Another case, involving the same principle, arose about this time. Sutherland, the deputy postmaster general, desired to facilitate the interchange of correspondence with the United States, and reported to the postmaster general that he had arranged to have the American postage on letters coming from the United States to Canada collected by postmasters in Canada, at the same time as they collected the Canadian postage. Freeling objected to this arrangement as of doubtful legality, on the ground that the act of 1765 prescribed the amount which postmasters should take on every letter, and it might be necessary to amend the act to permit this scheme.[194]
The house of assembly, however, did not wait for the answer to their remonstrance. In the following session they gave themselves up to the consideration of the more vital questions, as to "how far the present system is sanctioned by law, and whether and in what manner the same can be beneficially altered." This was not the first occasion on which the right of the British post office to collect postage in Canada was called in question.
Governor Simcoe, in 1791,[195] assumed it as indisputable that, when a postal system was established in Upper Canada, it would be under the control of the legislature, unless the British government by express enactment, retained the management of it in the hands of the British post office, paying over to the local government all surplus revenues arising therefrom. The question was not decided at that time, and it was only when the course pursued by the general post office was so unsatisfactory to Canadians that it was again raised.
A committee was appointed in 1821, to investigate the subject with Dr. W. W. Baldwin as chairman. On December 10 the report was laid before the assembly.[196] The committee had little help from the post office in pursuit of its inquiries. The only official available, the postmaster of York, was examined, but whether from unwillingness or want of knowledge, he contributed little information to the inquiry.
Allan stated that he was appointed by the deputy postmaster general under his hand and seal. He occasionally received instructions from the deputy postmaster general, but had no idea as to the authority under which the latter acted. He had never been referred to any particular statute for his guidance, and, indeed, the postage on letters within the province had been charged at arbitrary rates, which were fixed by the deputy postmaster general.
Some valuable information respecting the revenue of his office was submitted by Allan, which completely disproved the intimation of the secretary of the general post office, that the offices in that part of the country were conducted at a loss. The post office at York yielded an annual revenue of between £800 and £900, which was remitted to the deputy postmaster general at Quebec.
The committee found it impracticable to call the postmasters of the more distant offices, but having regard to all the circumstances, they were satisfied that there was remitted each year to the deputy postmaster general at Quebec an amount exceeding £2500, of which perhaps ten per cent. or eleven per cent. was foreign postage collected in Canada, and, therefore, due to Great Britain or the United States.
Next the committee addressed themselves to the question as to how this surplus was disposed of, which, after deducting the amount owing to the other postal administrations was probably more than £2000. Allan believed, though he was unable to give it as a fact, that the money was passed over to London. What was beyond doubt, however, was that this revenue in no way inured to the benefit of Upper Canada.
Assuming, as the committee felt they might safely do, that the surplus from Canada was made part of the revenue of the general post office in London, the committee then sought to ascertain how the revenue of the general post office was dealt with, and whether any part of it was employed for the benefit of the colonies.
The post office acts of 1710[197] and 1801[198] made this point clear. It appeared that after certain deductions had been made for pensions, the revenue of the post office was applied in various specified ways to the service of Great Britain, the postal rates being avowedly levied for raising the necessary supplies, and for making a permanent addition to the public revenue. The committee could find no instance in which any part of the post office revenues was devoted to the use of the colonies.