Now, let us look into and over that postoffice “deficit,” to the origin of which the memory of man scarcely runneth back, and which Mr. Hitchcock, by some strenuous effort on right lines readily converted into a surplus—a $6,000,000 deficit into some hundreds of thousands of dollars surplus. The returns are not all in yet. At any rate the Postmaster General has not announced them loud enough for The Man on the Ladder to hear, or he was in his physician’s hands when the announcement was made.
However that may be, Mr. Hitchcock has proved quite conclusively that there is no deficit—or, at least, no valid reason for one under present conditions.
And here, again, I desire to say that our present Postmaster General is deserving the praise or commendation of every American citizen for having demonstrated, by a few economies here and a few betterments there in the operation of his department, that the service can be rendered, and rendered efficiently, with an expenditure safely within the bounds of the department’s receipts or revenues.
Especially is Mr. Hitchcock deserving of commendation for this demonstration, because in making it he has done what so many of his predecessors talked of as desirable, but failed to do.
But with full acknowledgment of the splendid effort Mr. Hitchcock has made in converting a postal deficit of $6,000,000 in 1909-10 into a surplus for the year 1910-11, I desire to discuss, briefly, postal department deficits of the past—or the future—and the origin and cause of them.
In the future pages of this volume little if any reference will be made to our vigorous Postmaster General’s attempt to put onto the Senate course a rider that would run down certain periodicals which were to him and certain of his friends, as it would appear, of obstructive if not offensive character. It is possible, if, indeed, not probable, that I may, in this somewhat hurried discussion of our Postoffice Department deficits and their sources, cause and origin, repeat something, in whole or in part, that I have said elsewhere in this volume.
The discussion of the postal deficits leads us into the Raider factor or feature of our general title—into a consideration of the political, partisan and business influences and interests which have for thirty-five or more years been conspicuously—yes, brazenly—looting the revenues of the department. I shall not be able to advert to all such influences, interests and persons. Especially can I not mention some of the persons. Many of them have gone to “their reward”—or to their punishment—as the Almighty has seen fit to assign them. As a matter of venerable custom and of current conventional courtesy we must leave them to His justice—to our silence. One by one many of the dishonestly enriched from our postal revenues have dropped into “the dead past,” which Christ instructed should be left to “bury its dead.” In our treatment of this subject we shall obey the Master’s instruction—we shall discuss methods, practices, and acts, not men.
In turning to our subject directly, I desire to make a few positive statements or declarations.
1. The Postoffice Department is a public service department—a department intended to serve all the people all the time.
2. The people are paying, have paid, and are willing to pay, for their postal service.
3. The people do not care—never have cared—whether the expenditures exceed the receipts by $6,000,000 or $100,000,000, if they get the service for the money expended.
In comment on the last, I wish here to ask if anyone has heard much loud noise from the people about the army and the navy expenditures—expenditures larger than that of any other nation on earth for similar purposes?
Yet, for twenty or more years, the people have paid the appropriations for—also met the “deficit” bills of—each of those departments without any noticeable “holler.”
But, again, it must be pertinently asked, what have the people received in return for their billions of expenditures for those two departments?
Yes, what? They have had the doubtful “glory” of having their army debauch some island possessions, maneuver for local entertainments and do some society stunts while on “post leave”—which “leave”, for epauletted military officers, appears to have occupied most of their time.
And the people have put up, ungrumblingly, $100,000,000 to $150,000,000 or more (I forget the figures), for a navy—a navy carrying on its payrolls more “shore leave” men and clerks than it has service men. (At any rate that was the showing in a recent year). For this vast expenditure of their money the people got—got what?
Well, for their hundreds of millions expenditure on that navy of ours, the people, to date, have received in return newspaper reports of numerous magazine and gun explosions with, of course, a list of the killed and wounded, and reports of “blow-hole” or otherwise faulted armor plate, turrets, etc., of raising “The Maine,” of shoaling this, that or the other battleship, or of “sparring” or “lightering” off, to the music that is made by a “blow-in” of fifty thousand to two or three hundred thousand more of their money.
Reader, if you read—if you have read—the “news”—the periodical literature—of those past twenty years, you will know that the people have received little or no returns for the vast expenditure of money—of their money—that their representatives (?) have made for the Navy Department.
Oh, yes, I remember that our army and navy fought to a “victorious” conclusion the “Spanish American” war.
No patriotic American citizen alive at the time that war occurred will ever forget it. He will ever remember Siboney, Camp Thomas, Camp Wycoff, and the cattle-ship transports for diseased and dying soldiers. He will also remember the “embalmed beef” and the “decayed tack” and other contracts and contractors.
If the patriotic citizen has been an “old soldier,” or is familiar with the history of wars, he will also know that, if the whole land fighting of that Spanish American war was corralled into one action that action would be infinitely less sanguine than was the action at a number of “skirmishes” in our civil war—that, if the several naval actions of that war were merged into one, it would not equal, in either gore or naval glory, Farragut’s capture of Mobile, the action in Hampton Roads, nor even Perry’s scrimmage on Lake Erie in 1813.
What has all this to do with the postal department deficit, some one may ask? It has just this to do with it:
If a people stand unmurmuringly for the expenditure of billions for a service that yields them no return, save a protection they have not needed and of doubtful security if needed, that people is not going to raise any noisy hubbub over a dinky deficit of a few millions a year for a service which should serve them every day of every year.
I have expanded a little, not disgressed, in writing to my statement numbered 3. I will now proceed with my premeditated statements. Some of them may be a little frigid, but none of them are cold-storage. Some one may have told it all to you before, but that is his fault, not mine. He merely beat me to the facts.
4. As stated in a forward page of this volume, the people of this nation want and demand service of its Postoffice Department. They care not to the extent of a halloween pea-shooter whether the service is rendered at a deficit of six million or at a surplus of ten million, if service is rendered for the money expended.
5. The people of this country will object more strenuously against a surplus in their postal revenues—their service tax—than they ever have or will object to a deficit in the revenues of that service, if they get the service.
6. The Postoffice Department is not understood—is not even thought of by intelligent citizens—as a revenue-producing department. It is understood to be a service department, and the citizen—His Majesty, the American Citizen—is always willing to pay for services rendered.
7. The Postoffice Department has not in the period named—no, not for thirty or thirty-five years—rendered the citizen the service for which he paid.
I mean by that, of course, that the citizen has been compelled to pay far more for a postal service than he should have paid for that service.
8. Had that service been honestly, faithfully and efficiently rendered, the price the citizen has paid for it would have left no deficit for any year within the past thirty.
9. The only deficits in those thirty or thirty-five years have been the result of manipulated bookkeeping, of political trenching into the revenues of the department, of loose methods in its management, of disinterest in the enforcement of even loose methods, and of downright lootage and stealings.
“Rather harsh that, is it not?” asks one.
“Mere assertion,” says another
To the first I need only say that this is an age not congenial to milk-poultice talk. I have previously expressed my opinion on that point. If you have a thing to say, say it hard. The majority of people will then understand you. Those who do not understand you can continue their milk poultices—or believe and talk as they are told or are paid to believe and talk.
The latter—the reader who yodles that my preceding nine statements appear to be assertions only—can make a courteous and, possibly, a profitable use of an hour’s leisure in reading a few following pages, before he rusts into the belief that those nine “assertions” are groundless assertions.
In showing that there is no “deficit”—a shortage of receipts in the Postoffice Department over its legitimate expenditures—I shall not take my nine statements up seriatim, but present my reasons in a general way for having made such blunt declarations. I may go about that, too, in an awkward way, but the reader who follows me will get my reasons for making those nine declarations.
NO CREDIT ALLOWED FOR SERVICES RENDERED OTHER DEPARTMENTS.
If the department of public works in Chicago does a piece of bricklaying, concrete or other construction work for the police, fire, health or other department of the city government, or if it carts or hauls away some excavated material or razed debris for any of those other departments, the service rendered is made a charge by the department of public works against the department for which the service is rendered.
What is true in this instance in Chicago’s municipal government is true of every other city or incorporated town in this country that has its service departmentized.
If the County Commissioners of McCrackin county build a bridge or culvert for Ridgepole township in the county the cost of constructing that bridge or culvert (or a proportional share of it, if on a general highway), is made a charge against Ridgepole township.
If the transportation department of the United States Steel Corporation delivers the services of three steam tugs (services rated at $30.00 per day) to the corporation’s smelting or rail departments there is a credit of $90.00 given to the transportation department, and a corresponding charge made against the department for which the service is rendered, for each day’s service rendered.
That states a recognized business rule and practice among both private and public corporations. Its valid and just purpose is to prevent the loading upon one department (any one department) the expenses created or incurred by another.
Is it not a valid, fair and just method of business?
If it is not, then the largest merchants, the most productive and profitable manufacturing establishments, transportation companies, banking and other mercantile, industrial and financial institutions have not discovered the fact.
If the owner of an Egyptian hen ranch had a shrinkage in his castor bean crop, he would not think of charging the cost or loss on those castor beans up to his hens, would he? Hens do not eat castor beans. That is useless—well—yes, of course. Well, hens do not eat castor beans, anyway. So my ill-chosen illustration, though may stand—stand anyway until someone finds a breed of hens which likes castor beans.
But, if the hens of that hen-rancher invaded his vegetable garden, scratched up his set onions and seeded radishes, pecked holes in three hundred heads of his “early” cabbage and otherwise damaged the fruits of his labor, care and hopes—likewise disarranged his figures on prospective profits—if the hens did that, that hen-rancher would most certainly charge his loss to the hens, would he not?
That is, he would do so, if the hens had attended to their legitimate business as industriously as they looked after his vegetable garden and, by reason of that legitimate effort, showed a “profit balance.” The preceding is based, of course, on the assumption that the rancher has acumen enough to distinguish a hen from a rooster and a sunflower from a cauliflower. If he is so wised up, whether by experience and observation or by academic training, he will most certainly charge his loss on vegetables against those hens.
“What is the application of all this to the Postoffice Department deficits?” some one is justified in asking.
Well, my intended application of it is, first, to show a generally recognized and practical business method—a business method practiced by both public and private corporations and by individuals and firms, from the hen-rancher to the department store. My second purpose is to show that this almost universally recognized business method has been and is totally ignored in conducting the vast service affairs of the Federal Postoffice Department.
FREE-IN-COUNTY MATTER.
The 1910 report of the Postoffice Department states that 55,639,177 pounds of second-class mail was carried and distributed free in the counties of these United States.
Of course, this 1910 gift to country publishers is the result of a moss-grown custom—a custom born of an ingrown desire common to crooked politicians—a desire to trade the general public service for private service. All the second, third and fourth class cities in the country, as well as a majority of our towns and larger incorporated villages, have their party newspaper or newspapers.
Comparatively speaking, few of them have any extensive telegraphic service, if any at all, in the gathering of news. Those which have not, capture the early morning editions—or the late evening editions of the day before—of two or more metropolitan papers, “crib” their “news” and deliberately run it, in many instances, as special wires to their own sheets. In some cases, which I have personally noticed, that practice was indulged when their own “newspaper” consisted of but two to four locally printed pages reinforced by a “patent inside.” Why should such newspapers (?) be given “free distribution” in the county of publication?
They contain little if any real news and less matter of any real informative or educational value. True, the most of them do publish a “local” column or half column of “news” for each or for several of the outlying villages in the county of publication. These “local news” columns inform the reader that “Mr. Benjamin Peewee circulated in Boneville on Wednesday last;” that “Mrs. Cornstalk and her daughter Lizzie are spending the week at the old homestead, just south of town,” that “Mr. Frank Suds shipped a fine load of hogs from Bensonville on Friday of this week,” etc., etc.
Most edifying “news” that, is it not? So didactic and brain-building, is it not?
Now, why should the Postoffice Department carry those millions of pounds of Reubenville sheets free?
The department report says it carried about 56,000,000 pounds of such “periodicals” free last year. The figures for this year (1910-11) will probably be around 60,000,000 pounds.
Why should the department give away $600,000 in revenues?
Besides that, the department does not know how much of this “free in county” matter it does carry and distribute. Of course, it may be able to make a more dependable guess at the total tonnage of such second-class matter than can I. However, any one who has been around the “county seat” or the “metropolis” of any of the “hill” or “back” counties during a county, state or national canvass for votes will know that the postmaster’s scales are often sadly out of balance when he weighs into circulation the local newspaper. In fact, it frequently happens that he does not weigh it at all—especially not, if it be an extra or extra large edition issued “for the good of the party”—and more especially not, if the edition is issued to serve his party.
“It goes free anyway, so what is the difference?” the postmaster may argue, and with fairly valid grounds for such argument. The department, acting, pursuant of law, says “carry and distribute your local papers free inside your county.” So what difference does a few hundred or a few thousand pounds, more or less, make to the department?
Why, certainly, what difference can it make? It is all done for “the good of the party,” is it not?
This condition, governing, as I personally know it does govern, furnishes my chief reason for saying that the Postoffice Department does not know—does not know even approximately—the tonnage of the “free in county” matter it handles. It never has known and does not now know, within millions of pounds, the weight of such matter it carries and distributes.
Again, I ask, why is this vast burden thrown onto the department and the department getting not a cent of either pay or credit for carrying it? Is it because of a paternal feeling our federal government has for the poor, benighted farmers of the country? I can scarcely believe it is. The farmers of this country are neither poor nor are they benighted. If they were, free carriage and distribution to them of these local sheets has not enriched them to any appreciable extent, however much such free carriage and delivery may have added to the bank accounts of the publishers of such periodical literature. Besides, ninety-five in every hundred farmers whose names are on the publishers’ subscription books pay their subscriptions. They usually pay, too, a pretty stiff rate—$1.50 or $2.00 for a “weekly,” which gives them mostly borrowed news and much of it decidedly stale at that. If a beneficent government grants its “free in county” postal regulation with a view to dissipating the gloom which clogs the garrets of our “benighted farmers,” that government misses its purpose on two essential points. Our farmers, as previously intimated, are no more benighted than are the residents of our villages, towns and cities, and even if their ignorance was as dense as a “practical” politician’s conscience, the medium which the Government delivers to them, carriage free, seldom contributes much enlightenment.
No, it was not for either the enrichment or the enlightenment of the dear farmer that the present “free in county” postal regulation was made operative. It was to give some local party henchman a fairly profitable job as publisher of a county newspaper—a party newspaper—and to have, in him, a county “heeler” who would divide his time between building the party fences and telling the dear farmer how to vote.
It is due to the publishers of country newspapers to say, that hundreds of them have grown away from rigid party ties—have grown independent. It is also but just to say that as these publishers have grown independent of party domination, their newspapers have improved. We have now many most excellent country papers published in our “down state” cities and larger towns.
The points I desire to make, however, are, first, the “free in county” mail delivery regulation was originally adopted for partisan political purposes, not to serve the farmer residents of the counties, and, second, that such regulation is unjustly discriminating and is raiding the service earnings of the Postoffice Department to the extent of at least six hundred thousand dollars annually. In my opinion such raiding will reach seven or eight hundred thousands a year.
FRANKED AND PENALTY MATTER.
Going back now to that generally recognized and practical business method referred to and which the government persistently refuses or neglects to adopt in handling and directing the fiscal affairs of its Postoffice Department, we find another raid on that department’s revenues.
Third Assistant Postmaster General, James J. Britt, makes a sort of estimate of the amount of free second-class matter of Government origin the Postoffice Department transported and distributed during the fiscal year ended, June 30, 1910. Mr. Britt places the figure at 50,120,884 pounds.
Mr. Britt’s estimate is based on a six months’ weighing period in 1907 (the last half of that year.) It is reported as a “special weighing” and showed 26,578,047 pounds of “free in county” second-class matter and 23,941,782 pounds of free franked and penalty matter of the second-class. Mr. Britt then proceeds (page 335 of the department report for 1910), to arrive at his estimated tonnage of franked and penalty matter by assuming that the weight ratio of such second-class matter to “free in county” matter would be about the same for 1910. He says: “If, as it seems reasonable to believe, the relative proportions of this character of matter have remained the same,” there would result for the fiscal year 1909-10 the figures he gives for the franked and penalty tonnage, or 50,120,884 pounds.
Well, to The Man on the Ladder it does not seem “reasonable to believe” that such method of estimating is sound nor the tonnage result attained by it dependable. The year 1907 was a decidedly off-year in franked matter of the second-class. The then President kept most of the Senators and Congressmen guessing as to just what he intended to do in the matter of the presidential nomination of his party. In fact, he kept a goodly number of federal legislators guessing on that point until well along in 1908. The result of this condition of doubt was greatly to lessen the franked mailings and also reduced in material degree the mailing of departmental, or “penalty” matter of the second-class.
For this and several other reasons, the tonnage of franked and penalty matter reported as carried in the last half of 1907—even if the “special weighing” Mr. Britt mentions was accurate and dependable, which it was not and could not be, either then or now, under the lax methods by which such weighings were and are made—the reported weight of such franked and penalty matter carried in the last half of 1907 furnishes no fair or safe basis upon which to predicate 1910 totals or to base a dependable estimate of them.
Another defective factor is used in Mr. Britt’s estimate—the reported total weight of “free in county” second-class matter as ascertained by special weighing in the last half of 1907. As previously stated in discussing the raid of six to eight hundred thousand dollars a year made upon the postal service revenues by this “free in county” matter, the department’s reported figures for it are little more than a robust guess at its tonnage, even now, and the figures given for 1907 are much less trustworthy than are the department’s estimates and guesses for the fiscal year ended in 1910. Whatever may be said of its faults and faulty purposes, it is but simple justice to say the present departmental administration has shown more judgment and activity and has put forth more strenuous effort to get to the bottom of things and at dependable facts in mail weights than has been shown by any of its recent predecessors.
Still, I repeat that its reported figures for the total tonnage of “free in county” for carriage and delivery of second-class mail matter are not sufficiently reliable to warrant their use as a basis for making a dependable estimate of the tonnage of another free division of second class mail. Especially unreliable are the figures reported as total tonnage of free-in-county-matter as a basis for estimating the tonnage of a division of the service so far removed from “free in county” as is that of free franked and penalty matter.
All that aside, however, the fact is the Postoffice Department should receive credit for every pound of franked or penalty matter it handles for the legislative and other departments of the government service.
Mr. Britt himself appears to recognize the force of that fact. On page 335 of the department report for 1910, he speaks as follows:
The public mind seems unusually acute on the subject of free mailing facilities, and there is much criticism in the public press of the continuance of the franking privilege and the use of the penalty envelope, the suggestion being often made that the same should be abolished and that this department should receive proper credit in accounting for matter now being carried free. It is therefore suggested that consideration be given to the desirability of eliminating the transportation of mail matter under frank or penalty clause, in order that the Postoffice Department may receive due and proper credit for the tremendous, and in some part possibly unnecessary, services which it is performing free, to its apparent financial embarrassment.
It is probably true that the use of the penalty envelope and the franking privilege is availed of with undue liberality, even if not actually abused, as is often alleged; that is to say, the same care is not taken to confine the mailings of governmental and congressional matter to only that which is necessary as would undoubtedly be the case if there were a strict accountability for their use.
It will be noted that Mr. Britt in the foregoing covers other than second-class mail matter. Taking the figures of his estimate of the volume of free franked and penalty matter of the second-class (51,000,000 pounds in round numbers, which I believe is so conservative as to be far below the actual tonnage), then the various other departments of the government are raiding the revenues of the Postoffice Department to the extent of $510,000 for the carrying and handling of their second-class mail alone. That is, they are requiring the Postoffice Department to render to them without pay or credit over a half-million dollars’ worth of service a year. That is figured at the 2nd class rate of 1 cent a pound. If Mr. Britt’s own estimate, on another page of the same report, that it cost the Postoffice Department 9 cents a pound to transport and handle second-class mail, is correct, which as previously shown it is not, then other departments of the government would be raiding the postal service revenues—revenues which private individuals, firms, corporations and governments subordinate, now alone pay—to the extent of more than $4,500,000 a year.
It must be borne in mind by the reader, however, that Mr. Britt’s estimate of 51,000,000 pounds (a round figure) of second-class matter carried and handled free by his department for other departments of the federal government does not represent the total of service rendered those other departments for which the Postoffice Department received neither pay nor credit. Far from it.
Hundreds of tons—how many hundreds of tons, I do not know, nor have I been able to find an authority or record to inform myself—of letters and other sealed matter were carried and distributed by the Postoffice Department for other departments. For that service not a cent in pay or credit was received.
It must be remembered that the service rate for carrying and handling the class of matter (first-class) we are here speaking of is 2 cents per ounce or fraction thereof. That is, the rate is not less than 32 cents a pound, not 1 cent a pound as is the rate on second class on which Mr. Britt gives his estimate of tonnage carried.
Why should not the Senate and the House, the Judicial, War, Navy, Interior and other departments of the government be required to provide in their annual appropriation bills for paying for the first-class service furnished them by the Postoffice Department?
The postal service of the government is also rendered free to the several departments to handle all their third and fourth class mail matter. What the annual tonnage of these two classes aggregates I have been unable to learn. Whether or not the Postoffice Department keeps any records showing the aggregate mailings by the other departments, I do not know. I do know, however, that it gets neither pay nor credit for transporting and handling the third and fourth class matter put to mail by the other departments of the Federal Government. That the total weight mailed must run into many hundreds of tons yearly for each of the classes named there can be little grounds for doubt or question, records or no records.
The mailing rate on third-class is eight cents a pound. On fourth-class it is sixteen cents a pound. Those are the rates the people have to pay. That both rates are outrageously excessive is well known to every one who has made even a cursory study of the cost of transporting and handling government mails, and the irony of it all is the stock arguments put up by postoffice and other federal officials to justify such outrageous rates.
“The rates are necessary to make the Postoffice Department self-supporting—to avoid a deficit,” or statements of similar washed out force and import. And that in face of the fact that the government permits its departments, bureaus, divisions, “commissions,” etc., to raid the postal revenues by loading upon the postal service the cost of transporting and distributing thousands of tons of mail matter for which it gets not a cent of pay or credit.
Nice business methods or practice that, is it not?
Beautiful “argument,” this prattle about deficits in the postal revenues, is it not?
Why, it is humorous enough to make empty headed fools laugh and sensible men use language which postal regulations bar from the mails.
Think of the tons upon tons of official reports, of the bound volumes of the Congressional Record, of copies of the Supreme Courts rulings and other printed books and pamphlets distributed by the Departments of War, Navy, Agriculture, Interior and others.
All these fall into the third-class, or 8-cent-a-pound rate.
Think of the tons upon tons of seeds—farm, garden and flower—sent by Congressmen to their constituents—to thousands of constituents who do not need the seeds, in fact, who can make no possible use of them; of the tons upon tons of clothing, suitings, household bric-a-brac, etc., franked by Senators and Congressmen to their homes, to their wives, children, sweethearts or friends.
Investigations in the past have shown that hundreds of typewriters, office desks, even articles of household furniture, were sent home under frank.
It was also shown in several instances, if I remember rightly, that some of the typewriters, etc., were never franked back to government possession. However that may be, all such mailings are of the fourth class and fall into the 16-cent a pound rate for carriage and handling.
Let us here foot up the amount of the raidings on the postal funds, so far as we have gone.
First,—There is the free-in-county second-class—$600,000 to $800,000.
Second,—There is the free second-class franked and penalty matter. Third Assistant Postmaster General Britt “estimates” it at $510,000, figured at the present one-cent rate. I have shown the weakness of Mr. Britt’s basis of estimate. In my judgment the tonnage of franked and penalty second-class mail is nearer 75,000,000 pounds than his estimate of 51,000,000 pounds. But to take Mr. Britt’s figures, there is another raid of $510,000 on the service revenues of the Postoffice Department.
Next, we have the free first, third and fourth class matter which the postal service handles under franking or penalty regulations.
How much does this raid total? How much has and does this raid contribute toward the creation of that “deficit” which has so long, so continuously and so brazenly been used to bubble the people in politico-postal oratory and writing?
The reader must keep in mind that we are here asking about the thirty-two, the eight and the sixteen cents a pound classes of mail. To what extent have the various departments of the government raided the postal funds by taxing the postal service with their over-load of the character indicated? That they have taxed the Postoffice Department’s revenues by demanding of that department its highest class and highest rated service in unlimited degree, and that, too, without one cent of compensation, pay or credit, is a fact which no informed man will attempt to controvert.
But what did such service (and abuse of service) cost the Postoffice Department? To what extent did and does this “frank and penalty” privilege in first, third and fourth class use of the mails loot or raid the postal revenues?
Is it to the extent of three, two or one million dollars? Is it lower than the lowest or higher than the highest figures just named?
I do not know—do you? Have you, the reader, been able to ascertain from the records of the Postoffice Department, or elsewhere, any figures or data that enables you to make even a “frazzled” guess at the approximate cost to the postal department of this unjust—this politically and governmentally crooked burden put upon it?
I have hunted and have found nothing but talk, and a few figures scattered here and there and gathered from—well, the Lord may know where. But the Lord has failed to inform me. So I am in ignorance—am benighted, just like our “poor farmers,” both as to the source of the figures I have seen and as to their force and value in reaching a fair conclusion as to the aggregate amount of postal revenues the departmental raiders have been and are carrying off. If any reader knows or can dig up the facts, he will confer a great favor by handing the information to The Man on the Ladder. Not only that, but I am confident that the people of this country will give such reader a niche, if needed not a conspicuous position, in their Hall of Fame, if he will give them even a dependable approximation of the extent to which the postal service revenues are raided—looted—by federal department abuses—their service and their money, for the departments pay not one dollar for the thousands of tons of mail matter of the various classes which the Postoffice Department transports and handles for them.
So far or so long has this departmental—bureaucratic, that is what it is—practice of raiding the postal revenues by loading its service continued, that the Postoffice Department has been and is looting itself by the same practice.
This volume is written during what is known as the “weighing period” in the postal service, the weighing being done to establish a basis for four years on which the railroads transporting the federal mails shall be paid. In other words, as basis for a “railway-mail-pay” rate, which rate will govern railway contracts for carrying the mails for a period of four years.
During the current weighing period I have, at various times, both during the day and at night, watched the weighing for varying intervals of from an hour to two hours. Among the revenue raids observed during those hours of leisure (?), I shall here mention a few. As the present Postmaster General treats all departmental, or “penalty,” matter as “franked” matter (See page 11 of the Postoffice Department report of 1910), I shall, in the brief mention of personally observed facts at several railway stations in Chicago do likewise.
(1) Three carloads of Senate speeches, franked to Chicago in bulk, the bulk then broken and the speeches remailed, under frank, to individual addresses.
I do not know the tonnage of those three cars. Local newspaper reports stated that there were 3,000,000 copies of one of the speeches. I take it that sixty tons is a low figure for the three carloads. The actual weight was probably nearer ninety tons. But leave it at sixty, the remailing in piece at bulk destination makes the weight 120 tons on which the Post office Department had to pay transportation, on sixty tons of which it also had to stand the expense of piece handling.
(2) Another carload of Senatorial vocal effort passed through Chicago to a destination far west. I do not know, but presume it was in bulk, and on arrival, bulk was broken and the matter returned to mail for piece distribution.
The reader must not overlook the fact that the character of matter carried in those four carloads was third-class—was eight-cent-a-pound matter. There were eighty tons or more of it in bulk and its remailing in piece would make it 160 tons.
If a manufacturer, merchant or other business man put to mail 160 tons of third-class matter he would contribute to the postal service revenue just $25,600.
(3) Three crates of fruit went into a mail car at one time, two cases of canned goods at another and a crate of tomatoes at another, without passing over the weighing scale. A drum of coffee, fifty to eighty pounds in weight, went to mail at another time, and a large sack of sawdust at another.
Both of the last mentioned went over the weighing scale before they went to the mail car.
I am speaking only of what casual or chance notice brought to my attention in three railway stations in Chicago. If similar or corresponding abuses were indulged at other stations here, as it is a legitimate inference they were, it is also a legitimate inference that similar abuses were, and are, practiced throughout the country, especially in cities of the first, second and third classes—in cities and towns on which has been conferred the distinguished honor of having their mail handled under the watchful eye and supervising care of a “Presidential Postmaster,” that is, by a postmaster appointed by the President for partisan reasons and prospective uses.
Again going back to our mutton, I repeat the question, “What is the extent of this ‘franking’ and ‘penalty’ raid upon the revenues of the Postoffice Department?” I have cited three local instances merely to give a “hunch”—to blaze a line along which thoughtful people may safely think, and think to some fairly satisfying conclusion. I do not know the extent of the lootage of postal revenues by the uses and abuses of those “frank” and “penalty” regulations. You do not know, and the present Postmaster General admits he does not know, nor has he any means or method of ascertaining.
On page 11 of the report of the Postoffice Department for the fiscal year 1909-1910, Mr. Hitchcock very frankly states the fact and gives his personal opinion of the extent of the franking raid upon the service of his department. He also suggests a partial remedy which also I shall quote because it is a good suggestion, on right lines, and for making it Mr. Hitchcock deserves the thanks of a people over-burdened by the abuses his suggestion would, I believe, correct in material degree. At any rate, the suggestion is on right lines. Following is what he says:
The unrestricted manner in which the franking privilege is now being used by the several federal services and by Congress has laid it open to serious abuses—a fact clearly established through investigations recently instituted by the department. While it has been impossible without a better control of franking to determine the exact expense to the government of this practice, there can be no doubt that it annually reaches into the millions. It is believed that many abuses of the franking system could be prevented, and consequently a marked economy effected, by supplying through the agencies of the postal service special official envelopes and stamps for the free mail of the government, all such envelopes and stamps to be issued on requisition to the various branches of the federal service requiring them, and such records to be kept of official stamp supplies as will enable the Post office Department to maintain a proper postage account covering the entire volume of free government mail.
“There can be no doubt that it annually reaches into the millions,” says Mr. Hitchcock of the cost to his department of transporting and handling the government free mail matter—frank and penalty matter. It should also be noted that he says that “the unrestricted manner in which the franking privilege is now being used by the several federal services and by Congress, has laid it open to serious abuses.”
Not only are the foregoing statements of our Postmaster General true, but with equal truth he could have said that the abuses of the postal service practiced by other federal departments have encouraged—have coached, so to speak,—the Postoffice Department into abusing itself.
Those crates of fruit and cases of canned goods which I saw loaded into mail cars were probably for some postmaster who conducted a grocery or fruit stand, as a “side” to his official duties. Or they may have gone to some “friend” or “good fellow” along the line, or to some one who stood for a “split” of the express charges on such a shipment.
The drum of coffee and sack of sawdust may have had consignees of similar character. But their shipment as mail matter showed another abuse of the postal service by the Postoffice Department itself, or by employes of that department. They were weighed into rail transportation at a time when the average weight of mail carried during a period of three or six months would govern the rate of pay the transporting railroad would receive for carrying the mails during a period of four years.
The same might be said of the four carloads of Senatorial eloquence referred to on a previous page. Those cars were franked through during the weighing period in the postal service. There is this difference, however, between those four cars of franked eloquence and the drum of coffee and sack of sawdust. The former was an abuse of the postal service and a raid upon its revenues by permission, if not by authority, of the postal statutes. The latter was an abuse of the postal service and raid upon its revenues by employes of the Postoffice Department itself.
But the point we are after is the extent of federal departmental raid upon the postal revenues. How much is it? I have confessed my ignorance of the sum such raid will total. Our Postmaster General has (see last preceding quotation), confessed his ignorance of the total. He says there can be “no doubt that it annually reaches into many millions.”
I have no other evidence or authority at hand save the testimony of William A. Glasgow, Jr., before the Penrose-Overstreet Commission in 1906. Mr. Glasgow represented the Periodical Publishers’ Association. In presenting the case for that association—strong, reputable body, representing vast business and public service (educational, social, fraternal and trade interests)—Mr. Glasgow used the following language:
You may take the revenues of the Postoffice Department and give away $19,000,000 per annum in the franking privilege to other departments of government and then give away $28,000,000 per annum in the beneficent advantages of rural free delivery, and then lose millions in unequal and exorbitant transportation charges, certainly $5,000,000, and thus create an apparent and artificial deficit and use that as a basis for further taxation upon those who read magazines, but no one will be deceived by such an excuse and no wise Congress will be moved by considerations so transparent or necessities so unreal.—Page 544 Penrose-Overstreet Report (Hearings), 1906-7.
If Mr. Glasgow were speaking in 1911, I have no doubt he would have raised his figure of $19,000,000 to twenty or more millions as a nearer approximate of the total of federal departmental raids upon the earnings or revenues of the Postoffice Department.
Do not misunderstand me.
All legitimate departmental service should be rendered by the Postoffice Department, but that department should receive credit for such service rendered.
The departmental “abuses” of the postal service are steals. They should not be tolerated. If extra-departmental service is rendered (as is well known it is), it should be paid for just the same—and at the same service rates—that Jim Jones, Susie Bowers and Widow Finerty are compelled to pay for similar service.
Now, we have raidings on the postoffice revenues by the government departments themselves, including free in county, and by the Postoffice Department’s looseness of methods in handling its own business, of somewheres around $22,000,000 a year, not counting the stuffing of weights during the “weighing period”, which goes to swell the railway mail pay rates for mail carrying railroads for a period of four years.
As to the last, I wish to say that Mr. Hitchcock, the present Postmaster General, has done more to correct such weighing frauds than has any of his predecessors within the range of my study of the question. Yet it lingers—hangs on to an extent which should put some subordinate postoffice officials and railway officials in restraint—put them out of range of opportunity for such looting.
In the face of an annual raid of $22,000,000, what is the use of all this prattle—prattle extending over years—about deficits in the postal service? Will some one kindly rise in the front pews of the postal department or in the sanctum of its beneficiaries and tell us?
There is no deficit in the postoffice service revenues. The people pay and have paid for more service than is rendered—for more service than they have received or do receive.
“But what difference to the people does it make whether they pay for carrying the departmental mail out of the postal revenues or have each department pay for its own mail carriage and handling?” is a common answering interrogative argument (?) to my immediately preceding charge that the various government departments raid the postal revenues to the extent of “many millions,” as Mr. Hitchcock has put it. “The people have to pay for it anyway, do they not?”
Just so, and what difference does it make? Well, here are a few points of difference which might be seen and comprehended without jarring any fairly normal intellect off its pedestal:
1. To have the departments pay or give credit to the Postoffice Department for the service it renders to them is an honest and approved method in any other business. The present method not only violates sound business principles but is dishonest as well—dishonest because it throws the burden of those “many millions” for mail haulage and handling of franked and penalty matter upon the postal rate papers, and not upon all the people of the country as it should.
2. If the free congressional and departmental matter now costs, say $20,000,000 a year for mail haulage and handling, then the government is practicing a policy which both originates and distributes revenue without appropriation. In other words, the general government in such practice usurps the function of originating revenue which function, under the Constitution, is vested in the Lower House of Congress.
Next, the general government distributes that $20,000,000 (or its equivalent in service, which amounts to the same thing), to the several departments, or lets each department raid that service as it pleases. It does this in flat violation of another section or clause of the Federal Constitution which provides that the cost of maintenance and operation, including any contemplated construction and permanent betterments, shall be provided for in an annual appropriation bill.
3. The recommended method would greatly lessen the “abuses” of the postal service by government departments and officials of which Mr. Hitchcock speaks. On the other hand, the method of the present and the past invites such abuses. Abuses grow but do not improve with age. Each year the abuses of which Mr. Hitchcock speaks in his 1910 report have grown until abuses is scarcely a fitting designation for them. These abuses of the postal service have grown, and grown in such a stealthy, porch-climbing way, that they amount to a colossal steal every year.
4. When they hear so much yodling about “deficits” in the Postoffice Department, millions of our people are led to believe that such deficits are created by an excess of cost over receipts in carrying the letters, postal and postcards, the newspapers, magazines and other periodicals, the books and merchandise, which the people themselves entrust to the mails for delivery. They hear that the postal service “should be self-supporting,” that “each division of the service should be self-sustaining” and then they are called on for higher service rates to meet “deficits.”
Why should this great government of ours permit its officials longer to gold-brick the people with such ping-pong talk? Why not tell the people the truth, or at least give them an open, honest opportunity to learn the truth?
The annual federal appropriation bills informs them at least of the “estimated” expenditures for the year for other departments. Why not give them an honest estimate of what it costs the Postoffice Department to render a service which should serve them?
Other easily comprehended differences between the present method of loading all governmental mail service upon the Postoffice Department without pay or credit for the vast service rendered and a method which would give that department such credit could readily be mentioned. However, the four points of difference between the two methods above cited, and the advantages which would accrue both to the service and the people by adopting an approved, honest business method instead of the present unfair, foolish and dishonest one, are sufficient, I think, to convince the reader that there are differences between these right and wrong ways of handling the nation’s postal service—its governmental mail matter—that are of vital importance—differences which on the one hand invite raidings, waste and lootage of the postoffice revenues and on the other would make for economies in the service and for business care and honesty in the use and expenditures of those revenues.
EXPRESS COMPANIES CONDUCTING A CRIMINAL TRAFFIC.
But, says another apologist for the loose, wasteful methods of the Postoffice Department in handling both its service and its revenues, “The postal service was originally instituted for handling the government mail only.”
That be as it may, though I doubt the sweeping assertion of the statement made, just as I doubt the integrity and truthfulness of purpose of the person making it. It came to my notice as part of an argument (?) in defense of the outrageous railway mail pay and mail-car rental charges which mail carrying railroads have been permitted to collect from the postal revenues paid by the people. But whether or not the postal service was originally intended to be merely a dispatch service for transmission of government orders, documents, etc., can stand as no valid reason now for the Federal Government’s permitting its several departments to use and abuse the vast system for intercommunication among the people which it has permitted to be built up, and for the building of which it has taxed (by way of postal charges) those who made use of the system—taxed them excessively, if indeed not somewhat unscrupulously—whether or not, not, I say, the government originally intended the mail service to be an exclusive service for use of the government only has no present bearing. If such was the original intention, the foolishness of it must soon have become apparent, for we find that federal laws were enacted to establish a general postal service for all the people. Not only were laws enacted for the establishment and regulation of a mail service, but by the law of 1845 it was clearly intended to make such service a government monopoly. Section 181 of the federal statutes reads as follows:
Whoever shall establish any private express for the conveyance of letters or packets, or in any manner cause or provide for the conveyance of the same by regular trips or at stated periods over any post route which is or may be established by law, or from any city, town or place between which the mail is regularly carried, or whoever shall aid or assist therein, shall be fined not more than $500, or imprisoned not more than six months, or both.
The foregoing makes it quite evident that, as early as 1845 at least, this government of ours did not intend or design the service on mail routes then existing, nor on routes to be established, was to confine itself to the carriage and handling of government matter only. The establishment of rail post routes and the greater facility and speed with which such routes would handle the people’s mails—“the letters, packages and parcels of people residing along such mail routes”—was one of the stock arguments of the Illinois Central Railroad promoters in 1849-50—an argument designed to justify before the people a grant of land to the chartered company so large as to make the grant a colossal steal. The same or similar argument was turned loose and persuasively paraded in the oratorical procession which preceded the vast federal land grants, or land steals, in connection with the building of transcontinental or Pacific rail lines.
Enough has been said to show quite conclusively that whatever may or may not have been the “intention” of the government at the first establishment of a mail service—a service then wholly by water transportation, by runners and by a “Pony Post” and mail coach—a decision was very soon reached to make the postal service a public one—a service for all our people—and to give the government a monopoly of that service.
No one reading the section of the Revised Statutes of the United States above quoted will attempt to controvert the statement last made.
Then, it may be asked again, and justly, too, why does the government continue to permit its various departments to over-load and to loot the postal service, the revenues for maintaining which the people—the mail-using portion of the people—alone contribute?
It also may be justly asked, why does the government permit its postoffice and other officials to scream at the people about “deficits,” when they have already paid far more than the service—their service—costs the government?
Other equally pertinent questions might be asked, but I shall forbear. I have shown, I believe, that the raids upon the postoffice revenues by free-in-county matter and by government itself would more than meet any “deficit” yodled about in recent years.
That is what I started to demonstrate in this chapter. But there are other raids and raiders upon the revenues of the Postoffice Department to which I must advert. I purposed in writing to this phase of our general subject, to make official prattle about postal service “deficits” look and sound foolish.
I believe I have already done that, but in justice to the subject and to the postal ratepayers, at least three other raiders must have their cloaks slit.
The President’s message of February 22, 1912, reached me a few hours after the closing chapters of this volume had gone to the printers. With it arrived a copy of the Postmaster General’s report for the year ending June 30, 1911; also notice from a Congressman friend that he will have the Hughes Commission’s report on the way shortly. The Man on the Ladder, like Lucy, when selecting her spring bonnet, desires the “very latest creation.” It may not be essentially necessary in a discussion of Federal postal affairs, but even a hurried reading of the President’s message and the report of Postmaster General Hitchcock will furnish abundant evidence that expressed official opinion is somewhat ephemeral and transitory, like the styles in ladies’ headwear. I have never had the pleasure of retaining a lady’s unanimous friendship for any appreciable length of time after giving her my honest opinion of the style of her most recently acquired bonnet, and readers who have followed me thus far in my consideration of government postal affairs will have discovered that my respect for “style” in official oratory and literature needs coaching.
All that aside, however, the point is that I have persuaded my printers to “break galley” just here and permit the insertion of a chapter, having as subject the “very latest” in official postal affairs.
THE PRESIDENT’S MESSAGE.
In his Washington Day effort our smiling President is profusely loyal to the characteristics of his style in composition—plumage and displacement. Mr. Taft, however, should set up no claims of originality of design in Executive messages. Several of his predecessors presented the people of these United States with numerous displays of verbal plumage and trimmings. So our President had many working-models as guides in building the message upon which we shall proceed to comment.
This message, both in architectural specification and in contour or ensemble, is largely but a re-trim of the “block” furnished by Mr. Hitchcock in his report, under date of December 1, 1911. In considering the President’s message and the report of the Postmaster General, we may, then, shorten our task somewhat by treating the two public documents as one. They, of course, differ in phrasing and wording, but the language of the message is only a sort of Executive “Me-too” approval of what Mr. Hitchcock says in his report, save on one point—the taking over of the telegraph companies by the government. That point we will discuss separately, presenting the argument of the president against the proposition and the facts presented by Postmaster General Hitchcock:
“It gives me pleasure to call attention to the fact that the revenues for the fiscal year ending June 30, 1911, amounted to $237,879,823.60 and that the expenditures amounted to $237,660,705.48, making a surplus of $219,118.12. For the year ending June 30, 1909, the postal service was in arrears to the extent of $17,479,770.47.”
Well, yes, certainly. It gives us all pleasure to see a surplus grow where only deficits grew before—gives us great pleasure. Still, Mr. President, you will permit us humbly to say that it has been a distressful winter and that here, the very last of February, the ground is still frozen hard. You, of course, will recall that our Postmaster General, at intervals during the last fiscal year, as opportunity for “interviews” offered, gave us confident assurances that his department was harvesting a surplus, ranging in amount from one to three million dollars. These assurances beyond our expectations—our hopes—led us to an elevation which makes it a far fall to $219,118.12. Of course, it is our fault. We should not have permitted our hopes and expectations to become so altitudinous. But Mr. Hitchcock has a very persuasive delivery and the public press quoted him so numerously and so prolixly that we climbed on and on up—away above the one and some of us well on towards the three million level and—well, as before said, the ground being frozen, a drop to $220,000 jars us some considerable in alighting. Mr. Hitchcock probably framed up his mid-year interviews to fit observed conditions, the best he knew how. Most of us will soon be out of the hospital and in condition to take an inflation for another flight. Some of the less venturesome among us may be over-careful not to soar too high, but our tank capacity remains about the same. So the Postmaster General may meter nearly the same amount of rhetorical gas to us without fear. The President might, however, if he thinks it would not occasion any unseemly discord in rendering the grand symphony entitled “Administrative Policy,” give us folks some information on the following points—points raised by a reading of the Washington Day message and of the 1911 report of the Postmaster General, both of which are before me, as I write. Of course this is the President’s busy season and he may not be able to devote as much time to our enlightenment as he would like to and otherwise would. In that event, he may turn the subject over to Mr. Hitchcock and request him to separate himself from a few interviews to clear these matters up for us.
In each annual report of the Postoffice Department I have at hand (1907 to 1911 inclusive), there appears an item which reads, “Expenditures on account of previous years.” For the years indicated, the figures on this item of expenditures are as follows:
1907 $ 303,045.55
1908 823,664.64
1909 586,404.69
1910 6,786,394.11
1911 7,132,112.23
As figures are always more or less of a serious nature, we will here drop the personal element in discussing these points on which information is desired, and much needed, if public press notices can be at all depended upon as informative. Of course “figures do not lie.” Still, it is generally known that, however truthful they may be in correct calculations, they sometimes appear very peculiar, if not queer, in tabulations. Some persons have even gone so far as to assert that “official figures” have frequently been so arranged and manipulated as to “conceal the facts.” Now, the figures for that item, “Expenditures on account of previous years” may conceal no facts which the public has any right to know. Still, there is something about them which irritates one’s bump of curiosity; that is, if one’s bump is not abnormally dwarfed or stunted. At any rate, it appears from press comment that those figures have sand-papered or otherwise frictioned several bumps of curiosity into a state of irritation. It is the hope of securing some official light that will act as a linitive or demulcent to my own and other bumps that persuaded those figures into evidence here.
What do those figures mean? Are they of any real informative value or merely convenient things to have around when building the sub and superstructures of a department annual reports, like the figures of the postal deficits? A glance at the sums named in the table shows a variableness that amounts almost to a waywardness in totaling bills or accounts payable. The federal fiscal year ends June 30th. The annual reports of the Postoffice Department bear date December 1st—full four months after the close of the fiscal year. Surely four months is sufficient time to gather into account the bills payable or carried-over obligations of a previous year, is it not? Of course the business of the department is a large business—over $237,000,000 last year and about $260,000,000 is asked for this year in the appropriation bill recently passed by the House. But that is no reason whatever for failure to account for amounts ranging from $300,000 to $6,200,000 of unpaid bills of the business year in which the obligations were created; especially not, when publication of the accounting is made four months after the close of the year.
This item of “expenditures on account of previous years” becomes no more understandable, if indeed it does not become more suggestive of purposeful manipulation, when one looks over the itemized or segregated expenditures of the year. The items of expenditure are all of the conventional character used in business accounting—operation and maintenance—such as service salaries, transportation of the mails, rents, light, fuel, supplies, repairs, etc. And these are all set down as expenditures of and for the fiscal year’s business covered by the report, there being not even a suggestion that any part or portion of the total is an expenditure of the previous year—of any previous year.
So much for the detail of expenditures as published in the reports. From the summaries of receipts and expenditures one gathers no additional light. In the reports of the Third Assistant Postmaster General (division of accounts), one finds only the bald item, “Expenditures on account of previous years,” down to the report of Third Assistant, James J. Britt, for the year ended June 30, 1910. For that year Mr. Britt segregates the item as follows:
Services for the fiscal year, 1909 $6,721,058.52
Services for the fiscal year, 1908 53,814.12
Services for the fiscal year, 1907 108.97
Claims, fiscal year, 1907 and prior years 11,605.44
Claims, fiscal year, 1906 and prior years 25.00
Total for prior years $6,786,394.11
Anyone taking the trouble to add the five amounts given above, will discover an error of $217.94 in the total. While that error is only a trifle, its appearance, however, in the addition of but five items is not highly commendatory of the ability of Mr. Britt’s expert accountants. The making of such an error in totaling only five entries has a tendency to arouse doubt or suspicion as to the reliability or dependability, not only of the footings given for the longer tabulations published in the report, but also of the footings which must necessarily have been made to secure the totals which are entered as items in such tabulations. Be this as it may, very few persons, aside from clerks paid for doing the work (and, possibly, an official or two whose duty it is or should be to see that the work is done accurately), will go to the trouble to verify even the footings of the published tabulations. So the errors, if any have been made, are not likely to become subject matter for much adverse criticism.
My purpose in presenting the showing of the 1910 report on that item of “expenditure on account of previous years” is to make the statement that, so far as I have been able to look up the matter, it is a first weak attempt to make public in the annual report the accounts and claims carried over from a previous year or years and published as expenditures of the year to which they are carried. I desire the reader to note, also, that of the total of “expenditures on account of previous years” ($6,786,612.05 as above corrected), all but $65,553.53 is set down as expenditures for the year immediately prior—for 1909.
Now, the business of the Postoffice Department is a cash business—wholly so in the matter of receipts and nearly so, or should be, in the matter of expenditures. This being the case, that item entered in the published annual reports as “expenditures on account of previous years” must consist largely of payments made on account of the year immediately preceding the year covered by the report. As just shown by the published analysis of the item in the 1910 report, the expenditures on account of prior years other than the one just preceding are so small (only $65,553.53 in a total of $6,786,612.05), that they may be ignored in the attempt I am shortly to make, to show that the item we have been considering—“expenditures on account of previous years”—has such dominance in the department’s method of accounting, as evidenced in its annual reports, as to materially affect the deficit or surplus showing.
First, however, I desire to call attention to another point or two relating to this item of expenditure.
A glance at the tabulation made of this item shows a huge jump in its amount for the year 1910 of $6,200,000, round figures. Next, it appears that the necessities of business, or the emergency needs of those building the report, forced this item still upward in the showing for 1911 as made December last—upward by $345,718.12, making its total $7,132,112.23. In the report before me, no analysis of that large carried-over payment on account of prior years is given. The Third Assistant Postmaster General may furnish information as to the year or years of its origin. His report has not reached me yet, so I cannot say. The bald statement is there, however, that 1911 paid over seven million dollars on account of 1910 and prior bills. It is also in evidence that no information whatever is published which enlightens the public as to the amount of unpaid 1911 bills that are carried forward to 1912 account.
Whether adverse criticism is justifiable or not, such cloaking of accounts in giving them publicity most certainly warrants it. It is just this cloaking that has subjected Mr. Hitchcock’s little vest-pocket surplus for 1911 to much and merited criticism, doubt and question. Mr. Urban A. Waters, in testifying before the House Committee on Civil Service Reform harpooned the Postoffice Department with an accusation that it had permitted a million dollars to waste, evaporate, be misapplied or stolen, in connection with a deal for sanitary and safety appliances to railway mail cars.
If Mr. Waters’ charges are grounded in fact, then is provoked and invited the question: Is it designed or intended to carry that million into the accounting of 1912—or into that of some future year—as an “Expenditure on account of previous years?”
Mr. Waters is publisher of the Denver Harpoon. He can say things and is generally recognized as a man who makes a practice of gathering the facts to back up what he says before he says it. In his testimony, so far as I know, Mr. Waters made no statement or suggestion that the evaporated million he spoke of would be, or could be, very securely cacheted or “fenced” in this “account of previous years.” It is The Man on the Ladder who points out—who says—that such loose accounting as carries to account of a subsequent year the expenditures made or incurred in a previous year can very readily be made to cloak a steal of one or more millions of dollars.
Then, there are those rural carriers who refused to do as Mr. DeGraw, Fourth Assistant Postmaster General, told them to do. You read the papers of course, and—you believe them, of course, though most of you say, “Of course, I don’t believe ’em.” Well, it was broadly published that the Rural Free Delivery News had the temerity to publish—not merely to insinuate, mind you—that Mr. Hitchcock’s showing of a little $220,000 surplus for the year ended June 30, 1911, was made possible only by the failure of the Postoffice Department to make a plain, valid charge of $7,201,149.64 expenditures for that same fiscal year of 1911!
Those are not the exact words used in giving publicity to the asserted fact by the Rural Free Delivery News, but that is the meat in the nut the publication cracked. It appears that the published statement was closely contiguous to the facts. At any rate, its nestling juxtaposition to the truth was such that it appears to have neither looked nor listened well to the department. There is a presidential campaign on the speedway at this time, with all its usual concomitants of cackle, clack, cluck and other atmospheric disturbances. Such a published truth—if truth it is, and it certainly displays a marked resemblance in both form and feature to that article so extremely rare in campaign clutter—the appearance of such a truth on the speedway has a tendency to “blanket” some candidate or jockey him into the fence. With a view no doubt, to guarding against such possibility, that machine so much used in recent years to smooth down the rough places in administration roadways was turned onto the track. A hostile opposition, always somewhat harsh and careless in its language, calls it “the steam roller.” So the steam roller, with Fourth Assistant Postmaster General DeGraw at the wheel and manipulating the levers, rolled out among the rural carriers.
But it appears that it did not roll over them. There are forty-odd thousand rural carriers and, of course, it would have to be some “steam roller” to mutilate or seriously dent the ranks of so numerous a body of men; especially of men who travel about with the fragrance of the clover blossom and the corn bloom in their nostrils. They just wouldn’t be rolled and, it is reported they so informed Mr. DeGraw in very polite and easily understood language. They would not demand of the publisher of their association organ that he retract and, to date, the Rural Free Delivery News has, so far as I have seen, shown no sign of either intention or inclination to back away from or in any way modify its charge which, in effect, was that the showing of a surplus—of even a little “runabout” surplus of $220,000 for the fiscal year of 1911—is a “faked” showing—a showing made possible only by carrying $7,201,149.64 of 1911 expenditures over to 1912 account.
May the Rural Free Delivery News live long in the land and flourish.
In a letter just received from Mr. W. D. Brown, editor of the R. F. D. News, he says: “When the Postoffice Committee submitted its report on March 6, it contained the statement that instead of a surplus in the postal revenues there was, up to that time, a deficit of more than $600,000.00 and I am satisfied that the amount will be greatly increased before the end of the current fiscal year.”
In the News of January 27, the issue to which Mr. DeGraw took exception, Editor Brown publishes a letter he wrote under date of January 11, 1912, to Mr. Charles A. Kram, Auditor of the Postoffice Department. He also publishes Mr. Kram’s reply. In comment on the reply, Mr. Brown says: “Auditor Kram’s reply throws very little light upon the subject, except to establish the fact that it is impossible to say at any time, whether the Postoffice Department is being conducted at a profit or a loss.”
Next comes Congressman Moon, an admitted authority on postal affairs and Chairman of the House Committee of Postoffices and Post-Roads.
I see by a press notice that Mr. Moon, in speaking to the question before his committee recently, stated that there was a “deficit of $627,845 for the fiscal year of 1911” in the Postoffice Department, instead of a surplus of $219,118.12, as published in its report, and over which Mr. Hitchcock and President Taft display so much luxuriant jubilation.
We have probably presented sufficient testimony to evidence the fact that the figures presented by our Postoffice Department are numerously, if not unanimously, doubted among people who take upon themselves the trouble and the labor of looking into them. True, the three or four witnesses we have introduced do not agree as to the amount or magnitude of the shortages or discrepancies they have found, nor have they said, just where in the loose, bungled accounting they found the discrepancies. However, my purpose here is to show only that publicity of such bungled accounting does not enlighten or inform the public and that the practice of charging the expenditures of one year to account of the next may easily be made to cloak and cover up much wasteful if, indeed, not dishonest expenditure. That being the case, the disagreement of our witnesses as to the amount of dollars and cents they severally have found to be mislaid, or not properly accounted for, can make little difference in the conclusion forced by their testimony on any fair, inquiring mind.
But, it may be argued by apologists for such misleading practice in accounting or by persons who would plead extenuating conditions for Mr. Hitchcock and others charged with administering federal postoffice affairs, that this loose, fraud-inviting practice is of long standing, that the present administration has not had time to correct and remedy the faulty practice and that the published showing of current years is correct, because it is made on the same basis as was the accounting for many previous years.
All very well said, but it does not answer. Hoary-headed age in loose, falsifying methods of accounting neither commands respect nor can stand as reason or excuse for continuing such methods. It most certainly has no warrant as argument in extenuation for the continuance of such methods by the present administration.
“Why?” Well, there are several reasons. Mr. Hitchcock, it appears, has been aware for some two years or more that the practice we are here discussing was a questionable one, even if he was not fully informed as to the dangers—the waste, the fraud, the crookedness—which that practice might easily be made to cloak. Yet he has not only continued the practice, but, it would appear has further indulged or encouraged its growth. Let us look at the published evidence on this point.
A reduced deficit in the showing of the Postoffice Department for the year 1910 was somewhat evidently desired. To that end, the practice we are criticising charges 1910 with $6,786,394.11 for expenditures “on account of previous years,” all of which, save $65,553.53, as previously shown, were expenditures made on account of the year 1909.
Now, in a footnote to page 278 of the 1910 report, Third Assistant Postmaster General Britt presents a somewhat confusing, if not confused explanation of his showing of the “Revenues and expenditures” for the year. One statement in the explanation, however, is resonantly loud in its clearness.
“On the other hand,” says Mr. Britt, “expenditures made in the first three months of the fiscal year, 1911 on account of the fiscal year 1910 and prior years are not included in the reported deficit for the year 1910. The amounts are approximately equal.”
I italicize that last statement. Let’s see: 1910 was made to pay (in accounting only, of course), $6,786,394.11 of 1909 and prior expenditures and, in an exchange, as simple as swapping Barlows, $7,132,112.23 of 1910 expenditures are shunted onto the year 1911!
“The amounts are approximately equal,” says Mr. Britt.
Well, the difference is only $345,718.12—a mere trifle, of course, in a shuffle of millions. But if that trifle had been added to the 1910 expenditures, where it rightly belonged, the 1910 deficit would have shown up a trifle over instead of a trifle under six million dollars, as given in the published report—a very important matter along in the closing days of 1910.
Then, too, when our President and his Postmaster General so warm up to a surplus of $220,000, it is possible, if not probable, that a trifle like $345,000 might have been a convenience as a deficit reducer in December, 1910.
On page 19 of Mr. Hitchcock’s report, he presents the following as one of thirty “Improvements in Organization and Methods” accomplished by the Postoffice Department during the year ended June 30, 1911:
A change in the financial system whereby the surplus receipts of postoffices throughout the country are promptly centralized at convenient points for the purpose of meeting other postal expenditures incurred during the period in which the surplus receipts accrued, thus paying the expenses of the service from current receipts and obviating the necessity of applying to the Treasury for a grant to meet an apparent deficiency in postal revenues when, as has happened in many instances, no actual deficiency exists.
Now, that is certainly an “improvement” worthy of all commendation. If, as stated, it provides for “Meeting other postal expenditures incurred during the period in which the surplus receipts accrued” it certainly should prevent “an apparent deficiency … when … no actual deficiency exists.”
But why, then, is it reported that over $7,000,000 of expenditures for the year ended June 30, 1910, are charged to the fiscal year 1911? The report bears date December 1st, 1911—four months after the fiscal year 1911 closed. If the receipts of postoffices throughout the country are “promptly centralized” for the purpose of meeting current expenditures, it would require super, if indeed not supple, expertness in accounting to figure out a surplus of $220,000 for a year’s business which assumes over seven millions in unpaid bills of a previous year without, apparently, knowing what amount of unpaid bills can be shunted onto the next year.
But, it may be argued, there is nothing inconsistent in Mr. Hitchcock’s claim as just quoted, of an improvement in the department’s system or methods of accounting which makes, or should make, unnecessary the carrying over to 1911 so large a sum for expenditures made in or an account of the year 1910. While the improved methods have been introduced, it may be argued that insufficient time has elapsed, even to December 1st, to admit of their application in making up the fiscal report for the year 1911. In short, that the improved methods were introduced so late in the fiscal year 1910 that the resulting betterments in the system of accounting could not be shown in the report for 1910-11.
Yes, that possibly might be of some weight in considering this claimed improvement in the accounting methods of the department. There is, however, one serious objection to its acceptance as evidence in this case—evidence in proof that there was not sufficient time to make the improved methods operative in the showing for the fiscal year 1911:
(5) The adoption of improved methods of accounting by which the surplus or deficiency in the postal revenues is approximately determined within three weeks from the close of each quarter, instead of three months thereafter, on the completion of the audit of postmasters’ accounts.
(6) The adoption of an accounting plan that insures the prompt deposit in the Treasury of postal funds not immediately required for disbursement at postoffices, thus making available for use by the department several millions of dollars that, under the old practice, would be tied up in postoffices.
In his 1909-10 report, Mr. Hitchcock sets forth fifty “improvements” in methods of handling and conducting the business of the Postoffice Department—improvements made prior to June 30, 1910, mind you. Well, the foregoing quotation presents numbers 5 and 6 of the enumerated 50 “improvements” that were set up as having already been instituted—instituted prior to June 30, 1910. Beyond saying that the department has certainly had ample time to install and make operative the improvements in methods of handling its business and of accounting, which its published reports claim to have been made, comment is unnecessary. If the improvements, as twice claimed in the two annual reports from which I have quoted have been made, then, it is pertinent to ask: Why was over seven millions of 1909-10 expenditures carried to 1910-11 account?
Such a showing excuses another question—excuses it because it invites the question:
What amount—how many millions of dollars—of 1910-11 unpaid bills and claims was carried over to become a charge against the fiscal year 1911-12?
Oh, yes, I am fully aware that this may be all readily explained by saying that the claimed improvements as set forth have nothing whatever to do with the practice of carrying forward unpaid bills of one fiscal year and making them a charge against the receipts of the next or some subsequent fiscal year.
Such an explanation is easily understood, because it does not explain. That is, it is an explanation which, to be believably understood, requires more explaining than do the faults and crooks in the method of accounting it attempts to explain.
That the “fumbling” of this carrying-over practice needs correction—needs abolishment—will be seen from a glance at the two following tabulations. That the practice also makes the departments’ annual showing of the results of the business of the year—any year—almost valueless is also made evident—that is, valueless so far as real, dependable information is concerned as to whether the postal service is conducted at a loss or at a profit.
The first tabulation following shows the published figures for the fiscal year’s expenses as given in the departmental reports. It also shows what the expenses of the fiscal years indicated really were, when their unpaid bills (as shown by the next annual report of the department) are charged against them.
The whole charge, “On Account of Previous Years” in each report is treated as a charge against the immediately preceding year. It has been shown that payments on “account of previous years,” as given in the published reports, include for years other than the first or immediately preceding, amounts so small that they may be, for purposes of comparison, ignored.
At any rate, the figures in the following tabulations of expenditures and deficits—accepting the department’s published statements of receipts as correct—are far more enlightening to the general public as to the results of each year’s business, for the five years here covered, than are the statements made in the annual reports of the department for the years named.
The second table shows the “deficits,” or balances for each of the five years as compared with the deficits shown in the annual reports of the department, the corrected figures being subject, of course, to any trifling reduction which may have resulted from the payment of bills carried into the account from some other than the immediately preceding year:
ANNUAL EXPENDITURES OF THE POSTOFFICE DEPARTMENT.
Expenditures as published. Expenditures as corrected.
1907 $190,238,288.34 $190,758,907.43
1908 208,351,886.15 208,114,626.20
1909 221,004,102.89 227,204,092.31
1910 229,977,224.50 230,322,942.62
1911 237,648,926.68 230,516,814.45
From the foregoing it will be seen that the corrected figures show a range of variance from the published figures, of over $6,400,000. That is, the corrected figures are some $230,000 below for the year 1908 and more than $6,200,000 above for the year 1910, the showing in the departments published reports.
A similar correction for the year 1911 cannot be made until the department chooses to enlighten the public as to the amount of 1910-11 unpaid bills it has carried forward to become a charge against the receipts of the year 1911-12.
As the account for the year stands above, the surplus for the year 1910-11 is $7,363,009.15—not the comparatively trifling amount of $219,118.12, as published. Of course, if the report shows that 1912 pays $7,363,009.15 of 1911 expenditures, then the paltry surplus for the last-named year may stand as given in the report. But if the 1912 report should show that so much as one dollar more of 1911’s unpaid bills were shunted onto 1912 than 1911 paid on account of 1910’s shunted bills ($7,132,112.23), then Mr. Hitchcock’s joy-producing “surplus” will vanish as an actuality in correct accounting.
Following is the showing of the deficits or balances as published, as compared with the actual deficits or balances, as corrected according to previous explanation:
Deficits as published. Deficits as corrected.
1907 $ 6,653,282.77 $ 7,173,901.84
1908 16,873,222.74 16,635,962.79
1909 17,441,719.82 23,641,709.24
1910 5,848,566.88 6,194,285.00
1911 219,118.12 (Surplus) 7,363,009.15
There, again, is shown a range of more than $6,400,000 between the published and the very near actual deficits of the several years, not including 1911, for the showing on which, for reasons stated, I and the rest of the “dear people,” who are just now being “worked” for votes, will have to wait until the 1912 report is published.
Why, nothing but a government treasury—the treasury of our easily “bubbled” people—could survive that sort of bookkeeping for the time covered in the above tabulated statement of published and actual yearly shortages and of one alleged surplus.
AN EXECUTIVE OVERSIGHT—POSSIBLY.
We will now detach ourselves from these wearisome figures and more wearisome figuring, using figures only as a sort of garnishment to chief courses served to us by the President and our Postmaster General.
The receipts of the Postoffice Department, as published in its annual reports, were $34,317,440.53 greater for the fiscal year 1910-11 than for the year 1908-9.
Both the President and Mr. Hitchcock are eloquently ebullient because of the appearance of a tender shoot or bud of a surplus in a place where nothing but deficits grew before. But neither of them appears to have boiled over in either message or report to show the people what splendid things have been accomplished in two years with that thirty-four millions of increased revenues. I wonder why? Possibly the failure of ebullition at the point indicated is the result of oversight. Of course, it may have resulted from lack of thermic encouragement or inducement. Or, it may be, that some “induced draft” drew the major part of the thirty-four millions up the smoke-stack without leaving a B. T. U. equivalent under the kettle.
“The Postmaster General recommends, as I have done in previous messages, the adoption of a parcels post, and the beginning of this in the organization of such service on rural routes and in the city delivery service first,” says President Taft.
If the President really has recommended in “previous messages” the “beginning” of a parcels post “experiment” in “the City Delivery Service” such recommendation entirely escaped my notice. A “test” of a parcels post service on rural routes—yes. That was much talked of a year or more since. But of an “experimental test” of an improved parcels post in urban carrier service, little or nothing was said or, if said, it did not make sufficient noise for The Man on the Ladder to hear. However, I presume it is as permissible for the conceptions and concepts of a President to broaden, enlarge and improve as it is for those of a Postmaster General to broaden, enlarge and improve. For that matter, a proportional, if not entirely corresponding thought-expansion may be occasionally noticed in the Department of the Interior as conducted and operated by common, ordinary mortals.
As the parcels post is the subject of a later chapter which is already in type, further consideration here is unnecessary. It may be said, however, that extending the proposed test—any “test”—of a parcels post service to city free delivery routes, instead of confining it to a few “selected” rural routes as Mr. Hitchcock proposed it should be confined in his 1910 report, is a step in the right direction—a step in advance. Still, such a step is but dilatory; is but procrastinating. A cheap, efficient, general parcels post service must come and, now that the people are aroused—aroused as to the criminal wrongs inflicted upon them by a Postoffice Department and a Congress that have acted for thirty or more years as if indifferent to or not cognizant of those wrongs—it must come quickly, unless, of course, it should develop that the people are, really and truly, as big fools as railroad, express companies and certain public officials have treated them as being.
“The commission reports that the evidence submitted for its consideration is sufficient to warrant a finding of the approximate cost of handling and transporting the several classes of second-class mail known as paid-at-the-pound-rate, free-in-county, and transient matter, in so far as relates to the services of transportation, postoffice cars, railway distribution, rural delivery, and certain other items of cost, but that it is without adequate data to determine the cost of the general postoffice service and also what portion of the cost of certain other aggregate services is properly assignable to second-class mail matter.… It finds that in the fiscal year 1908 … the cost of handling and transporting second-class mail matter … was about 6 cents a pound for paid-at-the-pound-rate matter, and for free-in-county, and transient matter, each approximately 5 cents a pound, and that upon this basis, as modified by subsequent deductions in the cost of railroad transportation, the cost of paid-at-the-pound rate matter, for the services mentioned” (I have not mentioned all the “services” enumerated by the President, all being covered in the words “handling and transportation”), “is approximately 5? cents a pound.” …
That is from the President’s Washington Day message. Can you beat it? Well, it will take a smooth road and some going to do it.
First, it is cheerfully admitted that the Commission (the Hughes Commission) had no “adequate data to determine the cost of the general postoffice service and also what portion of the cost of certain other aggregate services is properly assignable to second-class mail matter,” and then our President proceeds—with equal cheerfulness and smiling confidence (or is it indifference?) to assure us that the Commission proceeded to figure 6 cents a pound as the cost of handling and carriage of paid pound-rate second-class matter and 5 cents a pound as the cost of corresponding service for free-in county and so-called “transient” matter!
Again I ask, can you beat it? If you can, please send me your picture—full size and two views, front and profile. I would derive much pleasure from a look at your front and side elevations. Of course, the President has an official right to a “style” of his own. A “style” of expression, however, cannot be protected by copyright, otherwise, as stated at the opening of this interpolated chapter, President Taft would be guilty of infringement. Other presidents have run into verbose verbosity in expressing themselves. It is an official convenience at times to do so, however ludicrously open of intent or “phunny” it may appear to laymen.
The President, in the paragraph of his message above quoted, recalls two of his “arguments” before the Swedish American Republican League, of Chicago, which arguments I had the honor to hear. In one instance he was flourishing about our ideal of popular government and said: “What we are all struggling for, what we all recognize as the highest ideal in society, is equality of opportunity.… Of course perfect equality of opportunity is impossible,” then why it is impossible followed for a paragraph.
It was so nicely and redundantly redundant, so resilient in phrasing, so honestly earnest, that one just had to go along with our President, whether or not one could see how “the highest ideal in society” could possibly be found in a chase after the “impossible.”
At another point in his kindly persuasive Come-unto-me discourse, he pointed out to us how liable a “majority of the people” is to “make mistakes by hasty action and lack of deliberation.” Then, after a paragraph of beautiful foliage, the President cited the anti-trust law of 1890 as an evidence of the advantages and beneficent results of ample “deliberation” before taking action in matters of “grave import”. He explained that the decision of the Supreme Court was at first “misunderstood, or if not misunderstood, was improperly expressed, so as to discourage those who were interested in the federal power to restrain and break up these industrial monopolies. After twenty years’ litigation the meaning of the act has been made clear by a decision of the Supreme Court, prosecutions have been brought and many of the most dangerous trusts have been subjected to dissolution.”
It was all so fine, so lulling if not luring! It made one feel as if he were lost or had gone to sleep looking for himself. But when in a comfortable seat, in the owl car, where the jostle of the wicked world was so toned down and gentled as to permit a little analytic thought, that beautiful illustration of the value of making haste slowly and of long, careful “deliberation” when acting on matters of vast import recurred to us—that Anti-trust Act.
“After twenty years” careful deliberation, the Supreme Court was able to decide what the act meant! Was able, also, to decide what its own prior decisions meant and prosecutions were then brought and “many of the most dangerous trusts have been subjected to dissolution!”
All of it listened very well, but it don’t stand the wash very well. It is matter of common knowledge that during the twenty years the Supreme Court was industriously trying to find out what the Anti-Trust Act and its own decisions meant, the trust organizers and promoters got away with more than eight billions of unearned values—some set the figure above fifteen billions. The Supreme Court made haste slowly in its “deliberation,” while the respectable get-rich-quick Wallingfords were going after the people’s money and going in high-powered cars with the speed levers pulled clear down. No making haste slowly or duly prolonged deliberation with Wallingfords’.
Then, if one will take the trouble to glance at market quotations of the stocks of any of “those dangerous trusts” which “have been subjected to dissolution,” he will find that they have passed through the trying ordeal of “dissolution” without the turn of a feather. All are smiling. Why should they not? Stock quotations show that Standard Oil is over $250,000,000 better off than before its deliberated judicial dissolution. The Tobacco Wallingfords are also many millions ahead of the game since “dissolution” set in. And “Sugar”—well since the Sugar Trust was “busted” and subjected to the “dissolution” process nearly all its controlled saccharine matter appears to be trickling into its bank account. Similar “most dangerous trusts” show similar evidences of “dissolution” since the Supreme Court processed them.
What has this to do with our immediate subject? Nothing whatever. It is a mere interpolation—with a purpose. Its purpose is to evidence what appears to be a practiced habit with our President—a florescence or foliation similar to that displayed in the quotation I have made from his Washington Day Message. In the quoted paragraph, the reader will observe that he first says the Hughes Commission was “without data to determine the cost” of certain very important factors in the aggregate expense of handling and transporting the mails, and then he immediately proceeds to inform us that the Commission finds that the “cost of handling and carriage of paid-at-the-pound rate matter was about 6 cents a pound,” etc.—a virtual impeachment of the Commission’s finding before the finding is stated.
THE HUGHES COMMISSION.
What little space permits me to say of the report of the Hughes Commission may as well be said here.
In their report the commissioners very frankly admit the meagerness, or, on numerous important points, total lack of informative data. But, as the President states, they proceed to put on record a finding of 6 cents a pound as the cost of handling and transporting paid second-class matter and 5 cents a pound as the cost of similar service on free-in-county matter, for the year 1908. They finally recommend, however, that the present “transient” rate (for copies of periodicals mailed by other than publishers) be continued—1 cent for each 4 ounces; also that the present free-in-county privilege be retained, but not extended.
What does that “not extended” mean?
I do not know. Do you? Does it mean that the country newspapers now issued—now entered in Postoffice Department for free haulage and handling—shall continue free and that no new newspapers established, founded and distributed in counties, shall be transported and handled free?
If it does not mean that, what does it mean? If it means that, then why does this Commission recommend a thing that is primarily—elementary—wrong under the organic law of this government?
The Constitution of these United States specifically prohibits “special” legislation. Then why, I ask, should the recommendation of this Commission be complied with? I have been publishing The Hustler, a controlled Republican or Democrat 4 to 8 pager, as the case may be, for four years. Paul Jones comes along and flings in his money to publish and print the Democratic Booster in the same county. Does this Commission mean to recommend that The Hustler be carried and distributed free in the county and that The Booster be required to pay the regular pound rate for the same service?
A flat rate of 2 cents per pound is recommended for all other periodical matter, newspapers and magazines alike.
Well, that recommended rate is of course, better than Mr. Hitchcock’s “rider” recommendation, discussed in a previous page. The Commission’s “finding” that the cost of carriage, handling and delivery of second-class mail “was approximately 6 cents a pound” is also an appreciable step-down (toward the facts), as compared with Mr. Hitchcock’s assured—milled, screened and sifted—finding that said cost was 9.23 cents a pound—a finding as late as March 1, 1911. So if this commendable “merger” of views, opinions and guesses keeps growing, as industrial, rail and other mergers are wont to grow, the postal rate payers of the country may hope yet to find that even their great men may agree.
I have discussed this second-class mail rate—the cent-a-pound rate for periodicals—elsewhere. With private companies (the express companies) carrying and delivering second-class mail matter for the average mail haul, at one-half cent a pound (and standing for a “split” with the railroads for one-half of that), the question as to whether or not the government can carry mail matter without loss at one cent a pound, is not worth debating among men whose brains are not worn in their sub-cellars.
I mean the last statement to apply to third and fourth class matter as well as to second. What it has cost the government, or what it now costs the government, to transport, handle and distribute the mails is another and quite different matter from what such service can be and should be rendered for. Was it not that the people’s money is lavishly wasted by such foolishness and foolery, a dignified commission of three or six men sagely deliberating upon, critically “investigating” and laboredly discussing what it costs the government—what the government in 1908 or any other year paid—to carry and distribute the mails, might be staged as the working model of a joke. If a Commission’s time and the people’s money were spent in making a careful, thorough investigation as to what it should cost to collect, transport, handle and distribute the mails, and as to just where and how the millions of dollars, now annually wasted in an over-unmanned, incompetently managed, raided and raiding service, could be saved, results fully warranting the expenditures made on account of these postal-investigating commissions would readily be obtained.
A summary of the proceedings of the Hughes Commission is presented elsewhere. Here I shall take space for only two or three observations. First, as is evidenced by the Commission’s report, the Postoffice Department was before it in conspicuous volubility and the frequency of a stock ticker during a raid, with call money at 84. Postmaster General Hitchcock and his Second and Third Assistants appear to have been the chief “floor representatives” of the department during the flurry. Of 201 “Exhibits” listed by the Commission, about 100 of them—reports, documents, memoranda and letters—found origin if not paternity in the Postoffice Department, and a considerable portion of them was already on file in government archives. Of the sixteen papers submitted after close of “Hearings,” fourteen or fifteen are letters and memoranda of the department, besides which seven memoranda are mentioned as having been received from “the Postoffice Department and not marked as exhibits.”
That should make up a pretty fair collection of departmental argument, views, opinions and “estimates,” should it not? It is very doubtful, though—debatable, if not doubtful—if the collection is worth $50,000. Especially does such a valuation appear questionably excessive, when it is observed that much of the collection is made up of public documents, the findings of former postal commissions and committees, and of reports and showings made up by the Postoffice Department at departmental expenditure of time and money, and not at an expense chargeable to the Commission’s appropriation. Of course the Hughes Commission may not have followed the precedent set by most prior postal Commissions, and by commissions in general. The Hughes Commissioners may not have spent all of their $50,000 appropriation. Let us hope they did not. However, a statement of expenditures actually made would be, by some of us at least, an appreciated “exhibit.”
Another feature of the Commission’s 108-page report that deserves special attention is the close adherence of its findings to the findings of present postal officials. Even in cases where the opinions of past officials are quoted commendingly, the opinions usually support and bolster the opinions of Mr. Hitchcock and his assistants. The report presents a number of tabulations, among which are several that are most excellent and informative. However, the tabulations, and the more important conclusions of the text as well, are based upon “estimates,” rather than upon ascertained facts. Then, too, these estimates, as is somewhat annoyingly evident, are all, or nearly all, the departmental estimates of the present Administration. Of course, that should in no way impair their value or dependability and it probably would not, but for two facts: The present Postmaster General has, for two years or more, displayed great activity—at times, a fevered if not frenzied activity—to secure the enactment of laws and issuance of executive orders to accomplish results which, while they may appear most desirable to him, were considered by many thousands of our people as being very objectionable, indeed, inimical to the fundamental right of free speech in this country and a menace to a free press and to popular education. The “estimates” which the Hughes Commission has published as basis for its findings quite uniformly, if not entirely, support the contentions which the Postmaster General has been making—at times, making with little or no warrant of fact to support.
Again, it will be observed by careful readers of the Commission’s report that the “estimates” upon which several of its more important findings are based, are conspicuously lacking in elements essentially necessary in the structure of reliable estimates from which fact or facts may be deduced. To warrant the drawing of conclusions of fact from it, the structural material of an estimate must consist largely, if not wholly, of fact, not of conclusions drawn from other conclusions which, in turn were deduced from estimates based on other estimates that may or may not have been accurate and dependable.
As just stated, the estimates which the Commission appears largely to have accepted, are nearly all productions of the Postoffice Department. Few of them are built directly upon ascertained facts. Most of them are estimates of estimates based on other estimates. It appears that the Postmaster General’s estimates are Assistant Postmaster Generals’ estimates of the estimates made by weighing clerks of the several classes of mail-weights carried by certain railroads during six months in the year 1908. The nearest approach such a method or procedure makes to a fact is an estimate of the fact, you see.
A POSTAL TELEGRAPH.
One more quotation from the President’s message and this chapter may end. This quotation is anent the proposition of having the telegraph service of the country operated by the government—in connection with the postal service. Mr. Hitchcock’s recommendation in the matter of a postal telegraph “is the only one,” says the President, “in which I cannot concur.” I shall first quote President Taft and then quote Mr. Hitchcock as he expressed himself in his 1911 report:
This presents a question of government ownership of public utilities which are now being conducted by private enterprise under franchises from the government I believe that the true principle is that private enterprise should be permitted to carry on such public utilities under due regulation as to rates by proper authority rather than that the government should itself conduct them. This principle I favor because I do not think it in accordance with the best public policy thus greatly to increase the body of public servants. Of course, if it could be shown that telegraph service could be furnished to the public at a less price than it is now furnished to the public by telegraph companies, and with equal efficiency, the argument might be a strong one in favor of the adoption of the proposition. But I am not satisfied from any evidence that if these properties were taken over by the government they could be managed any more economically or any more efficiently or that this would enable the government to furnish service at any smaller rate than the public are now required to pay by private companies.
More than this, it seems to me that the consideration of the question ought to be postponed until after the postal savings banks have come into complete and smooth operation and after a parcels post has been established not only upon the rural routes and the city deliveries, but also throughout the department. It will take some time to perfect these additions to the activities of the Postoffice Department and we may well await their complete and successful adoption before we take on a new burden in this very extended department.
As an exhibition of rhetorical aviation, that is both going and soaring some. How beautifully it “banks” on the curves! How smooth its motor runs! And its transmission! Words fail me.
Some paragraphing wit has said, “Foolishness is as plentiful as wisdom isn’t.” Our President appears to know that we fools can take in a lot of foolishness without our tanks sloshing over as we stumble along the old, well-worn way—the way that leadeth the earned dollar into somebody’s unearned bank account. But I do not intend to comment. The italics I have taken the liberty to mix into the President’s verbal flight is all the comment needed. Mr. Taft makes it quite clear that all we fools need to do is wait—make haste slowly, take time for due deliberation. Of course, some of us fools think we know, or presume to think we know, that the telegraph companies are charging us two or three prices for the service they render—frequently, do not render for twenty-four or more hours after it ceases to be a service. But think of the good other folks derive from the pocket change they extract from us! The Western union is, or was, a “Gould property.” It paid interest or dividends on eighty or more millions of quasi and aqua pura in stocks and bonds. But think of the fun sons George and Howard had! Think of the former maintaining the beautiful Lakewood place, leasing English hunting preserves, playing polo and “busting” into, through and around Knickerbocker society circles! How could Howard have built a replica of Kilkenny Castle on Long Island Sound, where he and “Wild West Katie,” it is said, spent millions and had a realistic Kilkenny-Cat time of it? Or how could Frank, the fourth and last son of Jay Gould, have given to the world such a lurid, if not illuminating, picture of the “Married Rue” as was exhibited at his divorce hearings? And there is “Sister Anna”—Well, it is sufficient to say that Anna Gould could not have blown away ten millions in settling “Powder-Puff” Boni’s debts and turning him loose in the straight and broad way which leadeth unto the life that is somewhat too “fast” for even unearned money.
Well, none of the before-mentioned “life lessons” could have been set for the world’s enlightenment—likewise, disgust—had the people of this country not waited, not made haste slowly, in “due deliberation,” while the Western union and other “Gould properties,” were used to separate them from many millions of dollars which no Gould or Gould property ever earned.
But this is digressing. The President advises us to wait, to delay action a little longer—until the “postal savings banks have come into complete and smooth operation,” until “after a parcels post has been established … throughout the department.” Just wait and keep on paying twenty-five cents for a ten-word wire to your mother or friend ten miles out, even though the veriest fool knows that a postal telegraph service would carry a twenty-five word message to any postoffice in the United States for ten cents. Just keep on waiting—until the big telegraph interests have sheared a few millions more fleece.
But, says President Taft, “If it could be shown that telegraph service could be furnished to the public at a less price,” etc., etc.
Well, maybe there is a sort of visual aphasia which makes a quarter look like ten cents to some men. If not, I am at a loss to understand how it yet remains for anyone to be “shown” that telegraph service could be furnished to “the public at a less price than it is now furnished by the telegraph companies.” Postmaster General Hitchcock furnished sufficient information, it seems to me, to show the President, or anyone else for that matter, that telegraph service “could be furnished the public” at rates much below those the telegraph companies collect. Mr. Hitchcock speaks in part, as follows—page 14, 1911 report:
The telegraph lines in the United States should be made a part of the postal system and operated in conjunction with the mail service. Such a consolidation would unquestionably result in important economies and permit the adoption of lower telegraph rates. Postoffices are maintained in numerous places not reached by the telegraph systems and the proposed consolidation would therefore afford a favorable opportunity for the wide extension of telegraph facilities. In many small towns where the telegraph companies have offices, the telegraph and mail business could be readily handled by the same employees. The separate maintenance of the two services under present conditions results in a needless expense. In practically all the European countries, including Great Britain, Germany, France, Russia, Austria, and Italy, the telegraph is being operated under government control as a part of the postal system. As a matter of fact, the first telegraph in the United States was also operated for several years, from 1844 to 1847, by the government under authority from Congress, and there seems to be good ground why the government control should be resumed.
While much more could be said in support of Mr. Hitchcock’s position, he has said sufficient in the above, I think, to “show” even a President.
As evidence that the “estimates,” upon which the Hughes Commission so largely base their findings are not entirely dependable, I desire to make two brief quotations from other pages of Mr. Hitchcock’s 1911 report. On page 17, as the first of thirty “Improvements in Organization and Methods,” the Postmasters General sets forth as having been accomplished in the service during the fiscal year 1911, will be found this:
The successful completion of an inquiry into the cost to railway companies of carrying the mails and the submission of a report to Congress making recommendations for revising the manner of fixing rates of pay for railway mail transportation.
On pages 9 and 10 of the report, in discussing a readjustment of railway mail pay, Mr. Hitchcock uses the following language:
The statistics obtained during the course of the investigation, disclosed for the first time the cost of carrying the mails in comparison with the revenues derived by the railways from this service.… The new plan (paying railways on the basis of car space occupied by the mails), if authorized by Congress, will require the railway companies each year to report what it costs them to carry the mails and such other information as will enable the department to determine the cost of mail transportation.
From the above it would seem that Congress was to be asked to adopt at its present session a “new plan” which “will enable the department to determine the cost of mail transportation;” to determine an important service fact which, according to the preceding quotation and also to the first sentence of the one just made, was determined sometime prior to June 30, 1911.
Has the Postoffice Department already determined the facts as the report twice claims, or has it merely collected some data upon which to base an “estimate?” Which enables it to make a more or less reasonable guess at the cost of mail transportation?
FOOTNOTES
I find from reports of the department auditor that the fiscal year of 1909 was made to meet a charge of $128,307.32 which rightly stood against the year 1907; also that the fiscal year 1911 is charged with an expenditure of $148,490.01 belonging to 1909 and another expenditure of $85,195.34, belonging to “1908 and prior years.”
I intended to take up here the railway mail-pay and postal car rental steal and then the infringement by express companies on the postal service and its revenues. However, since I have quoted Section 181 of the federal statutes governing, I think it as well, or better, here to take notice of the express companies’ raiding into the postal revenues—raidings into the field of service which the law specifically reserved for the operation of the nation’s Postoffice Department.
Let me ask the reader to turn back a few pages and read again that Section 181 of the federal statutes. Let me ask him also to think a moment about the character of small parcels and packages the express companies carry. To help our memories a little, let us note a few items.
The express companies carry and deliver for the general public money remittance for any sum. For carrying sealed remittance of a hundred dollars or less—for the carriage and delivery of which the government has provided in its postal money order regulations—the express companies are criminals under that Section 181.
Had the express company “influence” not reached federal legislators, it is not only highly probable, but almost a certainty, that our postal service would today be both prepared and permitted to transmit and deliver sums of money to any amount and at rates lower than now charged by the express companies.
If a publisher has ten or a hundred thousand copies of a book to deliver to mail-order purchasers, some express company steps in and makes him an offer for delivery, a trifle lower than the 8-cent-a-pound rate charged by the Postoffice Department for the same service.
In such instance, the express company making such tender of delivery on any “post route” is a criminal, under the specific wording of that Section 181.
In previous pages of this volume the reader will find testimony of people and of firms that pay large carriage bills for second-class matter. Among this testimony are found statements (some of them under jurat), that the express companies carry periodicals in bulk of five to ten pounds and upward from New York to Chicago, and to other points equally distant from office of publication, at a rate materially below the cent-a-pound rate charged by the government for postal carriage.
In one instance, it is known that one express company has offered to contract to carry periodicals from New York to Chicago over a certain connecting railroad at a rate of one-half cent a pound.
What does that mean?
It means simply this:—The railroad handling such express business hauls express cars en train with the United States mail, and the railroad handling such express consignments of periodical mail matter makes the New York-Chicago haul at somewhere around one-fourth of a cent a pound. That is, it is somewhere around one-fourth cent a pound unless the carrying road takes more than half the express company’s contract charge.
“What more?”
The express company contracting such business and the railroad handling it are criminals under that Section 181 of the federal statutes.
In this connection I wish to say that under a strict—yes, under a just—construction of that Section 181, I am not sure but that the publishers party to such contracts are not also parties to the crime.
From the letter of that section, I confess an inability to see any other construction of it than that previously stated. The United States government, or at least its legislative department, in 1845, intended that all such matter—letters (sealed matter), “packets,” or packages and parcels, should be turned over to the Postoffice Department for transportation, handling and delivery.
Why has not the intent of that law been carried out?
Why are the express companies permitted, and for years been permitted, so brazenly to perpetrate criminal violations of that postal statute? Why and how does it chance that they (the express companies), can violate the law for years and go unscathed—go unchastized for plain, open, brazen violation of that Section 181 of the federal statutes? Yes, why?
There is but one answer; there can be but one answer.
Federal executives, federal legislators and federal judicial officials have connived with private individuals and interests to nullify or make abortive that Section 181.
Have you ever read any of Allan A. Benson’s writings? “No?” Then you have missed something you should never miss again, should opportunity perambulate around your way. Allan A. Benson says something when he writes—says it blunt, plain and hard—says it in language that guarantees its own truth—says it in an open, broad way in which no man, “even though a fool” or a joy-rider, can go astray. In both the February and the March, 1911, numbers of Pearson’s Magazine, Mr. Benson writes on the parcels post as a subject. I shall probably quote from him extendedly when I reach that division of our general subject in this volume. Mr. Benson knows his subject. And what is didactically of more importance, he makes the reader know he knows it.
Well, even with a fear that I may here reprint from him some paragraphs for which I may have a greater need later, I cannot refrain from quoting him in answer to those several “whys” I have just written, anent the violations of that Section 181 of the postal statutes.
Following his quotation of that section of the federal statutes, Mr. Benson says:
The purpose of this law was to give the United States government a monopoly of the mail-carrying privilege. The law was first enacted in 1845, and, although the statutes have been revised from time to time, it stands today in precisely the form herein given.
On the face of the law the express companies are law-breakers. But it is not enough to look at the face of a law. Everybody except the government is prohibited from carrying letters and packets—but what are “packets?” A letter is a letter; but what is a packet?
Foolish question? Yes, it ought to be—but it isn’t. The whole express business rests upon the answer to this question. When the law was enacted, there was no doubt about the meaning of the word packet, because there were no express companies to raise the question, and everybody knew that packet was a synonym, used more frequently then than now, for “parcel.” Express companies did not come along to raise the question until forty years ago.
Even the express companies, when they began business, had no doubt about the meaning of the word “packet.” This is proved by the fact that whenever they handled packets, they required shippers to affix postage stamps. But recognition of the government’s mail monopoly had a strong tendency to curtail express business, and there came a time when the express companies decided to evade the law, leave off the stamps and openly compete with the government.
See how ridiculous the express companies have since made your government. In 1883, a mail carrier who had stolen tea from a packet, made the defense at his trial that since a packet of tea was neither a letter nor a parcel, the law which prohibited tampering with sealed letters or parcels could not be invoked against him. United States Judge McCreary, who sat in the case, was not so minded. He told the jury to disregard the prisoner’s defense. In other words, a package was not only a parcel, but presumably a packet. The judge split no hairs about definitions. The mail carrier had stolen tea. That was enough. He was sent to prison.
See how another judge, years later, construed “packet.” Nathan B. Williams, of Fayetteville, Ark., brought suit in the United States Circuit Court to prevent express companies from carrying packets. When the last judge had had his guess about the conundrum, Mr. Williams was judicially informed that the government mail monopoly, so far as packets are concerned, extends only to “packets of letters.” In other words, a packet is a packet of letters; that and nothing more. Here are the judge’s words:
“While Congress has full constitutional powers to reserve to the postal department a monopoly of the business of receiving, transporting and delivering mails, and, in the exercise of such rights, may enact such laws, regulations and rules as will effectively preserve its monopoly, yet this monopoly is intended (see the Judge read the mind of the Congress of 1845), to extend only to letters, packets of letters, and the like mailable matter, and Congress has never attempted to extend this monopoly to the transportation of merchandise in parcels weighing less than four pounds, nor to prohibit express companies from making regular trips over established post routes, or from engaging in the business of carrying such parcels for hire.”
That is what the court says—and what the court says goes. Here is what the present Attorney General of the United States says—and what the Attorney General says does not go. The Receivers’ and Shippers’ Association of Cincinnati asked the Attorney General to join in Mr. Williams’ suit, which the Attorney General declined to do for this reason:
“The department has made a very complete study of the proposition and agrees with Mr. Williams upon the law, except as to the one point, namely, that there has been an administrative construction against the proposition for over forty years, and the chances are that a suit will be defeated on that ground.”
In other words while the Attorney General believes the express companies have been and are violating the law, the postoffice department, for forty years, has let them do it, and it seems useless to try to enforce the law.
Here, then, is the absurd situation with regard to packets into which the express companies have forced the United States government:
If a packet contains tea, and a mail carrier steals some of it, it is a packet without doubt, and the mail carrier is sent to prison.
If an express company carries a packet of tea, the packet is not a packet, because a packet is only a packet of letters.
But a mail carrier will find out rather quickly, whether a packet of tea weighing less than four pounds, is a packet or not, if he carry the packet for his own profit instead of turning over to the government the amount of the postage. Let the fact become known to the government, and he will be arrested as quickly as an officer can reach him.
Now: Is or is not this juggling with the law? If it is not juggling with the law, what, in your opinion, would be juggling with the law? If the foregoing decisions sound like good law to you, perhaps you ought to be upon the federal bench. You might shine as a judge. You don’t shine as a voter. You think, but you don’t act. You don’t put your thought behind your ballot. You let somebody else put his thought behind your ballot.
That is pretty plain talk—talk which should do us readers some good. It should, at least, enlighten us as to these facts.
First: The express companies have been criminally trenching upon and into the service of the Postoffice Department for forty years or more—have been raiding what were originally intended to be the legitimate and legally protected revenues of that department.
Second: Such raidings have been winked at by our federal legislators and condoned, and the raiders exonerated by juridic opinions which were so bald, bare, brazen and cheap that they would make a practiced confidence or get-rich-quick man blush.
I intended to write further here about this raid of the express companies on postal revenues, but have concluded to defer much of what I intended to say in handling this phase of our general subject to the closing division of this volume—the parcels post. One reason for doing so is that today it is not the express companies which command and direct the raidings that express business is making, and for some years has made, into what rightly and legally should be the field of postal revenue gathering. Twenty years ago, a trifle more or less, when John Wanamaker was Postmaster General, he stated to a committee or delegation calling on him, that there were four insuperable objections to the establishment of a parcels post at that time. He named the four objections. They were, if I remember rightly, “The Adams Express Company, the American Express Company, the Wells-Fargo Express Company and the United States Express Company.” It may be he named the Southern or some other express company instead of the United States Express Company. I cannot remember. At any rate he named four express companies as the “insuperable objections” to the establishment of a parcels post.
Well, he was right for the period in which he spoke. But twenty years is a long time in a swift, governmentally aided get-rich-quick age or country like ours. There are some dozen or more express companies now—a dozen or more on paper—quasi-express companies.
The railroad companies and railroad officials control the express companies and the express business of this country today.
A departmental report of the government showed, as stated in the Saturday Evening Post of May 27, 1911, “that the four principal express companies have thirty-seven directors, of whom thirty-two are residents of New York, two are residents of Chicago and three of San Francisco. These express directors are also directors in twenty-five of the leading railroad systems of the United States.”
So, today, if Mr. Wanamaker were inclined to do so, he would probably revise his statement of twenty or more years ago. He would probably say that the railroads of this country stood as the insuperable objection or obstruction to the establishment and operation of an efficient, cheap and serviceable parcels post—the failure or neglect to do which is running one of the greatest raids into postal revenues this or any other nation has ever known.
Mr. Albert W. Atwood in writing to this point under the general caption “The Great Express Companies,” in the American Magazine, February, 1911, issue, says:
Perhaps you have thought of all this before, but do you also know that the six largest express companies are among our greatest bankers? With them, in one year, the public has deposited $352,590,814 and their transactions in money orders, travelers’ checks, letters of credit and bills of exchange rival those of the most powerful banks. This business, unlike any other form of banking is under no governmental jurisdiction and goes untaxed. It is made possible only by using the machinery of the regular banks, although to these the express companies pay no revenue. In the money-order line, express companies compete with the postoffice and do about one-third as much business as the government. The American Express alone has handled nearly 17,000,000 money orders in one year. That the public has confidence in the safety of the express companies as banks admits of no doubt, and it has been credibly reported that in the panic of 1907 money was withdrawn from banks, which the people did not trust, and invested in express money orders.
Transportation in a multitude of forms and branch banking do not comprise the sum total of express activities. The surplus funds of these huge institutions have grown large enough to require constant investment, and the express companies form a close second to the savings banks and insurance companies as the most dependable, regular and important class of investors in railroad securities. Diversified as the functions of the express companies have become, success has more than kept pace with their extension into varied fields, and a keen, wideawake public interest in the express business is demanded, not alone by the public and necessary character of the business itself, but still more by the extraordinary return which the companies receive for service performed.
Six companies control more than 90% of the country’s express business, and of these the Adams is one of the oldest and most powerful. Organized more than fifty-six years ago, its capital stock had grown to $10,000,000 by 1866, in which year the members of the association, as the shareholders are called, received a stock dividend of $2,000,000. The $10,000,000 of stock itself did not represent shares issued for cash. According to the company’s own reports, no shares were ever issued for cash. The 100,000 shares were given to members of the association to represent each member’s pro rata ownership in the assets which had accumulated from earnings. As late as 1890, according to the census figures, the company had an actual investment in property employed in its business of but $1,128,195. Yet it had been paying 8% dividends for many years, or 80% on the actual value of the property in use. In 1898 it distributed $12,000,000 of its own bonds to stockholders, these bonds to be secured by the deposit in trust of the surplus funds not used in the express business. At this time the company reduced its dividend rate to 4%, but as 4% was also paid on the bonds, the stockholders did not suffer any loss of income. By 1904 the dividend rate had mounted to 10%, the bond interest remaining at 4%. In 1907, $24,000,000 additional bonds were given to the stockholders, likewise secured by another fat surplus, and like the first issue, paying 4% in interest. Dividends on the stock have since been maintained at 12% and there has grown up another surplus of nearly $25,000,000 which must soon be disbursed. Meanwhile the property actually employed for express purposes has grown to but something more than $6,000,000.
Moreover, there is another large fund slowly but surely accumulating in connection with the 1907 bond distribution. This 1907 gift to the shareholders was in the form of a bond issue secured by the deposit of stocks and bonds of other corporations formerly owned by the company itself. The deed of trust provides that if the income from these stocks and bonds is more than enough to pay interest of 4% a year on the $24,000,000 of Adams Express bonds, the surplus shall accrue and be distributed in 1947 among the holders of the Adams Express bonds. As a matter of fact there is a computed excess income derived in this way of $151,517.50 a year and by 1947 this will have mounted up to more than $6,000,000, not allowing for compound interest. Here is a 50% extra dividend being nourished along toward maturity. If there is any better example of being able to eat one’s cake and have it too, I have yet to hear of it.
At the outbreak of the civil war the Adams Express Company turned its routes in the Southern States, in which it had enjoyed a complete monopoly, over to the Adams-Southern Express Company, created by the Georgia courts for the purpose of assuming this business. The property of the association was to be represented by 5,000 shares, of which 558 were then issued. The Adams Express Company has held to the present day a dominant interest in this association, which it created to facilitate business during the war. After hostilities ceased, it resumed some of its Southern routes by agreement with the Adams-Southern Express Company, whose name had meanwhile been changed to the Southern Express Co. The two companies still work in common and use the same wagons and offices in many places.
But close as the Southern Express is to its parent company, it has a separate enough existence to justify a separate account of its money-making capabilities. Referring to the original 558 shares of stock, the secretary and treasurer of the Southern Express says: “None of the original twenty-four stockholders are living and there is no existing record to show how much was realized from the distribution.” This does not help us much, but in another report to the Interstate Commerce Commission the company appears to know what these records showed, for it says “none of its stock was ever issued for real property, equipment, acquisition of securities, or for any other purpose in the sense in which the issuance of stock is understood in connection with corporations.” But we do find that in 1866 the number of shares was increased to 30,000 and distributed to the owners as a stock dividend. Plainly, the civil war did not impoverish the express carriers. Then in 1886 enough more new stock was created to give the owners five shares in place of every three which they already held, so that there are now 50,000 shares.
Five hundred and fifty-eight shares of stock, the circumstances of whose issue are known to no one living, have sprouted into 50,000 shares by the mere process of paying stock dividends. Dividends of 8%, or $400,000 a year, are now paid upon the 50,000 shares, although the entire value of the company’s property, real estate, buildings, equipment, furniture, etc., was only $944,179 on June 30, 1909. Here are dividends of 8% on $5,000,000 stock, or more than 40% on the value of the property employed in the business. And this is not all. The Southern Express Company owns high-grade stocks and bonds valued at almost $4,000,000, which may some fine day form the basis of another melon.
If the Adams Express Company and its Southern associate were the only ones to shower their members with unheard-of profits we might be inclined to think they had been visited with peculiar and exceptional good fortune. Such is far from being the case. Let us proceed alphabetically and see how the members of the American Express Company have fared.
The Adams and American are easily the two most important of the express companies, and control, or have controlled at various times, all the other important companies with the exception of the Pacific. Since 1868 the capital of the American has stood at $18,000,000, this stock having been issued in exchange for the shares of the original American Express Company and the Merchants’ union Express Company, under articles of merger and association dated November 25, 1868. The company’s books show that $5,300,000 was the value of the assets taken over at that time. There was $183,819 in cash; $1,261,023 in securities; $2,200,300 in real estate, less a mortgage of $505,143; and $1,260,000 in equipment; making a total of $4,400,000. New stock was sold which realized $900,000 in cash, making a total of $5,300,000 in assets for the $18,000,000 of stock. No new stock has been issued since 1868 and no further cash has been paid into the treasury except from earnings.
From its own balance sheet we find the company now has less than $10,000,000 in real property and equipment, all of which does not represent property employed in the service, because the item “real property” includes real estate investments.
With an original investment in cash and property of but one-third the par value of its capital stock, the American Express Company now pays dividends on this stock of 12% a year and for many years paid 6, 8 and 10%. Moreover, it has accumulated from its earnings a fund of more than $20,000,000 which is invested in readily negotiable stocks and bonds, the yearly income on which amounted to $1,178,000 in 1909. Among these securities are such high-grade railroad stocks as Chicago and Northwestern, Northern Pacific, New Haven, New York Central and union Pacific.
Six years ago (1904-5), the substantial assets of the American Express Company had grown from $5,300,000, the amount fixed in the articles of association, to six times that amount. These assets, let me repeat, did not represent new capital put into the business, for none whatever was put in, but were accumulations of earnings over and above funds required to carry on the business and pay dividends of 8% upon $18,000,000 of stock. Even the association’s own shareholders failed to see the need of such a treasure and in 1906 a committee representing them addressed the officers of the company thus: “It is evident the management has faith in its ability to conserve the vast fund so accumulated beyond the needs of the business, without wasting the same or embarking it in new and dangerous ventures, and while we personally neither criticise them nor express any want of confidence in them, still it is our opinion, and that of many representative holders of long standing, experience and means, that this immense fund should not be further rapidly increased to become a source of temptation to the possible weakness or a snare to the possible inexperience of their successors.”
I would like to quote further from both Mr. Benson and Mr. Atwood. The former writes two articles which appeared in Pearson’s Magazine in February and March, 1911, clearly showing not only why we have no parcels post, but, to some extent, the raid which the express companies have made and are making on postal service revenues that rightfully and legally should accrue to the government. The latter, Mr. Atwood, speaks in three splendid articles in the American Magazine (February, March and April), under the caption, “The Great Express Monopoly.” Each of the gentlemen handles his subject masterfully. Each of them set forth facts which every American citizen should know and, knowing, should go after every public official who has ignorantly permitted or knowingly condoned, aided or cloaked the criminal raiding into the legitimate field of the postal service and revenues. Every one who can should get hold of and read the five articles referred to. I shall probably quote further from them in the closing division of this volume, but to appreciate them fully one should read them entire and connectedly.
Sufficient has here been said, however, to show any fair-minded reader that our express companies, or the railways which use the express companies merely as pinch-bars to pry into our postal revenues on the one hand and as cloaks for excessive rates to the general public for handling light or parcels freight on the other, are illegally taking millions of dollars annually for a service which should be, and which was originally intended to be, rendered by the Postoffice Department.
I say that the express companies, or the railroads over which they operate and which, today, virtually own and control them, are doing an illegal business—a business carried on in flat contravention and defiance of the plain letter of the federal statutes.
I say further: The contravention of law which makes this vast lootage—steal—possible has no other basis for its past and present raiding of the field of postal revenues than corrupted federal legislators and, either corrupted or loose screwed, juridic opinions which are permitted to stand in place of the plainly worded statute of 1845.
And there is a colossal irony in the brazen effrontery with which this raiding of the postal revenues by the express companies has been, and is, carried on.
On the one hand, we have public officials cackling about its costing the government 4 to 9 cents a pound to transport and handle second-class mail matter—rather, making voluble and voluminous guesses that it costs from 4 to 9 cents a pound—while on the other hand, the express companies enter into contracts with publishers to carry and deliver at line stations that same second-class matter at one-half cent a pound.
When it is remembered that the express companies must “split” with the transporting railroad to the extent of 40 to 63 per cent of their gross haulage and delivery charge, the talk of its costing the government 4 to 9 cents to do what the express companies do for a half-cent—in some cases possibly, for less even than that—passes, from the domain of irony and becomes disgusting twaddle.
The postal rate for carrying merchandise parcels not exceeding four pounds is 16 cents a pound. That rate is, as previously stated, outrageously high and the maximum weight of four pounds is almost as outrageously low. Both the postal weight and rate have been held for years at the figures named, it has been numerously asserted and is generally believed, by the “influence” of express company and railroad lobbying in Congress. The result is that by far the larger portion of light or parcels shipments go by express instead of by mail, as it was clearly intended in the law of 1845 they should go.
To get this business, the express companies cut under the government charge of 16 cents a pound, as they can both easily and profitably do.
Nor do they hold the shipper to a maximum of four pounds for any single package or parcel. In fact, they set up practically no maximum parcels weight, and they deliver at any postoffice or station along their lines of service. In fact, again, the express companies now have, it is asserted, a sort of compensating agreement by which the company collecting the business can have another company make deliveries, each company taking its prorated share of the profit on the carriage and handling of the parcel or consignment.
Such arrangement, it will readily be seen, enables the express company to accept package consignments for delivery at almost any point in the country, if on a railroad, or for delivery at some rail point near the addressed destination of the parcel.
Then, too, as Mr. Benson points out, the railroads and railroad officials and owners are also controlling owners of the express companies. Being so, they do not hesitate virtually to “club” the public into shipping its parcels freight by express. They do this by fixing a minimum weight in their freight tariffs. That minimum is 100 pounds. That is, it will cost the shipper as much to send a four or ten pound package to destination by fast freight as it would cost him to send 100 pounds.
The foregoing is sufficient to show the reader that the express companies are permitted to raid the legitimate business of the Postoffice Department—or what should be and, under the law, was intended to be the business of the Postoffice Department.
The express companies, or their railroad control—which amounts to the same thing—also forage the field of third-class matter which, by law, was made a preserve of the Postoffice Department.
The postal rate for third-class mail matter is eight cents per pound. That rate is, of course, away too high. With The Man on the Ladder the conviction remains, as it has been a conviction for twenty or more years, that the postal rate of eight cents per pound for third-class matter is three times what that rate should be—easily double the charge that should be made to cover the legitimate cost to the government for handling it, which cost is all that the department should seek or be permitted to collect.
Trusting that the reader will find excuse for me, I desire to repeat here what, in substance, I have written into an earlier page:
The postal service of the nation should not be made a revenue-producing service, any more than the War, Navy, Interior, Justice or other departments of the federal service should be made revenue-producers.
If the people pay—have paid and are willing to pay—the actual cost of an efficient, honestly administered and managed postal service, that is all they should be asked or expected to pay.
But returning to the express companies’ raidings into the postoffice revenues, let me here assert what every observant citizen of intelligence knows: The express companies are today carrying millions of pounds of books—leather, cloth and paper bound books—at a rate for carriage and delivery materially below the government’s excessive rate of eight cents a pound.
These same express companies are today carrying thousands of tons of catalogues, pamphlets, business, political and other circulars, color prints of apparel fabrics, etc., etc., which the Postoffice Department ought to handle—and, under the law, should handle, and, but for that extortionate rate of eight cents a pound would handle.
It has been repeatedly asserted by persons who are familiar with carriage and handling costs, both in the postal and private service, that the postal rate of 8 cents a pound for third-class mail matter has been maintained—and is maintained—by reason of corrupt and corrupting influences (the coat-pocket “dropped roll,” the “job” bribe, the “deposit slip,” etc., etc.), which express and railway interests have liberally exerted upon federal legislators and upon executive and judicial officeholders—exerted upon “public servants.”
However, that may be, the facts today are that the postal service rate of 8 cents a pound for third-class matter is so excessive—so conspicuously above the cost of the service rendered—that the express companies find no difficulty in under-cutting it—in many cases, more than cutting it in half—and still reap millions of profit from the handling of such matter.
If a publisher has an edition of five, ten or one hundred thousand of a book to be delivered in piece, or single copies, an express company representative will see him at once—often see him before the book is from the press. If the publisher is doing a large and general business in book publishing or the book trade, the express companies have already seen him, by representative, and a carriage and handling charge agreed upon, under which the contracting or agreeing express company will handle any or all the publisher’s books, both single copies and trade shipments, at a rate much below the government’s postage rate of eight cents a pound.
If a publisher brings out a book which weighs, when wrapped or jacketed for mailing, say one pound on which the mailing charge would be 8 cents, the express company tenders a rate of 7 cents. If the edition of the book is a large one the express company will tender a rate of 6 cents or even a rate as low as 5 cents or 4 cents.
In performing such service the express company is a violator of law—a brazen outlaw. Yet the government not only permits this outlawry, but, by maintaining that excessive rate of 8 cents a pound, the government virtually invites it.
What I have above said applies with equal or even greater force to the transportation and distribution of mercantile and other catalogues, and of descriptive pamphlets, etc. However, I think sufficient has been said to cover the point raised.
The government persists in charging a third-class rate which virtually drives thousands of tons of third-class matter to the express companies. The express companies handle this vast tonnage at a cost charge to the sender or shipper, ranging from 16? per cent to 50 per cent below the government’s mail rate.
The express companies roll up millions—many millions—of profits every year, while at the higher rate, the government officials (some of them), slash up the ambient with rapier verbiage about “deficits” and make extension-ladder guesses at what it “actually costs” the Postoffice Department to carry and handle a pound of third, or some other, class of mail matter.
Another raid upon the postal revenues—and the raid is by the oldest gang of looters in the game—or graft—is the railroads.
For lo, these many years, the railroads have carried the mails at a carriage charge of $21.37 a ton per annum per line mile of haul. That is $21.37 is allowed on “dense” traffic lines where the daily mail weight is above 5,000 pounds. On lines where the daily weight is 5,000 lbs., the rate is $171.00 per annum per line mile of haul. For mail weights less than 5,000 pounds the rate of pay varies, the ton-mile rate increasing from 21.37 cents for a weight above 5,000 pounds, to $1.17 per ton-mile for an average weight of 200 pounds.
Following are tabulations showing the scale of mail pay and also the postoffice car rental pay. I get them from the Wolcott Commission report made in 1901. The tables and accompanying paragraphs form part of the testimony of Mr. Marshall M. Kirkman, who at the time of the Wolcott Commission hearings was Second Vice-President of the Chicago and Northwestern Railway. The rates of pay may have been modified in some slight degree since 1901. If so, I have not learned of the fact. I am of the opinion that the figures given by Mr. Kirkman still govern as rates of mail pay and car rentals, and as Mr. Kirkman was speaking for the railroads the reader may depend upon it that the case of the railroads—especially of the Chicago and Northwestern, then a system of about 5,000 miles of trackage—was presented in as favorable a light as the governing facts would permit:
RATES BASED ON THE WEIGHT OF THE MAILS.
Average daily weight of mails over whole route. Present pay
per mile
per annum. Present rate
per ton
per mile. Present rate
per hundred
pounds per
mile.
Cents
200 pounds $42.75 $1.170 5.85
500 pounds 64.12 .700 3.50
1,000 pounds 85.50 .468 2.34
2,000 pounds 128.25 .351 1.75
4,000 pounds 156.46 .214 1.07
5,000 pounds 171.00 .187 .96
Each 2,000 pounds in excess of 5,000 pounds 21.37 .058 .29
The most striking feature of this table is the rapid decline in the rates paid with an increase of weight.
In addition to the above payments based upon weight there is an additional allowance when full-sized postoffice cars are provided, the Postoffice Department deciding when these are necessary. The rates of pay for these cars are as follows:
RATES ALLOWABLE FOR FULL-SIZED POSTOFFICE CARS.
Length of car. Rate per
mile of track
per annum. Rate per mile
run by cars.
Cents
40 feet $25.00 3.424
45 feet 27.50 3.786
50 feet 32.50 4.471
55 to 60 feet 40.00 5.498
The first column, which shows the rate paid per mile of track per annum, is likely to be misunderstood. The compensation seems very liberal, and it would be so in fact if it were as large as it appears to be. To gain $25 per mile per annum a 40-foot car must make a round trip over each mile of road per day. If it only makes one trip over the road each day, it will earn but $12.50 per mile per annum, as it would be but half of what is known as a line. The statute reads:
“That … pay may be allowed for every line comprising a daily trip each way of railway postoffice cars, at a rate not exceeding twenty-five dollars per mile per annum for cars forty feet in length.…”
Let us here take note what the foregoing tabulated figures mean—figures which Mr. Kirkman argued, if I read his testimony correctly, are too low. I have read the testimony of numerous other railroad representatives, testimony before the Loud Commission, 1898, the Wolcott Commission, 1901, the Penrose-Overstreet Commission, 1907, and before the Hughes Commission, whose report is not yet compiled for publication. Each and all of them, so far as I have read their testimony, argue eloquently that the present rates of railway mail-pay and car rentals are, if unfair at all, unfair to the railroads—that the rates of pay are too low.
In this connection a most peculiar, if not indeed a peculiarly suggestive, harmony of opinion appears to have existed between the special pleaders for the railroads in this matter of railway mail-pay and government officials—both executive and legislative—who have had most to do with fixing railway pay rates. The government has spent millions of dollars for investigations by commissions, by Senate and House committees, by inspectors, special agents, etc. Each commission has heard numerously from the railways. Twenty-seven of them were in hearing before the Wolcott Commission. The testimony of Mr. Kirkman, from whom I quote the preceding tabulations, while varying in phase, phrase and verbiage from the other railroad representatives, has two essential features common to them all, or, I should say, three features common to them all.
1. The railroad representatives unanimously oppose any reduction in the rates for railway mail pay (weights pay), and mail car rentals—“space charge,” they call it.
2. They are a unit in declaring that the present rates are too low, but they as unitedly express a willingness to continue business at the old rates rather than to contemplate the possibility of a reduction in them, or even squarely to argue the justice and fairness of such a reduction.
3. When forced down to “tacks”—down to specific facts—by some interrogating member of the commission before which they are testifying, these railroad representatives again have a marked similarity as to “form.” Each comes eloquently forward with his own set or sets of figures and proceeds to make his own application of them. But when some commissioner asks for information and enlightenment as to “net cost,” “relative cost,” etc., of mail carriage as compared with the cost of express, freight or passenger handling, the railroad representatives, almost to a man, at once begin to display a dense denseness that is marvelously wondrous or wonderously marvelous, as the reader may choose to word it.
The peculiar or suggestive harmony between the opinions of these railway representatives and the controlling executive and legislative officials of the Federal Government, is especially conspicuous under point 2 as numbered above. The railway people plead that the ruling rates are too low, but are willing to stand for them. However, they do not want the rates lowered.
The peculiar harmony of opinions just adverted to is ample evidence, or so it appears to The Man on the Ladder, of this one fact:
The present rates of pay for railway mail weight carriage are the rates fixed by the act of 1879. Freight, express and passenger rates or tariffs have been changed—have been lowered. The railways did not want the mail rates lowered and the governmental powers that be, and have been, were apparently at least, quite willing to take their view of the matter, even if they did not concur in the numerous half-baked, threadbare arguments advanced by the railroad people in support.
The rates of railway mail pay have remained the same for thirty-three years—until 1908.
Comment is unnecessary.
As evidence in support of points 1 and 3 as above numbered, points on which railroad representatives so uniformly agree in support of, or, with equal uniformity, display concurring lapses of memory or lack of knowledge relating to, I shall here quote further from Mr. Kirkman’s testimony before the Wolcott Commission. In electing to quote from Mr. Kirkman rather than from another to evidence points 1 and 3, I am influenced only by the fact that I have the report of the Wolcott Commission before me at the moment, and to the further fact that Mr. Kirkman’s testimony appears to me cogently illustrative of the points to which I have called the reader’s attention.
In closing his prepared or written testimony (page 208 of the report), Mr. Kirkman says:
In conclusion, it may be stated that the compensation afforded this railroad for carrying the mail is not now in excess of what it should be. It is not improper, therefore, for us to beg, if rates can not be increased, that no further reductions may be made; also, that the practice of fixing the compensation paid for mail service on the basis of the weight carried at the commencement of the four-year periods (instead of on the weights carried in the middle of the periods), may be abandoned in favor of a more equitable system.
From the above it will be seen that this witness states with confidence that the compensation his road (the Chicago and Northwestern) receives “is not now in excess of what it should be” and begs that, “if the rates cannot be increased, that no further reductions be made.”
I shall now reprint a few pages from the report of Mr. Kirkman’s oral testimony as illustrative of point 3:
By Mr. Catchings:
Q. What did you state were the gross receipts from your whole system for carrying the mails?—A. About $800,000.
Q. Now, can you state to this commission what your net profit was for carrying that amount over your system?—A. I do not know.
Q. Can you make any estimate?—A. No, sir.
Q. You heard the testimony of Mr. Simpson (representing the Flint and Pere Marquette Railroad), did you not?—A. Yes, sir.
Q. He stated that his road carried the mails at a dead loss. What that loss was he was unable to give us. I understand you to say that you do make a profit out of carrying the mails?—A. I beg your pardon. I said that, because we got approximately the same rate per ton per mile for carrying the mails as for express (and that the express rate had been a matter of careful negotiation as between our company and the express company); I have reason to believe that we would not have taken the express business unless we derived a profit from it, and therefore I think it is reasonable to suppose that we must derive a profit from the postoffice business.
Q. Do you mean to tell me that you have no estimate as to the cost of carrying this mail matter?—A. Not to my knowledge. We have taken what the Government gave us. As I have shown you, they have never pretended to remunerate us for many services rendered.
Q. If you are unable to say what your profit was for carrying this mail, how can you complain that you are not being properly compensated for the service rendered?—A. Because we render so many services today that we did not formerly when the rate was fixed.
Q. I understand; but, so far as we know from your testimony, you may be amply compensated for it.—A. We receive, as I said before, a certain rate from the express company for analogous service, and do not render them anything like the equivalent that we render the Postoffice Department, so that we must derive a great deal more profit from the express business than we do from the postoffice.
Q. Still, it would not follow that you were not deriving proper compensation for carrying the mail, would it?—A. It would not follow that we do not derive some compensation from it.
Q. Unless you are prepared to tell us what your profit is, or your loss, as the case may be, of course you can not expect us to know it, and, unless we know it, you can not expect us to sympathize with the complaint.—A. We are not making complaint about the compensation we receive, but the threat held over our heads that our compensation would be cut down. When they cut us down on the land-grant roads they did not make it a matter of negotiation at all; they just simply took off 20 per cent.
Q. Do you not think that the best way to prove this complaint would be to show that you are not receiving due compensation?—A. If I was keeping a boarding house and you came to me and I agreed to give you two meals a day, and you afterwards exacted four, because you are mightier than I in forcing it, would it be necessary for me to prove that I was giving you something that you were not entitled to under your contract?
Q. You ought to show us what your net profits are.—A. It is impossible.
By the Chairman:
Q. General Catchings calls your attention to this: In your direct examination I asked you if you had any suggestions to make to this commission in the matter of changes of law. You said you thought the law should be so changed as to increase your compensation to an adequate sum. Now, in answer to General Catchings, you say that it is remunerative; he asks you how much you make, and you can not tell; then he asks you why you recommend a change in the law if you will not tell the commission what you are now making by it, and if you can tell what your profits in carrying the mail are. That is what General Catchings is anxious to have you tell.
By Mr. Catchings:
Q. I would like very much to know if we are under-paying these roads; we would like to pay them.—A. You ask a question that there is nobody but Omniscience could answer, because there is no possible method by which you can determine accurately what the cost is of carrying traffic. The Government did pretend at one time to divide the expense of operating as between passenger and freight, but finally abandoned it. Now, if you can not determine the cost between passenger and freight, how can you determine it between mail and other kinds?
Q. There is one thing certain; if the roads can not determine it, the Government can not.—A. Is it not true that, in matters of this kind, no one would expect anything definite in the absence of definite information?
Q. I do not see why you can not figure as well the cost of carrying these mails as you can the cost of carrying the express packages. I do not see why it ought to be more difficult for you to determine that.—A. There is not any single thing that a railroad carries, from a first class passenger to a cord of stone, that it can tell accurately what the cost is. Tariffs are a matter of evolution.
Q. At least, your road is better off than the Flint and Pere Marquette, for they carry at a loss and you carry at a profit—A. I did not say we carry at a profit; but I say that is my judgment, sir.
Q. I believe something has been said about the extraordinary cost at which these railroads handle these postal cars. I would like to have you help me reach a conclusion from that. How many railway postal cars have you on your system?—A. I do not know how many we do have.
By the Chairman:
Q. Does your statement show?—A. No, sir; it does not.
By Mr. Catchings:
Q. How much do you receive from the government for the railway postal cars?—A. We receive certain compensation for cars over a given length.
Q. You stated, I believe, the gross revenue to you for these cars?—A. We have a great many that we do not receive any revenue from the government for their use.
Q. I want to know what your revenue is from the postal cars?—A. I can not tell you.
Q. You can furnish that amount?—A. Yes, sir.
Q. I wish you would furnish this commission a statement showing the gross revenue to your system of road derived from these postal cars; and then I wish you would furnish a statement showing what the cost to you is of maintaining those cars, keeping them in repair, what the estimated cost to you is of hauling them, and the number of cars?—A. I will give you all that you desire so far as I can.
By Mr. Loud:
Q. You stated, Mr Kirkman, that you were Vice-President of the Chicago and Northwestern?—A. Yes, sir.
Q. Are you General Manager?—A. No, sir.
Q. What is your particular business in connection with the railroad?—A. I have charge of the local finances and accounts of the company.
Q. You are not prepared to answer technically, then, questions that might be propounded to you, as has been developed in the examination by Mr. Catchings, about the cost of the operation of a car and the cost of the transportation of a ton of freight, passengers, etc?—A. I am as well prepared to answer the question as anyone. There is no one, as I said before, who knows what the cost is or can tell you definitely, simply for the reason that it is utterly impossible to fix the cost as between passengers and freight, for instance.
Q. What is the use of our investigation, then?—A. I am here before this commission; my time here, perhaps, represents ten dollars or ten cents. What am I going to charge it to? In this case perhaps to mail. In many expenses of railroads there are questions impossible to determine as to what expenditures should be charged to. You may make, as the General has, a comparison between the Flint and Pere Marquette, what he thinks is an approximate statement of cost; it may be more, and it may not. For instance, the Government of the United States requires that the mail shall be carried on fast trains—
Q You are going into quite an argument. You ought to be able to tell what it cost to haul the mail.—A. No, sir; I can not.
Q. You can not tell?—A. No, sir; nobody can tell.
Q. Could not your General Manager give us some information on that subject?
Mr. Chandler. He can tell how much their gross receipts are and what the gross expenditures are, and he can tell whether their whole business is done at a profit or not; but I do not understand that the railroads can subdivide their receipts and expenditures so as to tell whether any particular branch of it actually pays a profit or not. The previous witness undertook to do it, and I noticed, as he went on, that it was mere guesswork. Mr. Kirkman says he never has done it.
The Witness. I want to say, Mr. Loud, that this question of division of cost has been up before railroads and experts for forty years, and here is what the chief engineer of the Pennsylvania says in regard to it. He estimates that the cost, for instance, of maintenance of track and machinery increases with the square of the velocity.
By the Chairman:
Q. How much do you charge this maintenance of way?—A. What is the wear and tear of machinery and track from the passage of a particular train? No one can tell nor guess approximately. In an examination of this question I gave it, probably, the most exhaustive study that I have given any subject in my life, because so much depended on it—I searched all the records of Scotland and England and of the United States to determine, but unavailingly—
By Mr. Loud:
Q. Could you not put a train of five cars on and run it from Chicago to Council Bluffs and give approximately what that train would cost to operate and the approximate cost of wear and tear to your rails?—A. I can determine all those things that are apparent; that is, the cost—
Q. That is all we expect; what is reasonable.—A. But then there is the question of interest and the wear and tear of machinery and track.
Q. Let us discard the interest. You ought to be able to get at the cost of operation.—A. That train so run has to receive the constant attention of station men, of track men, the whole length. If you will give it a moment’s reflection you will see how utterly impossible it is to determine it accurately enough to state here to this commission.
Q. Approximately, it ought to be a perfectly easy matter. It seems to be to other railroad men.—A. I do not think there is any railroad man who has given it any more attention than I have and no railroad man understanding the subject will do more than guess at it.
Q. I will ask you a few questions. If you can answer them I wish you would. How many miles of land-grant railroad have you?—A. My impression is that we have about 600.
Q. Out of your total of 5,000 miles?—A. Yes, sir.
Q. What is the average charge on your road for freight per ton mile?—A. Last year ninety-nine one-hundredths of a cent per ton mile.
Q. You do not know how much it costs? That is correct, is it not? You do not know how much it costs?—A. That is correct.
Q. You do not know how much it costs to operate a 40 or 60 foot mail car?—A. No, sir; only approximately.
Q. Can you say, approximately, how much?—A. No, sir. It will afford me great pleasure to give you all this information that can be determined if you desire, but it is valueless in itself.
Q. Can you say approximately?—A. I can not. I would be very glad to furnish you all the figures, but such questions, like the cost of the velocity with which we send trains across the country, are unknown.
Q. Does it cost a dollar a mile as the outside?—A. I could not——
Q. Would it not?—A. I would not want to pay you the disrespect of saying a thing that I know nothing about.
The foregoing testimony appears on pages 213-216 of the Wolcott report. The italics are mine. When so well informed a railroad man as Mr. Kirkman answers questions—questions covering that which appears, to a layman at least, to be essential in successful railway management—as he is reported in the foregoing, what is to be thought of such testimony? With all due respect to Mr. Kirkman, it may be said that his apparently frank confession of ignorance as to several points made subject of inquiry by the commissioners in the part of his testimony quoted, many readers of it are left with more or less valid grounds for doubt—grounds for asking more or less offensive questions: “Was the witness telling the truth or equivocating—stalling for time?” If he told the truth—if his acknowledged ignorance was genuine—as to several essential factors in the successful management and financing of a railroad—then of what value are his—or any other railroad man’s—statistics and tabulations of cost, profits, losses, rates, tariffs, “cost of velocity,” etc., etc.?
Mr. Kirkman’s reputation for truth and veracity, I believe, is as high as that of any other railroad man’s in the country, yet on several basic factors in the problem which the Wolcott Commission was, presumably at least, trying to solve, he confessed an ignorance as profound as its members and the officials of the Postoffice Department acknowledge. If, as Mr. Kirkman virtually testifies, the information sought is beyond the ken of man, then why persist in spending thousands—yes millions—of money trying to run it down?
If these railroad men do not know the things which it is necessary to know to arrive at a solution of this railway mail carrying problem—to arrive at a just, equitable rate of pay for the service rendered—why waste more time on them?
That question brings us back to the rails again.
Why do not our postal officials and commissions reach out to Cornville and summon a few eighth-grade nubbins? Then turn over to them the wastefully collected and collated statistics, data and talk which the Postoffice Department has in cold storage and tell them to “go to it” at, say, $25 per week?
Yes, why not?
Skilled lawyers, reputed “experts,” men of “experience” and “students,” it would seem, have told all they know about this railway mail cost problem—told the truth or equivocated or lied about it, to the best of their ability and in full accord and harmony with their several “standards” of veracity. Still they have failed to uncover or to divulge the essential and governing factors in the problem—failed for thirty or forty years. Is it not about time, then, for sensible people, I would ask, to enter the plea of the Master and say, “Suffer little children to come unto me?”
Any average “shock” of eighth-grade nubbins from Cornville, or from other hamlets where the “little red school house” has been in fairly active operation, will “figger” the cost—the cost to the railroads—of mail haulage and handling, in not to exceed four weeks.
That is, such a bunch of eighth graders will arrive at a dependable solution of this forty-year-old problem in four weeks, if they are given the plain, bald facts upon which a correct solution depends, and not turned loose on a lot of befuddling, alleged data and accepted “testimony.”
As I must necessarily touch upon the raid of the railroads into postal revenues when I reach the closing division of this volume, I shall not comment further here on the testimony and special pleadings presented by railroad representatives to the several postal commissions that have sat and sat and then “reported.” The commissions probably—possibly, if not probably—reported the best they could on the evidence presented to them. Certain it is, their reports present much valuable—much informative—data of which neither Congress nor the Postoffice Department appears to have made any constructive or corrective use.
Before quitting this railway pay raid, however, it may be well to do a little figuring—basing our figures on Mr. Kirkman’s tabulations of rates, printed some pages back. The tables of rates are correct. They ought to be. If rate-tables could vote the youngest of the two was entitled to the suffrage many years since. But let us look into and over them in a little-red-school-house way.
The first mail rail-haul weight is 200 pounds. That weight of mail is carried on some cornfield railroad—“a feeder.” It is all bundled or sacked, if “free in country” or other second-class matter, sacked or pouched if first or third-class, and, also, if valuable fourth-class. Some of the fourth-class, if large in dimension of package, may, of course, be loose. But whatever their class, character, pouching, sacking, casing, or jacketing, that estimated weight (estimated once every four years), is received by the railroad and dumped into a corner of a “general utility” car. By that I mean a car used for carrying baggage and express matter, between stations—jars, buckets, boxes, bags, etc., of local “favors” or shipments; such as jam, fruits, eggs, butter, and even “line loafers” who are going to mother, uncle, or friend for a few days feed, or—sometimes—going to the local metropolis for a “good time.”
But let us, for the moment, stick to that quadrenially estimated 200 pounds of mail. At the several stations along the cornfield or “feeder” railroad the packages, sacks and pouches of mail are tossed off to the station agent. Coops of chickens, cases of eggs, tubs or jars of butter and crates of fruit or vegetables are taken on.
Have you, the reader, ever traveled on a “cornfield line?” Have you ever “got off to stretch your limbs” at some station between start or “change” to destination? Have you, while stretching those limbs of yours, ever noticed or taken note of the miscellaneous and promiscuous sort of goods—merchandise and human adipose tissue—that get into companionship, into carriage or housed connection, with that “estimated” 200 pounds of United States mail?
Well, if you have, no argument is necessary to convince you that the “railway mail pay” rate on that cornfield line is from two to five times the rate paid for any other weight (tonnage) carried.
Turn back and look at the table of railway mail-pay (weight). Look at the rate per 100 pound per mile haul—5.85 cents, or eleven and seven-tenths cents for carrying 200 pounds one mile.
Do you weigh 200 pounds? If not, our President and several other gentlemen in this country do, and you, the President, or the other gentlemen, will be carried—and for thirty or more years have been carried on any railroad east of the “Rockies”—for three cents a mile.
Now, you, the President, or other gentlemen, pay only two cents a mile for rail haulage on most all of the cornfield or “feeder” lines (and on “trunk” lines as well), east of the Rocky Mountains.
You see the joke of it? The postal revenue raid in it?
Two hundred pounds of United States mail is railroaded in a general—a catch-all or pick-up—car at a government charge of 11.7 cents per mile, while you, the President, or other gentlemen, pay but 3 cents! You, and the other fellows as well, have an upholstered seat, have watering and toilet facilities and accommodations, have smoking, “pitch,” “high-five,” “cinch,” “euchre” and, maybe, even “poker” as divertisements—with palatable “wets” on the side!
You, the President, and the other gentlemen, have all this sumptuous haulage for three (or two) cents a mile, while the 200 pounds (averaged every four years) of United States mail, handled as junk or dunnage, pays 11.7 cents a mile.
Does it not look—look to you—somewhat off at the corners somewhere? Does it not look as if that railway “system” feeder line was getting robustly large pay for the service rendered?
Well, if it does not so appear to you, it appears to me that you should, at your earliest convenience, consult some qualified and competent alienist, or drop into a “rest resort” for six months or more.
As to the other weights given in that tabulation—500, 1,000 and up to 5,000—nothing here needs be said. They are all below the “postoffice car” weights. At the weights, 5,000 pounds per day of mail-haul, the student of this rail-mail pay raid should sit up and begin to observe his nurse and the attending physician.
Before I further inflict the reader with personal comments, it might be of mutual advantage to quote a recognized authority on the weights actually carried in postal mail cars—weights of actual mail.
I take the following from the official report of the Penrose-Overstreet Commission, pages 30-31.
“It is stated in the report of Dr. Henry C. Adams to the former Commission (Vol. II, 233), that—
“The average loading of the postoffice car, according to the testimony before the Commission is 2 tons. It must be admitted, in view of the great weight of these cars, that such loading pays little regard to the requirements of economy. It is doubtful if, on the basis of such loading, the railways could afford to carry mail at a rate much cheaper than it is now carried. On the other hand, if cars were loaded with 3? tons, which Mr. Davis says is an easy load, or should the average load go as high as 6 tons, which, according to testimony, is accomplished on the Pennsylvania Railroad by a special train, I am confident that railways operate upon a margin of profit in carrying mail that warrants a reduction in pay.
“For the purpose of emphasizing the importance of loading as essential to the determination of railway mail compensation, as well as to suggest the line of desired improvement in the present railway mail service, it may be added that were it possible to load 5 tons in a car, the expense would be reduced to $1,766 per mile of line; that is to say, a sum less than one-half the amount actually paid.”
Dr. Adams in the foregoing was presenting a judgmental summary, or digest, of the testimony before the Wolcott Commission on this “railway-mail-pay” question. His opinion, or conclusion, as to the dominant factors involved, has been recognized as authority—if not final authority—on the points to which he spoke.
Now, let us figure a little more. I’m not much at “ciferin.” Maybe the reader can help me along. Let’s get properly started.
Those rail “postoffice cars,” of which Dr. Adams spoke, are from 40 to 55 feet or more in length. They must weigh, empty, or “stripped,” figuring running trucks, body, etc., forty to one-hundred or more thousand pounds. So, according to Dr. Adams, this twenty to fifty ton vehicle is sent hurtling over a hundred or a five-hundred mile run on a steel track with finest and most modern engine or motive power, baggage and express cars ahead, and sleepers, buffet, diner and observation cars trailing, to carry two tons of United States mail in each mail car in the train.
Oh yes, I know that Dr. Adams spoke some years ago (1901, I believe), and spoke of the “average load” of mail carried by mail cars then. I also know that our present Postmaster General has “gone after” this railway mail car raiding—has made them carry more load. All praise to him for doing so. It was an action which any of his predecessors had the power to have taken, and which should save millions of postal revenues.
The department report for 1910 (P157), states, there were 1,114 full and 3,208 apartment postal cars in service—rented cars—while there were 206 of the former and 559 of the latter (a total of 765), kept in “reserve.” That makes a total of 5,087 postal cars for which the government pays rent.
There is, however, another strong presumption—with some very robust facts which investigation has uncovered—that a considerable number of the so-called “reserve” cars are in the hospitals about railroad shops, where such patients receive little but “open air treatment.” In “emergencies” it is legitimate, of course, to presume that the division traffic manager may order out or put on the rails any of these hospital cars, “full” or “apartment,” as first aids to the injured. And it is right that he does so.
But why, in the name of George Washington, should all these hospital cars be charged up to the Postoffice Department? Yes, why?
Oh, yes, I know that they are all in “service” or “reserve”—all subject to department orders. But when one looks down from the ladder top into these shop-hospital yards for car patients, he not unfrequently sees, unless he is freakishly nearsighted or a victim of a new brand of strabismus, an old “flat-wheeler” which bears a marked resemblance to one that he used to, in days agone (long agone), pause, while husking the “down-row,” and gaze at in admiration as well as wonderment. Of course, it did not wear “flat wheels” then. It also carries some mars and scars of time, just as The Man on the Ladder carries marks which did not stand out so conspicuously then as now. But there, on its sides, appears, somewhat dimmed by age, that patriotic, stirring designation: U. S. Mail Car.
This is not intended as a criticism. It is merely a suggestion as to where the present or some future Second Assistant Postmaster General may find additional raiding into the postal revenues.
A few years since, Professor Parsons asserted, (so the public press declared—I have not the document by me and am writing hurriedly—the Professor will, therefore, excuse me if I mis-spell or misquote. Corrections will be made in later editions) that the railway mail pay and car rental raid amounted to something like $24,000,000 a year.
Speaking again from press reports, Mr. Hitchcock seems to have been going after those raiders. At any rate he appears to have stopped that graft sluiceway to the extent—reports vary—of from nine to fourteen millions of dollars a year.
Again, Mr. Hitchcock, we say, may your tribe increase—on this line of action.
Now let us return and do a little “red-school-house” figuring on this railroad pay raid. Some pages back, we reprinted Mr. Kirkman’s tables of weight and car rental pay to the railways. You can glance back and verify the figures when you deem necessary. Here “orders” force me to hurry. But in spite of orders a few generalizations in “cipherin,” have to be made.
Many pages back, the Postoffice Department’s own distribution of mail weights for 1907 (the last preceding “weighing period”), was printed. For ready reference, we will here reprint it.
Per Cent.
First-class matter 7.29
Second-class matter 36.38
Third-class matter 8.32
Fourth-class matter 2.73
Franked matter .21
Penalty matter 1.99
Equipment carried in connection therewith 38.12
Empty equipment dispatched 4.96
Total 100.00
A few pages back we figured out how a 200-pound mail weight haul stacks against, around and up-to a 200-pound human avoirdupois haul, assuming, of course, that the aforesaid avoirdupois is not casketed with the mail, express or baggage in front. Well, with that understanding, the reader may take my previous statements anent those 200 pounds of U. S. mail matter and human avoirdupois—whether citizen or imported—as made. He should also understand that what was then said fits, of course with a varying application, to the wheatfield, cornfield, oilfield, cottonfield, timber, tobacco and other “feeder” fields, which carry our mails at varying rates of pay for varying weights up to 5,000 pounds.
Now, at the weight of 5,000 pounds (2? tons), is about where the “postoffice car” enters, and it is to the mail-carriage-pay the railways get for this postoffice car service we wish here to “cipher” on a little. As a start, however, the “example” must be “set.” To do that a little preliminary figuring must be done.
The quadrennial weighing of the mails is now in progress. The last preceding weighing was in 1907. In the interim, however, Mr. Hitchcock, has made some special or test weighing—a good and commendable business movement—of second-class mail.
From these weighings the department, I take it, has arrived at estimated results more or less satisfactory—to itself at least. The 1910 report presents a tabulated tonnage of second-class matter on page 329. A prolix discussion of the cost of handling second-class mail appears on immediately associated pages. The discussion is a masterly, a forensic, production, and, outside of Indiana, the habitat of experts, it may stand out in fair form as a literary production. Our Third Assistant Postmaster General must, though, have got the wires crossed or the gear jammed on his comptometer to have reached those two “answers.”
Sixty-two and a fraction per cent of the total mail is second class.
To haul and handle a pound of second-class mail costs the government nine and a fraction cents.
SOME LITTLE RED SCHOOL HOUSE FIGURING.
Now, let us sit down on the veranda, bring out the little red school house slates and do some figuring on this railway pay problem, question, proposition, or whatever the “experts” may choose to call it.
First, there, on page 329 of the 1910 report, it states, “estimated” on the basis of those 1907 “special weighings,” that there were 873,412,077 pounds of second-class mail carried and handled.
Let’s see! Yes, of course, how simple it is. There’s that 1907 table of percentages, a page or so back.
As it was “figured out” in 1907 by the people who did the weighing, or who bossed it, we may consider it as dependable as the Third Assistant Postmaster General’s figures on page 329 of the department’s 1910 report.
The reader will please understand me. I do not mean to say that either the 1907 or 1910 reports are dependable.
I wish the reader to understand that I understand, or believe, them both to be merely guesses—guesses more or less mis-stitched in the knitting and more or less frazzled and threadbare by reason of long service.
But they are what we have to “figger” from.
Page 329 of the 1910 report says:
Total mailings (second-class), 873,412,077 pounds.
The 1907 tabulation of distributed mail weights (see table a few pages back) says that second-class mail, in carriage, is 36.39 per cent of the total mail weight.
Here’s where we put our slates into service.
We’ll first divide (look back at that 1907 table), 873,412,077 pounds by .3638—that being the percentage of second-class to the total of mail carried, as reported in the “special weighing” of 1907.
Well, .3638 into 873,412,077 gives us 2,400,802,850 pounds as the gross mail weight carriage in 1910.
That does not look near so large, nor so questionably peculiar, as does some other “answers” we are figuring out on our little red school-house slates.
Looking back to that 1907 tabulated estimate, we find that, of the total weight carried—and paid for as mail—.4308 of that total for which we patriotic, likewise confiding, kitchen-garden citizens pay is not mail at all.
A glance at that 1907 tabulation will show us that 43.08 per cent. of the total mail weight for which the government pays is for “equipment” and “empty equipment dispatched.”
Now let’s take our slates again and multiply that total weight 2,400,802,850 pounds by .4308. “Well, what’s your answer?”
One billion, thirty-four million, two hundred forty-five thousand, eight hundred and sixty-eight pounds!
Well, that’s some tonnage, is it not? Of course, as the reader will readily grab hold of, that tonnage is not, in itself, staged as a “feature” in this “ciphering.” This is a big country and its tonnages are big, whether of wheat, corn, pigs, fools, or mail. It is a “curtain” comparison we desire to have noticed and studied. Look at it, study it prayerfully, then put your thinker to work for about thirty seconds.
According to the Postoffice Department’s own figures and estimates, it appears that a total tonnage of 2,400,000,000 pounds (omitting the tail figures), were handled, and the cost of all paid for by this grand old government of ours.
Next, let us notice that 1,034,000,000 pounds (tail figures again omitted), was not mail at all—sacks, fixtures, etc., etc.
Now, look at it—the result.
Railroads were paid for carrying 2,400,000,000 pounds of mail.
Of that total weight 1,034,000,000 (nearly half) was “equipment” and “empty” equipment “dispatched.”
Beyond the showing of these figures, comment is scarcely necessary for anyone at all familiar with railway traffic methods and costs—whether the haulage is by slow or fast freight or by express—anyone will see the raid in it.
Look at that haulage of “equipment,” which the postoffice revenues pay for! Pay for as mail. Look it over, and over again and then sit up and do a little hard thinking.
Waters Pearse, of Pearseville, Texas, ships, say ten or twenty coops of chickens to Chicago. He may ship by express or by fast freight—the latter of course, if “Wat” and his friends have been able to make up a carload. “Wat” consigns his chickens to some Commission house in Kansas City, St. Louis, Chicago or elsewhere. Wherever our friend “Wat” of Pearceville, Texas, ships, or whether he ships by express or by fast freight, his empty coops will be returned to him without charge.
If Steve Gingham, in Southern Illinois—“Egypt”—has a hen range and his hens have been busy, Steve will have several cases of eggs to ship every week or ten days. Well, all Steve has to do is to take his cases of eggs over to the railroad station. Some express company will pick them up and take them to Chicago, to St. Louis, to Cincinnati, or other market. In a few days, about the time Steve gets the check for his eggs, he’ll find the cases on the station platform returned to him, without charge.
What we’ve said about our friends, Wat down in Texas, and Steve in “Egypt,” is equally true of any shipment of any sort of specially crated fruit or vegetables, of boxed, bucketed or canned fish, milk, etc., etc. The shipping cases, buckets, boxes or cans are returned to the shipper without charge. Yet here is this great government of ours paying the railways for nearly one ton of fixtures and equipment for every ton of mail (all classes), carried. Fixtures, equipment, etc., aggregated, in the weighing of 1907 (see tabulation a page or two back), 43.08 per cent of the total weight for which the government has paid mail-weight rates for four years—paid for hauling those racks, frames, sacks, etc., etc., back and forth over the rail-line haul every day of the four years.
Railroad people and their representatives have written voluminously, likewise fetchingly, to prove to an easily “bubbled” public that the government has been paying too little rather than too much for the rail carriage of its mails. I have read numerous such vestibuled productions. They were all good; top-branch verbiage and rhetoric, so smooth, noiseless and jarless in coupling that the uncritical reader’s sympathies are often aroused, and his conviction or belief enlisted by the sheer massive grandeur of the terminology used. Try almost any of these promotion railway mail-pay talkers and throw the belt on your own thought-mill while you read. Four times in five the ulterior-motive writer or speaker will have you rolling into the roundhouse or repair shop before you know you have even been coupled onto the train. When you emerge, if your thinker is still off its belt, you will find yourself about ready to “argue” that the railroads are very much underpaid, if, indeed, not grossly wronged by the government. I would like to quote some of the picture arguments from several of these railway studios but cannot. As illustrative of the general ensemble of these forensic art productions, I will, however, reproduce here a gem from one of them—a bit of verbal canvas so generic and homelike as to class as a bit of real genre.
The reader will find it in Pearson’s Magazine for June, 1911. Who personally perpetrated it, I know not, and the magazine sayeth not. The editor of Pearson’s, however, assures us that the article from which the following excerpt is made, was “prepared” by the authority and under the direction of the Committee on Railway Mail Pay, and as prominent members of said committee the editor gives the names of Julius Kruttschnitt, Director of Maintenance and Operation, union and Southern Pacific Systems; Ralph Peters, President and General Manager, Long Island Railroad; Charles A. Wickersham, President and General Manager, Western Railway of Alabama; W. W. Baldwin, Vice-President, C. B. & Q. Railroad; Frank Barr, Third Vice-President and General Manager of the Boston and Maine Railroad.
That is certainly a representative quintette of railway artists and generally recognized as qualified to produce—verbally—almost anything in railway art, from a freehand tariff to a “car shortage” done in oil while the crops ought to be moving. Am sorry I cannot quote more extendedly. The following, however, will give the reader a sample of the “style” and also of the “argument” common to most of the protective and promotive railway word pictures:
If, as has been reported, a certain railroad president ever did utter the famous phrase attributed to him, “the public be damned,” the public has more than gotten even. It does the damning itself nowadays instead, and so effective is its verdict that we are even confronted with the spectacle of the government itself bowing to the popular prejudice irrespective of the facts in the case. Undoubtedly we have become a nation of stone-throwers. To a certain extent this has worked for the public benefit. Every deserved stone has worked for the correction of admitted evils. But so rapidly has the public taken to the lately discovered pastime of stone-throwing that it not infrequently uses its strength like a giant, and that, we have been told, is tyrannous. Let a corporation raise its head nowadays and it is greeted by a shower of stones of which perhaps not ten per cent. are intelligently cast. The only thing to do in such a case is to “duck;” argument becomes futile in the heat of battle.…
That is sufficient to show the “style.” The article then proceeds to give some mail-service history and to cite a few points wherein by “arbitrary” rulings the government is grievously wronging the railroads in under-paying them for the carrying of the mails. The following is one of the strong points or arguments presented:
Furthermore, the railroads hold that an additional injustice was done in this connection in the adoption of the present methods of determining the weights. In addition to the several reductions from the act of 1873 above mentioned, and in spite of the fact that various government committees admitted their injustice, a singular order amounting practically to a juggling of weights in favor of the government was issued under the date of June 7, 1907.
Under the date of March 2, 1907, the following order was issued:
“When the weight of mail is taken on the railway routes, the whole number of days the mails are weighed shall be used as a divisor for obtaining the weight per day.”
But under date of June 7, 1907, a surprising order was issued reading as follows:
“When the weight of mail is taken on railway routes, the whole number of days included in the weighing period should be used as a divisor for obtaining the average weight per day.”
Certainly this is a startling change of methods on the part of a government which has been attempting to establish a high standard of integrity in the conduct of all business. Slight as the difference in the wording of the two orders may seem upon a casual reading, the actual effect is drastic. Under the order of March 2, 1907, the total amount of mail weighed to obtain the average daily weight was to be divided by the total number of days on which it was handled. Surely there could be no other fairer basis of determining the average weight. But under date of June 7, 1907, the system of weighing was changed, so that to determine the daily average weight of mail the total weight should be divided, not by the number of days on which it was weighed, but by the whole number of days included in the weighing period irrespective of whether mails were handled daily during the whole period or not. As a matter of fact in many cases they were not, and this arbitrary “change of divisor,” as it is called, further reduced the pay of the railroads for the transportation of mails by about 12 per cent in addition to the reductions above mentioned which congressional committees had previously characterized as unfair.
There, now. Is not that profoundly and beautifully conclusive? The strictures, hard and unjust regulations and arbitrary impositions of the government in the matter of railway mail weights is working great wrong to the roads; is, in fact, so cutting into their earnings as to jeopardize their solvency or to force them to raise freight and passenger rates in order to continue business.
Very sad, very sad, indeed! And how unjust it is for the Postmaster General so to cut down railway mail pay as possibly to cut down the dividends the railroads have been paying the “widows and orphans” who own stock in the roads—stocks and bonds aggregating two or three times their tangible value. Especially wrong was it for the Postmaster General to issue and enforce such drastic orders after “congressional committees” had declared any reduction of the weight-pay rate “unfair.”
I shall not impose on the reader any extended discussion or consideration of the quoted bubble talk. A few comments I will make—comments which it is hoped will peel off sufficient of the rhetorical coloring to let the reader see at least enough of the real subject (the points involved), as will enable him to make a robust and correct guess at the “ground-plan” of both the sub and the superstructure the railway talkers and speakers are trying to erect.
First: Every right-minded citizen should—and when he rightly understands the matter, I believe, will—give the Postmaster General unstinted praise and commendation for the issuance and enforcement of the two orders which the railway men quote and complain about.
Second: The rail people say the last order (see quotation), “reduced the pay of the railroads by about 12 per cent.”
Without questioning the veracity of the gentlemen under whose “authority” that statement is made, The Man on the Ladder, as a judgmental precaution, shall line up with the folks “from Missouri” until that 12 per cent is set forth in fuller relief—until he is shown. The reader will observe that the railroad authorities quoted merely say that the “arbitrary change of divisor further reduced the pay of the railroads.” Whether or not the pay received by the roads before that order was issued was too low, low enough or too high is not directly stated by the writer or writers. That it is designed to have the reader draw the conclusion that the rate was low enough or too low before that second order was issued is made evident by the reference to the expressed opinions of “congressional committees”—opinions to the effect that the “reductions” forced by the first order were “unfair.”
Third: The names of many men of both ability and of integrity have appeared upon the rosters of the Committees on Postoffices and Postroads of both the Senate and the House during the past forty years. In face of that fact stands forth in bold relief a fact so bare and bald—and so suggestive of wrongs done and doing by the rail people—as to remove it from the field of serious debate. That fact is: For forty or more years the railroad men and allied interests have by lobbies, or other persuasive means, got the Congressional Committees (Senate, House and joint), to do about what they wanted done in the matter of rail carriage and pay for handling the mails, or to prevent the committees from doing things they did not want done.
Fourth: That “change of divisor,” covered in the order of June 27, 1907, and which these railroad men accuse of causing a shrinkage of 12 per cent in the mail-weight pay the roads were receiving under the order of March 2, 1907, and prior, possibly was based on some valid reasons or grounds, or upon grounds the then Postmaster General believed to be valid. I have not before me, at the moment, any written data or information as to the reasons assigned by the postal authorities for that “change of divisor”, or whether they assigned any reasons for the order making the change. I know, however, of one very good reason there was for making such a change on several railroads or divisions of roads.
The weighing of the mails was formerly made during a period of 90 to 105 days, or fifteen weeks, once every four years. The law now permits the Postoffice Department to make special weighings, I believe. On the average daily mail weight for those 105 days the postal department based its contract with the roads for carrying the mails for four years.
Now notice this: The terms of such contracts not only implied but specifically required a daily carriage of the mail weight for the number of days designated, allowing, of course, for wrecks, washouts and other unavoidable interruptions in the movements of trains.
Keeping that in mind, suppose the Postmaster General discovered that on a good many mail runs—“lines” or “half-lines”—suppose that the chief of the department discovered a condition on many mail runs similar to that I personally know to have existed on a few, in years 1907 and prior. That was, briefly stated, this:
The contract called for a daily carriage of so much mail weight and the government paid for that per diem carriage, the days of unavoidable interferences and interruptions included. Suppose that the postoffice authorities discovered that, by reason of the diversion of the mails to other lines, the daily mail service was not rendered; or discovered, as in at least one instance I discovered, that the contracting road (or roads) gave little consideration to the daily service clause save during the weighing period, dropping the mail from train—skipping a day’s service—whenever it was to their interests to do so, and often assigning the most flimsy reasons for so doing or assigning no reasons at all?
That order of June 7, 1907, would have a tendency to stop that sort of disrespect and abuse of contract stipulations, would it not?
Fifth: The writer of the article from which we have quoted appears to have got himself somewhat twisted in his consideration of that order of March 2, 1907. It seems that (see first paragraph of quotation) he would have the reader class it among those several forced reductions which “various government committees” had called unjust. But, further along, it is stated that “surely there could be no other fairer basis of determining the average weight” than that furnished in that order of March 2.
I wonder why the railroad lobby so strenuously opposed that order of March, 1907—connived and schemed for its rescinding, until the order of June 7, 1907, gave the gang of corruptionists something still more objectionable to the interests they served? Yes, I wonder why they so hotly opposed that order of March 2? If there could be “no other fairer basis of determining the average weight” in June, 1911 (the publication date of the article from which we have quoted), why was it not fair in March, 1907? And why was it not a fair and just basis for arriving at the average daily mail weights for many weighing periods prior to 1907? Did anyone ever hear any railway man advocating the “fair basis” provided in that order of March? Most certainly The Man on the Ladder never heard of such advocacy. The railway people did not advocate such a “fair” method of ascertaining the average daily mail weight their roads carried during a period of fifteen weeks—or during any other period—because they were beneficiaries of some very unfair methods and practices which gave them pay for mail weights their roads did not carry.
As I refer later to some of the practices indulged in the weighing periods, I will here mention only a method used for years prior to the issuance of that order in March, 1907—a method of arriving at the “average daily weight” for the carriage of which the railroad was to be paid for a period of four years. That method was, though I have been unable to learn that it was ever officially authorized by the Postoffice Department, to find the daily average for each week covered in the weighing period and then arrive at the average for the whole period by dividing the sum of the weekly averages by the number of weeks in which the mail was weighed.
Nothing wrong with that is there? Should work out fair and square, should it not? Well, it did not. The method was all right in theory and in letter, but a crooked practice was worked into its application—worked into it by collusion between crooked railway and public officials. And the crookedness of the practice was very plain and bold and bald. It was what in street parlance would be called “raw.” Here it is in figures:
Take a “heavy” mail line. Say the total mail weight for a week was, using a round figure, 840,000 pounds or 420 tons. Now dividing that total by 7, the number of days in a week and the number of days also on which the mail was weighed, would give a daily average of 120,000 pounds, or 60 tons. That is all clear and straight, is it not? Most certainly it is.
But the crooked application of the method divided the week’s total by 6 instead of by 7—divided the total of seven days’ weights by six. The railway people, you see, were great respecters of the Sabbath. They would run trains on Sunday to accommodate the public and to meet the necessities of their business, which was, and is, perfectly proper. They would also carry the mails for your Uncle Sam, which was also right and proper. But their lofty respect for the Holy Sabbath, or the high esteem in which they held our much loved and much abused Uncle, was such as induced them to hold up said Uncle as a respecter of the Sabbath, or seventh day, while they “held him up” in averaging his mail weights.
In the illustrative example we have put on the slate, the “hold up” would amount to—let’s see: 840,000 pounds, or 420 tons, divided by 6 gives us 70 tons as the daily average for the week, instead of 60 tons, as the actual average was. That is a “hold up” for pay for ten tons a day—for 10 tons not carried.
“What did the hold-up amount to in cash?”
Yes, it might be well to follow our hypothetical or illustrative example to its cash terminal. Well, that is easily and quickly done.
The rate of pay per ton mile per year on daily weights above 2? tons is $21.37. That ten tons added to the daily average would give to the railroads, then, just $213.70 in unearned cash each day.
If the contract stood for full four years on such false average, the railroad would pull down just 1,460 times $213.70 of unearned money or a total of $312,002 in the four years.
I would, of course, not have the reader understand that our hypothetical example would fit all railroads. Many, in fact most, of the mail-carrying roads average in mail weight much below sixty tons per day—even below ten tons per day. Some roads were and are paid for an average above sixty tons. Nor would I have the reader understand that the crooked practice just mentioned was common to all mail-carrying roads. There were possibly—yes, probably, some exceptions—some roads that carried so little mail as not to make a steal of a sixth of its weight-pay worth while.
I would, however, have the reader understand that I mean to assert that most of the mail-carrying roads were parties to the crooked method here described and that the hypothetical figures here given applied, proportionally, to any average per diem weight of mail covered in the carriage contract, whether it was one ton or a hundred tons.
I would also have the reader understand me to assert that, so far as information has reached me, no railroad man, or man representing the rail mail-carrying interests, ever questioned the “fairness” of the crooked practice just described—a practice which looted the government of millions of dollars.
As a raider into postal revenues, this thieving practice, it must be admitted, deserves conspicuous mention—more extended notice than I have given it.
FOOTNOTES
5,000 to 48,000 pounds, $20.30 per ton. Above 48,000 pounds, $19.24 per ton.
Land grant roads receive but 80 per cent of these rates.
This is the rate received for carrying each ton handled 1 mile, and is obtained by dividing the yearly compensation by 365 and then dividing the daily compensation thus obtained by the number of tons carried 1 mile each day.
This rate was obtained in the same manner as the ton-mile rate.
By full-sized cars is meant cars 40 feet or more in length and wholly devoted to mail.
Car and mile-run rates corrected for 1908 and since.
Tables corrected for 1908.
The rate 1907 and prior. Now the rate is $20.30 for tonnages between 2? and 24 tons and $19.24 for each ton above 24 tons.
One other raid into the postal revenues I must notice before passing to a consideration of the parcels post question, in which consideration of other raids and raiders will be mentioned.
Here I desire to refer to that band of raiders—thousands in number—who are carried on the payrolls of the Postoffice Department—carried at salaries ranging into the thousands in many cases—and who do little or nothing of service value for the money paid them.
The Postoffice Department is a large institution and does a big business—a huge business which has much detail and extends over a vast territory. To handle such a business properly, necessarily requires the service of a large force of operatives. Most of the work of the department is of that sort which human brain and muscle alone can do. The machine can touch but a few of the minor details of the vast amount of work our Postoffice Department handles. It may cancel stamps, perforate documents, etc., but it cannot collect, sort, distribute, carry and deliver mail. It requires human muscle and brains to do such work. Much of it requires skill—the trained eye and hand as well as academic knowledge.
Well, the Postoffice Department employs a large force—a vast army of men, and some women, I believe. Counting the employes in its legal, purchasing and inspection divisions with the postmasters, assistant postmasters, railway and office clerks, city and rural carriers, messengers, etc., there must be somewhere around 330,000 people employed in our federal postal service.
Whether that is too large or too small a force for the proper handling of our postal service is beyond my purpose here to discuss. That the business now handled by the department could be far better handled by 330,000 employes than it now is, and that such a service force could, if properly directed and disciplined, handle a business much larger than that now transacted by the department, I do not hesitate to assert. I base that assertion chiefly on the following observed conditions:
First: There are frills and innovations in handling the business which take up the time of employes and which have little or no service value.
Second: There is, not too much “politics,” as Mr. Hitchcock and his immediate predecessors have modestly but wrongfully called it, but too much political partisanship—dirty, grafting, thieving, partisanship—not only in the appointment of people to the service, but also in making partisan, often grafting, crooked use of them after appointment.
Third: There are too many non-producers—non-service producers—among that army of 330,000.
It is the last, or third, condition named that I shall here briefly consider, or such observed phases of it as, in my judgment, so trench into the postal revenues as not only amounts to a raid in itself, but which also encourages others to graft and loot.
First, I desire to say that there are many thousands in that postal service, many who are honest, faithful and competent workers. There are about seventy thousand (69,712 according to the department’s report for 1910) carriers, city and rural, most of whom work industriously and efficiently and who are underpaid for the service they render.
There are about 50,000 clerks employed. Of these, the 1909-10 report says, 16,795 are railway clerks. Quoting the same report, there were 33,047 postoffice clerks in the service. All or nearly all of these are employed in the “Presidential” postoffice—offices of the first, second and third classes. Of the total number of clerks, 31,825, are employed in offices of the first and second classes. There were 424 offices of the first class and 1,828 of the second. That placed the service of 31,825 clerks in 2,252 offices. The report (1909-10), from which these figures are taken states 5,373 as the number of third-class offices. The remainder of the reported number of clerks (1,222) are, it is presumed, distributed among those 5,373 third-class offices. At any rate, in the statement of expenditures for the fiscal year ended June 30, 1910, the Second Assistant Postmaster General, Mr. Stewart, presents the following showing of expenditures as compensation to clerks:
Clerks in first and second-class postoffices (31,825) $31,583,587.37
Clerks in third-class postoffices, lower grade 540,891.31
Clerks in third-class postoffices, upper grade 663,632.20
The lower grade of third-class postoffices comprise those which yield the postmasters an annual income ranging from $1,000 to $1,500 and the higher grades are those with a compensation of $1,600 to $1,900 to the postmasters. In this connection, it should be noted that for the fiscal year there was paid, in addition to the amounts above named, the sum of $325,953.44 for what are called “temporary” and “substitute” clerks.
Adding these various sums gives a total of $33,114,064.32 paid for clerk hire for clerks in first, second and third-class offices—in the “Presidential postoffice,” or offices to which the President has, by law or otherwise, been granted or permitted the right to appoint the postmasters.
As previously stated, there is a total of 7,625 Presidential postoffices on the payrolls of which are carried the names of 33,047 clerks. In addition to these are 16,795 railway postal clerks. Beyond saying that the appointment and advancement of these last-mentioned clerks have been in the past—and yet are—largely influenced by assistant postmaster generals, superintendents and other chiefs of division in the Washington or department office and by Senators, Congressmen and postmasters in offices of the first and second-classes, I shall not consider them further here, nor do I include them in the adverse criticisms I shall make of the clerical force and service of the department.
It should, however, be noted in this connection that in addition to the 31,825 clerks employed in the 2,252 offices of the first and second classes, there are 2,237 assistant postmasters. These were paid $2,536,997.24 for the year ended June 30th, 1910. There were in offices of the first and second-classes 2,252 postmasters. To these was paid the sum of $5,814,300. That makes the service personnel of the first and second class offices, not counting carriers, messengers, etc., 36,314, and gives a total of annual expenditures for this service amounting to $40,465,361.56.
The reader will please keep in mind the fact that the foregoing figures apply only to postoffices of the first and second-classes. There may be a few clerks and also assistant postmasters in offices of the third-class. If so, there are so few of them that the department did not deem it worth while to account for them in that position in any of its fiscal statements, so far as I have been able to find. I would ask the reader also to bear in mind that while the following strictures are intended to apply to all three classes of Presidential postoffices, their application is less general and less forceful in offices of the second than in offices of the first class, and less in offices of the third-class than in either of the two higher class offices.
There has been much talk by Postmaster Generals in recent years about efforts made and making to get the employes of the Postoffice Department into the classified service—getting them under civil service protection. Not only has this been made subject of urgent advocacy in almost every annual department report of recent years, but Postmaster Generals have made prolix and voluble reference to and favorable comment upon the progress that has been made in “taking the department out of politics.” Mr. Hitchcock in the 1909-10 report commends highly the progress made in that direction. See pages 13, 14, 24, 85, 86 and others of the report. The party stump and banquet oratory of the past twelve or more years has sparkled—fairly scintillated it might be said—with rhetorical coruscations about what “the administration has done” to remove the federal service from the “baleful clutch and influence of politics.”
Now do not misunderstand me. I am not saying this because the Republicans have been in control of things. Had Democrats been at the helm of the national craft, they would have done the same. The Democratic politicians might have done more or less than the Republicans have done to get the civil service of the government away from corrupt and corrupting partisan influences. The Republicans have done only what they have been compelled to do—compelled by general public demand. So the Democrats would have done, had they been in power. Politicians do not want a civil service free from party control. The “jobs” have been and are a source both of spoils and of continued power to the so-called “practical” politician of either party—of any political party. That is why the party leaders—“bosses”—fight so persistently and craftily to retain control of the civil jobs. That is why almost every civil service law or “executive order” for placing civil employes under a merit or efficiency classification carries a “joker” somewhere about its clothes. That is true of most all such laws and orders so far enacted or issued, whatever be their field of application—city, county, state or nation.
So I desire the reader to understand that there is no political or party animus in what I may say in adverse criticism of the jokes and jokers which so conspicuously decorate the Republican display of effort to place federal postal employes under classified civil service and which, it is said, “has taken them out of politics and will keep them out.” The Man on the Ladder believes in civil service, but he does not believe in either legislative or executive “jokers” which, under the guise and pretense of establishing a protected merit classification of public servants, makes stealthy crooks and turns to keep their own partisans on the jobs, regardless of either their ability, merit or fitness.
Now let us return to our subject—to the points which make much if not most of the alleged “progress” in the postal department toward the institution of a merit classification of its office employes but little more than a move on lines to keep administration partisans on postal service jobs, and which makes this much-talked of progress toward efficiency conserve party more than service interests.
But some readers may urge that this is mere assertion. Well, let me present a few facts and conditions which support the assertions, or which, to me, seem to make the statements assertions of fact.
Mr. Hitchcock rightly asserts (page 13 of 1909-10 report) “that the highest degree of effectiveness in the conduct of this tremendous business establishment cannot be attained while the thousands of postmasters, on whose faithfulness so much depends, continue to be political appointees. The entire postal service should be taken out of politics.”
Well and good. Following the foregoing, he mentions the fact that all assistant postmasters have been placed in the classified service by order of the President. Mr. Hitchcock, “as a still more important reform,” recommends that “Presidential postmasters of all grades, from the first class to the third, should be placed in the classified service.” He also speaks of efforts made and making to place the fourth-class postmasters under its laws and regulations. He points out some valid difficulties to be surmounted if such desired result is attained without impairment rather than betterment of the service. The First Assistant Postmaster General, C. P. Granfield, states in his report, that, under an executive order dated November 30, 1908, all fourth-class postmasters in fourteen states have been put into the classified service. He also explains briefly the method of procedure in filling vacancies—when they occur.
That is probably sufficient preliminary. Now for a few of the observed and observable conditions which govern in civil service as thus far applied in the Postoffice Department. Taking the fourth-class postmasters first, it may be said the method of appointing such postmasters by civil service examination scarcely rises to a dignity entitling it to serious consideration. While the method itself reads well, its application, in many instances, is but a joke—a tame joke at that. Postmaster General Hitchcock substantially admits, as previously stated, that conditions are met with which make its application extremely difficult if not quite impossible.
Certain it is that, so far as applied, the results have given a vast majority, if not all, of the certifications to persons of administration party affiliation.
Then, too, it might be asked by a person addicted to the habit of doing his own thinking—a habit very obnoxious to party “leaders” and to politicians of the so-called “practical” breed—it might be asked by any capable, independent thinker, if it was mere chance that selected twelve administration and two “doubtful”—chronically doubtful—states in which first to make application of a civil service method to the selection and appointment of fourth-class postmasters?
While there are, according to the last published department report, about 52,000 fourth-class postmasters in the country, a great majority of them are persons of little or no local political influence. Beyond their own votes, then, they are of little service to the administration party, save as distributing or disbursing agents of the party in power for its campaign literature and other promotion matter. They are used also to keep the county and state “bosses” of the party advised of local political conditions as they view them—flurries in the party atmosphere, as indicated by hitching-post and whittling discussions of party legislation and proposed legislation or of party policies, as set forth by the published utterances of state and national “leaders.”
In such and other minor ways, then, the fourth-class postmaster may be a helpful instrument in the retention of power by the political party in power—the party from which he has received appointment. So it is good “practical” politics to keep such a party agent on the job. To that end, then, the party in power—the administration—places the fourth-class postmaster in the classified civil service, thus making his removal more difficult, if not impossible, in case an opposing party should win out at the polls and take charge of the government.
The foregoing is said, of course, on the presupposition that every reader knows that a vast majority of the postmasters and other personnel of the postal service today is of the political party in power. In saying that the party from which these postmasters and other postal service employes received their appointments has been and is using a civil service classification largely, if not wholly, for partisan ends. I say only—in fact have already said—that the Democratic party or any other party would, if in national control, make similar use of the civil classification. And such partisan manipulation of a merit service classification will continue so long as we fool people will stand for or permit it.
The chief “jokers” woven into most all civil service laws and executive orders are these:
First: The law or “order” directing the application of a classification of a service into certain grades, places those holding positions at the time of the enforcement of such law or order, into the various grades without any examination as to their merit or efficiency.
Second: Such laws and orders almost universally provide a promotion or advancement credit for “experience,” and the only factor or element recognized in the make-up of experience is time. The number of years an employe has been on his job or in the service is his “experience.”
Third: Such civil service laws or orders always provide for examinations—usually an “entrance” and “promotional”—and for “examiners.” Seldom is anything said as to the qualifications of the persons selected as examiners. Their selection is invariably left to a “Civil Service Commission,” and the membership of such commission is as invariably left to partisan appointment. There is usually a pretense of making such commissions “non-partisan,” that is, one of three or two of five of the appointed commissioners are to be of the minority party. Nevertheless, they are all appointed by the majority party—the party in power.
All three of these “jokers” are in the government civil service laws and the extension of those laws to the various divisions of the federal civil service is left largely or wholly subject to the orders of the President. I object to a classified merit service under such statutory “jokers.” They provide a service more partisan than efficient. They permit a payroll raid upon the revenues from which employes are paid. They retain incompetent, inefficient persons in graded positions for partisan purposes—often “grafting” purposes—rather than for service reasons. They leave the promotion or advancement of honest, industrious and competent employes largely, if not wholly, subject to the will, wish and whim of a partisan appointed or elected superior or to a partisan civil service commission. They provide for advancement on an “experience”—a time service—which may not, and which in many cases does not, constitute an experience of any value whatsoever to the service.
I have said that the office personnel of the government’s postal service embraces a large number—thousands—of raiders on the postal revenues. I repeat that assertion here.
Most of these raiders occupy the higher salaried positions—postmasters of the “Presidential” classes, assistant postmasters, chief clerks and others who secured their positions through partisan “pull” or “drag.” These do little work of service value for the salaries paid them. Many of them are so occupied with affairs of their party that they have little time for service work even if they were inclined to do it. Most of them are not so inclined. Many of these raiders know of—some of them have been parties to—railway mail-weight, contract and other raids upon the department they are supposed to serve.
But this is only generalization, some one may say. In answer I say kick off your blanket of apathy. Go do a little investigating and then do a little—just a little—hard thinking. See what you shall see in even such a modest effort to put two and two together. Visit a “Presidential” postoffice in your county, preferably the one at the county seat or the one at the capital or at the metropolis of your state. These cities are the storm centers of partisan activity, likewise of partisan manipulations, bubble and crookedness. If you know the postmaster, so much the better. If you are of the same party affiliation as the postmaster, still better. If you are not, do not let that deter you. You visit him to see things for yourself, and an investigator is not only warranted but fully justified in appearing to be what he is not. Fix upon some subject of inquiry before you reach the “presence” on that particular “Presidential” P. O. throne. Then, with ears spread and eyes shrewdly as well as interestedly open, go to it.
The postmaster will be glad to see you if he knows you. If he does not know you, he will be assumedly glad to see you anyway, after he learns where you are from and that you have an ingrown habit of voting the ticket of his party. He may even warm up to the extent of tendering a box of his favorite brand with an invitation to smoke up. Then he will probably want to know “how things look up your way.” It does not make much difference how or what you answer, so long as it is favorable to “the party.” He is handing you a case-hardened jolly. You must be gentleman enough to return the courtesy. “I know you are a very busy man, Mr. Jones, and I must not take up your time. I want a little information and decided I would come to the right place to get it,” etc., or something along such lines will do.
Then ask your question or questions. Preferably let them be about some detail or details in the handling of “the large business” of his office. Now you will begin to see things.
The postmaster will press a buzzer button. In response a well groomed gentleman appears whom, by introduction, you learn is his assistant. “Fred,” says the postmaster, “Mr. Smith here desires some information. He is from Brainville and—well, he is a friend of ours. Now, Mr. Smith,” with a real “glad-hand” shake, “you go with Fred. He’ll dig up any information you want, and, now, don’t forget to call on me the next time you are in town.”
Then you go off with Fred. He sluices a lot of kiln-dried small talk at you and rounds out with “How are things up at Brainville, Mr. Smith?” Of course you assure him that things “look good” to you, or that, in your opinion “there will be nothing to it but counting our majority.” By this time Fred has steered you to the chief clerk. To the latter he says, “Here, Baker, shake hands with Mr. Smith. Mr. Smith lives up at Brainville and is one of our friends. He wants some information. You see that he gets it will you?”
Fred, then, with another ingratiating hand shake, leaves you in Mr. Baker’s care. To him you state the points on which you wish enlightenment. “Oh, I see,” says Mr. Baker. “You just come with me and I’ll have you fixed out.” Then, if it be a postoffice of fairly large business, he will take you over to some chief or foreman of division, tells him what you desire to know and instructs him to inform you. The division boss next takes you in tow and with much pleased and pleasing talk steers you down the line to some $900 or $1,200 a year clerk to whom he turns you over. This shirt-sleeved clerk knows the answer or answers and gives you the desired information in about three minutes.
Incidentally in your round of the postoffice, you have asked some conventional questions and have learned, among other things, that the assistant postmaster, chief clerk, division chief and other top-notchers in the service are all men of “experience”—have each been in the service five to ten years and “know the business from garret to basement.”
Once outside or on your way home, some questions will begin swimming a marathon in your think-tank. Such as these for instance:
“Did those top-notchers really know the business of their office?”
“If they did know, why did they troll you around for an hour to get information which a shirt-sleeved worker gave you in three minutes?”
“If they did not know, then what have they been doing during their five or ten years of service?”
“If they know so much, how many years would it take “Boob” Sikes of Boobtown to learn as little as they appeared to know?”
By the time the questions begin to take on this sort of “How old is Ann” character, you will have reached the conclusion that you have discovered something and have seen things to prove it.
Just here it may be pertinently asked, why those top-notchers in that postoffice should be blanketed by the stipulations of a civil service law which gives them merit credits and grades for the years they have been in the service? If you and I have been loafing on a job for five, ten or more years—been foozling with the duties of that job while heeling and fanning for a political party—why should the law credit those years to us as service “experience?”
In placing any service or a division of any service under a merit classification, the law should require that every position in such service be filled by examination, and such examination should be open alike to the shirt-sleeved employe already holding a position in such service and to outsiders. Such a requirement would show what of service value there really was as a result of the years an employe had been in the service.
Do you ever go to Washington, D. C.? If so, the next time you go, take in one or more of the main divisions of the Postoffice Department. Some guide or clerk will probably be detailed to steer you through. Your pilot will talk considerable and his talk will listen well. You need not, however, hear all nor even much of what he says. As advised in your visit to the Presidential postoffice, keep both your ears and your eyes open to hear and see what the service employes say and do.
You will observe that a considerable number of the clerical force are doing something—are really trying to work. You will also discover before going far that a number of employes are industriously engaged in talking. The smiles and quiet laughter which embellish their conversation may lead you to believe that they are talking about some of the humorous incidents and features of the postal service. Do not, however, be hasty in arriving at such conclusion. If you get near enough to hear an occasional word, you may discover that their conversation is evidently about something which a humoresque writer has described as “the recently distant elsewhere,” and not about the department service at all. It may be about some feature or phase of Washington’s social flux or about some social function which is to stake a temporary claim in the circle in which the talkers circulate. In short, you will discover that the conversation is but commercially pasteurized small-talk and not business.
Moving on, you will observe other little groups in animated conversation. A glance at the an?mic appearance of some of the talkers will lead you to the immediate and sound conclusion that the subject of conversation cannot be weighty. Politics, even party politics, either practical or progressive, you will readily see would be some sizes too large for them. Getting within hearing range, you will learn that these industrious servants of the people are discussing the telling points in some prize fight “pulled off” the night before or of the ball game which some one or more of the coterie had seen the day before. Maybe some one of the group is turning loose his stem-winding, automatic bloviate ejector in telling his interested auditors about what a “ripping time” he had with Rose at some dance or other party last night. What you hear will be sufficient to convince you that these “classified civil service employes” must put in considerable time in mental and physical exertion to work out of their systems the lessons they were taught at mother’s knee, and much more of their time trying to keep several laps behind their jobs. You will also see that some of the service men are workers—real workers—who earn more than the salaries paid them. So, too, are there many of them whose industry should make a more or less conspicuous service trench into four or five dollars a day. But when you get outside or get home, you will remember having seen numerous supervising and directing heads and many clerks who appeared to be actually tiring themselves out in exertions to keep away from work.
Yes, I repeat, the Postoffice Department carries upon its payrolls too many non-producers of service values—too many mere payroll-raiders on the postal revenues. Putting all these into graded classified service and under the protection of a “joker”-ridden law will not improve the actual service—will not stop the raid of which I have been writing.
The civil service of the government and subordinate division of it—city, county and state—should be controlled by law, not by political partisanship. Mr. Hitchcock is forcefully right in what he says on this very important subject. But laws providing rules and regulations for the betterment of a public service should not provide blind alleys and trenches through which dominating party officials and “bosses” may so easily obstruct or balk accomplishment of the purpose, or the alleged purpose, of the law. I have mentioned three objectionable features common to nearly all civil service laws—to all that I have read. There are other objectionable provisions in some of the laws. I am not, however, intending to discuss here the desirability or the objections to civil service, either as it is or as it should be, save in so far as the present federal law has applied, is applied and may be applied, to the postal service.
I have tried to show how three of its joker provisions—only three of them, mind you—have worked, have been and may be “worked,” to keep party henchmen on the jobs rather than to secure to the people industrious, capable and efficient servants. Of the three wire-tapping provisions of the law mentioned, I have suggested how two of them might, in my opinion at least, be remedied. The third is that of leaving it an easy possibility to victimize employes through the agencies of partisan commissions selected to enforce or administer the law and of incompetent, biased and prejudiced persons such commissions may select to conduct examinations for entrance or promotions in the service. How remedy that?
Having civil service commissioners elected, instead of being selected by a temporary official over-lord would, in my judgment, go far toward correcting the abuses which now flourish so luxuriously under that third “joker” provision of the law.
Any service embracing a considerable number of persons in its execution, must be closely supervised if anything approaching efficiency is attained and maintained. An old German saying reads thus: “The eye of a master will do more work than both his hands.” If value is secured either in public or in private service, the people paid for delivering it must be kept under close supervision—must be kept under “the eye of the master.” A consciousness of having earned his pay should enable any service man, whatever his position, to shake hands with himself without blushing at the close of his day’s work. But if his superiors set him an example in loafing, of hitting the nail slack while on duty, most men will soon learn not only how to loaf but how to accept any amount of pay for services not rendered, and accept it, too, without a flicker of blush or jar of conscientious scruple.
So in closing our consideration of this phase of our subject, permit me to say that efficient civil service will never be attained—can never be attained—if department, division and other supervising and directing heads sit at their desks most of the time, approving documents and requisitions, reading reports and talking politics. If they expect men under them to work, they must get out on the job where they expect the work to be done, and that, too, whether the job be in the office or in the field.
Anyone who attempts to give our parcels post service anything like careful, studious consideration will, at the very outset of such consideration, find himself confronted by a number of bald facts which, when fully rounded out and understood, should make unnecessary any discussion of our claim that we need, should have and are entitled to better and cheaper service than that we now have. Without attempting any immediate discussion of these facts, I desire to present them, or some of them, to the reader’s consideration just here at the opening of our discussion of the subject. The desire to do this is prompted by a hope that their presentation here will induce the reader to think of their significance and their bearing upon the parcels post question in any fair discussion of it.
Now for these facts:
1. There are about 250,000 miles of railroad in this country—more than the aggregate mileage of all the other nations of earth.
2. The capitalization of the railroads of these United States is now, according to Poor’s Manual of Railroads, the universally recognized authority, about $18,800,000,000—Eighteen billion eight hundred million dollars!
3. That capitalization is admittedly twice the value of all the tangible values—trackage, rolling stock, terminals, shops and other—owned by the roads. In many instances the capitalization of a road is easily three times the value of its tangible property.
4. Most of these railroads were built with borrowed money, covered by bond issues, and the payment of the bonds met from the earnings of the roads, or by new issues of bonds, payment of which has been, or it is intended will be, met from earnings. In view of this method of financing construction and equipment, it is well known in informed circles that the present capitalization of these railroads is ten or twelve times the actual cash ever invested in them—that is, cash other than that collected from the people for freight, passenger, and other service rendered—rendered at rates unscrupulously excessive. Some of the best informed people have gone so far as to say that all of the stock and a considerable part of the bond capitalization of the nation’s railroads is water.
5. There are a number of express companies in this country. The express business of the country, however, is controlled by six companies—the “Big Six.”
6. The express transportation (land) is wholly by railroads. The railroad companies, and men owning large or controlling interest in railroads, own a large majority of the “Big Six” stock capitalization.
7. For most of the express company stock owned by railroads, no cash consideration whatsoever was given. For the stock, a railroad company gave to some express company a monopoly of the express business on its line or system of lines of road.
8. The express companies, in addition to any stock bonus they may have given for the monopoly of the express business on a rail line or system of lines, pay to the railroads on which they operate forty to fifty-eight per cent of the gross receipts from the express business handled.
9. The railroads furnish cars free to the express companies. They also furnish depot accommodations and facilities for storing and handling express shipments. In some instances, as much as 90 per cent of the handling of express shipping is done by railroad employes.
10. There are thirty-seven directors in the controlling express companies. Of these, thirty-two are also directors in some one or more railroad companies or are large owners of railroad stocks and bonds.
11. Practically no cash investment whatsoever was ever made in establishing or organizing an express company, nor in equipment to conduct its business. Every dollar of value there is in equipment and other tangible assets of the express companies today—and hundreds of millions besides—has come from the people—has been taken from the people for handling their express business at rates ranging from two to five times the actual cost of handling.
12. The controlling express companies—“associations” some of them are called—pay 8 to 12 per cent dividends yearly on their stock capitalization, which stock has but a fraction of substantial values back of it, and all those real values have come from earnings. 13. In addition to the regular annual dividends paid, these express companies, every few years, “cut a melon”—pay stockholders a substantial “extra” dividend. One company (Wells, Fargo & Co.), with a stock capital of $5,000,000 in 1872—and no one knowing what tangible assets that five millions represented—increased it to $8,000,000 in 1893. That added $3,000,000 was issued to the union Pacific Railroad for a contract which gave the express company a monopoly of the express business on the union Pacific rail system. On that eight millions the express company paid annual dividends ranging from 6 to 9 per cent from 1893 to 1901. From 1902 to 1907 it paid 9 per cent annually, since which date its annual dividend rate has been 10 per cent.
In addition to these substantial yearly dividends on $8,000,000 of stock, which cost its holders little or nothing, this company cut a huge “melon” in 1910. This melon was an extra dividend to its stockholders of 100 per cent in cash ($8,000,000) and a stock dividend of 200 per cent—a total of 300 per cent as an extra dividend—thus raising its stock capitalization from $8,000,000 to $24,000,000.
On this twenty-four millions of stock the company has continued to pay 10 per cent annually.
The net earnings of the company for 1910 and 1911 were about 20 per cent on its $24,000,000 of stock.
14. There are no express companies in European countries. The heavier express shipments here are there handled—and satisfactorily handled—by the railroads direct. All the lighter express shipments are there handled by the parcels post.
15. The parcels post service of European countries is entirely satisfactory to the people, is cheaper than the pretense of a parcels post service which has victimized the people of this country for a half-century and far cheaper than the rates we have been forced to pay for express service.
16. As it was originally designed, and so provided by law, that our government should have a monopoly in the carriage and delivery of packages and parcels, the express companies in this country—all of them—have been and are engaged in an outlawed traffic. They are criminals.
17. Our government, in all its branches—legislative, executive and judicial—has been party to this outlawry. It not only has protected these express and railway raiders while they robbed us, but it has permitted itself to be robbed by them.
The seventeen statements of fact should be sufficient for a starter—a starter for arriving at a safe, sound conclusion as to how and why a comparatively few folks get fabulously rich so quickly and so easily while so many millions of other folks, though lavish in industry and self-denying in expenditure, rise only to modest means or remain poor.
We shall now take up a discussion of the parcels post—as it has served us, and as it has served other peoples and should be made to serve us.
The first thing that is noticed in taking a ladder-top view of this Parcels post question is the immense amount of public bubbling talk and writing and money that is being expended upon, about and around it.
Is it the people? No. That is easily to be seen. The people are being written and talked to. The people are saying little, write less and are not putting up the money to bubble themselves in the anti-parcels post campaign.
Is the general government putting up the oil and fuel to run this anti-parcels post bunk-shooting game?
Well, the government for years has made little noticeable effort to give the people better and cheaper parcels accommodation in its mail service. That is, the executive arm of the national government has done so. The legislative arm of the national government has uniformly, though never unanimously, opposed any and every measure intended to increase the service value of parcel mail-carriage to the people.
“Why have U. S. congressmen and senators opposed?”
They have opposed, because the party caucuses of the House and the Senate have been and are dominated and controlled by men who were and are opposed to such legislation.
Still, the government, executive or legislative, has probably spent no money and has certainly made little noise to defeat the establishment of a better and cheaper parcels post service.
Now, if it is not the people themselves nor the people’s government who are making all the parcels post noise, buying newspaper space and putting up money to steer country merchants and others into organizing and petitioning against increased parcel facilities in the mails—if it is not the people trying to bubble themselves nor the government trying to bubble the people, I wonder who it is? Who is putting up for the fuel and oil to run this anti-parcels post opinion-molding sulky-rake, which has been so vigorously, so industriously and so designedly dragged over the mental hay-fields of the American hoi polloi during recent years? What’s the answer?
Unless, of course, one has taken on an over-load of this anti-parcels post tonnage, thereby giving his feelings a chance to hip-lock or strangle-hold his intelligence, he’ll not need to browse around long for an answer.
You have a boy working at Blue Island or Elgin, Illinois. Mother in Chicago wants to send him a Christmas present. If it weighs no more than four pounds she can send it by mail, paying one cent an ounce. If she wants to feel sure that her boy gets it, she can “register” the parcel, paying ten cents more.
If the parcel weighs the fraction of an ounce more than four pounds, mother cannot send it to her boy through the mail service at all. If the parcel weighs exactly four pounds, then our Uncle Samuel will deliver it at Blue Island or at Elgin when mother puts up sixty-four cents—seventy-four, if mother wants to feel sure that her boy gets it and for that reason has the parcel “registered.”
That is one case—one statement of fact.
Andrew Carnegie at Skibo Castle, Scotland, desires to send a four-pound Christmas present to some son of Norval or “blow-hole” friend in Los Angeles, California, or Mrs. John Bull, at Manchester, England, has a yearning—and the price—to send a present of corresponding weight to her daughter Margaret, who is happily, likewise richly, married and who lives in a beautiful suburb of San Francisco. Well, “Andy” and Mrs. John Bull can send their four-pound presents—to be more exact, they can send even if the parcels weight up to eleven pounds each—can have those four-pound parcels carried by rail to some steamship port, carried across the Atlantic ocean, put into our mail cars, carried with our own mail across the entire country and delivered by American carriers to the remotest suburb of Los Angeles or San Francisco for forty-eight cents—three-fourths the price mother has to pay to get her four-pound present to her boy at Blue Island or Elgin!
That is another case—another statement of fact.
For many years the United States government has carried parcels of newspapers, magazines and other periodicals, weighing up to 220 pounds, to any point in the country reached by its mail service, broke the package and delivered each separate piece to individual addresses in postoffice boxes or by carrier for one cent a pound.
Yet it persists in charging mother sixteen cents a pound to send her present to her boy at Elgin or Blue Island and compels her to keep its weight down to four pounds.
That is another case—another statement of fact.
For many years, the government has carried by mail, not hundreds, but thousands of tons of parcels free. Every United States Senator, every Congressman, every department head, every division head, every first, second, third or fourth “assistant” department or division head, every political “fence” builder, whatever his position in the government’s official service, uses his franking privilege.
Not only that. Most of them abuse it.
Not only that. Most of those who abuse it do not confine the abuse to franking public documents to “friends at home” and speeches—most of which were never made or were made or written by somebody else—to “my constituents.” Oh, no! That government “frank,” so it has been credibly asserted, has been used to carry easy chairs, side boards, couches and other household goods which have been “bought cheap”—some of it too cheap to carry a price tag—and which “can be used at home.” Typewriters, filing cases, office desks, frequently acquired by a process of benevolent appropriation, have reached home without carriage charge.
That is another case—another statement of fact.
But why continue? I could go on for a page or two with statements of fact, all evidencing this other FACT.
Mother—your mother, my mother—the great tax-paying body of our people—is wronged, is victimized, by our postal service and regulations.
That is my opinion. That opinion is based upon a “broad, general and comprehensive view”—a ladder-top view—“of the whole question in its various and varying details,” as one anti-parcels post spouter has spouted.
I have presented but four statements of fact. A score of others will readily appear to any reader who does his own thinking. But take any one of the four above given and study its significance for just one minute.
Have you done so? “Yes?” Well, then you see the joke—or the “joker”—in the anti-parcels post talk and literature, do you not? You will also be able to make a close guess as to who are financially backing the public-bubbling opposition to any legislation for the improvement of our parcels post service. If you cannot, I advise you to go to some jokesmith and have the gaskets and packings on your think-tank tightened up.
John Wanamaker was a great merchant. He was a brainy business man and, to a large extent, did his own thinking. He was, for a term of years, Postmaster General of the United States. Mr. Wanamaker was likewise a man of broad, comprehensive and comprehending humor. He could crack or take a joke. In either event, the kernel was separated from the shell quickly. Here is one of Mr. Wanamaker’s jokes:
Years ago, when Mr. Wanamaker was Postmaster General, John Brisbane Walker asked him why the American people stood for the existing parcels post outrage. Mr. Walker believed the American people were quick, judgmental thinkers and swift in remedial action when thought reached the conclusion that the thinker was being victimized.
Mr. Walker was right—is right. American people do think. The trouble is that too many of us are coupled into train with the wrong kind of thinkers. We are switched or shunted onto any side-track or yarding the engineer, the conductor or the traffic manager desires. We simply think we think, while really we are merely following a steer. But I digress.
To Mr. Walker’s question, Mr. Wanamaker made this reply:
“It is true that parcels could be carried at about one-twelfth their present cost by the Postoffice Department, but you do not seem to be aware that there are four insuperable obstacles to carrying parcels by the United States Postoffice Department. The first of these is the Adams Express Company; the second is the American Express Company; the third is the Wells-Fargo Express Company; and the fourth, the Southern Express Company.”
Of course there are several more “insuperable obstacles” to an improvement in our parcels post service. There is the previously mentioned “big six” obstacles with the railroads, now as when Mr. Wanamaker spoke, owning or controlling them all.
The reader may know—no need of guessing—that those insuperable obstacles are stoking the engines which are “yarding” public opinion—and much honest, but superficial or careless, private opinion—where it will yield unearned revenues to the stokers. Any man who argues against cheapening our parcels post rates is merely a hired angler for suckers or a sharer in the spoils which railroad and express raiders are looting from the people.
I recently heard one of those patriotic hired “cappers” talk to his job. Among his forceful points were the following:
“The big express companies employ nearly 100,000 men.
“Their payroll (officials included), is nearly $50,000,000 a year.
“Roosevelt added 99,000 names to the federal pay roll during his seven years in office.
“There are about 70,000 postoffices in the United States and an improved parcels post service would require an additional clerk in each. Therefore 70,000 more tax-eaters would be added to the federal payrolls.
“There was a deficit of $6,000,000 piled up in the Postoffice Department last year. To what appalling figures would that deficit mount if a parcels post were established?”
Now, I want to ask a few questions.
First, those 100,000 men employed by the big express companies and who are paid the colossal sum of $50,000,000 in salaries. The express companies neither employ so many men nor pay so much money. But if they did, that is an average of but $500 a year to each employe. Do you think those 100,000 express men would lose any killing amount in annual salary if the government took the whole bunch of them bodily over and put them into a parcels post service?
So much for those alleged 100,000 express company employes, concerning whose interests and welfare the anti-parcel post bunk-shooter appears to have had a pain in his lap or bunions on his mind.
Now, how about the 90,000,000 or more people who make up the rest of us folks in these United States? How would we come out in the ledger account if a good, efficient and cheap parcels post service was put into operation and the “big express companies” put out of business?
It is quite impossible to figure it out to the cent. The public reports of those big express companies, likewise their system of double cross bookkeeping, prevent us getting nearer than about eight blocks of their “inside information.” But some of the governing facts we know and others must necessarily follow in any process or method of reasoning recognized outside the harmless ward of a crazy house.
The stock of express companies is owned largely by a comparatively few people—a thousand, possibly five hundred, persons own 90 per cent of this stock. No one at all familiar with express company tangibles, unless he is exercising a loose-screwed veracity, will estimate their aggregate tangible values above twenty or twenty-five millions. More than that. The present tangible values in these companies are, as previously stated, almost wholly investments from earnings. So largely, in fact, is that true that six million dollars is a liberal estimate for the actual cash capital at any time invested in actual operation.
These companies paid their owners two to three and a half, or more, millions a year in dividends.
Since 1907, the Adams company has paid $480,000 a year on $12,000,000 of bonds. Those twelve million of 4 per cent bonds were given to the stockholders. Not one cent of actual cash was given in consideration.
What has that to do with the parcels post question? Simply this:
When the government installs a parcels post service that accepts, carries and delivers packages weighing from twelve to twenty or more pounds these looting express and railroad raiders will go out of business.
SUBSIDY RAIDERS.
Everybody who has studied the question at all knows that all alleged deficits in the postal service are the malformed progeny of an illegal union between crooked public officials and criminal violators of the law enacted to establish and govern the carriage and delivery of mail matter in these United States. So noticeable has been the closed eyes and “rear view” of government officials while the railroad and express raiders raided and walked off with their loot that petty thieves began to shin up the posts of the Postoffice Department directly or sneak in by way of Congressional legislation.
“What were they after?” Why, they wanted a “subsidy” for carrying foreign or ocean mails, or they wanted a “pork” contract—one of those contracts which renders little service for much money.
Did you ever hear of Tahiti? No. It is not a breakfast food nor a sure cure for cancers. It is an island. “Where?” Ask the Almighty. I don’t know, and I am doubtful whether the Almighty knows or cares. I know it is an island somewhere, because a few years ago the postal department entered into a contract with some “tramp” steamer flying a rag, which close inspection might discover had once been the American flag.
The Postoffice Department paid that tramp $45,000 for carrying our mails to Tahiti—a service that another vessel in the Tahiti trade offered to render for $3,500.
Can there be any legitimate surprise or wonder at a “deficit” resulting from such business methods?
But that, of course, was “a few years ago.” Yet, stay! On page 264 of the 1910 report of the Postoffice Department, I find that the Oceanic Line—a line of United States register—carried to and from Tahiti and the Marquesas Islands 7,622 pounds of letters and 159,483 pounds of prints. This was carried under a “contract” and the Oceanic people were paid $46,398 for the service—for carrying about 88 tons of mail matter.
Looks like a good “deficit” producer, does it not?
But there is another queer thing about this Tahiti mail contract. Note (1) on page 263, to which the report refers readers, says steamers of United States register not under contract are paid 80 cents a pound for carrying letters and 8 cents a pound for carrying prints. Figuring up the Oceanic’s service at those rates gives as result only $18,856.24.
So it can readily be seen there is something in a “contract”—some contracts, anyway.
On the same page (264), I find that another ship, one of the union Line and under foreign register, touches at Tahiti in making New Zealand. It carried 2,713,850 grams (about 5,970 pounds) of letters and 58,926,887 grams (about 129,639 pounds) of prints—within 16 tons the weight the Oceanic people carried—and received only $7,781.54 for the service. These vessels of foreign register are paid about 35 cents a pound for letter weights and 4? cents for print weight.
Figuring up the weights hurriedly at the named rates, I find that the union folks were entitled to $7,923.40, or some $142 more than was paid them. The Oceanic folks, you will remember, were paid $46,398 when at open carriage rates of pay to vessels of United States register they earned only $18,856.24.
Looks a little off color, does it not? But we must remember that Tahiti is an island. Must be an island of vast importance. It requires the shipment of 88 tons of mail matter in a year—a whole year—and our government pays $46,398 haulage on it. Something over 79 of those 88 tons of mail was printed weight, too.
What great printers and publishers those Tahitians and Marquesans must be! Or was that print stuff of United States origin? Catalogues and franked and penalty matter, I wonder?
At any rate there is the “contract” in 1910 as an evidence that some one here is doing, or has done, a little turn toward “burning” postal revenues and helping, in a small way, to keep a postal “deficit” in evidence. A deficit, you know, shows that the revenues of the department are too low, too small, to permit the establishment of an efficient, cheap parcels post, or so the railroad and express raiders would have us think.
The important point, however, is: Are we fools enough to think it? If so, how long shall we continue to be fools enough to think it? If not, is it not about time that we created a disturbance—that we raise some dust—in efforts to let these raiders and their cappers know we are not fools? Why should we continue to act foolish if we are not fools? Please rise, Mr. Sensible Citizen, and answer.
As before said, no one expects nor desires the government to make money out of their mail service. People have, however, a right to expect—and to demand—that their regularly chosen representatives and other government officials prevent a lot of raiders, or any one else for that matter, from making more than a fair, legitimate profit on what they do for or contribute to that service.
There has been much talk the last three or four years about the economies effected by the Postoffice Department in the execution of the work it was established to do. How much of this talk is grounded on fact and how much of it is mere political gargle and party and administration “fan”-talk I shall not here attempt to say. Time has not permitted me to look into these averred economies carefully and thoroughly enough to warrant positive statements from me anent them here. I am inclined to believe, however, that the present Postmaster General, Mr. Hitchcock, and his immediate predecessors, Mr. Meyer and Mr. Cortelyou, have really accomplished a little in the right direction—a little, where the Lord knows we should know there was much to accomplish. But, as stated, my favorable opinion is not based on what I have dug up myself about these economies alleged to have been effected in the recently passed years. If they have been effected, their accomplishment only goes to prove that advocates of a cheap parcels post in this country have been right in their facts and arguments, and also that their exposures and severe condemnation of the waste, extravagance, grafting and stealing in the postal service were timely and well deserved.
Something, however, has, I think, been done. The exposure of criminal crookedness, grafting, waste and thievery which existed in the department—with administrative employes, officers, Congressmen and Senators, either directly or collusively connected with it—was bound to wipe some leaking joints in the service. The exposures uncovered so much porch-climbing and so much nastiness that most decent citizens were holding their noses and thinking of buying a gun. Something had to be done. The noise and injured-innocence “holler,” which railroad and express company raiders are vocalizing and printing, is pretty good evidence not only that some little has been done to them, but also that they fear more is going to be done to jam the gear or otherwise interfere with the smooth running of some one or more of their high-speed, noiseless-action cream separators. And more will be done if the people keep on the mat and keep swinging for the jaw and plexus. But it is not all done yet. The raiders may be squealing and squirming a little. They always do when a little hurt. But they are still busy—still actively after the cream. They may spar a little for time, but they will use the time actively in figuring out a new entrance into the people’s milk house.
And these raiders will find a way to get in, too, if the people pull up the blankets and let themselves be talked and foozled to sleep.
TOUTING FOR “FAST MAIL.”
There appears to be much talk about “fast mail” service. Of course if the railways are already running at a destructive loss on mail weight and space-rental pay—which they are not—why they will want more pay if they furnish a fast mail service. The postal authorities (official) seem to think that a “fast mail” is a thing altogether lovely and much to be desired. The railroad carriers are of like mind, but—well, such service costs more money. They want more money. A fast mail is just the thing the people want and need! It will push the corn crop ahead and keep the frost off the peaches!
For these and other equally easy reasons it is sought to steer the people into making a scream for a “fast mail” service. They want and need their mail in a hurry. The quicker the better. In fact, from the way some people are already talking, it would appear they want their mail delivered about twenty-four hours before it starts in their direction.
If the cream-skimming raiders and their “public servant” assistants can only get the people to talking for a “fast mail” service, why a fast mail we will have, and we will pay the raiders for furnishing it.
How will we pay them?
Oh, that is easy. Bonuses and subsidies are popular fashions in federal legislative society. Likewise they appear to be popular in postoffice circles. They are seasonable the year around and are cut to fit any figure. They don’t stand the wash very well, but—well, don’t wash them. The raiders and their official valets always keep them brushed up and vacuum cleaned. Just pay for them is all the people have to do.
I recall a serviceable subsidized fast mail gown which was handed to a railroad between Kansas City, Mo., and Newton, Kan., some years since. It was neatly boxed and delivered by the handlers of postoffice appropriations. It was worth $25,000 a year to the road that got it.
“Of what use was it to the people?”
None whatever. The fast train it was made to drape was put on the line named for the sole service and benefit of two Kansas City newspapers. It swished those papers (their midnight editions), into Western Kansas, Oklahoma and Northern Texas ahead of the appearance of local morning issues.
I recall another “fast mail” bonus. It was $190,000 and went to the Southern Railway for a fast train out of New York for New Orleans. It left New York about 4 a. m. and carried little or no mail for delivery north of Charlotte, N. C.
It arrived in New Orleans, if I remember rightly, along about 2 a. m. the next day—too late for delivery of any mail before the opening of the day’s business—9 or 10 o’clock in the morning.
But the regular mail train, as was shown in the debate in the Senate, left New York at about 2. a. m. and arrived in New Orleans about 4:30 a. m.—two hours after the so-called “fast mail”—in ample time for deliveries when the business of the city opened.
Fine business that, is it not? Well, yes, for the Southern Railway.
The reader, however, should be able to recognize it as a regular 60 H. P., six-cylinder, rubber-tired “deficit” producer. Especially will he so recognize it if he thinks of it in connection with this other fact:
That same year, the Southern Railway was paid, in addition to the $190,000 “fast mail” subsidy mentioned, over one million dollars at the regular weight rates for hauling the mails!
There are numerous others of equal beauty and effectiveness in design. As previously stated, however, subsidies and bonuses are all carefully designed and cut to fit any figure. All we wise, “easy” people need do is to make a little noise for a “fast mail” service and Congress will hand it out.
The railroad raiders can easily justify their demands for subsidies for a fast mail service with people who have given little or no study to this mail-carrying question. Our Postoffice Department furnishes the raiders about all the argument that is needed. One of the raiders has been quoted as saying: “We could carry the mails at one-half cent per ton mile, if the Postoffice Department would allow us to handle it in our own way.”
There you are. The department will not let these raiders help the people save their own money. Very generous. Much like a burglar calling on you the day before in order to tell you how to prevent him from cracking your safe.
But the beauty of that railroader’s statement lies in the fact that it states a fact; not one of these glittering, rhetorical facts, but a real de facto fact.
The rules and regulations of the Postoffice Department for the carriage of mails in postoffice cars are such as furnish ample grounds and warrant for the railway official’s statement.
Postoffice cars are from 40 to 50 or more feet in length and weigh, empty, from 50,000 to 110,000 pounds. The department then has fixtures and handling equipment put in. This equipment occupies about two-thirds of the floor space of the car, and, with the four to twelve railway mail clerks also put into it, weighs from 10 to 15 or more tons. The railroad is paid for carrying all this bulky, space-occupying equipment at the regular mail-weight pay rates.
And how much real mail does the department get into these postoffice cars?
Well, some years since Professor Adams, after a most careful and extended investigation, placed the average weight of mail actually carried at two tons. He pointed out, however, that the mail load could easily go to three and a half tons and referred to the Pennsylvania road which, in its special mail trains, loaded as high as six tons. He also stated that if the load were increased to five tons, the cost of carriage would be reduced more than one-half, and he made it very clear that his figures were easily inside the service possibilities.
In view of such evidence and testimony from Professor Adams, and of other men to much the same effect, the department may possibly have increased the mail load since 1907 to three or maybe to three and a half tons.
Even so, it is still evident that the railroad must haul from 70,000 to 140,000 pounds of car and equipment to carry 6,000 to 7,000 pounds of mail; thirty-five to seventy tons of dead load to carry three to three and a half tons of live—of service—load. Do not forget that, so far as the railroads pay is concerned, the equipment is live weight—paid weight. So, the railroads get paid for a load of fifteen to eighteen and a half tons, while they carry only three to three and a half tons of mail—for carrying, according to Professor Adams’s figures in 1907, only two tons of mail.
As a deficit-producer that should rank high. As an evidence that our Postoffice Department is run on economic lines, that mail car tonnage load is nearly conclusive enough to convince the residents of almost any harmless ward.
Speaking seriously, the department’s methods of mail-loading the postoffice car—methods which put from two to three and a half tons into cars that should carry six to ten tons—furnishes the carriage-raiders an excellent basis for their talks to the people to the effect that the roads are not getting sufficient pay for carrying the mails now, and if they (the people) want better or faster service the roads must be paid more money, either as bonuses or subsidies. In fact, the railroad people have been holding up this nonsensical—or collusive—practice of the department for years as basis for their demands for more pay for hauling the government mails. As proof of this statement, take the testimony of Mr. Julius Kruttschnitt before the Wolcott Commission, I think it was. Mr. Kruttschnitt was then (1901) Fourth Vice-President of the Southern Pacific. In reply to the Commission’s inquiry as to whether or not the mails could be profitably carried over the New Orleans-San Francisco routes at a half cent a pound ($10.00 per ton or for $100 to $200 per car if reasonably loaded), Mr. Kruttschnitt is reported to have answered in part that “at half a cent a pound the mileage rate for 442 miles is 2.3 cents. Statement G,” he continued, “shows that to carry one ton of mail we carry nineteen tons of dead weight, so that for hauling twenty tons we get 2 cents or a little over one-tenth of a cent a gross ton mile.”
All very forceful and conclusive, if it were true, which it is not. It is true, however, that Mr. Kruttschnitt was making good argumentative use of the ridiculously low loading of cars under the regulations of the department. That is all. If the postoffice car used on Mr. Kruttschnitt’s road was a 50-foot car and weighed, say, 100,000 pounds, that and the railway mail clerks constituted the only “dead” weight hauled.
His road got paid for hauling the tons of ridiculously heavy mail-handling equipment and fixtures in that car—got paid for hauling them both ways, at the regular mail-weight rates. His road also received over $8,000 a year rental, or “space pay,” whichever the rail-raiders desire to call it, for the use of that car for mail haulage.
So, it is really not so bad as Mr. Kruttschnitt apparently would have it appear. In fact, one does not have to look into the matter very closely to see that the Southern Pacific had what might be called a “good thing” in its mail carrying contract.
But what are the railroads really paid for hauling mail tonnage as compared with the rates they receive for hauling other tonnage?
In writing to this phase of the question at the time of the pendency of the Fitzgerald and another bill,—the former requiring that periodical publishers pay $160 and the latter that they pay $80 per ton for mail carriage of their publication—Mr. Atkinson said:
Let it not be forgotten, that publishers pay the government $20 per ton for their papers; doesn’t it seem enough, when the government is so generous toward the railroads that it pays for transporting 1,000 pounds of leather, locks, etc., for every 100 pounds of letters?
…
It is no unusual thing for the railroads to haul live hogs from Chicago to Philadelphia, a very inconvenient as well as unpleasant kind of freight. The hogs have to be fed and watered on the way, they cannot be stacked one upon another, so require much space. What do the railroads charge for this service? Is it $160 per ton? No. Is it $80 per ton? No. Is it $20 per ton? No. They do it for $6 per ton, and are glad of the job.
Professor Parsons wrote a volume a few years ago entitled “The Railways, The Trusts and The People.” Professor Parsons looked into this ton-mile rate of pay for rail haulage most carefully and gave the results of his investigations in his book, from which I take the tabulated rates following.
In passing, I may say that the professor is recognized by everybody as a most dependable authority—that is, everybody save the railroad and express raiders and their hired men. They have written and talked at great length to “refute” him, which thoughtful and disinterested people take as mighty strong evidence that Professor Parsons presented the truth and the facts, or so nearly the truth and facts that his statements made the “authorized,” rake-off patriots turn loose on him their high-powered, chain-tired public bubblers.
Following are the figures which the Professor published as showing the average ton mile rates the railroads then received for carrying different kinds of shipments:
Rate per ton mile, cents.
For carrying express generally 3 to 6
For carrying excess baggage 5 to 6
For carrying commutation passengers 6
For carrying dairy freight, as low as 1
For carrying ordinary freight in 1. c. 1 2
For carrying imported goods, N. O. to S. F. 8
For carrying average of all freight 78
For carrying the mails (Adams estimate) 12.5
For carrying the mails (Postoffice Department estimate) 27
THE PARCELS POST.
The Postmaster General in his reports for 1908-9 and 1909-10 recommends a trial or “test” of a parcels post service on several rural routes “to be selected by the Postmaster General.”
The Congress now in session is giving, or will give, this recommendation serious consideration, it is presumed. Especially will it be given such serious consideration when the 1911-12 bill, making appropriations for the postal service, is under fire and is being “savagely attached by its friends.”
It may be depended upon that the express and railroad gentlemen now shearing a rich fleece from your Uncle’s postal fold will not have any fair tests made of a parcels post service so long as they can prevent it, and they appear to have numerous representatives in both houses of Congress who can be influenced to prevent it, if their past talk and votes may be taken as indicating what they are there for.
Of course, the chief clack of the enemy’s hired men is “lack of funds.” Yet they go on appropriating millions to people who do not earn it—to pay for services not rendered.
The same kippered tongue lashed the “rural delivery” service the same way. In the end, the people won. But they won, in the bill as originally passed, a rural delivery of the “test” variety. “Why?” Well, a properly equipped and serviceable rural delivery would be a step towards a serviceable parcels post and the raiders do not want the people to have such a parcels post.
As samples of the sort of “friendly feeling” manifest in Congress toward a parcels post and of the profound wisdom carried by some of its alleged friends, I desire to make a quotation or two.
When the measure was first up (1908), Representative Lever of South Carolina introduced the four counties “experimental test” amendment in the House. Following is his opening:
Every farmer here present knows of his own experience how much time is taken in extra trips to town and city.
Now, that is real fetching. Especially before so vast a gathering of farmers as heard it!
But a Missouri “farmer” present wanted to be shown. So he fired a question at Mr. Lever. The farmer from Missouri wears the name of Caulfield. He likewise wears an abiding distrust of the parcels post. Following is his question:
Is it not a fact that the great mail order houses of the country are the ones who are really in favor of the parcels post?
There is real intellectual magneto and lamp equipment for you. Note, too, the shrewdness of this Missouri “farmer” in wording his question—the mail order houses may not be the only ones who favor the parcels post, but they are about the only ones who “really favor” it!
Well, there are over 40,000,000 residents of the country—villages and towns in this country—among them, too, are twenty millions of real farmers. These are pretty firmly of opinion that they “are really in favor of the parcels post.” There are, also, not less than 30,000,000 more residents of incorporated cities, small and large, who at least think they favor a parcels post service which will permit “mother” to send a pair of pants to her boy ten miles away as cheaply as the laird of Skibo Castle, Scotland, can send two pairs of kilts to a son of his friend’s Aunt Billy who lives in Los Angeles, California.
Of course, the people may only think they think and are sitting up nights with the windows open and their ears spread to hear their representatives tell ’em they are wrong. If so, Mr. Caulfield and Mr. Lever will probably hear from them. It takes the people some time to recognize or properly to appreciate how wise some of their representatives are—what a vast amount of charges-prepaid wisdom they have. But the people finally catch on and then—well, then there will not be so many “farmers” of the Mr. Lever variety in Congress.
But I want to give Mr. Lever another show. He’s entitled to it “under the rules.” He should have several of them—not to show his profound knowledge of the value and dangers of an efficient, cheap parcels post, but to show that a man need not spend a cent in Congress to advertise the fact that he is a “practical politician.” All he needs do is make a few hired or ignorant remarks on some subject about which the people of the country have been thinking.
Here is Mr. Lever’s answer to Mr. Caulfield’s question, as previously quoted:
The wisdom of discriminating in favor of the local merchant must be apparent to any one who regards, for a moment, the danger involved in a system (parcels post) which would inevitably centralize the commerce of the country.
Now, candidly, how could a “friend” of a parcels post service show his friendship more nicely than that? Especially if he is a “farmer?” Or even if he is not, and merely desires the farmers to think he is their friend?
Why, Mr. Lever has Mr. Caulfield shoved clear over the ropes in that answer. Mr. Caulfield, of Missouri, may have full magneto and lamp equipment, but Mr. Lever, when it comes to a friendly, high-speed spurt for a parcels post service, shows all the latest improvements. No, sirs, Mr. Lever is not merely a last year’s model. He’s bang up-to-date—axles, drawn steel; forged crank shaft with eight cams integral; continuous bearings and bearings all ground; two water-cooled, four-cylinder motors with sliding gear; “built-in” steel frame, and running on a “wheel-base” of 106 inches. Mr. Lever shows all the other “latest,” necessarily belonging to the “best seller” class among late models.
However, I have probably mentioned enough to make it clear to my readers, if not to his constituents, that Mr. Lever is fully equipped to act the part of the farmer’s “friend,” a friend of the parcels post, or of any other old thing. Some may think he carries a little too much weight for a good hill-climber. It should be remembered, however, that some sorts of “friends” do not climb hills. They skip around the hills and get what they are after while we are climbing. When farmers and others of our producing classes wise-up to the brand of vocal friendship I am “insinuatin’ about,” such representatives as Mr. Lever will last about as long as it would take a one-armed, wooden-legged man to fall off the top of the Flat Iron Building flag pole.
PARCELS POST “TESTS.”
It may as well be said here as elsewhere that such “tests” of the feasibility and desirability of a good parcels post service as Mr. Hitchcock proposes to make are but procrastinating foolery. Great Britain and every continental country of Europe has an efficient parcels post service in operation.
Postmaster Generals and railroad and express company raiders know that. The countries indicated have made all the “tests” we need have of people-serving parcels post, and every one of them derive more or less revenue from that service, there being no deficits.
Postmaster Generals and our railroad and express company raiders know all that. So, also, do our Senators and Congressmen know that. Even alleged “farmer” Congressmen know it.
Our public servants know even more than that. They know that under the International Postal union agreements our government has entered into, our postal service today handles these foreign countries’ parcels, of either United States or of foreign origin, weighing up to eleven pounds. They also know our own postal service now won’t permit our own people to send by mail, packages weighing more than four pounds. They also know that for carrying a four-pound parcel by his own mail service the American must pay 64 cents if the parcel is for delivery in any of the foreign countries covered by Postal union agreement, but if sent by some one in any of those countries for delivery in this, the sender may make up a parcel weighing as much as eleven pounds and for its delivery will have to pay only 48 cents.
I say that our mail carriers and public officials know these things. The facts as stated must be known of the Postal union agreements. On request, the Postoffice Department does not hesitate to give this information to anyone. The following is a paragraph taken from a department communication. It was sent in response to a request made by Mr. Alfred L. Sewell, who wrote a most informative communication that appeared in the Chicago Daily News of date November 6, 1911. I take the quotation from Mr. Sewell’s article.
Mailable merchandise may be sent by parcels post to Bahamas, Barbadoes, Brazil, Bermuda, Bolivia, Danish West Indies (St. Croix, St. John, St. Thomas), Colombia, Ecuador, British Guiana, Costa Rica, Guatemala, British Honduras, Republic of Honduras, Haiti, Jamaica (including Turk islands and Caracas), Leeward Islands, Windward Islands, Mexico, Newfoundland, Nicaragua, Peru, Salvador, Trinidad, Tobago, Uruguay, Venezuela, in the western hemisphere, and to Australia, Japan and Hongkong in the east, and to Austria, Belgium, Denmark, France, Germany, Great Britain, Hungary, Italy, the Netherlands, Norway and Sweden in Europe. The postage rate is uniform at 12 cents a pound, or fraction of a pound. A parcel must not weigh more than eleven pounds, nor measure more than three feet and six inches in length, or six feet in length and girth combined.
Then why prattle about a “test” as to the desirability and practicability of a good, cheap parcels post service in this country; one that will serve our own people?
Especially why prattle about such a parcels post service on a few selected rural routes? It is not only foolishly silly, but it looks suggestively wrong—as if there was some ulterior motive back of any suggestion of such a test. “Why?”
Well, if such test is made under regulations suggested by the Postmaster General, the only parcels that service, or “test” service, is designed to carry, are such as originate on a selected rural route and are for delivery on the same route or on a route immediately connected with it. That is, as I understand Mr. Hitchcock’s recommended regulations, any farmer or villager along the selected “test” rural route may send a package (weight and rate of carriage yet to be decided upon) to any other farmer or villager on the same route or connected route, or to a resident of the town or city at which such route originates or starts.
If such a farce can be seriously thought of as a “test” of what use and economic value a nation-wide parcels post service would be to our people, even to the people residing on the test routes, it will take some graduate of a foolery school or foreman in a joke foundry to so think of it.
Let’s see. A farmer may send a jar of butter, box of eggs, crate of fruit or vegetables, etc., to the village storekeeper and get his pay for the consignment, “in trade” usually. By writing the storekeeper an order, postal card or letter, the farmer may get on the next round of the carrier what he desires. That is, he will get what he has asked for if the storekeeper has it in stock. The farmer, or the farmer’s wife, may do the same thing in the event that the consignment of their products, presuming that the “regulations” will permit the carrier to handle perishable goods, goes no farther away than the county seat or other town or city from which the rural route starts. They can also send such parcels to any railroad station on the route for shipment to any more distant point. In such case, however, the farmer must pay an express carriage charge from the local railroad station to the destination of his shipment.
But enough of this local application of the proposed “test” regulations. It will readily be seen that if the farmer or villager on a selected test route desires to send a parcel, not above the regulation weight—whatever that may be—to any point not on the same route, he will have an express charge to pay—whatever that charge may be. And if he orders something, inside the regulation weight, from some factory or city not on his carrier’s route, he must also pay an express charge for its carriage to his local railroad station. If he wants the article or goods delivered at his home by the rural carrier, he must pay an additional charge—the postal carriage charge, whatever that may be.
As a “test” of the service value of a parcels post, could anything be more absurd? If so, it would be difficult to frame it up. Such a “test,” however, will still leave the raiding express companies in position to hold up the selected “home circle,” rural-route residents on all shipments, which go to or come from any city or point outside the home circle—and that is about what, if not just what, the proposed “test” is designed or intended to do, or so it appears from the ladder top.
In this connection it should be noted that the rural-route delivery enactment, or the department regulations under which it was to be applied, carried an express protecting “joker.” If not, why was the rural route carrier required to furnish a cart or other carrying vehicle of only twenty-five pounds capacity? Was it valid for ulterior reasons which named so small a weight? Would it have cost the government any more money for rural carrier service if a maximum weight of 500, or even of 1,000 pounds, had been named for the carrying vehicle?
The reader may answer. To The Man on the Ladder, though, that 25-pound requirement looks to be of doubtful mail-service value, if, indeed, not suspiciously queer.
It was carefully figured in 1900 that our rural, or non-railroad, communities alone lost $90,000,000 a year in excessive express charges and delays in delivery by reason of the criminal apathy of their government in the matter of furnishing even a reasonably adequate domestic parcels post service, such, for instance, as that furnished by the German government. The German government carries an 11-pound package anywhere in the German empire or in Austria-Hungary for 12 cents.
To aid the reader, I give, following, a table covering the data essential to a fair understanding both of the excessive pay for a service which our government should render for a tenth of the money and, also, of why our express service is inconvenient—is wasteful and expensive—by reason of the distance the express offices are from the people ordering. This last is clearly shown by comparing their number with the larger number of postoffices in the several states named.
THE WORM UNCOVERED.
STATE. No. of express offices. No. of postoffices. Average express charge. Amount saved by parcel post at 12c. English merchants’ advantage at 48c. German merchants’ advantage at 58c. Mexican merchants’ advantage at 66c.
Alabama 334 2,445 $1.33 $1.21 $0.85 $0.75 $0.67
Arizona 41 202 3.89 3.77 3.41 3.31 3.23
Arkansas 262 1,880 1.66 1.54 1.18 1.08 1.00
California 586 1,659 3.16 3.04 2.68 2.58 2.50
Connecticut 108 511 .61 .49 .13 .03
Georgia 451 2,657 1.33 1.21 .85 .75 .67
Illinois 1,495 2,622 1.09 .97 .61 .51 .43
Kentucky 471 2,892 1.22 1.10 .74 .64 .56
Maine 248 1,254 .61 .49 .13 .03
Michigan 737 2,161 1.22 1.10 .74 .64 .56
New York 1,309 3,735 .61 .49 .13 .03
Ohio 1,362 3,398 1.09 .97 .61 .51 .43
Oklahoma 30 576 2.10 2.07 1.62 1.52 1.53
Pennsylvania 919 5,206 .61 .49 .13 .03
Rhode Island 90 153 .61 .49 .13 .03
South Dakota 229 639 2.67 2.55 2.19 2.09 2.01
Texas 662 2,968 2.19 2.07 1.61 1.61 1.53
Virginia 263 3,468 1.22 1.10 .74 .64 .56
Whole country 20,155 60,000
Had I the space at command I would print the figures for the whole United States. However, it will be seen that the states I have taken are fairly representative of the whole country—the populous with the sparsely settled.
The figures as to number of express and postoffices are from the United States census for 1900. The estimates are made on the parcel weight of 11 pounds. Eleven pounds is the English domestic parcels weight that is carried anywhere in the United Kingdom for 24 cents or, by international postal agreement, to any point in this country for 48 cents. In passing, it might be noted that for the year 1900 the British postoffice turned into its national treasury over $18,000,000 profit. It might also be well to notice that English merchants imported nearly five and a half million dollars value by parcels post and exported nearly twenty and a half million dollars of value by means of the same service.
But to get back to our 11-pound parcel.
Germany carries it anywhere in her empire or in Austria-Hungary for 12 cents.
Switzerland carries it for eight cents, and several other countries are now trying to reach the German weight-rate for domestic delivery.
So we will take as our package of eleven pounds and figure its delivery at any postoffice in the United States for twelve cents.
One more point about this table.
The reader must keep in mind that we now deliver packages up to eleven pounds from any person—merchant, manufacturer or other—living in England, Germany or Mexico. It is delivered for the English shipper (by our mails) to any United States postoffice for 48 cents; for the German shipper for 58 cents or for the Mexican shipper for 66 cents.
The three right-hand columns of the table show how much cheaper the English, German or Mexican merchant, or other shipper, can have his eleven pounds of merchandise carried to Rabbit Hash, Ky., Springtown, Mo., Gold Button, Cal.—to any postoffice in the United States—than the New York merchant can send his 11-pound parcel to the express office “nearest” the customer ordering.
The express charges given are the carefully figured averages for the states named for carriage from New York City. The third column gives the average express charge (at rates ruling in 1900) from New York City to the states named. The fourth column gives the savings to the purchaser—the merchant or the consumer—if the 11-pound parcel were carried, as it should be carried, in the mails for 12 cents. The first two columns give the number of express offices and postoffices in the several states named and are intended as conclusive proof that millions of our people are much nearer to a postoffice than to an express office.
With this preliminary, let us now comment on the table. Don’t side-step it because it’s figures—unless, of course, you’re some hired man of the express or railroad companies.
The total of express companies in the footing is that given in the census report for 1900. There are probably several hundred more now. The corresponding total given for the number of postoffices is correct for July 1, 1910. There are fewer postoffices now than in 1900, the establishment of rural route delivery having reduced the number greatly. The reader must keep in mind that the figures named in headings of the three right-hand columns cover a “delivery” charge in addition to the home-rate mailing rate for the countries named. This delivery charge was covered in the international agreements.
If the reader will study that table a little he will learn several things.
If we have one hundred millions of people in this country, there is an express office for about each 5,000 of them, while there is a postoffice for about each 1,666 of them.
There is an express office to about every 175 square miles of our territory, while there is a postoffice for about each 60 square miles of our territory.
The reader will have no trouble to see by the table that, if he ordered an 11-pound lot of hose and shirts or phonograph records, photograph films or other goods from New York City for delivery in Chicago, he would get the goods by a properly served parcels post for just 97 cents less carriage charge than he now pays the express companies. If he live in Los Angeles, Cal., he would get the goods from New York for $3.04 less. Even if he lived in Buffalo, N. Y., he would get those eleven pounds of goods from the metropolis of his state for 48 cents less than he now pays the express companies.
Be sure, however, to notice those three right-hand columns.
You will observe that the Right Honorable John Bovine, an exporting merchant of London—or a manufacturer, if you please, of Manchester or Leeds, England—can send that 11-pound package to you in Chicago, Hot Springs, Fargo or elsewhere in the United States—send it by mail, which no American merchant or manufacturer can do—at from 90 cents to $3.00 less carriage cost than the New York merchant can send it to you by express—the only means our present laws and methods permit him to use.
Baron Von Stopper, an exporter of Berlin, likewise has a large advantage over the New York merchant in supplying your parcel demands. Even Senor Greaser of the City of Mexico, can ship—by mail—eleven pounds of kippered tamales or sombreros to any point in the country, save ten states within short-haul range of New York City, and have an edge of 30 cents to $3.23 over his New York City competitor in supplying your parcel order wants.
Great, is it not? Fine system, is it not, to “protect home industries?” To build up “foreign trade?”
But, it is not quite so bad as it looks for the very reason that our “postal agreements” recognize the “tariff wall” that is built around certain “infants” in this country. Your goods from England, Germany or Mexico must be of our “free list” kind, otherwise they must pay a rake-off to the government. As that is pretty stiff, you don’t order many parcels from abroad. You buy home products—thus paying the tariff rake-off to the protected “infant” instead of the Government.
Does it not appear that we American citizens are an easily “worked” bunch?
In connection with the tabulation just presented, should be noted the fact that millions of our people live in non-railroad communities—live, often, many miles from any express office, while a postoffice may be near. If these people have pressing need for any article of merchandise weighing over four pounds it cannot reach them, under existing law, by mail. They must order it sent by express and make the long drive to the nearest express office to get it.
The article may be one needed for the health of the family or it may be a rod, a gear wheel or other part of some machine that has broken in a critical hour of need—any one of a hundred needs, delay in supplying which costs money.
It was carefully figured in 1900 that our rural, non-railroad communities alone lost $90,000,000 a year in excessive express charges and delays in delivery by reason of the peculiar if not studied apathy of their government in the matter of furnishing even a reasonably adequate domestic parcels post service.
The hypothetical rate (1 cent a pound or $20.00 per ton), for parcels carriage and delivery by post is low—maybe a little too low. If so, it is only a very little, if it is figured to have the rate cover only the actual cost of the service. A nation-wide parcels post service, if properly organized and directed, would, it must be remembered, handle all the short as well as the long haul business. It would not, as now, permit a collusive raiding arrangement between the railroads and the express companies by which the latter get most of the short-haul shipments and leave most of the long-haul parcels to be handled by the mail service.
I see by a local press item, that the Senate Committee on Postoffices and Postroads is going to propose in the bill it is drafting that parcels of eleven pounds in weight be carried by the mail service for 50 cents—10 cents for the first pound and 4 cents for each additional pound or fraction thereof, up to the maximum of 11 pounds. Of course, a rate of 50 cents for the carriage of 11-pound parcels would be a great betterment over the present rate and weight regulations. But a rate of 50 cents for an 11-pound package is away too high, figuring on short and long haul parcels, unless it is intended to make the service a revenue producer, which it should not be. The committee, I gather from the news item, has recognized the fact that a 50-cent rate is too high on short-haul matter and are considering the recommendation of a lower rate for it—a distance scale or schedule of rates. It is to be hoped that, if the proposed bill becomes law, it will carry such a provision.
It is said the committee decided upon the weight and rate limits after an “exhaustive investigation of all the parcels post systems of the world,” and it was pointed out that this investigation disclosed the fact that only “five powers” reported deficits in their postal services in 1909—Luxemburg, Chili, Greece, Mexico and Austria—the deficits ranging from $7,437 in Luxemburg to $1,693,157 in Austria. Of these, it will be noted, all save Austria are small or only partially developed countries. None of them have rail or other transportation facilities at all comparable to those of this country. Yet our government, with its excessive parcels rate and ridiculously low maximum weight limit on parcels reported a deficit of $17,441,719.82 in its postal revenues for 1908-9, and $6,000,000 in 1910.
Whatever the action that may be taken by the present or a future Congress looking to the betterment and to a cheapening of the nation’s parcels post service, one thing must be done if such action be made effective—if it yield the results it is alleged are expected of it. Such action must carry provisions that will effectively break up the present collusive understandings and arrangements between the railroads and the express company interests, which arrangement has for years been raiding the postal revenues on the one hand and, by greatly excessive rail and express rates for carrying parcel freight, has been looting the people on the other.
This can be—and should be—done. There are two actions which may be taken by the government, either of which I believe would accomplish that most desirable and necessary result.
On previous pages (pages 227 and 228), will be found quoted a section of the law of 1845—a law for the establishing and regulation of the government mail service. On the pages 256-257 will be found a most instructive discussion of the law by Mr. Allan L. Benson. Turn back and read those pages. Mr. Benson is always worth a second reading.
That it was the intention of the legislators of that time to make the carriage, handling and delivery of letters and “packets” (small parcels or packages of any sort of mailable matter), a government monopoly, there can be no valid reason to doubt. That the express companies have operated and are operating in violation of Section 181 of that law, there can be no valid reason to doubt. That Section 181 of the enactment of 1845 is good, sound law today, there can be no valid reason to doubt. That the express companies have operated, and continue to operate, in violation of that law—in open defiance of it—and are therefore engaged in a criminal traffic, there can be no valid reason to doubt.
True, they have a very peculiar court decision to protect them in their violation of that law. I call it a “peculiar” decision. A more fitting term might be used in describing that court decision, and the use of such a term would be fully justified.
One of the two actions which Congress might take would be to amend Section 181 of its Revised Statutes so that even a yokel, as well as a Federal Judge, may clearly see that the carriage of packages and parcels, as well as of “packets,” which do not exceed the maximum regulation weight and are of mailable class and kind, is “intended” to be the exclusive privilege of the government.
Such an amendment to the law would force the express companies out of business.
The other action which could be effectively taken would be to make the parcels post rate so low and the maximum weight of parcels so liberally high that the railroads and express raiders would quit of their own accord, which they would do as soon as their present tonnage of loot is seriously cut down. Nothing would cut into that lootage deeper or quicker than would a service rated and weighted parcels post.
I have been severe in my strictures and condemnation of the express and railway raiders. In evidence that my condemnation is deserved I desire to quote two or three people—people who have made a careful, painstaking study of the game these raiders have played, and yet play, and of the practices and tricks which make it a “sure thing” for the high-finance gentlemen who play it.
Mr. Albert W. Atwood wrote a series of three most informative articles for the American Magazine under the caption, “The Great Express Monopoly.” They appeared in the American in its issues for February, March and April, 1911. I trust the publishers will not take unkindly my quoting Mr. Atwood. He presents some facts which so conclusively evidence several points that I cannot resist the appeal they make for quotation.
In evidencing the fact that the railroads own and control the express companies and also showing how that ownership and control was obtained and is maintained, Mr. Atwood writes as follows:
It has frequently been asserted by merchants and shippers that the stock issues of the express companies are merely a device to make possible the exaction of unreasonable charges. Perhaps the most direct case in point is that of the Pacific Express Company, organized in 1879 to do business on the union Pacific and Gould Railroads. Before the Indiana Railroad Commission John A. Brewster, auditor of the company, recently testified that there were twelve stockholders and $6,000,000 of stock. On pages 784-785 of the record there appears this colloquy:
Q. What did you do with that stock, Mr. Witness?
A. The capital stock was given to the Wabash, union Pacific, and Missouri Pacific for the rights, franchises.
Q. For what rights?
A. Franchises and rights to do business.
Q. We begin to understand it; it wasn’t understood before that; nothing was received by the Pacific Express Company for the issue of this $6,000,000 of stock? Do these railroad companies own the stock?
A. Yes, sir.
Q. These twelve stockholders are the railroads. The railroads get these 6 per cent dividends on the stock?
A. Yes, sir.
Before another State Railroad Commission an officer of the company stated that so far as he knew and so far as the records show no cash was received for the $6,000,000 stock. The Illinois Railroad and Warehouse Commission has decided this stock was issued in fact and in law without consideration. Ostensibly the stock was issued by the express company in exchange for the right to do business over the lines of the railroads, but all the express companies pay a fixed percentage of their gross receipts, ranging from 40 to 57? per cent, to the railroads over which they operate.
On the question as to whether express companies operate at a profit or not, Mr. Atwood writes as follows of this same Pacific organization:
Whatever legal view we may take of this curious stock issue, there is no room for doubting that it has served as a device for the extortion of money from the shipping public, for express charges are made high enough to more than pay dividends on the stock. Starting in business with no capital except such as may have been temporarily loaned to it by the railroads in control, the Pacific Express Company has paid dividends of $8,334,000 in twenty years and in addition has been paying to the railroads, which owned all its stock, about 50 per cent of its gross receipts of more than $7,000,000 a year. A large block of the stock recently changed hands at $200 a share, and yet we have seen how it was issued without consideration in cash or property. Indeed it is said the company operated for eight years before the stock was issued at all.
In speaking to the same point as applied to the United States Express Company, Mr. Atwood calls attention to the fact that 55 per cent of its “stockholders” have entered suit to wind up the company’s affairs on charges of mismanagement by its dominating officers. Mr. Atwood further writes:
Although the gravest of charges of mismanagement and waste of assets have repeatedly been made against the directors of the United States Express Company, a profit of almost 15 per cent was earned by the company on the capital invested in the express business in the year 1909. This profit would have been still greater had general trade been normal, and had there not been a hiatus between the loss of one large contract and the securing of another. That the stockholders have not received all the profits proves nothing. Millions have gone into unnecessary real estate investment and large salaries have been paid, but earnings on the capital actually invested have clearly shown that even under a management whose good faith and ability is being challenged in the courts there is an ample return.
As long ago as 1875 a writer in Harper’s Magazine said the express business had already created fifty millionaires, a statement which does not tax the credulity of anyone who casts a glance at the dividend record of these companies. To use the calmly judicial words of the Census Bureau: “In no other business is it probable that so little money, comparatively, is invested where the gross receipts are so large.” We have seen that new capital is not a necessity of the express business. Unlike the railroads, new security issues to raise capital are never sold to the investing public.
The cappers for railroad and express interests, keep the atmosphere agitated with talk about the “uncertainty and irregularity” of the quantity of express matter to be carried, “the excessive taxes paid,” etc. In answer to such bubble, Mr. Atwood has this to say:
While this may be theoretically true, the experience of years has shown that the patronage of these companies has been fairly regular, remunerative and growing. Not only will a study of the gross receipts prove this contention, but further confirmation will be found in the remarkable series of excessive dividends. “We do not feel that any extravagant return should be permitted upon the business of these companies,” said the Interstate Commerce Commission in Kinde v. Adams et al., “for it involves none of the elements which entitle an investment to a high return.”
When the Adams Express Company enriched its shareholders with a 200 per cent extra dividend in 1907, stress was laid upon the increase in taxation throughout the country. How ridiculous this is can be seen from the fact that the Adams Company paid only $145,184 in taxes in the entire fiscal year of 1909, and $202,234 in 1910, although its extra dividend alone amounted to $24,000,000. Profits on stock and bond speculation amounted to $418,979 in the year 1909, and $1,943,889 in 1910. The American Express Company, with its huge resources, paid but $283,951 in taxes in 1909. In the same year the volume of its banking business alone amounted to more than $250,000,000. In at least one important state, the express companies paid no taxes until a few years ago and in Indiana the companies had the audacity to tell the Tax Commissioner that they had little or no tangible property in that state. When Congress voted to put a tax of two cents on every express transaction to raise revenue for the Spanish War the companies made the shipper pay, and when the shippers objected fought the case to the highest courts.
At this point the question naturally arises as to how the express companies have been able to carry on for so many years such a perfect system of extracting money from the public without being seriously molested. The answer involves a knowledge of the relations existing between the railroads and the express companies, and a knowledge of the complete monopoly which exists in the express business—a monopoly made possible only because of these very relations.
In Pearson’s Magazine appeared two forcefully written articles by Mr. Allen L. Benson on the parcels post. The articles appeared in Pearson’s in February and March, 1911. In his February opening and closing Mr. Benson says some things to us and says them with a kindly bluntness which we should appreciate:
Is it a pleasure to you to be treated as if you were a fool? Do you never tire of acting like an organ-grinder’s begging monkey?
These questions are put to you in good faith. I have no desire to insult you. I know you are not a fool. I know you don’t like to beg. Yet here you are again, with your little red cap on and your little tin cup out, begging for a parcels post. Begging from those whom you should order. And the gentlemen from whom you beg treat you as if you were a fool.
Perhaps you believe these statements are not so. I shall soon show you that they are so. But before we go down this interesting parcels-post road, let us hang a lantern to the wagon-tongue. You will understand the scenery better if you see it by the light of this particular lantern. Here it is:
Bad government is largely made possible by the mistaken opinions held toward each other by the governing classes and the governed. By “governing classes” I don’t mean Presidents and Congresses. I mean the great capitalist interests that make Presidents and Congresses. The governing classes underestimate the intelligence of the people. That is why the governing classes are always in process of yielding something to the people. Depending upon the stupidity of the people, gross wrongs are inflicted that are righted only under force, inch by inch.
The people, on the other hand, have too exalted an opinion of both the intelligence and the patriotism of those who control the government. They have no good opinion of the patriotic impulses of the great capitalists, but they fail to note that the great capitalists are the National government. Mr. Morgan in Wall street they recognize. But Mr. Morgan in Washington, disguised as Uncle Sam, they do not recognize. Therefore they behold him with a certain veneration. They have been taught, since childhood, to look up to Uncle Sam as to a father. He is the government in breeches. The people do not always agree with the men who govern them, but they always agree with the government. The grand old government of the United States looks good to them. It looks good to them because it seems to embody the power, the will and the virtue of the people.
All of which is not true. No government is much better than the men who control it. If the men who control it are bad, the government is bad. If a few control it, the rest do not control it. If a few use it to get more than belongs to them, the rest cannot use it to get what belongs to them. If a few control the government to rob the rest of the people, the government is not the friend, but the enemy, of the rest of the people.
The United States government is and long has been controlled by a few rich men. These men have used and are using the government to enrich themselves at the expense of the rest of the people. I do not mean so say that the government never performs an act that is of service to all of the people, but I do mean to say that when there is a conflict between the interests of the few who control the government and the interests of the rest of the people, the government is almost certain to take the side of the few as against the many.…
The little guiding group of rich who tell you that a high tariff helps you is the same little guiding group that tells you a parcels post would hurt you.
…
Is it a pleasure to you always to be treated as if you were a fool? Do you never tire of paying 16 cents a pound on mail packages limited to four pounds, when there is hardly a little South American republic or fourth-class European state that will not carry at least eleven-pound packages for a cent a pound or less?
Think of it—we have entered into agreements with forty-three nations that have the parcels post to receive and deliver their parcels when directed to any person in this country; we are permitting the Philippine Government to establish a parcels post; we have agreed to receive in this country big packages at low rates for delivery abroad; but we ourselves have no such rights among ourselves. We must not only pay tribute to the express companies, but we must believe that it is good for us to do so.
If the American people only knew their power; if they only knew their power! If they would tear off their party labels and vote as they talk at home among their neighbors, they could push this country half a century ahead at the next election. Everybody knows something is wrong, but almost everybody votes the thoughts of those who make the wrong.
Shall we never vote for ourselves?
The italics in the last paragraph quoted are mine. So, too, are the sentiments of that paragraph—both the expressed and the implied. That is I believe in them—I believe in them hard and stubbornly. If my readers will think hard about them for a few minutes, I feel confident they will conclude that it is about time for them, for all of us, to act on Mr. Benson’s advice—tear off our party labels and begin “to vote for ourselves.”
In support of his charges of bad faith on the part of the government in giving the people a serviceable parcels post, Mr. Benson’s remarks are most illuminating. He makes reference to a public or semi-public document of the government, written by one Mr. Turner and proceeds as follows:
“‘This will open a great business for American retail merchants,’ wrote Mr. Turner. ‘Brazil can be flooded with catalogues. This information, in advance, will enable those desiring to go after business to prepare for it.’
“Mind you, these are only occasional sentences from his enthusiastic article. He dwelt at length upon the eagerness of the Brazilians to buy such articles as we make. He even became specific and enumerated some of the articles that could be advantageously sent by parcels post. ‘This opens up great possibilities for the retail shoe houses,’ he said, for instance, ‘as elegant shoes are worn.’ Also, there was a great market for gloves, embroideries, ribbons, silks, stockings, and underclothing.
“Here, then, we have the spectacle of the United States Government making statements to business men through a publication that the common people never read, that are directly opposed to the statements that are made to the people of the United States in congressional debates and other publications.
“Now, ask yourself these questions:
“Would the establishment of a parcels post by Brazil, which we have permitted to extend to this country, open any markets for Americans in Brazil if parcels-post rates did not permit American merchants to deliver their goods in Brazil at reduced cost?
“Again: If a parcels-post in Brazil will enable American merchants to lay down their goods in Brazil at reduced cost, why wouldn’t a parcels post in the United States enable American merchants to lay down their goods in the United States at reduced cost?
“Furthermore: If reduced carrying charges would enable American merchants to capture Brazilian trade by reducing selling prices, why wouldn’t reduced carrying charges tend toward lower selling prices in the United States?
“Finally: Is there any reason on earth why the United States Government, which is opposed to a parcels post in this country, through an official publication, welcomes a parcels post in Brazil—is there any reason except the one fact that there are no American express companies in Brazil?
“Figure it out for yourself. I have figured it out for myself. As I figure it out, the United States Government is treating us as if we were a little weak in the head; as if we are just foolish enough so that it was safe to print, in a semi-public official publication, an acknowledgment that all of its excuses for not giving us a parcels post are really impudent lies.…
“‘Should the mail trade have a government subsidy?’ asked one gentleman who represented an association of jobbing firms. Let us see how much honesty there is in this question. A subsidy implies the payment of money, either for nothing, or for something that is not immediately received in return. That is what these same rich gentlemen mean by subsidy when they ask you to subsidize American ships. What element of subsidy would there be in a parcels post that enabled the government to derive a great profit from the mail-order business? We have all the machinery for handling ‘packets’—costly postoffice buildings, cars, letter carriers, rural mail carriers. Why not use them? Why not let the rural mail carrier, whose average load is now 25 pounds, carry 500 pounds at a cent a pound? The postoffice department would earn $40,000,000 more a year if the rural wagons were loaded to the 500-pound limit.
“‘The fact is,’ said the same jobber gentleman, ‘that the United States Government cannot carry merchandise by parcels post without having to meet an enormous annual deficit for conducting the service.’ The fact is that the fact isn’t. What brazen effrontery to declare that the government would lose money carrying packages at a cent a pound, when the German government makes money by carrying packages at a little more than half a cent a pound! It is true that German rates are based upon distance, but it is also true that Germany, without any mail monopoly, competes with all comers and beats them out with low tariffs. The German government can compete with the German express companies because the German parcels post will accept packages up to a weight limit of 1103??? pounds, while our Government turns over to the express companies everything that weighs more than four pounds.
“Furthermore, if the carrying of packages is such a hazardous business that our Government should not dare to attempt it, how comes it that the express companies have become rich at it? The combined capital of the express companies is a little in excess of $48,000,000. For years, the big stockholders in express companies have been apoplectic with wealth. All of this money came from somewhere. All of this money came from those who consumed products sent by express. Only a few weeks ago the Interstate Commerce Commission brought out the fact that the Adams Express Company’s business in New England yielded a profit, in 1909, of 45 per cent, upon the investment. Yet, there was nothing brought out in the proceedings to show, that the Adams Express Company was gouging New England any harder than it was the rest of the country, or that the other express companies were not doing to the rest of the country approximately what the Adams was doing to New England. If you had the Government’s equipment for handling express matter, would you feel particularly frightened at a proposition to give you a monopoly of the ‘packet’ business at an average rate almost twice that of the German Government’s average rate?”
Knowing that my readers have not wearied of Mr. Benson, I shall presume to take further liberties with his articles on our subject. His handling of the point I have raised—railroad control of the express companies—is so informative and so able that I would do neither my readers nor my subject justice were I not to quote him and do it right here:
The railroads have become the express companies, not in legal fiction, but in transportational fact. The railroads largely own the express companies, entirely control the express companies, and, to all intents and purposes, are the express companies. We, the highly intelligent American people, simply don’t know these facts. Never has it seemed to occur to us that, since Benjamin Harrison was President and John Wanamaker was in his cabinet, the express grafters may have devised improved ways of working the express graft. Therefore, in this parcels post matter, we don’t know who is pushing the knife that we feel between our ribs. We accuse the express companies. A man who was being murdered might as well accuse the shadow of his murderer.
Perhaps the facts that follow will show you who are behind the shadows of the express companies. I quote from Senate Document No. 278, Sixtieth Congress:
Stock held by railways in express companies $20,668,000
Railway securities owned by express companies 34,542,950
Holdings of express companies in the stock of other express companies 11,618,125
Since this article was written (Mr. Benson adds in a footnote) the Interstate Commerce Commission has issued a report in which railroad holdings in express stock are given at $14,124,000. The same report says the “total book value of property and equipment of 13 express companies is $22,313,575.53.” The figures furnished by the express companies are evidently somewhat bewildering to the commission, which, having found the total value of the express companies’ assets to be $186,221,380.54, remarks: “It is evident that the capital stock of these companies bears no relation to the amount invested in the express business.” On the face of the Interstate Commerce Commission’s report, the railroads have disposed of more than $6,000,000 worth of express stock since the United States Senate investigated the matter during the life of the Sixtieth Congress. Yet there is no mention of such a transaction, and it seems exceedingly unlikely that the railroads have suddenly reversed their policies and become sellers instead of buyers of express stock. What seems more likely is that both the railroads and the express companies are continuing the policy to use figures to conceal facts. Gentlemen who can give $186,000,000 worth of assets a “book value” of $22,000,000 might have no difficulty in compelling figures to turn flip-flaps upon almost any occasion.
Please notice that railroad companies—not railroad men, railroad companies—own more than $20,000,000 of stock in express companies. The express companies are capitalized at only $48,000,000. Railroad companies therefore own almost half of the stock of the express companies. Railroad men like Mr. Gould, the Vanderbilts and Mr. Morgan also own stock in express companies. Railroad men presumably do not vote their private holdings of express stock in opposition to the manner in which they vote the express stock owned by the railways they control. But, even if railway men owned no express stock, the ownership by railways of a solid block of more than $20,000,000 of express stock would enable the railways to control the express companies. Mr. Morgan controls many corporations in which he holds only a minority interest. It is the way of big men to control more than they own.
…
Let us assume that you attach no significance to the ownership by the railways of almost half of the stock of the express companies. You don’t believe the railroads would take the trouble to get control of $3,500,000 more stock and thus control the companies. You want to be shown.
All right. You don’t mind using your common sense? Good.
Wouldn’t railroad companies be incorporated fools if they didn’t control the express companies? Couldn’t the railroad companies, if they cared to, control the express companies, even though the railroad companies owned not a share of stock in any of the express companies? What is an express company?
An express company is a corporation that is engaged in transportation. Not a single express company owns a foot of railway track, a locomotive, a roundhouse or a water tank. Not a single express company employs an engineer, a fireman, a train dispatcher, or a section hand. Not a single express company could carry a bar of soap from New York to Albany without using all of the mentioned instruments of transportation, besides many others. In other words, an express company is an institution engaged in transportation without owning any of the means of transportation. It exists only by sufferance. So long as railroad companies are willing to haul the cars of an express company, the express company may do business—but no longer. An express company, if ill-treated, has no other place to go. It cannot hire a department store company to haul its cars, nor a dry-goods firm, nor a manufacturer of hats. An express company must go to railroads for its transportation facilities, accept the best terms it can get, or go out of business.
Is it not so? How comes it, then, that you never hear of rows between express companies and railroad companies? How comes it that the same railroads that are always trying to squeeze you on freight rates apparently never try to squeeze the express companies on rates for hauling cars? The express companies are exceedingly fat birds. They are absolutely in the power of the railroad companies. If you owned the only vacant house in the world and a wanderer must rent from you or die in the street, you would not have him more completely in your power than the railroad companies have the express companies.
Yet the railroad companies are frying the express companies to a frazzle. The New York Central Railroad Company takes 40 per cent of the gross receipts of the express company that operates over its lines. But the frying is entirely friendly, and therefore the express companies do not cry out against it. A station agent does not complain because the railroad company for which he works takes from him the money for the tickets he has sold. He expects to give up the money. The officers of express companies expect to give up the money they take in. That is what they are there for. If they were otherwise disposed they would not be there. The $20,000,000 block of express stock held by railroads would keep them out. Can you imagine an express company giving 40 per cent of its gross receipts to a railway company if the directors of the express company were not controlled by the railway company?
Please get the full meaning of that New York Central arrangement. It is not a mere matter of 40 per cent. It is a matter of 40 per cent of the gross receipts and then perhaps 50 per cent of what is left. In other words, the railroad company first takes, as a carrier, four-tenths of the express company’s receipts. As a stockholder in the express company, the railroad next takes almost half of the net profits.
…
In both surveying the Canadian express situation and giving the order to reduce rates, Judge Mabee, chairman of the commission, said:
“Cut short of all the trimmings, the situation is that the shipper by express makes a contract with the railway company through the express company. The whole business could go just as it now does without the existence of any express company at all by simply substituting railway employees and letting the railways take the whole of the toll in the first instance.”
As showing how freight tariffs are manipulated by the railroads to force the people to make light shipments by express and pay the looting rates the express companies charge, the following by Mr. Benson should be read:
In what essential particular does the conduct of the American express business differ from the conduct of the Canadian express business? The Canadian express companies collect money from the public and hand it over to the railroads. What do our express companies do?
At this point, some gentlemen may be moved to ask. Why is an express company? At first glance, it does seem rather strange that the railroads should bother to do business through express companies if the railroads not only haul the express cars, but get the money the public pays. Yet there is nothing strange about it, as we shall see when we consider what the express business is.
Part of the express business is an effort to commit a crime for pay. The rest of the express business is an effort to perform a service at an exorbitant rate of compensation. In other words, part of the express business is the carrying of “packets” that should be sent only by mail, and the carrying of which by a private person or corporation is a crime, and the rest of the business is the carrying of light freight that should go by fast freight at a rate much below the express rate.
The express business, like every other business that has thriven, was based upon a public need. The public need was for a fast freight service for light freight. The railroad managers of forty years ago were not disposed to give the service, but they were willing to haul cars for an express company that wanted to carry fast freight at a high rate.
In this small, timid way the express business began. The crime of carrying mail in competition with the government had never been considered. When shippers offered mailable packages for transmission, they were accepted, but postage stamps were affixed to comply with the law. Even the volume of light freight was relatively small. The railroads themselves kept all of the light freight traffic they could. It was not until the railroads invested heavily in and obtained control of the express companies that deliberate efforts were made to compel the public to send light freight by express.
Let me explain precisely what I mean by this. The minimum freight rate from Chicago to North Platte, Neb., is $1.10. Whether a package weighs five pounds or 100 pounds, the charge is the same.
Suppose you want to send a ten-pound package. A dollar and ten cents seems an exorbitant charge, especially when the fact is considered that a ten-pound package, sent by freight, probably would not reach its destination in less than ten days. You look up express rates and find that you can send the package for 55 cents, with a certainty of delivery within forty-eight hours. Of course you send the package by express.
What has happened? Apparently, the express company has saved you 55 cents. Actually, the railroad company has clubbed you into the clutches of the express company. The railroad company never expected you to pay $1.10 for the transmission of a ten-pound package. In the good old days when the express companies were not owned by the railroad companies, and the railroad companies were not controlled by a little group of men in Wall Street, the freight rates for ten-pound and hundred-pound packages were not the same. The railroads wanted to carry small packages and made rates that brought them in. But the express companies showed the possibility of collecting a higher rate for quick delivery. For this reason, a certain amount of business naturally came to the express companies. But after the railroads obtained control of the express companies, resort was had to artificial means to drive business over to the high-priced express companies. The freight rate for 100 pounds was established as the minimum rate for all lighter packages. No one is expected to pay this exorbitant rate, but it is there for everyone to look at.
Slow freight delivery is also apparently employed by the railroads to compel the public to ship by express. If one have a full hundred pounds to send a short distance, he will find the minimum freight rate lower than the express rate. But he will also have reason to believe that freight trains are drawn by snails. The Pennsylvania Railroad and the New York Central recently struggled ten days to bring a hundred-pound package forty miles to me. An express company would have performed the same service over-night. If the railroads had wanted the business, they would have required no more than two days.
Now, I have quoted extendedly from both Mr. Atwood and Mr. Benson. I have done so, because they wrote not only what I have quoted but much more that I would like to quote, and each of them has handled his subjects pointedly and forcefully conclusive. The call for “copy” by my publisher, will, I trust, argue my excuse with the publishers of Pearson’s and The American magazines for having drawn so largely upon their columns without first asking and securing their permission to do so.
But it seems to me I can hear some barker for the interests barking “Yellow writers! Yellow magazines!”
A few years since, the fling of that appellation “yellow” may have had some influence—probably did have some influence among the thoughtless. But millions of the then indifferent and thoughtless people have become serious and thoughtful recently. To such there is no opprobrium in the word “yellow” as the barkers fling it at newspapers and magazines which attack and tell the truth about the interests for which the barkers bark. In fact, the word has become an appellation of honor rather than of discredit—of repute rather than of disrepute.
Here is another quotation—two of them. They are from an article in Pearson’s Magazine, February, 1912, issue. Get the magazine and read the whole article. The article is captioned “The Railroad Game.” It will richly compensate you:
I chanced to meet a man who is now president of one of the great Western railroad systems. He chided me good-naturedly about my antagonism to the railroads. Finally he said: … “You are too big a man to be fighting the railroads. Come get into the game with us. It isn’t how much money we make, but how much we can conceal that counts in the railroad business.”
…
These figures do not take into consideration at all the operations of the numerous express companies which impose upon the people a burden approximating $125,000,000 a year while their actual investment for all purposes does not exceed $6,000,000 a year. These companies all earn prodigiously. All pay big dividends. All have big surplus funds, and frequently have big melon cuttings. In one of these a few years ago $24,000,000 were distributed among the stockholders of a single company. And after all, these companies amount in actual service to the people to no more than a parcels post which the government should have established long ago. With government control of the railroads this pernicious form of extortion would end. In European countries express companies do not exist. There the parcels post is supreme, satisfactory to the people and remunerative to the governments.
Of course, the writer of the above when he mentions $6,000,000 as the “actual investment for all purposes” means all the actual investment for all express service purposes. In that statement he is entirely correct.
But who is the writer? Well, the man who made the statements just quoted is Mr. O. C. Barber, the American “Match King.” Certainly no one—not even the most courageous and venturesome hired liar of the raiding combinations—will call Mr. Barber “yellow.”
“Why?” Well, Mr. Barber has a lot of real long-headed and hard-headed sense. He also has money. He has a whole lot of money. That makes Mr. Barber a “strong” man, as Mr. Benson puts it, in the calculating eyes and minds of public bubblers. Not only has Mr. Barber money, but, as Pearson’s editor points out, “he is a man of affairs.” He has been a man of affairs for fifty years. He is an officer or director in companies which have a capital of fifty million dollars. Their combined freight shipments are from 150,000 to 200,000 cars per year, and go to all parts of the world.
No, there is nothing of the yapped “yellow” about Mr. Barber. When the barkers bark of him, the trajectory of their language will carry it scarcely beyond the walls or to the banqueters. In most cases the barker’s voice, when adversely criticising Mr. Barber, will take that humble, pendant expression so universally characteristic of the tail of a scared dog.
Mr. Barber is “strong.” If you don’t know it get the February, 1912, Pearson’s and read his article on “The Railroad Game.” You will know it then.
The clackers who clack for those who profit by the outrageous parcels post service in this country now, will tell you, of course, that Germany, France and some other countries can “afford” to give their citizens lower postal carriage rates, “because the governments own the railroads and have their mails carried free.”
It is sufficient to say in answer to such clack that if we can have a cheap, efficient parcels post service only by owning the railroads, then let us own them.
Why not? A good, cheap parcels post service is worth it—worth it to you, to me, to every man, woman and child of the country, both to those living and to the generations yet unborn.
Yes, sirs, such a parcels post service is worth more to our people than our railroads cost to build, or would cost to rebuild or to buy. Why do I say that? I say it because it is a fact—a fact that needs but a line or two to evidence.
1. Such a parcels post service would save our people more than $300,000,000 every year.
2. At 2 per cent (a rate at which the government can borrow all the money it wants), three hundred million dollars would pay the interest on $15,000,000,000.
3. Fifteen billions of dollars is more than either the “book” or the “market” value of all the railroads in this country—“water” included. It is more than twice their tangible, or construction, value.
So, if we can have cheap, reliable parcels post service only when the “government own the railroads,” then let’s get busy.
One of the much worn objections to a cheap parcels post service is that it cannot be established and profitably operated, as it has been in those countries which own the mail-carrying roads and pay much lower salaries to the operators of the service.
In reply, I will say that in neither Great Britain, nor in any country of continental Europe are all the rail-mail roads owned by the government. But those countries do control all their railroads—and that is exactly what this government must soon do or the railroads will control it.
To tell how these governments got control and keep control of their railroads is another story. In fact, it is a story for each of the countries. Suffice it to say here that they do control them. One element of that control compels the railroads to carry a large portion of the mails free of charge.
In Great Britain, all regular trains carry at least one mail car free, or at a mere nominal charge, and the trunk line roads are required to turn out extra mail trains of ten cars each on demand of the postoffice authorities. For such a train the road can charge no more for the run than the average cost of an average passenger train.
France guarantees and, I believe, pays the interest on a 70,000,000 franc railway bond issues. That is equivalent to $14,000,000. At 3 per cent the interest amounts to $420,000 a year. For that sum the railroads carry all the regular mails free—carry them under government direction and stipulation. Last year we paid our railroads $49,330,638.24 for carrying our mails. The French roads also carry the officials, the soldiery, and all military supplies free.
That, in brief, is about what the French government compels the railroads of France to do.
And those roads are all paying fair returns on the money invested in them!
It was only a few brief years since the railroads of the German Empire were all in the hands of private owners—of “frenzied financiers” who robbed both the government and the people in outrageous mail, freight and passenger rates. Germans will not stand for such conditions long. The people shouted aloud their grievances and demanded redress—demanded a remedy.
The German government heard and heeded the demands of its people. It usually does. When it started to give its people relief it was met on every hand with just the same sort of talk as has been heard in this country for a quarter of a century.
“You can’t cut down the rates, for the roads are now earning barely enough to pay fair interest on the investment.”
“You can’t trespass upon the ‘sacred rights’ of property.”
“You can’t think of taking such action! Why, it would create a financial upheaval—a panic—causing widespread disaster and bankrupting the railway companies.”
“You cannot possibly be so inconsiderate as to endanger the savings of the hundreds of thousands of widows and orphans who have invested in our stocks and bonds”—and a lot more of like junk.
But the Chancellor of the Exchequer was a clear-headed, clean-minded old German, with the rugged honesty for which his race is justly noted. Well, this Chancellor listened with courteous dignity to all their “you can’t do this,” “You can’t do that,” etc., until it was made quite clear to his mind that frenzied financiers and railroad grafters in his country were dictating as to the powers and policies of his government.
What happened then? Why, as Creelman put in writing of the incident, when this grand old Von heard enough of those “you can’ts” to make their object and purpose clear to him, he jumped to his feet and turned loose a few yards of forceful German language which, translated, summarized and anglicized, would sound something like this:
“I can’t! Well, you just watch me!”
“Did he give ’em anything worth looking at?” Oh, but didn’t he? The honest old Von sat quietly into their own game, played with their own marked cards and “beat ’em to a frazzle,” as our strenuous ex-President would put it. Did he buy up the roads, paying for all the aqua pura they had tanked up?
Well, hardly! It was control Von wanted, and ownership was neither immediately nor particularly sought, beyond the point necessary to that control.
As I remember the story, he quietly put some agents on the floor of the Berlin stock bourse and before the gentlemen who had handed him that miscellaneous assortment of “can’ts” knew what had happened, Von had control of one or two of the German trunk lines. Then the way he made those friends of the “poor widows and orphans” see things was profoundly and, for a few weeks, almost exclusively awful. He did not buy the road for his government. He merely bought control.
His government having control, he next slashed all the silk and frills out of rail rates on the road or roads controlled.
“What was the result?” Why, the “can’t” venders were on their knees to him in six months. In a year the German government controlled its railroads and there was not a railway patriot in the Empire who was not busy telling the Chancellor how many more things he could do, if he wanted to and, in fact, urging him to do some of them.
And the “widows and orphans,” or other legitimate investors in the securities of the German roads, lost not one cent of earned income in the passing of control from private to government hands. As a result, the German government is making money from its owned railroads. The net revenues of the German Government from its railroads is now annually about $250,000,000. From 1887 to 1906, the roads paid into the government’s exchequer about $1,400,000,000. It has saved money from its controlled roads and is furnishing its people a cheap and most serviceable parcels post. So much for the cheap foreign mail-carriage and the way the “cheap foreigners” got it.
Now, as to salaries paid. Mail carriers and clerks in this country are paid something under $1,000 a year. Railway mail clerks are paid an average of $1,165—and the latter work only one-half the time for full pay. I have no information at hand as to the pay of mail carriers and clerks in foreign countries, but I have the figures for the pay of railway mail clerks in Great Britain, Germany and France. So, we will make comparison of the pay in that class of service. They stand as follows:
Per Year.
In the United States $1,165
In Great Britain 780
In Germany 515
In France 610
There, now, you see the shocking disparity in the very worst and all of its enormity—the way it is usually presented by “farmers” in Congress who are cultivating express company crops. But let us look into those figures a little further.
Information carefully collected and collated, both by official and private agents, among the former being the Department of Commerce and Labor of our own government, has conclusively shown that living in England and in the countries of Continental Europe is from thirty to forty per cent cheaper than in this country.
Let us take 30 per cent—the lowest reported estimate of the difference in the cost of living—subsistence, clothing, housing, schooling, amusements, etc.—and see how the figures look in comparison as to pay of railway mail clerks:
Per Year.
In the United States $1,165.00
In Great Britain 1,114.30
In Germany 734.30
In France 871.43
The enormity of the difference, you will observe, is not so shockingly enormous as it appears in heeler’s figures first shown. But even the last set of figures does not afford a just comparison. Here is why:
The English railway clerk is allowed $160 a year as “travel pay.” The German rail man is provided free a house that is worth an annual rental of $135 in Germany. Here, it would rent for from $240 to $360. In addition to his “salary” the French railway mail clerk is allowed $180 “travel pay” and is also provided free with a house of a rental value of $80 per year—a house that would rent here at from $160 to $300 per year. Making these little additions to the actual service pay of those “cheap foreigners,” let’s see how they compare with our “high salaried” railway mail clerks. We will figure the “travel pay” allowances at its purchasing power in buying a living and for the rent allowances we will add the lowest equivalent given above of corresponding housing in this country.
On that basis the stack-up is as follows:
Per Year.
In the United States $1,165.00
In Great Britain 1,344.30
In Germany 974.30
In France 1,288.57
Those “cheap foreigners,” who are efficiently operating a cheap parcels post, you see, come out of the wash in pretty fair shape after all, when compared with our “high salaried” postal service men.
But even the last table does not present the whole truth as to the lie so often yapped about by the tools of the private interests in this country that are opposing the betterment and cheapening of our parcels post service.
The railway mail clerks of England, Germany and France not only get full pay while laid up from temporary injury, the same as do our rail postal men, but their governments pay those “cheap foreigners” a pension when they get old or are permanently injured—pay it for the remaining years those “cheap” mail handlers live!
Among the most brazen, yet most frequently used, objections to a cheap and serviceable parcels post is that it would “benefit but very few people in the country’s vast population,” or other vocalized breath of similar purport and purpose.
Objectors who use this argument belong to one of two classes: They are either fools or think you are, or they are men whose sense of the right and wrong of things, commonly designated as conscience, got lost in their transit from diapers to dress suits.
The “argument” is not worth a line of consideration were it not so frequently used by objectors of the two classes just indicated. A man—a full-sized man—who can give it more than a smile ought to hire a janitor and a couple of scrub women to clean up his garret and dust off its furnishings.
But, seriously speaking, let’s think a moment about “the few” people who would be benefited by a cheap parcels post service.
There are 95,000,000 or more folks in this country.
There are about 36,000,000 of that number engaged in farming, farm labor, stock-raising and other agricultural occupations, counting the dependent families.
Counting the dependent families. Those “few” would be benefited, would they not?
Counting wives and babies, there are somewhere around 22,000,000 of our folks engaged in the mechanical trades and manufacturing.
Those “few” would be benefited, would they not?
Among our folks are, counting families as before, not less than 16,000,000 domestic servants, saloon, hotel and restaurant people, policemen, firemen, soldiers, sailors and laborers “not elsewhere specified.”
Those “few” would be benefited, would they not?
Next, we have around 12,000,000 of bookkeepers, clerks, agents, operators, teamsters, etc., “engaged in trade and transportation,” again counting “the little ones at home” but not counting the “retail merchants” nor the railway manipulators.
Those “few” would be benefited, would they not?
Next, we may enumerate among our people, doctors, lawyers, teachers and other professional folks, counting their folks at home the same as before, some 7,000,000.
Those “few” would be benefited, would they not.
Next we have—
But we have already found about ninety-one millions of the “few people” among our folks who would be benefited by a cheap, serviceable parcels post. That leaves somewheres around four millions to be accounted for.
Again, including dependent families not less than 3,000,000 of that number can be classed as retail merchants. Half of that 3,000,000 are merchants, dealers, manufacturers, etc., in the “larger cities,” whom even the opponents of the parcels post have agreed would be benefited by its service. At any rate it has been demonstrated by organizations of merchants in the large cities that parcel deliveries within a radius of thirty or forty miles of their stores, which had cost from eight to fifty cents, can be made at an average cost not exceeding four cents.
That leaves the country merchants, the jobbers, the railroad and express company raiders and their hired opinion molders to account for. Of these, the country merchant is by far the most numerous, likewise the most deserving of consideration.
On a previous page I made it fairly clear, I think, that a good, cheap parcels post service would be of great service to him. He has the respect and the confidence of his customers. He knows the worth of goods. He can sell the goods—any line or make—at the advertised or catalogued price and still make a good profit, as I have previously shown.
The parcels carriage charge, either by mail or express, is now so high he is compelled to order in quantities to keep “laid-down-prices” low enough to meet competition. A cheap parcels post service would put him in position to meet the competition of the larger merchants of the cities. A line of samples, showing the latest patterns, makes and grades, could take the place of fully half the shelf stock he now carries, aside from the staples. He could take the order of his customer and have the goods delivered by parcels post either to his store or, if in a rural delivery district, to the home of his customer for a few cents—have it delivered as cheaply as the big city merchant, manufacturer or mail order house can have it delivered.
Do not overlook that last point, Mr. Country Merchant, when hired yappers are coaching you to oppose a good parcels post service. The government will not pay “rebates” nor allow “differentials” in its parcels carriage. You can put your packages through the mails at as low a charge as that paid by a merchant with millions of capital invested in stocks of goods.
Of all the objections now urged against a domestic parcels post in this country, the dangers lurking in the mail order house is the most industriously worked. “It would be a fine thing for the eastern merchant to have a parcels post system whereby he could supply the people throughout the country,” said a Mr. Louis M. Boswell, a few years since when speaking to the National Association of Merchants and Travelers, convened in Chicago.
And who, pray you, is or was Mr. Boswell? Why, Mr. Boswell was one of the main cogs at that time, in the Western freight traffic wheels. Mr. Boswell talked for his personal interests, and for those interests only. To make his anti-parcels post talk catch his auditors—the Western merchants—he even told the truth about the express companies.
Freight should be transported as such by railroads in freight cars, and not by the government in mail cars.… I have long regarded the express companies as unnecessary middlemen.… Millions of dollars would be saved annually to the public if the express companies were done away with, and I do not believe the revenues of the railroads would be decreased.
“And what are you on earth for,” wrote a self-serving trade journal editor in 1900, “if not to look after your own interests? A parcels post … will knock your business silly. You are the one entitled to the trade in your town and neighborhood.”
I present the above quotations as fair samples of the “argument”—its method and its source—against a domestic parcels post. Let it be noticed that these two quoted statements—as is the case with most of the other promotion talk against a parcels post—is talked or addressed to country, village, town and one-night-stand city merchants.
The mail order houses “will knock your business silly!”
Now, of course, it must be admitted that, in this day of super-heated service of self, a man’s personal interests must receive his first consideration. But I cannot for the life of me see why these “Western merchants and travelers” take the talk handed them by “traffic” cappers, express company agents and space muddlers—take it in such large slugs—and apparently overlook the fact that these talking and writing bubblers are serving special interests. Can you understand it, Mr. “Storekeeper” of Rubenville? Or you, Mr. “Merchant” of Swelltown? Or you Mr. “Shipper” of Cornshock or Feedersville?
Mr. Benson in his March article in Pearson’s, says something anent the great hue and cry which the raiders, aided in this particular case by merchandise jobbers and some of the larger department store retailers, are trying to raise among country merchants and rural residents about what a great “menace and danger” the mail order houses would be if a cheap, serviceable parcels post was put into operation. I hope my readers will carefully peruse what he has said. Here it is in part only:
The railroads, in fighting the parcels post through the country merchants, are playing the old game. The old game is to work upon the fears of a minority, create what appears to be a difference of opinion among the people, and thus give Congress an opportunity to say that as sentiment seems to be divided, it would perhaps be better to do nothing until the public can thrash the matter out and discover what it wants. In the present instance we see great firms like Marshall Field & Company combined in an organization to spread among country merchants fear of a parcels post. Such an association was recently formed in Chicago with a membership of 300.…
There is only one country merchant, perhaps, to every 500 country customers, and the country customers are all in favor of a parcels post. All other things being equal, Congress always moves in the direction of the greatest number of votes. But in this matter, as in many others, things are not equal. Great financial interests and a few country merchants are regarded by Congress as a majority.…
“At any rate, I cannot forget that while Marshall Field & Company cry out against a parcels post, because it would build up the mail order houses, that they themselves do a large mail order business.
“This action on their part may seem like patriotism of the highest sort—but it isn’t. The mail order houses don’t care a rap about a parcels post. They are not against it, but they are not for it. My authority for this statement is Mr. Julius Rosenwald, President of Sears, Roebuck & Company of Chicago, the largest mail order house in the world. I approached him upon the subject, believing that he would grow enthusiastic, but he didn’t. He said he had never signed a petition for a parcels post, or otherwise interested himself in the matter, and never should do so. He didn’t tell me why, but I found out why and will tell you.
“The minimum freight rates of the railroads literally drive country customers into the mail order houses. A farmer’s wife, we will say, has a present need for two or three articles that she can buy from a mail order house for less than her local merchant can afford to sell them to her. But the articles weigh only fifteen pounds, the express charge would annihilate her saving, and the minimum freight rate, for which she might as well have 100 pounds shipped to her, is just as high as the express rate. But she still wants the two or three articles and she wants to buy them from the mail order house. So what does this thrifty woman do? First, she increases her order by putting down a few articles that she will need perhaps three months later. Then she canvasses her neighbors for orders until she gets enough to make 100 pounds, and divides the freight charges pro rata. The result is that the mail order house gets an order for 100 pounds of goods instead of an order for the fifteen pounds that would have been bought if a parcels post like the English or the German had enabled the farmer’s wife to order only what she first meant to buy. Incidentally, the country merchant in her vicinity is not helped thereby.
“If you have any doubt about the truth of this statement, send a petition for a parcels post to Mr. Julius Rosenwald, President of Sears, Roebuck & Company, Chicago, and see how quickly he will not sign it. You will not be able to get him to lift a finger to help you. He is sending out fifty-eight loaded freight cars each day, comparatively little express matter, doing a business of $63,000,000 a year, and is quite satisfied with such transportation facilities as exist.
“But don’t blame the mail order men because they don’t help you. Help yourself. First, help yourself by getting it clearly in your mind who in this matter is the chief offender. Your government is the chief offender. So far as postal matters are concerned, your government is protecting the interests that are robbing you. Your government goes even to the extent of submitting to robbery at the hands of the interests that rob you. I refer to the continuing scandal of exorbitant mail contracts.”…
Now, I desire to talk somewhat directly to the rural and village storekeeper and of storekeeping.
The manufacturer, wholesaler or jobber always sells the retail merchant—the quantity buyer—cheaper than they will sell in broken lots to the consumer. They will always sell to you cheaper than they will sell to your customer, will they not?
You have an “edge” of 20 to 40 per cent., have you not? But to hold that “edge” now, you must order in quantities which anticipate the demands of your custom, must you not? You must “stock up,” must you not? If you miss your guess, and underbuy the demands of your trade, you must, later, “sort up,” must you not? If you sort-up, you do it at “broken-lot” rates and pay excessive carriage charges for delivery to your place of business, do you not? If, on the other hand, you overbuy the demands of your trade, your shelves are soon full of “shelf-worns,” are they not? These shelf-worns you must unload, must you not? To do that, you offer “bargains,” do you not? Unloading “bargains” loses your “edge”—your profits—does it not?
But still another point in your present and compelled method of business. Your customer is never so well pleased with your sacrifice “bargains” as he or she is with the fresh, up-to-date article, which you sell at a profit. Is that not so?
Now, let us see how a cheap parcels post would “knock your business silly.” Let’s put the rate, say at 5 cents for parcels up to one pound, 8 cents to two pounds, 10 cents to three pounds, 12 cents to four pounds, and so shading up in weight to twenty-five pounds, at one cent a pound. I present this scale of weights and prices merely to illustrate. I have given them no particular thought or consideration—that is, I do not present them as a recommended basis for a parcels carriage system. I believe, however, that the government can carry and deliver parcels at about the rates named and not create any larger “deficits” than the postal service now shows.
That aside, let us see how you, Mr. Retail Country Merchant, would come out in the deal:
First: You would not have to “stock up” beyond the known demands of your customers. Your “shelf-capital,” then, would need not, necessarily, be more than half what is now is.
Second: You could serve your customers fresh goods of latest pattern and at less cost, and still serve them at a profit, instead of working off shelf-worn “bargains” on them at a loss.
Third: Mrs. Lucy Smith sees a Sereno Payne imported glove, advertised by an “eastern merchant” or some distant “mail order house.” It is the “very latest” and guaranteed to be the very best “kid” ever built—from a premature calf. Or Uncle Joe wants a mop rag-holder for Martha. It, too, is advertised by some distant manufacturer, merchant or mail-order bogey man. Say the advertised price of each is $1.00. Each, of course, weighs less than one pound.
Now, if Mrs. Smith or Uncle Joe orders direct, the article costs them, postage added at our hypothetical rate, $1.05. Of course, they will have inquired of you before they ordered—to see if you have it in stock—will they not? Well, you haven’t it in stock—and you can’t work off on them “something just as good.” Mrs. Smith just must have those particular gloves, and no other mop-holder will satisfy Uncle Joe. Now what do you do?
Do you tear off a yard or two of tirade about mail order houses that are “knocking your business silly” and about manufacturers who are “flooding the country with fake goods?” If you do, you ought to quit business and go put your head in pickle or take the “cure.” But you won’t tirade. No sir, nary tirade from you! You will be onto your job in a minute. And why?
Well, first, you know that you can get those gloves or that mop-holder for 20 to 40 per cent less than the rate advertised for Mrs. Smith and Uncle Joe. You can have either sent by mail and deliver it to Mrs. Smith or Uncle Joe at the advertised rate, pay the parcels charge yourself and still make 10 to 20 cents on the deal. If the gloves or the mop-holder strikes you as a probable “seller,” you can order a half dozen or a dozen pairs of the gloves, or three or four mop-holders, and still keep your parcel inside the one or two pound rate.
One other point in closing:
Well, it may be of no use—of no service value to the reader who asks the question. He may be a man who has reached his limit of endurance—who has given up all hope of improving or correcting legalized injustices which rob him to enrich others. If so, he has my sympathy. Or he may be a man who has “set into the game” and lost, or one who is hired as a capper, steerer or “look out” for its operators. I cannot say. If the former, he still has my sympathy; if the latter, my contempt.
I am fully convinced that the outrages permitted by the municipal, state and national governments of this country in rendering public service to its people have discouraged thousands of its best citizens—best in manhood I mean, of course. The beneficiaries of the outrages I speak of are, usually, rated as “best” at the bank, in the society columns and in court proceedings. Even our divorce court records give the latter conspicuous precedence.
“Ill fares the land, to hastening ills a prey,
Where wealth accumulates and men decay.”
No truer thought as to the politics and policy of government was ever written than that. When wealth accumulates by legalizing the spoliation and exploitation of the great body of a nation’s people for the benefit of a few, the decay of its manhood is all the more rapid. When any considerable body of a nation’s citizens begins to ask, “What is the use?”—that nation has reached the danger line—has started down the decline.
Now, I undertake to say that no observing man of average intelligence can be found in this country today who will not give it as his honest opinion—unless, of course, he is hired to say otherwise—that not only thousands but millions of our people—of its industrial, productive manhood and womanhood—are asking, “What is the use” of arguing and struggling against the oppressive conditions which the laws and our administrative and judicial officers force upon us? What is the use of “knocking” the men who get the “graft,” the rake-off or the loot?
“Their big bunch of money,” says one writer, “makes so much noise, no one hears our knocks.” “Everybody is out for the stuff,” says another. “It is their representatives not ours who make the laws and it is their judges not ours who adjudicate them.” “Industry, thrift, brains and even honesty have ceased to count anywhere, save on their payrolls. Money alone counts.”
“Stop knocking, my son,” has become common in paternal counsel. “Sit into the game and get money. Of course, ‘get it honestly if you can, but get it.’”
“And if I fail,” asks the boy.
“Well, my son, unless you are careful to salt away in some place secure from assessors and raiders as well as from thieves, the chips I have raked in, your best course is to get on the payroll of the gamesters.”
A recent reading says, in effect, that there are dropped into the life of every man moments in which “he has the chance to act the hypocrite or to act the scoundrel.” But when aided and abetted by the law, such “chances” are not merely for the moment. They extend through days and years, and those so aided and abetted usually take both chances—act both the hypocrite and the scoundrel, and to the time limit of their protected opportunity.
But that is neither all nor the worst of it.
This legalized hypocrisy and scoundrelism is now widely known to the honest, productive citizenship of the country, and it is daily becoming better known. What is the result? Simply this:
The law and government administrators are, in permitting such injustices, not only creating class distinction by the enrichment of a few of our citizens and holding the millions to the subsistence level—hundreds of thousands of them to the “bread-line”—not only that, but legalized and protected injustice is dignifying hypocrisy and scoundrelism. It is sapping the moral foundations of a worthy manhood as well as robbing it of its material wealth and earnings.
But what has this sermonizing to do with the parcels post question, some one asks? It has this to do with it!
Of the numerous array of law enriched hypocrites and scoundrels in this country, nowhere can be found more of them to the lineal or square rod than can be counted in the ranks of the favored beneficiaries of existing postal laws and regulations—in the ranks of the opponents to cheapening and bettering the parcels carriage service.
The End