[The Saucepan Man]

Or perhaps they just didn't care if people couldn't read, and the signs were a device to force them into learning their letters and getting in step with the times?

I'd go with this one. It's reminiscent of Animal Farm, where the farm's rules were posted up notwithstanding that most of the animals could not read them. Perhaps there was a notice at Bag End reading "All Hobbits are Equal" on which Lotho had scrawled "... but some are more equal than others". [img]smilies/biggrin.gif[/img]