Penny postage refers to low-cost prepaid postage.
Background
By the early 1800s, postage was centuries old. But many postal carriers were essentially government couriers. They were extremely expensive. However, recipients could reject mail by refusing to pay. This made the entire system unpredictable and unstable. Furthermore, postal employees sometimes opened and read mail. Government censors ordered them to read mail searching for spies and some were merely curious.
Besides the recipient-pays scheme and censorship, postal rates varied by distance and the number of sheets in a letter. Recipients never knew how much a letter might cost until it arrived. To game the system, some letter senders would code messages onto envelopes so the recipient could reject the letter while still receiving the message. The system was a complicated, expensive, convoluted mess.
Hill Simplifies Mail
Rowland Hill realized a postal system could take advantage of massive economies of scale. Postal carriers already delivered small bundles of expensive mail. However, payment was iffy and frequently refused. If they carried more mail and payment was guaranteed, the overall system would cost less and be more useful.
Hill’s innovation envisioned vastly lower cost mail, available to any class of people, prepaid by a stamp affixed to the mail. Since recipients no longer needed to pay for mail, they would accept anything sent to them. Additionally, weight determined postage rates rather than size.
In 1840, within a half year after the introduction of his “Penny Black” stamp, the volume of mail more than doubled but costs barely budged. In a decade, the volume of mail doubled again.
The World Adopts Low-Cost Mail
The system gained worldwide fame. Every major country created an inexpensive mail system.
Hill’s inexpensive mail proved so popular that the Founding Fathers of the US wrote it into the Constitution. They explicitly charged Congress “to establish Post Offices and post Roads”. They understood that a functional, inexpensive mail system was vital to the economy of the US.
Despite the financial and logistical success of Hill’s methods and the enormous popularity of penny mail, he was fired as postmaster in 1842 when the conservatives won power. However, he was eventually rehired after the political winds shifted and was eventually knighted in 1860.