Some enterprises seem to fall naturally to government management - in fact, so naturally that the situation that they are really government enterprises is often lost sight of. The postal systems of various countries give the best example, perhaps, of an industry conducted by the government. The postal system is so generally conducted by the government that the possibility of its existence under individual management is scarcely given a thought. Not only is it one of the most general forms of public industry, but one of the oldest. Adam Smith referred to it as the only mercantile project which had been successfully managed by every sort of government.
The beginnings of postal systems were usually with individuals connected with mercantile pursuits. Messages were sent from establishment to establishment by a runner, who gradually acquired the habit of carrying messages for individuals who were along his route. An exception to this was the postal system which the Romans established as an adjunct to the military organization. As a whole, however, the system had very little development before it was taken over by the government in various countries.
After the postal system became a government monopoly a number of changes were made in rates of charges, and in the method for their determination. Charges at first were generally very high, and distance of carriage was an important factor to be considered in fixing the rate of charge. Gradually, however, rates were lowered, weight became the sole basis for the charge, while payment was made by affixing stamps. It might be said that the postal system had assumed its present form by 1850. While rates within the various countries were gradually reduced, cheap international postal rates came slowly. The recent establishment of the Postal Union has secured lower rates among the countries which are members.
Postal System in the United States. - The growth of the postal system in the United States has followed the general trend of development of this enterprise. Acts passed by the Mother country provided for a Colonial postal system. A three-cent rate was adopted in 1851, and a two-cent rate in 1883. Distance as a basis of charge was given up comparatively early, and weight with payment by stamp was adopted. This has no doubt imposed a burden upon some parts of the country at the expense of other parts. If statements could be secured which would separate the postal revenues and expenditure of the part of the country east of the Mississippi from those of the territory west of this line, there is no doubt that the eastern part would show a substantial surplus, while the western part would show a large loss. It appears the people in the more thickly settled part of the country are paying an excessive price for their service, while the more sparsely settled regions are securing services at less than cost, with the deficits paid by the former class. If all the indirect gains were considered, however, which have come to the eastern population because of the rapid development which a cheap postal service has fostered, it would no doubt be quite evident that all expenditures for maintaining the system have been very remunerative.
Motives for Conducting Postal System. - The aims which a state may have in view in conducting the postal system are not the same in different countries, nor in the same country at different times. In the earlier periods the idea of securing revenue predominated, while the claim of public service received little consideration. In that part of the service where the government has a monopoly, as in carrying letters, the charge will be comparatively high, while in the part of the service where there may be competition, as in carrying parcels, the rates will be fixed more on a competitive basis.
There has been a tendency to minimize the importance of securing the largest possible revenue, however, while public service has been given greater consideration. It is at present the policy of no country, perhaps, to secure more than a good business profit, while some attempt to conduct the industry on a cost basis, or even run with a deficit which must be made up from the common treasury. France and England usually receive a substantial profit, while the United States has practically attempted the cost basis, although in a majority of years a deficit has appeared. Before 1819, in the United States, the annual revenues exceeded expenditures, while a deficit appeared for more than half of the next thirty years. This whole period showed a slight deficit, while a deficit has occurred in practically every year since 1850. During the Great War the revenue aspect received more emphasis. Rates were raised, and distance was adopted as a factor in determining the postage upon second class matter. Since the war the letter rates have been reduced, and as expenditures assume more normal proportions the zone system of charge for second class mail will doubtless be repealed.