Indeed, as was stated in the House of Lords by Lord Monteagle, who, when Chancellor of the Exchequer, arranged the first contracts for the mail steamers, “the expense of the packet service, which was said to swallow up the whole of the revenue now derived from the Post Office, had no more to do with the Penny Postage than the expense of the war in Afghanistan or China. It was as distinct from the Post Office as the expense of the army or navy. The great packet communication between Great Britain and the British North American Colonies was undertaken upon much higher principles than any connected with mere consideration of revenue. It was felt by the Government of Lord Melbourne that it was not wise to allow the only rapid mode of communication between the British possessions in North America and the mother country to be dependent upon the means afforded by the United States. Means were accordingly taken to establish a line of communication of our own. He admitted that this was not done, except at a very heavy expense; but it was not right to place that expense to the account of the Post Office.” [263]
Still, it is obvious that, as these packets do postal work, some portion of their expense ought to be charged to the Post Office, and the question of amount is what has really to be determined.
Upon this question it is necessary to explain that, upon a suggestion from the Treasury, viz., that the amount should be “measured in each case by the amount of ocean postage received,”[264] the following is the rule observed:—
Whenever the amount of ocean postage is below the cost of the line of packets by which the service is performed, the Post Office debits itself, for packet service, with a charge just equal to the ocean postage received. In the only two lines of packets (viz., those between England and France, and England and Belgium), in which the ocean postage exceeds the cost, the department debits itself with the whole expense of the packet service.
Whatever may be thought of this arrangement, it will scarcely be maintained that it is too favourable to the Post Office, which, save in respect of the two packet services just mentioned (which now jointly yield a surplus of about £56,000 per annum), is debited with an amount equal to its whole receipts (viz., £470,000), without even any allowance for the expense it incurs in that portion of the packet administration which is necessarily carried on within the department.
The Eighth Annual Report of the Postmaster-General[265] contains an estimate of the net revenue of the Post Office for the year 1861, prepared on the principles laid down in the foregoing remarks, but including some less important adjustments shown in the document itself.
The net revenue thus determined is £1,161,985, the whole, save the £56,000 mentioned above, and about £30,000 derived from money-order transactions, being the produce of inland postage, which thus yields a net revenue of about £1,076,000.
Second. I now proceed to consider the question of net revenue as to its comparative amount, when contrasted with the net revenue obtained before the establishment of Penny Postage, the object being to ascertain the loss consequent on the reduction of the rate. When proposing Penny Postage, I estimated this loss (under different circumstances, however,) at about £300,000.[266]
The amount of net revenue in the year 1838, the last year throughout which the old rates were maintained, was, according to the mode of account then in use, £1,659,510.[267] For the purpose of comparison, it is obvious that a similar mode of account must be applied to the present state of things.
Bearing this in mind, we have now once more to consider the two points affecting receipt, viz., the postage of the Government correspondence, and the proceeds of the impressed stamps on newspapers, and the one point affecting expenditure, viz., the expense of the packet service.