of the ordinary penny letter rate for inland transmission, at least to the traffic of the whole of Europe, just as it has been applied to the traffic of the whole of the United States and Canada.[653]
But it is doubtful whether inland distances are really comparable with international distances. The cost of maintaining lines of communication between distant countries is often altogether out of proportion to the quantity of mails conveyed; and the sums paid, although ostensibly payments for the conveyance of mails, are often really subsidies, paid sometimes in order to assist the shipping or other industry, sometimes for political purposes.[654] They cannot, therefore, be used as a basis for calculating the amount of postage which should be charged on private letters.
This was particularly the case in earlier times.[655] With the expansion of commerce and the establishment for commercial
purposes of regular lines of steamers between the principal countries of the world, the task of the Post Office has been much simplified, and, notwithstanding the growth of mails, the cost actually reduced.[656] It is, however, still heavy, and in some cases the payments include an element of subsidy. The cost of transmission by sea of a foreign letter in the British service is on the average ¼d. Foreign rates are not, however, fixed on a simple cost basis. The reduction to a penny of the letter rate between Great Britain and all parts of the British Empire; between Great Britain, Egypt, and the United States; and between the United States and Germany and France, has been made from considerations of general advantage, political or otherwise, rather than from considerations of immediate profit or loss on the postal service.
The international parcel post has always been regarded as primarily commercial,[657] and the service has been deliberately restricted to small parcels on the ground that the conduct of an ordinary transportation undertaking is not a postal function, and that the admission of heavy parcels would render impossible the maintenance of the postal principle of uniformity of rate. Parcel mails are in the international service frequently denied the privilege of rapid transmission accorded to letter mails.[658] The developments of the present war have emphasized the essential distinction to be drawn between communications on the one hand, and packages of goods sent by parcel post on the other.
The general basis of postal rates is naturally affected in some degree by the fact that the Post Office is a State undertaking, and the propriety of Government control deserves
consideration. Adam Smith, with his individualistic leaning, was bound to touch on the question of a State Post Office. He thought there was no objection to the conduct of the Post Office by the Government,[659] and economists since his day have generally followed his view.[660] This acceptance of State control as theoretically justifiable has probably been induced by the logic of facts rather than by the recognition of any peculiar characteristics tending to that view discoverable in the postal service as an industrial organization.[661]
The transmission and delivery of letters for private individuals may have some affinity to the transmission of official despatches, but in theory such affinity is slight, especially in regard to the transmission and delivery of local letters. Because the Government had found it essential for its own
purposes to establish a system of posts, it did not necessarily follow that the Government must assume also the function of conveying letters for private individuals. But the Post Office is one of those organizations in the case of which the normal influence of economic forces tends to exclude competition. Its operations are spread over large areas, and duplication of services over large areas would result in waste of effort and increase of expenses. Competing postal establishments would exhibit the same glaring economic waste as competing arrangements for the supply of gas, water, or electricity. The service thus almost certainly becomes a monopoly; and its nature makes the assumption of its management by the State advantageous. In times of war, State monopoly of the means of communication (postal, telegraph, telephone, and wireless) is essential. Even if these services were in private hands at the outbreak of war, the first action of the Government would undoubtedly be to assume control.