To show the working of multiplication and division in the increase of profits, and the very low rate at which a service similar to that of free delivery can be performed, let us look at the newspapers. The principal daily papers in Boston are served to subscribers by carriers, at the expense of the publishers. Deducting Sundays and holidays, there are 310 papers in a year. These are served at the cost of 25 to 50 cents for each subscriber. Taking the highest cost, and you pay 1.6 mills for each paper delivered—less than one-sixth of a cent.
The penny papers are served to subscribers by carriers, who have regular beats or districts; and who furnish their patrons for six cents per week. These carriers purchase the papers of the publisher, at 62 to 75 cents per 100; so that their profits on each paper are from one-quarter to three-eighths of a cent. For this they deliver the paper promptly every morning, and collect the money on Saturday, running, of course, some risk of losses by bad debts, &c. And yet this business is found to be so profitable that some routes in New York have been sold, that is, the good will transferred, for at least $500, just for the privilege of serving that district.
The two-cent papers from New York are regularly served to customers in Boston. A person engaged in this business used to buy the New York Express, Tribune, and Herald, for 1¼ to 1½ cents each. He paid the cost of bringing them by express from New York. To guard against failures, he divided his bundles, and had a part sent by way of Norwich, and a part by Stonington. He then served them to subscribers all over Boston for 12 cents per week, making his collections on Saturday. This man made money, so that in a few years he sold out his route and business in the New York papers, and purchased an interest in a flourishing penny paper in Boston, of which he is now one of the publishers.
XI. The Expense of Cheap Postage, and how it is to be paid.
It is quite important to have it understood, in all parts of the country, that the friends of postal reform have no desire to curtail the public accommodations now enjoyed, in the slightest degree—unless in cases of manifest abuse. Neither do they consider that too much money is paid by our government to furnish the people with the privileges of the mail. We desire rather to see the benefits and conveniences of the post-office greatly increased, as well as brought more within the reach of all the population. The bill for establishing cheap postage should therefore contain a distinct declaration that the mail facilities of the country shall not be curtailed, but shall be liberally extended, with the spread and increase of population, so as to give, as far as the ability of the government will admit, the best practicable accommodations to every citizen of the republic.
It ought also to be provided that the Postmaster-General shall have it in his power, according to his discretion, whenever justice may require, to continue the compensation of all postmasters equal to their present rates, in proportion to the amount of services rendered, or labor performed. It is not easy, at present, to decide how much the labor of keeping the post-office will be lessened, by the adoption of uniform rates, and prepayment. Certainly, the reduction will be very considerable. And experience will hereafter suggest a new scale of compensations adapted to the new methods of doing the business.
The falling off in the gross receipts of the British post-office, on the first adoption of the new system, was upwards of a million sterling, being nearly 43 per cent. on the whole amount. A corresponding reduction from the income of our own post-office would amount to $1,696,734. But the falling off would not be so great. The reduction of postage in that case was from 7-½d. on an average, to 1d., while in ours it would barely prove an average of 6-½ cents to 2 cents. On the other hand, it is reasonable to expect a very rapid increase of letters, because the partial reduction in 1845 has already given the people a taste of the advantages of reduced rates of postage. The whole number of letters now sent by mail is 52,000,000. The number would, without doubt, be doubled in one year, which would give a revenue of above $2,000,000; $2,080,000 from letters. There would also be a very considerable increase of income from papers and pamphlets, and a great saving in the article of dead letters and newspapers. It is safe to estimate the revenue of the post-office, under the new system, at $3,000,000 for the first year, $3,500,000 for the second, $4,000,000 for the third, and $4,500,000 for the fourth, which will bring it up to what will then be the wants of the service, making the most liberal allowance for improved facilities.
As an illustration of the capability of retrenchment in expense, let it be remembered that the present Postmaster-General has effected a reduction of nearly a million dollars per annum in the cost of transportation alone. He says in his Report:
“The direction to the Postmaster-General to contract with the lowest bidder, without the allowance of any advantage to the former contractor, as had been the [pg 061] case before its passage, had the effect of enlarging the field of competition, and reducing the price of transportation, except on railroads and in steamboats, to the lowest amount for which the service can be performed; and will reduce the cost of transportation, when the other section is let to contract under it, but little less than a million of dollars per annum from the former prices.”
In other words, our letter postage is no longer taxed as it used to be, to give the people of other sections of the country, stage coaches which they do not support, as well as mails which they do not pay for. There will doubtless be still further reductions in this branch, in proportion as the knowledge becomes diffused among the people, of the profits of this business and the freeness of the competition for it. As Mr. Dana suggested in his valuable Report in 1844: