Gandalf -- That website is a lot of fun. My RPG character is based on it, as she is a member of the Shire messenger service and is also a Fallohide. However, a lot of what is in that website would definitely fall under the category of fanfiction rather than "canon" as it was mostly made up out of someone's head. That includes the bit about reading and schools, I believe. (correct me if I'm wrong)
However, I will say that the existence of a messenger service, which the Hobbit definitely implies, suggests that someone was capable of reading beyond just the richest folk.
By the way, I have a shire postal map hanging in my house which shows the various communities included in the routes and also indcates the required postage. You can get the stamps too, but those I don't have!
sharon, the 7th age hobbit
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