Mail Carrying Railways Underpaid
Mail Carrying Railways Underpaid A STATEMENT By the Committee on Railway Mail Pay representing 214,275 miles of Railway in the United States, operated by 268 companies, containing facts and figures which prove that RAILWAY MAIL PAY does not equal the operating expenses that it makes necessary, leaving nothing for return upon the value of the property.
October, 1912.
The Committee on Railway Mail Pay, representing railways whose lines include ninety-two per cent. of the aggregate length of all railway mail routes in the United States, believes that the payments to the railways for the services and facilities furnished by them to the Post Office Department are, and for a long time have been, unjustly low. This pamphlet contains a concise statement of the facts which prove that this belief is warranted and, incidentally, a refutation of the estimates made by the Postmaster-General, and reported to the Congress (House Document No. 105, Sixty-second Congress, first session), which led him to conclude that the basis of payment could now properly be changed so as to accomplish a present reduction of about twenty per cent. It will be shown that although the insufficient data and the erroneous methods employed by the Postmaster-General resulted in his making estimates of cost to the railways that are far below the real cost, his own figures and calculations, when properly analyzed and supplemented, demonstrate that the mail service has not been fairly remunerative to the railways.
Before proceeding to this demonstration it should, however, be noted that—
Congress has provided for a vast and incalculable extension of mail traffic by creating a Parcels Post, to be inaugurated on January 1, 1913, which, by opening the mails to many articles not previously accepted at the post-offices and by materially reducing the rates on mailed merchandise, is expected enormously to increase the volume of the shipments which it covers. The Government seems to have assumed that, under existing contracts, which were made before the meaning of the word mail was thus extended, the railways can be compelled, until these contracts expire, to carry this great additional volume of mail traffic WITHOUT ANY COMPENSATION WHATEVER. If the former practice of the Post Office Department is followed, no new contracts will be made until after the next quadrennial weighings in each of the four weighing sections, so that the position of the Government amounts to an assertion that the whole added volume of the Parcels Post mails will have to be carried without any compensation by the railways of New England for four years and six months (these railways are in the first weighing section but the weighing for the adjustment to be made on July 1, 1913, has begun and will be completed before the Parcels Post is inaugurated), by those of the second weighing section for three years and six months, by those of the third weighing section for two years and six months, by those of the fourth weighing section for one year and six months, and by those of the first weighing section, not located in New England, for six months. No presentation of the injustice of the mail pay received in former years suggests even the approximate extent of the losses which the railways will thus incur in the next four and one-half years, unless readjustments are promptly made on account of the Parcels Post.
Committee on Railway Mail Pay
Mail Carrying Railways Underpaid
TABLE OF CONTENTS.
I. SCOPE OF THIS PAMPHLET.
II. RAILWAY MAIL PAY IS ABOUT TO BE FORCED STILL FURTHER BELOW THE LEVEL OF JUST COMPENSATION, UNLESS PAYMENTS ARE PROMPTLY READJUSTED, ON ACCOUNT OF THE ADDITIONAL VOLUME OF MAIL THAT WILL RESULT FROM THE INAUGURATION, ON JANUARY 1, 1913, OF THE PARCELS POST.
III. THE POSTMASTER-GENERAL'S ERRONEOUS ASSERTION THAT THE RAILWAYS WERE OVERPAID "ABOUT $9,000,000.00" IN THE YEAR 1909, RESTS PRIMARILY UPON HIS ADOPTING AN UNPRECEDENTED THEORY WHICH ALLOWS NOTHING FOR A RETURN UPON THE CAPITAL INVESTED IN RAILWAY PROPERTY.
IV. THE MAIL SERVICE SUPPLIED BY THE RAILWAYS COSTS THEM MORE IN OPERATING EXPENSES AND TAXES THAN THEY ARE PAID FOR IT, AND LEAVES NOTHING FOR RETURN ON THE PROPERTY.
V. THE POSTMASTER-GENERAL'S APPORTIONMENT OF SPACE BETWEEN THE MAIL SERVICE AND THE OTHER SERVICES RENDERED ON PASSENGER TRAINS DID NOT ALLOW TO THE MAILS THE SPACE WHICH THEY ACTUALLY REQUIRE AND USE AND THIS HAD THE RESULT OF UNDULY REDUCING HIS ESTIMATES OF THE COST TO THE RAILWAYS OF THE MAIL SERVICE.
VI. THE POSTMASTER-GENERAL IGNORED DATA WHICH HE HAD OBTAINED SHOWING EXPENDITURES ON ACCOUNT OF THE MAILS LARGELY IN EXCESS OF THE DIRECT EXPENSES FOR THAT SERVICE WHICH HE REPORTED.
VII. THE MONTH OF NOVEMBER IS NOT A FAIR AVERAGE MONTH IN ANY RAILWAY YEAR OR ONE THAT IS TYPICAL OF A YEAR'S BUSINESS AND ITS USE AS THE SOLE BASIS OF THE POSTMASTER-GENERAL'S CALCULATIONS WAS SO UNFAVORABLE TO THE RAILWAYS AS TO DEPRIVE THE RESULTS OF ANY VALUE EVEN IF IN ALL OTHER RESPECTS HIS METHODS WERE BEYOND CRITICISM.
VIII. A COMMISSION OF SENATORS AND MEMBERS OF CONGRESS WHICH, BETWEEN 1898 AND 1901, MOST FULLY AND CAREFULLY INVESTIGATED THE SUBJECT, ASCERTAINED AND DECLARED THAT RAILWAY MAIL PAY WAS NOT THEN EXCESSIVE; SINCE THEN THERE HAVE BEEN MANY AND EXTENSIVE REDUCTIONS IN PAY ACCOMPANIED BY SUBSTANTIAL INCREASES IN THE COST AND VALUE OF THE SERVICES RENDERED BY THE RAILWAYS.
IX. THE ADMINISTRATION OF THE POST OFFICE DEPARTMENT HAS NOT, IN THE LAST TWELVE YEARS, EFFECTED ANY REDUCTION IN THE ANNUAL TOTAL OF ITS EXPENSES FOR OTHER PURPOSES THAN RAILWAY TRANSPORTATION OR IN THE PROPORTION OF ITS REVENUES REQUIRED FOR SUCH OTHER EXPENSES, BUT THE WHOLE SAVING WHICH HAS NEARLY ELIMINATED THE ANNUAL DEFICIT OF THE DEPARTMENT IS REPRESENTED BY THE REDUCED PAYMENTS, PER UNIT OF SERVICE, TO THE RAILWAYS.
X. THE CONTINUOUS REFUSAL OF THE POST OFFICE DEPARTMENT TO ORDER REWEIGHINGS OF THE MAILS EXCEPT AFTER THE MAXIMUM INTERVAL OF FOUR YEARS WHICH THE LAW ALLOWS, THE DEMANDS FOR STATION AND TERMINAL SERVICES THAT ARE RENDERED WITHOUT ANY OR WITHOUT ADEQUATE COMPENSATION AND THE UNJUST DISCRIMINATION AGAINST COMPARTMENT CARS USED AS RAILWAY POST OFFICES ARE ALL ABUSES, SERIOUSLY INJURIOUS TO THE RAILWAYS, WHICH HAVE GROWN UP UNDER THE PRESENT SYSTEM OF PAYMENT AND OUGHT AT ONCE TO BE REMEDIED.
XI. THE POSTMASTER-GENERAL'S PROPOSED PLAN OF PAYMENT BASED UPON OPERATING COST AND TAXES, TO BE ASCERTAINED BY THE POST OFFICE DEPARTMENT, PLUS SIX PER CENT. IS SERIOUSLY WRONG IN PRINCIPLE AND WOULD ENCOURAGE AND PERPETUATE INJUSTICE.
APPENDIX G.
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