MONEY-ORDERS.
ADAM SMITH somewhere observes that the Post Office is perhaps the only mercantile project which has been suc- cessfully managed by every sort of Government. His remark does not hold good of all Departments of our Post Office. Every- body knows that it is far from true of the Telegraphs ; neither does it bold good of the Money-Order Department. The business of the latter grows, but the profits do not ; about one-half of the work is done on somewhat eleemosynary principles ; the workman who trans- mits his half-crown or five shillings to his wife by a money-order gets, in point of fact, a form of poor-relief from the State; and we do not wonder that in the circumstances of the case the Post-Office Depart- ment has been inquiring into the whole subject of Inland money- orders, with a view to see whether they can be made still more convenient to the public, without continuing to be a loss to the revenue. Money-orders have hitherto been advantageous to all concerned save the State. They were started as a private enterprise as long ago as 1792, by three persons connected with the Post Office, who took offices near the Central Office in Lombard Street, and engaged to transmit, at their own risk and expense, to sailors and soldiers small sums of money. The general public did not avail themselves very much of this convenience, which was at first very costly ; at all events, only about seven hundred pounds' annual profit was realised by the three speculators. In 1838, when the Earl of Lichfield was Postmaster-General, the Government resolved to take over this enterprise, and established an official Money-Order Department, by the rules of which the limit of the order was fixed at £5. The onerous commission charged in these days was 6d. for £2 and any sum under it, and is. 6d. for any sum over it. In November of 1840 the charges were much reduced, with a view to induce the public to give up the deeply seated habit of sending coin by post ; and the business of the Department steadily increased. A further reduction of the rates in 1871 to id. for all sums under 10s., and 2d. for all under £1, produced a new expansion of business ; and now about sixteen or seventeen millions, in sums ranging from one shilling to ten pounds, are yearly sent through the medium of the Post Office. In many respects, the system is a complete success, putting to rout all the old-fashioned common-places about the inability of the State to conduct with success a mercantile business. It has the complete confidence of the poor. It is practically safe, only one order in 100,000 being lost by theft or negligence; and there is truth in the observation of Mr, Weldon, Superintendent of the Branches of the London and Westminster Bank, that " the poorer classes have in point of fact more security in regard to these small orders than a person who has drawn a cheque for £1,000." We might have expected that the managers of many of the vast number of Money- Order Offices would find themselves occasionally without funds to meet an unusual number of drafts, but judging from the very few complaints which the Department receives, that is not so. In fact, if the present restrictions established for the benefit of bankers were withdrawn, and the Department were free to trans- mit sums of any amount, the State might prove a formidable competitor of our great Bankers.
But, so far as inland orders are concerned, they do not yield any profit, and probably produce a loss of about £1,300 a year, —in fact, it is calculated that as the cost of each order in clerical work, &c., is about 3d., 50 per cent. of the orders are issued at a loss. In other words, the remitters of sums of £1 and upwards pay the expenses of remitters of smaller sums. The oause of the mischief is the elaborate nature of the book - keeping. The numerous details,—the making-out of the order, the entering of the amount and particulars in the postmaster's journal, the preparation of the advice-note by the manifold writing process, the transmission of the Money-Order account to the Receiver and Accountant-General's Office in London, a comparison of the account or docket accompanying it with the entries-in the cash account in the Receiver-General's Office—are costly. And yet we are afraid that none of them can be dispensed with, unless at a considerable sacrifice of security. We should
have hesitated to believe this, had the assertion rested merely on the testimony of officials conversant with the present routine, recollecting how they are apt to treat as perfect what they know by practice ; how on one occasion a Committee of the House of Commons announced that " the oldest and ablest officers of the Post-Office" said " they had no confidence whatever in the plan " of Mr. Palmer to accelerate the speed of the Mails from three and a half to seven miles an hour ; and how an experienced Postmaster-General long persisted in declaring Sir Rowland Hill's scheme of a uniform postage impracticable, But we must admit that a Committee, consisting of several experienced men of business, and including the late Mr. George Moore, were able to discover no superfluous or cumbrous device, and the proba- bility is that if any of the steps—for example, the final checking —were eliminated, the Department would lose a little of its reputa- tion for complete safety, and simple people would take to sending half-crowns or notes by post in lumpy letters, to the serious peril of the honesty of the officials. It has been suggested that the advice-note should be abolished, but the testimoiay.of most experts is that this would be followed by a great increase of suc- cessful theft. Every year some thousand orders are stolen, but not presented, in most cases, because the thief cannot answer the routine question, " Who sent this order ?" And if people who send orders by post only took oare to withhold sending by the same letter the name of the remitter, the present plan would be almost abso- lutely perfect. We may append a warning to the effect that some common expedients supposed to secure safety have the opposite effect. Speaking of the new envelopes made of paper and linen, Mr. Jeffery, who gives his opinion with all the weight of the manager of the Department of Lost Letters, says, " Their very strength is their weakness, because if you put a paper-knife in the folds of the envelope, it will lift it up without tearing, and may be closed again without showing traces of the violation. This can be done wherever linen comes to linen, or where linen comes to paper, but where paper comes to paper, youcannot separate the parts without "tearing and leaving the marks behind." It must be remembered, too, that the Post-Office servants acquire marvellous expertness in determining by the touch whether a letter contains bank-notes or stamps; if they cannot get the knowledge by their fingers, felonious postmen " can smell the stamps." A striking experiment on this sub- ject was made by Mr. Jeffery. He made up twenty letters, only five of which contained stamps, and all of which were alike on the outside. An experienced Post-Office servant was able to pick out by the sense of smell those with the stamps. The only device which baffled him was to scent the letters with eau do cologne. Of course, mothers will continue to send half-crowns or half- sovereigns to their boys at school by post, and the mass of man- kind will insist upon remitting small sums in the form of stamps, in spite of remonstrances and warnings. But it is right that they should know, from the testimony of experienced officials, that the employe's of the Post Office become experts in the feeling of letters ; that they can tell very correctly whether letters contain bank-notes, coin, or stamps ; that they have, in fact, as keen a perception of valuable letters as an American Post-Office clerk has of interesting English illustrated periodicals ; and that, if stamp remittances are not frequently stolen, it is because they rarely are worth stealing.
Of course, the most obvious way of reducing the expense of the Department and making the issue of all orders remunerative would be to raise the rates of commission to 2d. or 3d. Another proposal, which has not met with so much favour as it seems at first blush to deserve, is that for all sums amounting to only a few shillings no orders should-be issued, and that people should be left to find a substitute in the transmission of stamps,—a proposal which is, perhaps, put out of court by the testimony of all officials that with the few existing safeguards it would lead to much theft, and that it might cause the forgery of postage-stamps. These objec- tions are partly applicable to a scheme suggested by'a clerk in the Edinburgh Post Office, the principle of which was to paste postage-stamps of various denominations on sheets of paper pre- pared and sold by the Post Office. One gentleman has elaborated a scheme for issuing money-orders payable to order at any money- order office in the kingdom, and capable of being transferred, like a cheque, by endorsement. Not only does the inventor think that this would be very convenient to the public, but that it would lead to a great saving—some £47,000 a year, he calculates— dispensing, as it would, with eighteen out of thirty-three forms, books, &c., now required. Here, again, the opportunities of fraud would be so enormous as to make the scheme imprac- ticable. The only scheme which the Post-Office authorities have favoured is one for the introduction of postal circular notes,
suggested by Mr. Chetwynd, the Receiver and Accountant- General. The essence of the plan is, to quote the inventor's own words, to use " a form which will require no writing on the part of a postmaster beyond his signature, and which will combine the simplicity of a postage-stamp, as the subject of an account, with the advantage of a small bank post-bill and circular note, and a cheque issued by what may be called a Government bank, and payable at any one of 5,000 Govern- ment banks throughout the United Kingdom, to the order of any person named by the purchaser of the note in writing on the back of it." Mr. Chetwynd's idea is that the postal notes should be issued for sums of 2s. Gd., 5s., 10s., and 20s., at half the present rates for money-orders,—rates which the Committee think too low. No advice-note, or entry of details in the Postmaster's book, or detailed account to the Chief Office would be required, and the saving in clerical work to the Depart- ment would be considerable. The public would also be glad, he thinks, to have a note procurable without filling np any applica- tion-form, payable at any office in the United Kingdom, and pur- chasable in books, so that a circular note might be used at places where there was no money-order office. Mr. Chetwynd does not think that the issuing of these orders, drawn by persons as to the handwriting of whose endorsement the paying postmaster could have no knowledge, would be attended by much fraud. But we observe that Lord John Manners owns that the circular note, the trial of which he, as well as the Committee, favour, must be of inferior security as compared with the money-order. Why should not, we would here ask, the Department look for relief in another direction ? The foreign orders and the inland orders for sums above one pound are really remunerative, and why should not, this branch of the business be cultivated far beyond the point to which the present limits of the power of the Department permit ? Adam Smith's reasons for the uniform sucoess of the Post Office as a Government concern—that there is no mystery about the matter, and that it can be safely conducted, according to hard-and-fast rules —apply with full force to the transmission of sums of money, large or small ; and why, then, should not the State fully utilise the machinery which it already has, by engaging to transmit con- siderable sums for the convenience of commerce and the middle- classes? In theory there is no reason why the State should be a carrier of or transmitter of only one kind of property, viz., letters. Remitting specie or its equivalent is as simple as forwarding letters and newspapers. The work would be remunerative, it would meet the wants of classes who do not use bank post-bills, or even cheques, and perhaps the only reason against it is the fact that Bankers would not like it.
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