The question was akin to that which formed the subject of a later controversy between the home government and the colonies, as to whether sums collected from the public as postage were to be regarded as a tax, and as such would require the consent of the colonies before they could be appropriated to the use of the postmaster general in Great Britain.
Franklin, it will be remembered, contended that these sums were not a tax, but simply compensation for services rendered by the post office. The government, which founded an argument for the legality of its course in laying taxes in America, on the fact that the colonies had hitherto contentedly paid postage on the letters conveyed by the post office, and made no objection that the profits of the American post office should be sent to England, insisted that the postage collected was a tax.
Simcoe had no doubt on the subject himself. He fully shared the earlier view of the British government, and proceeded to a further discussion of the subject. In 1778, in a belated attempt to stay the progress of the rebellion in the colonies by a course of conciliation, the government, by an act of parliament,[147] renounced the right it had hitherto claimed of taxing the colonies except so far as might be necessary for the regulation of commerce; and in the case of such regulative duties, the proceeds from them were to ensure to the benefit, not of the home government, but of the colony from which the duties were collected.
Whether a post office tax was to be classed among duties for the regulation of commerce was a point on which Simcoe could not quite make up his mind. But if it were to be so regarded, then by the act of 1778, which was embodied in the constitutional act of 1791, the net produce from the Upper Canadian post office should be appropriated to the use of the province, and the question Simcoe asked was whether it did not lie with the general assembly of the province, rather than with the parliament of Great Britain, to superintend the public accounts of duties so levied and collected.[148] In order that the whole matter might be placed beyond doubt, Simcoe suggested that when a post office bill for the new province came to be drawn up, it should contain a preamble describing its connection with duties for the regulation of commerce, and vesting the collection of the tax in the deputy postmaster general of Lower Canada, who should be made accountable for the revenue so raised, to the legislature of Upper Canada.
Dundas,[149] the home secretary, to whom the matter was submitted, expressed no decided opinion upon it, but suggested that bills of that nature ought not to be passed upon by the governor, but should be reserved in order that the king's pleasure might be signified regarding them.
The question of a separate establishment for Upper Canada, as will be seen hereafter, occupied the attention both of the local government and of the general post office in England, but though several propositions were submitted by both sides, the objections to it were found insuperable.
The only other event of importance occurring in Upper Canada at this period which affected the history of the post office was the founding of the city of Toronto. Until 1794, when the lines of the present city were laid out under the direction of governor Simcoe, and for some years later, the future capital of Ontario[150] was in a state of the most complete isolation.
On the way up lake Ontario, settlement reached no further than the western end of the bay of Quinte. An official sent from York, as Toronto was named in 1792, to Kingston, to meet and accompany immigrants to York, found very few desirous of going so great a distance from all settlements.
The country to the west of Toronto was equally unsettled. The line of farm holdings from Niagara westward, came to an end at the head of the lake about the site of the present city of Hamilton. From that point to York, the country was occupied by the Mississauga Indians. When it was determined to remove the seat of government to York in 1797, the chief justice complained that the lack of accommodation of any kind was so great that the larger part of those whom business or duty called to York must remain during their stay there, either in the open air, or crowded together in huts or tents, in a manner equally offensive to their feelings and injurious to their health.[151]
The exact date on which the post office was established at York, and the name of the first postmaster are unfortunately not disclosed by the records, which are far from complete. There is a probability, however, which amounts to practical certainty, that the post office was opened in either 1799 or 1800, and that the first postmaster was William Willcocks.