In 1870 Government Savings Banks were first established in India in connection with District Treasuries, and in 1882 permission was given to open savings bank accounts at post offices, but the management and control of the funds still remained with the Treasuries. In 1885 all savings banks at Treasuries were closed and the business was transferred entirely to the Post Office. The general development of this branch will be treated of in the chapter on Savings Banks, but, as an example of the growth of business, the figures of 1882-83 and of 1913-14 are remarkable. In 1882-83 there were 39,121 depositors with a balance of Rs.27,96,730; in 1913-14 there were 1,638,725 depositors with a balance of Rs.23,16,75,467.
In 1883 combined post and telegraph offices were introduced, and it is no exaggeration to say that these are solely responsible for the extension of telegraph facilities to the smaller markets and rural tracts of India. In 1884 the sale of British postal orders was authorized, and the same year marks the introduction of Postal Life Insurance, a measure at first confined to servants of the Department but afterwards extended to all Government servants. In 1890, at the request of the military authorities, the Post Office undertook the payment of military pensioners in the Punjab.
In this way the Department has grown. From being a mere agency for the carriage of correspondence and parcels in 1866, the Post Office has now become the poor man's bank; it does an enormous value-payable and money order business; it is an important insurance agency and pension paymaster, and to such an extent have postage rates been reduced in India that it would be hard to find a man who could not afford to communicate by post with his friends.
Needless to say, the Post Office Act of 1866 was quite unsuited to modern needs, and Act VI of 1898 was framed to deal with the new requirements of postal work. The 1866 Act was amended by Act III of 1882, which authorized any officer of the Post Office empowered in this behalf by the Governor-General in Council to search for newspapers regarding which a notification had been published under the Sea Customs Act. By Act III of 1895 powers were provided in accordance with the general policy of the Postal Union for dealing with fictitious or previously used postage stamps of other countries found on articles received from abroad, and by Act XVI of 1896 the Post Office was authorized to collect Customs duty paid in advance in the same manner as postage under the Act.
Act VI of 1898 is to a great extent an Enabling Act which reserves to Government the power of dealing by rule with numerous questions of postal practice and procedure affecting the public. For the first time legal recognition was given to registered newspapers, and the Governor-General in Council was empowered to make rules for their registration in the offices of Postmasters-General. The acceptance of the official marks of the Post Office on postal articles as prima facie evidence that they have been refused, that the addressee cannot be found, or that any sum is due on them, was a principle taken from the English Law.
Section 20 of the Act was quite new and prohibits the sending by post of indecent or obscene articles, and the tendency of the age is shown by the first mention in this clause of the word "sedition" in connection with postal articles. "Articles having thereon or on the cover thereof any words, marks or designs of an indecent, obscene, seditious, defamatory or grossly offensive character" were prohibited from being sent by post. The wording of this section is interesting owing to the difficulty of interpreting the meaning of the word "thereon"; it would almost seem that the framers of the Act wished to wrap this clause in ambiguity. In Section 22 the important principle of the English Law is laid down that the Post Office is not bound to send parcels and packets along with the letter mail, but may detain them as long as is necessary. By Section 25 special power is given to search for goods notified under the Sea Customs Act, and in Section 26, the Public Emergency section, "The Governor-General in Council, or a Local Government, or any officer specially authorized in this behalf by the Governor-General in Council, may, by an order in writing, direct that any postal article or class or description of postal articles in course of transmission by post shall be intercepted or detained." Had the framers of this Act any idea of the extent to which this power would have to be used they might have expressed themselves in greater detail.[6] Sections 30 to 36 and 43 to 48 of the Act deal with the power of the Governor-General in Council to make rules for the insurance of postal articles and the transmission of value-payable articles and money orders by post.
To judge from the large number of additional penalty clauses introduced into this Act, postal crime seems to have grown side by side with postal development. Every possible misdemeanour and fraud is visited with appropriate punishment; not even the mail runner who fails in his duty to appear at the time he is required can escape, while the postman who makes a false entry in his book to show that he has been visiting a certain village, when all the time he has been loitering in a neighbouring bazaar, renders himself liable to six months' imprisonment or a fine of one hundred rupees. Sections 62 and 63 are taken from the English Post Office Protection Act, 1884, and impose penalties for injuring the contents of any letter-box or for disfiguring any post office or letter-box. To prevent hasty and ill-considered prosecutions, it was laid down in Section 72 that no Court should take cognizance of any offence under the Act, except with the previous sanction or on the complaint of the Director-General of the Post Office or of a Postmaster-General.
In 1898 postage rates on letters were reduced to the following scale:—