Stayner was on firmer ground when he pointed out that the post office act had made no provision for the conveyance of newspapers, and that, as things stood, the only alternatives before the publishers were to pay the prohibitive letter rates on their newspapers, or to come to terms with him, under the permission of the postmaster general.
The committee were loath to leave this controversial advantage with Stayner and asked him whether, since the newspapers were carried in the mail bags, he paid from the newspaper postage any part of the mail couriers' wages. He said he did not, and then committed himself to the extraordinary proposition that it cost nothing to carry newspapers because they were in the same bags with the letters. The committee did not waste any time arguing such a point as that, but called the contractor for the conveyance of the mails between Montreal and Quebec, who testified that if he were relieved of the newspapers, he could carry the mails on horseback, at a saving of £200 a year.
The O'Callaghan committee in their report to the assembly—a report which was made on the 8th of March, 1836, invited attention in the first place to the large sums which were sent by the deputy postmaster general to England from the revenues of the Canadian post office. During the thirteen years ended in 1834, the large amount of £91,685 sterling had been remitted to the British treasury on this account, and the remittances for the last four years averaged annually £10,041 sterling.
These remittances, and the usage under which they were made, the committee denounced as a violation of the fundamental rights of the people of the colony, and as an instance of the disregard of the declaratory act of 1778, which had cost Great Britain her American colonies, "now the flourishing and happy United States of America." Regarding the imperial act of 1834 as an admission that the British government had acted illegally in appropriating to its own use the surplus Canadian postal revenues, the committee assumed that the deputy postmaster general would cease to make remittances of Canadian revenues to England.
On discovering that this was not the case, the committee gave Stayner notice that the assembly would probably hold him personally responsible for any further remittances thus improperly made. Stayner, however, paid no attention to this warning, as he had but a short time before deposited $20,000 in the commissariat office for transmission to London.
Stayner's course in treating the newspaper postage as his perquisite came in for the strongest reprobation. The statutory authority which he ventured to put forward was easily shown to be no authority at all, and the committee declared it to be a monstrous absurdity that the head of the department should, in defiance of all law, presume to fix the charges on newspapers, and put the proceeds in his pocket.
From the statement furnished by Stayner, it appeared that no less than £9550 currency had been appropriated by him from this source during the six years he had held the office of deputy postmaster general, and the committee suggested that, as he had no shadow of right to any part of this large sum, legal proceedings should be taken by the province to recover the amount from him.
The total income which Stayner acknowledged having received was beyond belief. In each of the three years ending with and including 1834, his emoluments amounted on the average to £3185 currency. These emoluments were described graphically by the committee as nearly equal to the salary of the governor general, three times more than the salary of any of the puisne judges in the province, almost equal to the whole amount paid as compensation to the one hundred and thirty-seven postmasters in Upper Canada, and one-third more than the total amount received by the one hundred and seventeen postmasters in Lower Canada.
The committee endeavoured to convict Stayner of having misled the postmaster general as to the magnitude of his income. They were unsuccessful in this attempt, as the postmaster general was quite aware of the amount Stayner was receiving, and had expressed no disapproval.
The committee as a conclusion to its report urged that the provincial government should take over the control of the provincial post office, and they submitted the draft of a bill which they had prepared for the purpose of sanctioning the action recommended. The house of assembly adopted the report of the committee, and having passed the bill, sent it up to the legislative council for approval.