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Originally appearing in Volume V22, Page 187 of the 1911 Encyclopedia Britannica.
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MONEY ORDER DEPARTMENT The money order branch of the post office dates from 1792.1 It was begun with the special object of facilitating the safe Money conveyance of small sums to soldiers and sailors, Orders. the thefts of letters containing money being frequent. Two schemes were put forward, one similar to the present money order system. There were doubts whether the post office had power to adopt the system, and it was not officially taken up. Six officers of the post office, however, called the " clerks of the roads," who were already conducting a large newspaper business with profit to themselves, came forward with a plan, which was encouraged by the postmaster-general, who also bore the cost of advertising it, and even allowed the advices of the money orders to go free by post under the " frank " of the secretary to the post office. In 1798 the clerks of the roads gave up the scheme, and three post office clerks known as " Stow and Company " took it over. The death of Stow in 1836 left one sole proprietor who had a capital of £2000 embarked in the concern. In 1838 the government determined to take over the business and compensated the proprietor with an allowance of over £400 a year. The rates of commission fixed by the government were 1s. 6d. for sums exceeding £2 and under £S, and 6d. for all sums not exceeding £2. In 184o these rates were reduced to 6d. and 3d. respectively. The number 'and aggregate amount of the orders issued (inland, colonial and 1 An historical outline is given in the Forty-Second Report of Postmaster-General (1896), p. 26. Years. Number. Amount. £ I 1839 188,921 313,124 1849 4,248,891 8,152,643 1861–1865 8,055,227 16,624,503 (average) 16,819,874 27,688,255 1875 188o–1881 16,935,005 26,003,582 1885–1886 11,318,380 24,832,4221 1890–1891 10,260,852 27,867,887 1895–1896 10,900,963 29,726,817 1900—1901 13,263,567 39,374,665 1905–1906 13,596,153 44,612,785 £2, 3d.; and so on, an additional penny being charged per £. For sums of Do the rate was Is. It was found, however, that the low rate of id. for small orders did not provide a profit, and the rates were raised on the 1st of January 1878 to: orders not exceeding ios., 2d.; not exceeding £2, 3d. On the ist of September 1886 the rates were altered as follows: orders not exceeding £1, 2d.; not exceeding £2, 3d.; not exceeding £4, 4d.; not exceeding £7, 5 d.; not exceeding £io, 6d. On the 1st of February 1897 new rates were introduced; on orders not exceeding £3, 3d.; over £3 and not exceeding £1o, 4d. The cost of a money order transaction (at least 3d.) is very little affected by the amount of the remittance, and it was thought undesirable to continue the unremunerative business of sending small sums by money order at less than cost price at the expense of the senders of larger orders. The needs of smaller remitters appeared to be sufficiently met by postal orders and the registered letter post. It appeared, however, that the new charges fell with great severity upon mutual benefit societies, like the Hearts of Oak, which sent large numbers of small money orders every week, and on the 1st of May 1897 the 2d. rate was restored for orders not exceeding £1. This society and others now use postal orders instead of money orders. In 1905 the limit for money orders was extended to £4o, and the rates are: sums over £10 and not exceeding £2o, 6d.; sums over £2o and not exceeding £3o, 8d.; sums over £3o and not exceeding £40, rod. Money orders may be sent to almost any country in the world. The rates are as follows: for sums not exceeding £1, 3d.; Forcignaad £2, 6d.; £4, 9d.; £6, is.; £8, Is. 3d.; £i o, is. 6d.; Corontai and for countries on which orders may be issued for Money higher amounts (limit £4o), 3d. for every additional orders. £2 or fraction of £2. The money order system is largely used by the British government departments for the payment of pensions, separation allowances, remittance of bankruptcy dividends, &c.; and free orders may be obtained by the public. under certain conditions, for the purpose of remitting their taxes. The cost of management of the money order office was reduced by the substitution, since 1898, of a number of women clerks for men and boys. On the 2nd of September 1889 the issue of telegraphic money orders between London and seventeen large towns was begun as an experiment, and on the ist of March 1890 the system Telegraph was extended to all head post offices, and branch offices Money in the United Kingdom. Two years later it .was ex- orders. oney tended to every office which transacts both money order and telegraph business. The rates, which have been several times revised, are (i) a poundage at the ordinary rate for inland money orders, (2) a charge for the official telegram of advice to the office of payment at the ordinary rate for inland telegrams, the minimum being 6d., and (3) a supplementary fee of 2d. for each order. The sender of a telegraph money order may give instructions that, instead of being left at the post office to be called for, it should be delivered at the payee's residence, and that it should be crossed 2 The total sums remitted did not fall off to the same extent, showing that the small orders alone were effected. The average amount for ordinary inland orders is now £2, 19s. 5d. for payment through a bank. He may also, on paying for the extra words, send a short private message to his correspondent in the telegram of advice. Telegraph money orders may also be sent to Algeria, Austria, Belgium, Bulgaria, Denmark, Egypt, Faeroe Islands, France, Germany, Holland, Hungary, Iceland, Italy, Luxemburg, Monaco, Norway, Rumania, Sweden and Switzerland. A fee of 2d. is required in addition to the usual money order commission and the cost of the telegram. The system is being rapidly extended to other countries. The telegraph inland money orders in 1905-1906 amounted to 503,543. and the sums so remitted to £I,646;882, an average of 3, is. The number of telegraph money order transactions between the United Kingdom and foreign countries amounted to 18,787, representing £139,402. Postal orders were first issued on the 1st of January 1851. For some years before that date postmasters-general had con- Postal sidered the possibility of issuing orders for fixed orders. amounts at a small commission to replace money orders for sums under 2os., which had failed to be remunerative. When the plan was submitted to a committee appointed by the treasury, it was objected that postal orders as remitting media would be less secure than money orders. This was met in part by giving a discretionary power to fill in the name of the post office and also of the payee. Another objection which was urged, namely, that they would prove to be an issue of government small notes under another name, was quickly disproved. Parliament sanctioned the scheme in r880. The first series were: Is., Is. 6d. 2S. 6d., 5s., 7s. 6d. Poundage Id. rd. 10s., 12s. 6d., 15s., 17s. 6d., 20S. Poundage 2d. In 1884 a new series was issued and a provision made that broken amounts might be made up by affixing postage stamps, to the value of 5d., to the orders. Postal orders have become increasingly popular as a means of remitting small amounts, especially since the introduction in 1903 of new denominations, rendering it possible to obtain a postal order for every complete sixpence from 6d. to 21S. From 6d. to 2S. 6d. the poundage is 4d., from 3s. to 15s., rd., from 15s. 6d. up to 21s., rid. Postal orders are also furnished with counterfoils, as a means of keeping a record of the number and amount of each order posted. Orders for amounts of ros. and upwards are printed in red ink. A system of interchange of postal orders between the United Kingdom and India and the British colonies, and also between one colony and another, has been instituted. British postal orders are obtainable also at post offices in Panama, Constantinople, Salonica and Smyrna, and on H.M. ships. The following table shows the number and value of postal orders issued from the beginning to the 31st of March 1907 (000's omitted): Year. Number. Value. £ 1881-1882 4,462 2,006 1883-1884 12,286 5,028 1885-1886 25,790 Io,788 1890-1891 48,841 19,178 1895-1896 64,076 23,896 1900-1901 85,390 29,881 1906—1907 Io1,658 40,484 It remains to be added that the various statutes relating to the post office, except those relating to telegraphs and the carriage of mails, were consolidated by the Post Office Act 1908. The act repealed and superseded 26 acts wholly and ro acts in parts. Sections 1—11 deal with the duties of postage; §§ 12-19 with the conditions of transit of postal packets; §§ 2o-22 with newspapers; §§ 23-25 with money orders; §§ 26-32 with ship letters; §§ 33-44 with the postmaster-general and officers; §§ 45-47 with the holding, &c., of land; §§ 48-49 with the extension of postal facilities and accommodation; §§ 50-69 with post office offences; §§ 70-78 with legal proceedings, and §§ 7994 with regulations, definitions, &c.
End of Article: MONEY ORDER

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