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News in the Mail: The Press, Post Office, and Public Information, 1700-1860s.

News in the Mail: The Press, Post Office, and Public Information, 1700-1860s The work of new economic historians all to often assumes the existence of integrated markets, without asking how they were created or whether they existed. A great virtue of Richard Kielbowicz's book is that he explaiins how the mails allowed the transmittal of information throughout the United States in newspapers, which provided details of political events and commercial happenings that affected decision making. This has implications for the extent to which thewe was an integrated national economy; it also had consequences for the business history of both the Post Office and the newspaper industry.

The Post Office gave highly favorable terms for the carriage of newspapers through the mail. By the act of 1792, newspapers sent up to 100 miles paid one cent, and any greater distance 1.5 cents, whereas letters paid considerably higher rates. Even this low charge was castigated by James Madison as a "tax on newspapers," a sentiment that would puzzle an observer from Britain, where until 1855 all newspapers had to pay a stamp duty of 1d a sheet, which permitted carriage in the mail whether or not the service was required or used. In 1810, about one-sixth of the newspapers in the United States were distributed through the mails, and they accounted for about half of the items in the post. Their contribution to the finances of the Post Office was much less, covering around 10 percent of expenses. The newspaper service was therefore being cross-subsidized by the letter service, placing pressure on the finances of the Post Office, which had a deficit every year except three between 1828 and 1845. The problems were intensified by the emergence of private carriers, who diverted part of the lucrative letter mails from the Post Office.

The emergence of the postal reform movement in the late 1840s placed pressure on this system, for its supporters urged the reduction of the letter rate, opposed cross-subsidies, and felt that the Treasury rather than letter writers should cover any costs imposes by low newspaper rates. This led to a political divide, for the Whigs were willing to use the Treasury to cover the deficit created by below-cost newspaper services, whereas the Democrats were more inclided to favor the continuation of the existing arrangement, by which letter writers (predominantly northern businessmen) subsidized postal facilities.

The outcome of the debate was the legislation of 1845, 1851, and 1852, which reduced the rate for letters. The act of 1845 allowed newspapers to have free use of the mails within 30 miles of the office of publication (changed to the county in 1851). This, it was argued by the Democrats, allowed local papers to compete with distant city papers. The policy toward papers sent for long distances switched from a high rate in 1851 back to a low rate of one cent throughout the United States in 1852. The favorable treatment of the newspapers did not stop here, for editors were allowed to exchange newspapers through the mails free of charge, which permitted cost-free gathering of news by copying stories between papers.

There is much of interest in Kielbowicz's study--on the processes by which information was disseminated, on the finances of the Post Office, on the nature of rates and cross-subsidies, and on the business of newspaper publication. Perhaps there could have been less detail about the precise nature of the relationship between the Post Office and the newspapers and more about the economics of the two sides and about the creation of markets. Certainly, the determination of rates in public utilities, the issue of cross-subsidization, and the impact of private competition by "cream skimming" are issues that are as pertinent today as in the early nineteenth century, which is no doubt why the U.S. Postal Rate Commission provided support for the research. Although the implications could be developed further, the study is of much wider consequence than the somewhat specific title might at first sugges.

Martin J. Daunton is professor of modern history at University College London. He is the author of Royal Mail: The Post Office since 1840 (1985) and is currently interested in the development of public utilities in Britain. His other publications are in the history of the housing market, labor, urbanization, and the City of London in the eighteenth century.
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Author:Daunton, Martin J.
Publication:Business History Review
Article Type:Book Review
Date:Mar 22, 1990
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