Report by Mr. Edward Page, Inspector-General of Mails, on some points connected with the relations between the Post Office Department and Railway Companies.

(See page 85.)

General Post Office,

29th February, 1856.

Sir,

In the First Annual Report of the Postmaster-General, presented to Parliament last year, it is stated by Lord Canning as one of the reasons for instituting such a report, that “many misapprehensions arise from an imperfect knowledge of matters which might, without any inconvenience, be placed before the public.”

That such misapprehensions do exist as to several matters connected with the railway branch of the Post Office Service has lately been exemplified in an address by Mr. Robert Stephenson, M.P., on his election as President of the Institution of Civil Engineers.

In that address Mr. Stephenson (no doubt without any intention whatever to mislead) puts forward, in effect, the following statements, which I believe to be inaccurate:—

1st. That the scheme of penny postage, to the extent to which it has so far been developed, would have been impracticable, or, if practicable, unremunerative, but for the facilities afforded by railways for conveying bulk.

2nd. That railway companies, instead of being liberally treated by the Post Office, are called upon to perform the service of that department at a rate of remuneration which affords little or no profit.

3rd. That the Post Office has lately entered into a competition which is injurious to railway companies, by conveying books and other parcels at very reduced rates.

My object in this Report is to direct your attention to the facts on which, in my opinion, the Post Office is entitled to rely in opposition to the above allegations, the last of which has likewise been recently adopted in the Report of the Committee of Consultation of the London and North-Western Railway. It may perhaps be the desire of the Postmaster-General to furnish, in his Report for the current year, some corrections of these misconceptions, the more especially as Mr. Stephenson states, in the very outset of his address, that his chief object is to suggest topics for communications and discussion at future meetings over which he may have to preside. Such a correction is the more necessary, because there is reason to apprehend that these and other similar opinions which have been at various times promulgated have, by being made the ground for claiming special additional payment for the mail service, affected to a certain extent the arbitrations between the Post Office and railway companies, and have thus acquired practical importance.

On the first point (taking the subjects in the order in which they are named above), it is hardly to be wondered at that the public generally should be led to form erroneous impressions, seeing how imperfectly the details of the Post Office are usually understood. But it will not be difficult to prove that the conclusion arrived at by Mr. Stephenson cannot be supported, and to show that the increase which has taken place in the weight of the mails would have presented no difficulty to their conveyance by mail coaches, and that since the transfer of the mails from coaches to railways, the cost of transmission has increased in a far greater degree than it would probably have done had railways never been constructed.

I should premise that it has been ascertained from returns kept by the department, that while the whole number of chargeable letters delivered in the United Kingdom has increased about six-fold, the increase has been about nine-fold with respect to letters to and from London; and the same remark applies, although the increase is in a somewhat different ratio, to newspaper and book parcels. If, therefore, it can be shown that the weight of mails at present despatched from London (which greatly exceeds that of mails brought to London) could have been carried by mail coaches, it follows that no difficulty would have arisen with the mails in other parts of the country, where the increase of weight has not been so large.

The actual increase in the weight of the mails has been much less than is generally believed. It is often supposed that, because the whole number of letters has, since the introduction of penny postage, increased six-fold, therefore the whole weight of the mails has also increased six-fold. But when it is recollected that by far the larger portion of the mails has always consisted of newspapers, which were not in any way affected by the scheme of penny postage, it will be obvious that it would require a very large increase in the weight of the small or letter portion of the mails before the total weight would exhibit more than a small per centage of increase.[145]

In 1838 the gross weight of the night mails despatched from London in a single evening was about 4 tons 6 cwt. 1 qr. At the present time the total weight of the night mails despatched in a single evening may be stated at about 12 tons 4 cwt. 3 qrs. It will be seen, therefore, that the total increase in the weight has been only 183 per cent., or less than three-fold.

Mr. Stephenson correctly states that in 1838 the number of mail coaches leaving London each evening was twenty-eight, giving an average load for each coach of 3 cwt. 9 lbs., supposing the weight to have been equally distributed, which I am far from assuming was the case. Taking the present weight of mails, and assuming that these twenty-eight mail coaches were still running, the average load for each coach would be 8 cwt. 3 qrs. Now a reference to the Third Report of the Select Committee on Postage in 1838, pages 48 and 50, will show that, according to the testimony of the Post Office witnesses[146] (the general tendency of whose views was certainly not at that time favourable to the practicability of penny postage), a weight of bags amounting to 18 cwt., or more than double what the present average load would have been, was sometimes carried on one mail coach, and that a load of 15 cwt., in addition to the usual limited number of passengers and luggage, was by no means too high a maximum to fix for mail coaches generally.

Admitting, however, that the weight was not equally distributed over all the mail coaches, and recollecting, at the same time, that this average load of 8 cwt. 3 qrs. would be above the average ordinary load on any other than weekly newspaper nights, when it would no doubt be higher, the inference is still a fair one that the greater part of the mail coaches would have borne the increase of weight without any difficulty, although there can be no doubt that, on some of the lines, additional coaches would have been required for a portion of the distance.

But the result which the above calculations justify is a great deal more favourable than is at all necessary for the purpose of disproving Mr. Stephenson’s argument, that the expenses of carrying out penny postage would have been so large as to have entailed a certain loss.

Let us suppose that, partly to meet the increase of weight, either daily or on the heavy newspaper night only, and partly to provide for the establishment of additional day mails (they were already in existence on some of the lines), the number of mail coaches would have been doubled all over the kingdom, and that their cost would also have been doubled (an improbable supposition, considering the increase in the number of passenger coaches which must, in the absence of railways, have necessarily taken place to meet the increase of traffic). The expenditure of the department for mail-coach service would in that case have been advanced from £155,000[147] to only £310,000 per annum, while the present expenditure for the railway and mail coach service of the department is £443,000, of which sum £400,000 is paid to railway companies alone. Not only, therefore, would penny postage without railways have been both practicable and remunerative, but it would have been even more profitable (assuming the existing increase of letters) than it now is.

In order to show the impracticability of carrying out the penny postage system without the use of railways, Mr. Stephenson states, while speaking of the mails now carried by the London and North-Western Railway, that “not one mail coach alone, but fourteen or fifteen mails would have been needed to carry on with regularity the Post Office traffic.” It is probable that Mr. Stephenson is not very far wrong in this assumption, although he deduces from it the erroneous conclusion that penny postage must have entailed a certain loss. The facts of the case are, that in 1838 twelve or thirteen mail coaches from London were actually employed to carry the mails which now leave London by the London and North-Western Railway; so that, on Mr. Stephenson’s own estimate, only two or three additional mail coaches would have been required for forwarding those mails, which, it may be observed, constitute about one-half of the whole of the night mail leaving London.

The mail coaches which formerly carried the mails now leaving London in a concentrated form by the London and North-Western night mail train, were as follows, viz.:—

In alluding to the advantages which have been conferred by railways, Mr. Stephenson is unfortunate in putting forward as an illustration, the cheap transmission of the printed proceedings of Parliament. Under the old postal system, and during the existence of mail coaches, Parliamentary reports and proceedings were conveyed by post free of all charges. On the introduction of penny postage, a postal charge for their conveyance was imposed, and this charge has continued up to the present day.

Referring to the relations between the Post Office and railway companies as to the remuneration for mail service, I should observe, that under the old mail-coach system, the Post Office was protected from undue demands for the transmission of its mails along the public highways of the kingdom by means of competition. The principle of free trade in locomotion operated as a safeguard against extravagant charges. Coach proprietors, who had established themselves on any road, were prevented from taking advantage of their occupation of the line to levy unreasonable charges for either passengers or mails, by a wholesome fear of opposition. The result was, that by constantly offering its contracts to public competition, the Post Office insured the performance of its service on terms which afforded only a fair and moderate profit to the contracting parties.

The introduction of railways practically destroyed competition, and placed large monopolies in the hands of a few private companies; but, to compensate for this, Parliament took the precaution of insuring moderate charges for passenger conveyance, by special provision in each Railway Act. Strange to say, a similar provision as regards the remuneration for Post Office service was omitted, and it was deemed sufficient to specify that the remuneration should be “reasonable;” a most indefinite term, and one which has given rise to infinite variety of opinion.

It is true that, failing an amicable settlement, provision is made for a reference to arbitration; but, in the absence of any general principles to guide the arbitrators or umpire in their judgment of what is or is not reasonable, the question resolves itself into one of individual opinion, and the consequence has been that the most conflicting decisions have been arrived at in cases which, if not identical, have been so nearly alike as to render it impossible to reconcile the strange variation in the rates awarded.

Without, however, dwelling upon the uncertainty of arbitration, which is by no means its least objectionable feature, it can readily be shown that this mode of determining payments has led to results very different from those implied by Mr. Stephenson, who states that for trains put on to suit the Post Office service, very little remuneration is allowed beyond the absolute outlay which the service entails, and that the Post Office insists on the right of travelling at the mere actual cost.

It can hardly be necessary to point out that the Post Office has no more power than a railway company has to fix any particular rate, or to insist upon any principle of its own in regard to payment. The department can do no more than give expression to the views which it believes to be fair and just, leaving the final decision to the umpire. But that those decisions have allowed to railway companies the mere actual outlay, with little or no profit, is a misapprehension which a brief examination of some recent awards will suffice to remove.

It fortunately happens that Mr. Stephenson furnishes in his address the data for checking his own accuracy on this particular point. He says that locomotive expenses on railways do not on an average exceed 9½d. per mile, and that the cost of running a train may be assumed in most cases to be about 15d. per mile. Compare this with some of the rates actually paid by the Post Office to different companies at various periods within the last few years, amounting, it will be seen, in one instance to the enormous price of 4s. 6d. per single mile.

In these cases it will be seen that the rates paid by the Post Office for the use of only a fraction of the train exceeded the whole cost of running, as calculated by Mr. Stephenson himself, by from 60 to 260 per cent. But these rates, while they no doubt include in some cases special elements of expense not covered by the average of 15d. per mile, are independent of the receipts obtained from passengers, parcels, and in some cases from goods, earnings which, added to the Post Office allowance, have, in many instances, rendered the mail train one of the most profitable trains on the line.

It should be mentioned that the rates of payment quoted above applied, in some few of the cases, to trains which were running as passenger trains before the Post Office employed them for the mails, the times of departure and arrival, places of stopping, &c., being adopted by the Post Office almost exactly as the company had arranged them for their own convenience. In these instances the extravagance of the charge for the mails becomes of course the more remarkable.

I should imagine that the Post Office department would be well satisfied if those mails, the hours of which are absolutely fixed by notice, were conveyed at rates based on Mr. Stephenson’s estimate of the actual running cost, making some allowance, on the one hand, for the benefit derived by the company from the train, and adding, on the other hand, compensation for any special extra expenses to which the company may be subjected by the requirements of the Post Office, together with a full allowance for profit. I believe that some basis such as this has long been considered a desideratum by this department, and it is to be hoped that Parliament may see fit ere long to place the question on a footing of this nature.

It may not be inappropriate to mention here, in further refutation of Mr. Stephenson’s charge of illiberal treatment, that although the law officers of the Crown have given an opinion that Government can claim exemption from toll on railways, such claim has for many years been abandoned by the Post Office. The arbitrators acting for the department always considered the railway companies both as carriers and proprietors of the road, and from their calculations accordingly. It may also be observed that the strongest desire is usually evinced by railway companies to obtain the conveyance of the mails, a desire which is certainly incompatible with the assumption that no profit is allowed for that service, and strangely at variance with Mr. Stephenson’s theory that railway companies are indifferent to postal traffic.

Before dismissing this branch of the subject, I must refer to a description of postal service by railway which has now become very extensive throughout the kingdom. I allude to the cases in which the Post Office sends a certain weight of mail in charge of the companies’ guards, by an ordinary train, over the working of which no control whatever is claimed by the department. For a service of this nature, the payment awarded under arbitration has, in a recent case, amounted to the exorbitant sum of 7d. per single mile, the weight of the mail averaging for the whole line not more than 1 cwt., or about half that of a second-class passenger and his luggage. For this trifling weight of mail the Post Office was thus made to bear very nearly half of the whole cost of running the train; while it has been ascertained that the average charge made by various railway companies for ordinary parcels carried beyond short distances very little exceeds one half-penny per cwt. per mile, the average charge for ordinary goods being of course even less.

I may add, that, although in a few cases, railway companies have been induced to accept moderate sums either for the use of one or two passenger trains, or for the general use of all their trains, it constantly happens that the department is prevented from increasing postal facilities by the refusal of companies to accept rates equal to, and often exceeding, the charges made to the public for the occasional transmission of a corresponding weight of such ordinary light goods as are frequently sent by passenger trains.

At page 7 of his address, Mr. Stephenson gives the total earnings of railways from passengers, for the year 1854, at £9,170,000. The sum paid to railway companies by the Post Office during the year was about £392,000, or about 1/23 part of the gross earnings of all the passenger trains. He estimates the gross weight of passengers conveyed during the year at 8,000,000 of tons; while the gross weight of mails for the entire kingdom (including guards, clerks, &c.) was considerably under 20,000 tons, a large portion of which was not conveyed by railways at all. Assuming, however, that the whole of it had gone by the railways, it would appear that the Post Office paid 1/23 part of the total earnings for the conveyance of less than 1/400 part of the total weight.

In connection with this branch of the subject, it may not be immaterial to mention, that in the finance accounts printed by order of Parliament last year, the gross amount of the passenger tax paid to the Government by railway companies in the preceding year is stated to have been £309,000. As the amount paid by the Post Office to railway companies for the postal service of the year 1854 was £392,600, it follows that the Government paid to railway companies for the carriage of the mails very nearly one-third more than it received from them in the shape of passenger tax.

The third allegation of Mr. Stephenson is that the Post Office has lately entered into a competition which is injurious to railway companies, by conveying books and other parcels at very reduced rates.

Without stopping to inquire whether railway companies (most of whose Acts of Incorporation are of a later date than the Penny Postage Act, and several of whose lines have been opened since the commencement of the book parcel regulations) have any legal or equitable right to the monopoly of parcel traffic, it may be sufficient to state, that with very trifling exceptions it is only to books and other printed matter (the general circulation of which is so intimately connected with the diffusion of knowledge and the promotion of education), that any reduction below the ordinary postal charges for letters has been applied. Now, even assuming for a moment, that every book parcel that the Post Office carries is abstracted from parcels which would otherwise be conveyed by railway, it is obvious that the companies would not sustain any loss by such parcels becoming part of the mail, if the Post Office paid to the companies for its mail rates only as high as the booksellers pay them for their parcels, in which, for the most part, such books would be conveyed, if they were sent at all. But it is a matter of fact, that the general rates paid by the Post Office to railway companies are largely in excess of those paid by the booksellers for their parcels. It follows, therefore, that the companies, instead of being injured, would be benefited by any such abstraction, seeing that, besides receiving a higher rate of remuneration for the carriage of those book parcels, they are entirely relieved of the cost of collection and delivery, a cost which, as Mr. Stephenson shows, renders goods traffic less profitable to railway companies than passenger traffic.

But a more careful consideration of this question will establish good grounds for the opinion that by far the larger portion of the book parcels which the Post Office carries would not be sent at all, but for the peculiar facilities offered by the extensive organisation of the Post Office, contrasted with which the facilities which railway companies can of themselves afford sink into insignificance.

As bearing strongly upon this comparison of facilities, I may mention the somewhat remarkable fact, that copies of the very Report of the Committee of Consultation of the London and North-Western Railway, in which the Post Office is represented as unduly competing with railway companies for the carriage of books and parcels, were extensively circulated to that company’s shareholders through the medium of the Book Post, not merely to towns and villages at a distance from their railway, but even to Liverpool to which the company’s own trains might have carried them without any charge whatever. When it is recollected that there are about 10,500 Post Offices scattered throughout the United Kingdom, that there is scarcely a village without a Post Office, and scarcely even a hamlet without a regularly-established official means of communication with a Post Office, and that consequently persons even in the most secluded districts, can communicate by post with all parts of the kingdom with tolerable certainty, and with very little trouble or expense, it will readily be seen that such facilities as these must lead to the transmission of books and documents which otherwise would never be sent.

In fact, the book post service is one so different in its character and objects from that to which the parcel arrangements of the railway companies are adapted, that it may fairly be assumed it would hardly exist at all, but for the extensive facilities for its development which the Post Office possesses. The evidence given before the Select Committee on Conveyance of Mails by Railways (1854), especially that of Mr. Charles Knight, the eminent publisher, is very decided on this point. He says (3872) that the cases in which books are sent by post may be nearly all considered as exceptional cases to the ordinary commercial operations of publishing; and again (3870 and 3892) that the book post may be looked upon as a mere auxiliary to the conveyance of parcels by other means; and (3860) that if the existing regulations were stopped, the public would not be able to derive the same advantages through any other channel. The Select Committee, in their Report, admitted their conviction that “a large proportion of the parcels would not be sent but for the facilities offered by the Post Office in their distribution.”

Following, however, another line of argument, let us again assume for a moment that all the book packets conveyed by Post have been abstracted from the companies’ vans. It can on the other hand, be shown, that the imposition of a postal charge on Parliamentary proceedings,—the limitation as to size of packets passing through the Post,—and lastly (the most important alteration of all), the abolition of the compulsory newspaper stamp,—are changes, the combined operation of which must have been to give to the companies a far greater weight of parcel traffic than the weight of the whole of the book packets passing through Post Office. It has been ascertained, with regard to the night mails from London, by which by far the largest proportion of books is conveyed, that the reduction in the number and total weight of newspapers conveyed by these mails since the alteration in the Newspaper Stamp Act is more than six times the total number and weight of all the book parcels. To show the extent to which weight has thus been abstracted from the mails, I may mention that the number of carriage-loads of bags sent from the General Post Office to the Euston Square Station on Friday nights, has, since the recent Newspaper Stamp Act took effect, been five less than previously; and that the average nightly reduction of weight of newspapers despatched from London is upwards of two tons and a half. At the same time it is beyond doubt that the effect of the Act in question has been largely to increase the newspaper circulation of the kingdom, and consequently to add still further to the earnings of the railway companies.

If, as Mr. Stephenson states, uncertainty, irregularity, and delay are observable in the service at the Post Office, they result to a great extent from the irregularity which often occurs in the working of the mail trains by the companies, and not from any difficulties experienced at the Post Office in dealing with its vastly and rapidly increasing business.

Admitting, however, that slight detentions do occasionally occur from pressure of Post Office work, it is right to mention that the Post Office has long since urged upon the principal companies the adoption of a plan by which they and the Post Office shall be mutually bound to pay certain penalties for delay, from whatever cause; the Post Office further offering to pay in addition a premium to the companies in every instance in which the prescribed time is not exceeded. This proposal was, however, rejected at the time by every company to whom it was submitted, and since that date (1851) it has only been agreed to by one of the Scotch companies. It should be mentioned, that the Post Office offered in each case to reopen the award, and to readjust the payment by an arbitration, in which the proposed agreement for fines and premiums should be taken into consideration, the object being to render the arrangement as equitable as possible to the companies. I believe that the department is willing to renew this offer on the former basis, or, indeed, to adopt any equitable scheme for insuring greater punctuality.

Before concluding this report, it is but just to record a brief admission of the points in regard to which railways have, to a material extent, improved the postal communication of the kingdom.

The most important of those benefits is unquestionably the increased rapidity of communication, which has practically brought Edinburgh and Dublin almost as near to London as Birmingham and Bristol were in the days of mail coaches. But the acceleration of speed, great as it has been, has not been the sole cause of the saving of time; for the use of railways has led to the avoidance of many of the stops which formerly took place at what were termed “forward offices,” for sorting purposes, that duty being now performed in travelling sorting offices, during the progress of the train. For this boon the public are clearly indebted to railways, and the Post Office is equally indebted to them for the consequent simplification of its system. The chief of the other benefits which railways have given to the Post Office and the public is greater frequency of postal communication; for, although there would no doubt have been established more numerous day mails, as well as frequent postal communication between certain large towns, if coaches had remained the fastest means of transit, it is scarcely probable that we should ever have been able to concede the very extensive additions to the number of communications throughout the kingdom generally, of which the use of railways has admitted; and the effect of which has doubtless been to cause a greater increase in the number of letters than would otherwise have taken place.

The vast advantages comprised in those two improvements can scarcely be overrated; but, having briefly acknowledged them, it hardly devolves upon me, in the present Report, to dilate upon them at any greater length.

I am, Sir,

Your obedient faithful servant,

EDWARD J. PAGE,

Inspector-General of Mails.

To Rowland Hill, Esq.,
——&c.——&c.——&c.