by government has equal weight for its control of the telegraph, which should be considered only as a more rapid mode of postal communication when still greater speed is requisite.”
Every post-office and sub-office and every pillar-box should be a depository, and cleared once an hour or half-hour. Thus would the electric telegraph, with all its wonderful advantages, be brought to the very doors of the people, as is at present the admirable, although slower, system of the postal service.
By the adoption of a moderate and uniform rate, it is certain that, not only would the telegraphic business now in existence be greatly increased, but an entirely new class of persons would recognize and make use of the advantages offered who have hitherto been deterred by the want of facilities and the uncertainty of cost. Even under the present arrangements, in every case where a decrease of charge has been made, a vast corresponding increase in quantity has been the result.
Therefore it may be anticipated with certainty that the business of the telegraph will augment in accordance with the facilities in a ratio equal to the increase in the postal department since the introduction of penny postage.
The effect of reduction from high to moderate rates is well illustrated also by the report of the Atlantic Telegraph Company. At the meeting of the company held at the London Tavern, September 7, 1868, it was officially stated that each successive reduction from £ 20 to £ 10, from £ 10 to £ 5, and finally to £3 17 s. 6d., had increased the revenue, — the last having raised it from £495 to ,£525 per day.
It is a little surprising that there was not more opposition to the consolidation of the telegraph lines with the postoffice in Great Britain ; but the unanimity of the Board of Trade and of the public journals in support of the measure prove the success of the department in the discharge of its multifarious duties. The only opposition which appeared in print was from Mr. Grimston, the chairman of the International Electric Telegraph Company. This corporation had extended its lines through the principal part of Great Britain, and established charges much above the present rates. In 1862 a new company, the United Kingdom, was chartered, and limited to a shilling per message. It opened a hundred and twenty offices at the new rate, but was met by a reduction on the part of its rival to the same rate in the towns accommodated by both. Although the National Electric Telegraph Companies maintained higher rates in all other districts, and although the merchants and brokers using the wires had very generally subscribed to the new company, it was unable to control half the business of the towns it reached, in consequence of advantages offered by its rivals ; and, after struggling in vain for a dividend, was obliged by competition to ask permission to advance its rates. Up to the time of the rise the International Electric Company had stated in its reports that its charges were not remunerative; but after the advance, and when it was proposed by government to purchase at rates to be based on present income, the secretary of this company took another ground, and suggested that his company, while dividing but five per cent, had eighty-five per cent more in reserved profits, chiefly earned during the season of competition ; and the chairman of this doublefaced company, Mr. Grimston, sent out a pamphlet against annexation.
It is desirable that a new and important measure should be discussed before its adoption, and that its defects should be pointed out. If there were any in the scheme proposed, the manager of such a company would have the strongest motives to detect them ; he had triumphed in his opposition, and compelled the public to come to his terms, and was prepared to make an extra dividend of eighty-five per cent. In his pamphlet he makes the following points : —
First, that ninety-seven per cent of the profits of his company were drawn from a hundred stations or less, while the other three per cent were drawn from eleven hundred stations ; that a loss would attend the extension to all the small towns and villages of the island.
Second, that the country postmasters were unfit for the work, and would not deliver promptly ; that clerks must be trained and educated from youth to acquire skill in telegraphing.
Third, that the government, instead of purchasing, should consolidate the existing companies into one.
Fourth, that the telegraphs of England were better managed than those of the Continent.
Fifth, that the district company, which had served the city of London and its environs, had shown, by its advance from sixpence to a shilling, and previous inability to make dividends, that low rates would not answer.
Mr. Grimston’s pamphlet was ably reviewed by Frank I. Scudamore, the secretary of the Post-office Department, a gentleman of great ability, on whom the mantle of Sir Rowland Hill seems to have fallen.
Mr. Scudamore showed in his review : First, that the clerks in the post-office and in telegraphic offices, banks, and counting-rooms were recruited from the same classes and did not require a long training, and that many postmasters and their children knew how to telegraph ; that competent clerks could be found for the new duties when the present offices of the telegraph were abandoned ; that with the new business the post-office could give larger salaries and command a higher class of talent; that they could deliver by special messengers in the cities, while the letter-carriers could collect from pillar-boxes without increased expense; that most of the letters were received and delivered in the morning and evening, while most of the telegrams come in between ten A. M. and four P. M., when the clerks were least occupied, and could move with despatch.
Second, with respect to the extension to many new offices, that the department would use for extensions its surplus income, which the companies devote to larger dividends, and, beginning with the towns now accommodated, would discontinue nearly a third of the offices existing in towns which had stations of rival companies, and would reduce rents by the use of post-office buildings, and gradually carry the benefits of the telegraph to stations which would give no profit until their business was developed, and which no company would accommodate ; that it was fair to ascribe twice the amount they received to branch offices, as they contributed as much more to the income of other ofiices, and should be fostered by the nation.
Third, that the effect of combining private companies might be to reduce their expenses and increase their dividends ; it might benefit the stockholders, but would check extension and repress energy; and as respected the cost and rate of charge, the policy of Mr. Grimston’s company showed that, after a large reduction in rates, there had been the following striking results : —
Messages transmitted . . . 1,534,596 3,150,149
An increase at the rate of 105 per cent.
Revenue $1,097,000 $1,682,000
Working expenses .... 743,000 1,043,000
Increase 40 per cent.
Net produce ...... 354,006 639,000
Increase 80 per cent.
Percentage on capital .... 7,8/10 12
Number of messages per mile of
wire. 44 66
The report of Mr. Grimston, in the hands ol his adversary, became a powerful weapon against him, and it was shown to the satisfaction of the committee that the tendency of the English companies was towards an advance of rates, which checked the growth of telegraphing and left many important towns destitute; that rivalry led to wasteful competition in towns easily accessible, while in smaller towns there were vexatious delays and the offices were open for a few hours of the day only; that of English towns traversed by telegraph lines, thirty per cent were well served, forty per cent indifferently, twelve badly, and thirteen per cent not at all.
Mr. Scudamore having successfully met the objections of his opponent, the committee presented their report, and the bill for the union of the postal and telegraphic system has already passed most of the debatable stages.
American Post-offices and Telegraphs.
Our American post-office has been progressive, but has not kept pace with the British system, and possibly we may have marked our rates too low to make it self-sustaining, while full accommodation is given to the South and West, although it met its expenses in the loyal States during the war. The rates were reduced to three cents per letter in 1857. This low rate carries a half-ounce letter over a territory thirty times as large as Great Britain, where the rate is two thirds of our own. But under this postage our letters have increased from twenty millions in 1856 to four hundred and sixty-two millions in 1867, and the gross revenue from seven millions to sixteen millions. The expenses are in part defrayed by the general revenue, but the country is benefited and held together, and it is to be hoped that our Pacific Railway may increase the amount of correspondence, while it reduces the cost of transmission.
The money-order system has been adopted with marked success in 1,463 of our ofiices, and the sales of postal orders have risen from nine to fifteen millions of dollars in 1867. No steps have yet been taken to establish banks or insurance offices, and no subsidies are now paid to steamers in our trade with Europe, although moderate sums are allowed to Steamers running to Brazil, Aspinwall, San Francisco, and China.
When Morse established the first successful line of electric telegraph for commercial purposes, between the capital and Baltimore, he utilized the discovery of Franklin, who first grasped and guided the thunderbolt; and to-day the telegraphic system of Morse is pronounced the best invented. We have no records to show the progress of the American system, but it appears from the British Blue Books, printed “by command of her Majesty,” several of which are devoted to telegraphy, that in 1859, before the war, the annual receipts of the American companies to which we have confided our telegraphing were two millions of dollars, drawn from five millions of messages, while in the same year the receipts of British telegraphs were thirteen hundred and seventy-five thousand dollars, derived from fifteen hundred and seventy-five thousand messages. While the income of British lines has increased to twenty-eight hundred thousand dollars, our American lines, from further extensions at higher rates, have advanced their income to seven millions of dollars. We have not the length of our lines, but the length of their wires at the close of the present year is given by the editor of the Telegrapher as one hundred and twelve thousand miles ; and if we estimate four wires to each line, we may compute the entire length of our lines at twenty-eight thousand miles, all but four thousand of which are held by the Western Union Telegraph Company, whose nominal capital and bonds amount to forty-five millions of dollars.
The actual capital of the other lines, which average but two wires each, cannot exceed two millions, and the gross income of the whole may be safely set at seven millions of dollars.
Most of the American lines have been absorbed by a single gigantic company, whose revenue and expenses for the past two years have been as follows, namely ; —
Revenue and Expenses of the Western Union Tetegraph Company for 1867 and 1868.
Income, $13. 177.545
Net income, $ 5,210,343, or $ 2,605,172 a year.
It has arrived at its large capital by successive amalgamations and purchases of other lines, on which occasions additions have been made to the valuations. The current price of its stock is now seventy per cent upon the nominal par, which doubtless exceeds the actual cost; and were we to reduce the present prices of all our telegraph stocks to gold, the amount would fall below twenty-five millions of dollars at a gold valuation.
The cost of constructing a new line with a single wire in the United States does not exceed two hundred dollars per mile, while each additional wire, with the apparatus, would fall below one hundred dollars more. Were telegraphs to be assumed by government, it might well afford to allow for them twenty-five millions in gold, or two hundred and twenty-five dollars per mile of wire. As the good-will is worth more than that of the British lines, this nation might well afford to allow twenty-five dollars per mile more than the British standard of two hundred dollars per mile of wire, and thus remunerate the present holders, both for the original cost and the outlay on the improvements here, and give a moderate profit. They should be fairly, if not liberally, remunerated. It would be impolitic for us to discourage enterprise by attempting to coerce the telegraph lines into a sale by our power to build new and competing lines in connection with our post-offices. We should not resort to extreme measures, unless the existing companies should deliberately determine to delay improvement and defy the government.
All the reasons which impel the British nation to assume the electric lines are operative here. Indeed, they have additional force on this side of the ocean, as a greater monopoly exists here than is found in England. Nine years since, the average cost of messages in England was eighty-four cents ; it has now fallen to forty-six cents, or nearly one half.
In 1859 the average charge for a message here was but forty cents ; it is now much higher. As our companies have combined the price has risen, while the shilling charge of the United Kingdom Company in England has brought the British prices down — they are falling to a shilling. Is it not time for us to have a commission, and ascertain if we may not wisely follow the precedents of Belgium and Great Britain?
Can we as a commercial nation afford to fall behind them ? Would it not be the policy of our country to authorize a purchase of our lines for twenty-five millions, payable in gold, in the course of 1870? We are on our return to gold, and for two years could pay the interest in gold. The interest would not exceed $2,600,000 in currency, and might be easily defrayed.
Our currency will soon become equivalent to gold. We might at once reduce our charges to twenty-five cents for six hundred miles, the length of Great Britain, and to fifty cents for longer distances, with ten cents for each additional line of ten words or less. These rates would probably give less than forty cents for an average price per message, and this was the average charge in 1859, and would, if we take into view the expense due to distance, be proportionate to an average charge of twenty cents in the compact kingdom of Belgium, and twenty-eight cents in the British Isles, which are not larger than Illinois, Iowa, and Missouri. With the benefit of post-office connections and facilities, we might reasonably anticipate no loss of net revenue from the reduction, and from a surplus income of a million and a half might annually add three per cent to our lines, and thus keep pace with population, and once in five years reduce from ten to twenty per cent, from the accumulation and the growth of revenue.
And if little Belgium, with two thousand miles of line, can afford to send for government without charge three hundred thousand messages a year, why might we not, with fourteen times that length of lines, afford to send several millions gratuitously ? But it will be asked, Shall we add twenty-five millions to our war debt, and thus depress the price of our bonds, and impair the national credit? We have another alternative, altogether superior.
Let us adopt the policy of sagacious England, and convert our chief postoffices into savings banks. Let us give the national guaranty, allow interest at three and a half per cent, or one per cent more than England allows, — for we can afford to do so, — and have the funds we gather invested by our Treasury Department at Washington either in national stocks or new telegraph bonds at four per cent, and allow the depositor to withdraw his funds from any office on due notice and the surrender of his certificate.
If the United Kingdom of Great Britain and Ireland, with a population of but thirty millions and with less deposits in savings banks than we have, accumulates in its postal banks seven millions yearly, surely we, with nearly forty millions of people, can in less than three years accumulate enough in similar banks to buy our telegraphs, and thus confer a double benefit on the people.
Is it not politic at once to make the national post-office a bank of deposit ?
“In Scotland,” says Mr. Derby, in his Report on Reciprocity, “ banks have been established for one hundred and fifty years ; they are now thirteen in number, six of which may issue a circulation of twenty-two million dollars. The stockholders in these Scotch banks are all liable for the engagements. They are so cautiously conducted that none of them has ever failed to pay its bill-holders and depositors. It is their practice to keep a reserve equal to one third of their notes and deposits, and to allow an interest of three per cent to their depositors upon their daily balances. These banks have no less than six hundred and fifteen branches diffused through all parts of Scotland, which attract from the farmers and small traders their accumulations, and transfer them to the commercial centres, where they are profitably employed. These facilities have done much to stimulate the growth of Scotland, which, under a sky of steel, a harsh climate, with great asperity of surface, has in the last century made more rapid progress than any other portion of Europe.
“Much is due to the management of its banks and bankers, to cash credits and allowance of interest on deposits, which empty the till and the stocking into the vault of the central bankinghouse, which collect and gather up and utilize all the dewdrops, rills, and rivers of wealth, and pour them in fertilizing streams over the country. They may well be copied in America.”
But while we find much to admire in the banks of Scotland, the banking system of Great Britain has no form or symmetry, presents many imperfections, and is inferior to the new system of the United States. The circulation is anomalous and irregular, based partly on public securities, partly on the strength of joint-stock companies, subject to few restrictions, and partly on the credit of individual bankers; and no institution, except the Bank of England, makes any return to the state for the privilege of creating a currency.
While our national currency pervades the country from the Bay of Fundy to the Rio Grande, from the highlands of Neversink to the Sierra Nevada, the bills of the private banker rarely “ circulate beyond his own city or county.” And why may not we grasp all the rills and rivulets of wealth and use the dormant energies of the nation ? If the six hundred banks of Scotland are useful, six times that number of postal banks must be much more effective. In England the depositors in banks of saving are one out of eleven of the entire population, or nearly one for every two families. This would give one hundred and eighty-one depositors in a town of two thousand inhabitants. In most of our counties with two thousand people there are no savings banks, and people must travel long distances to reach them. But the emigrant who would trust no private banker, and the freedman who would trust no Southern bank, would bring out his dollars, and seek the security and the interest of a national institution with more avidity than the three thousand subscribers a day of Jay Cooke took the national loans ; it would be alike useful to the depositor and the nation. But it will be asked, Can we impose so many duties on the post-office and secure efficiency ? The English idea is that, if we would insure efficiency, we must extend duty. It fortunately happens that letters reach the offices chiefly in the morning and evening, and telegrams in the intermediate periods ; that telegrams are sent chiefly by day and letters by night, and it is as easy for the receiving clerks, after numbering and stamping the message, to hand it to the electrician as to the messenger or mail-carrier.
With respect to electricians, all the good men should be at once transferred with the telegraphs to the postoffice ; they will all be wanted. The civil-service bill of Mr. jenckes should at once be applied to the post-office, and the officers should hold their places, like judges, during good behavior. The electrician who has devoted himself to his profession, and helped to improve it, should be placed above contingencies, and be advanced in pay as he progresses. He should hold his position by no precarious tenure.
The pillar-boxes should be adopted for telegrams, and emptied hourly in the large cities, and the smaller towns should be dealt with liberally. If it be true, as it is stated officially, that two thirds of the revenue of the postoffice is drawn from the larger towns and cities, it should be remembered that nearly half that revenue comes from the correspondence between them and small country offices, and would be lost with the revenue of the latter were they to be discontinued ; and if telegraphy is developed, the village that could barely sustain a post-office may be productive when it receives letters, deposits, premiums, and telegrams.
Subsidies to Mail Steamers.
But one topic remains for discussion, — the provision of mail steamers to carry our mails and strengthen our navy, and to be the messengers of our commerce. Unless we provide them, we shall expose our commerce and our coast to the depredations of European nations. France and Great Britain, by liberal grants for the carriage of the mail by subsidies ranging from one to three dollars per mile, create fleets of fast frigates and devote to European vessels most of the ocean postages we collect. We, by duties on material and a false currency, place an interdict on the construction of seagoing steamers, and apply our ocean postages to build up the British and French navies. Are we infatuated, have we forgotten Farragut and a host of naval heroes, and their ships and steamers by which we recaptured the seaports of the South ? Could we have put down secession without them, and are we prepared to resign our naval power and prestige ?
Can the West afford it ? Can it afford to lose the four millions of customers, the heads of whose families and whose efficient members were engaged in building, repairing, and navigating, when our tonnage exceeded five millions of tons, and consumed the surplus of twice their number engaged in agriculture,— can it afford to convert them into farmers, and make them producers instead of consumers ? Would not such conversion carry corn back to twenty cents a bushel, and pork to two cents per pound ? Let us make the post-office productive, let us enrich it by increasing its revenue as we may, or by liberal appropriations as we can, and make it the mother of steam frigates, and our most efficient navy agent, as is done in Great Britain.