EXPRESS SERVICE VS. PARCEL-POST
Before defining and demonstrating the advantages of a Government postal express, however, it may be necessary to discuss more fully the features which differentiate at present the parcel-post from the express service.
They fall into two classes, (a) Special forms of service, and (b) Rates.
Under (a):
It will be immediately realized that some of the features of the express service which are not rendered at present by the parcel-post could be and should be rendered by the parcel-post for one fee without separate charges. On the other hand, it will be realized that some of these features should be rendered by the parcel-post only as separate privileges for which separate fees should be charged, as, for instance, the service of collecting parcels from the shipper. ([Note 2].)
For instance, there seems to be no good reason for limits upon the size and weight of the packages in the parcel-post. These limits have steadily been expanded in the parcel-post system from its inception, and the process has so strikingly demolished whatever arguments for size and weight limits may have previously been considered that they no longer seem valid.
In Austria, Belgium, Denmark, Germany, Hungary, Norway, Rumania, the old Russia and Switzerland, packages weighing up to 110 pounds may be sent by parcel-post (and after 100 pounds the freight service of the railroads is readily available in the United States as elsewhere). In 1915 France and Italy imposed weight limits of 22 pounds. In Belgium, Germany, Hungary, Norway, Rumania and Sweden there is no size limit, except that in certain cases special fees are charged for unusually large sizes. In Italy, the limit is 24 inches in any one dimension, although in certain cases packages 41 inches long are accepted. The limit in Denmark is 39 inches in any dimension. In France, the limit is 60 inches in any direction. With no limits upon weight and size, the parcel-post might handle the problem of especially cumbersome articles whose size is disproportionately large for their weight by following the example of the express companies, charging a special rate twice as large as the normal rate. And as to shipments so bulky that especial transportation facilities are needed for them another page might be taken from the books of the express companies, and special preliminary arrangements stipulated before such shipments are accepted.
Moreover, the experience of other countries proves that there is no insurmountable obstacle to removing the limit upon the amount for which a package may be insured. Merely, special provisions might be necessary, and perhaps an additional fee above the normal insurance fee charged, for articles such as jewelry, for which space in safes would have to be reserved, and for bullion, etc. The following countries seem to have no insurance limit: Austria, Denmark, Germany, Hungary, Portugal, Rumania, the old Russia, Sweden, Switzerland. The limit in France is $1,000; in Italy, $200. In addition, some countries give automatic indemnity without separate insurance fee, up to a small amount.
Similarly, now that the parcel-post experiments for small amounts have proved successful, the limit upon the amount collected from the consignee for the expressed article itself could be and should be either removed or greatly advanced, the fee for this service advancing with the amount collected. Nor does any cogent barrier present itself against a separate division in the parcel-post system to sell articles consigned to it, or even to buy them, the fee again synchronizing with the amount of the principal involved.
The features inherent in the express service and not now in the parcel-post, as the express service and the parcel-post now function, might be preserved by either of two methods. They might be added to the present parcel-post as separate features to be utilized only when especially desired and for which separate fees would be levied. Or else the Government postal express might be organized into two separate divisions—one for the services now rendered by the parcel-post, with possibly certain additional fees for certain secondary features, to be determined by experience in administration; and the other for the services now rendered by the express companies, except those proved by experience in administration to be homogeneous with the parcel post service proper, and hence properly adhering to the first division. Either the method of complete consolidation or the method of two divisions would meet the exigencies of the service—only the results of experience and experiment could award greater merit to one or the other.
The fact that these separate functions of the express service are of too great value and in too great demand to be eliminated is seen by a study of the relation of the express shipments and the parcel-post shipments to the express and the parcel-post rates, this constituting the second point of departure (b) between the public method and the private method of transporting parcels. The differences between the express rates and the parcel-post rates may be graphically realized from a comparative table. As will be seen, the differences between the two sets of rates may be roughly summarized in one sentence—as a rule, the parcel-post rates are lower than the express rates for the shorter distances and the smaller parcels.
Accordingly, if the value of the service rendered by the two systems were nearly identical, the express company's shipments would be almost entirely of larger parcels and for the greater distances. But as a matter of fact it is generally known that a large proportion, a very large proportion, of the shipments sent by express are at weights and for distances at which the parcel-post rates are lower than the express rates, often decidedly lower. Only the need to a shipper of all, some, or any one of the above-discussed features of express service not duplicated at present in the parcel-post system can explain this situation. It is therefore imperative that the Government make provision for all these features in establishing a Government postal express.
COST OF LIVING
A moment's reflection is sufficient to show that a Government postal express would make express facilities available to a far greater number of persons than are served at present by the express companies. For the Government postman and the Government post office cover the country as a whole—the express companies operate only along railroad, electric, steamboat and stage-lines. Moreover, of these four media, 83.7% of the mileage is by railroad and only 2.9% by electric line, 13% by steamboat line, and 4⁄10 of 1% by stage-line.
All in all, the mileage covered by the express companies totals 307,400. On the other hand, the mileage covered by the postal system is 1,374,056. Of this amount, 1,112,556 represents the mileage of the rural routes alone, and the number of persons served by the rural routes in 1917 was more than 27,000,000. Of course, it is certain that not all of the persons along these more than one and a quarter million miles were deprived of the benefits of an express service, but it is equally certain that many of them were, and it is probable that the majority of them were.
But it is the extension of the express facilities to just that element of the population living off the railroads and on the rural post routes in which lie the greatest potential benefits that an express service can render to the nation. For, speaking by and large, most of this population is engaged in farming; and, conversely, possibly the majority of the producers of foodstuffs in the country live off the railroads and on the rural post routes. Now, it is stated on reliable authority that of each dollar expended by the consumer for food in New York City, for instance, the farmer gets only from thirty-five to fifty cents. In other words, at least 40% of the cost of food is represented by the cost of getting the products of the farm to the ultimate purchaser. The rôle thus played in the drama of the high cost of foodstuffs and the high cost of living generally is apparent. Equally apparent is the rôle which a simplification of or a reduction in the processes of getting food from the farm directly to the dinner table could play in lowering the cost of living.
But such a simplification and reduction are possible only to a Government postal express. At present the rural free delivery does make provision for sending farm products directly from the farmer to the consumer, but its efforts in this direction are still largely embryonic. For the machinery of the process must be constructed anew and the task of construction is one of those tasks which cannot be hurried. On the other hand, the express companies have built up through the years an extensive and efficient machinery for "farm to table" transactions, but their services in this direction are hampered by the fact that the companies are limited on the whole to the territory adjacent to the railroad lines. The fertilization of the vast farming territory tapped by the post office by the express company facilities should give birth not many months after its consummation to the one most potent factor at present available to lower the retail cost of foodstuffs to an appreciable extent.
Under such an arrangement, a separate bureau would be established in the postal system, covering both the parcel-post and the postal express. This bureau would collect names of farmers—both those voluntarily resorting to it and those reached in its own canvasses—who would send their products collect on delivery to consumers. Similarly, lists of consumers desiring thus to be served would be collected. It would be no difficult matter for individuals on the two lists to get into touch with one another, and to deal directly through either the parcel-post or the postal express. Where they could not by their own arrangements get into touch with one another, the bureau's task would be to get them into touch. And where a farmer and a consumer could not even thus be brought into direct contact, the bureau would act as the agent for each—maintaining warehouses, if necessary, to which farmers would send goods to be sold at a stated minimum price and to which consumers would resort for their purchases. Since these functions are already performed to a slight extent by the express companies, there should be little question of the legality of such procedure by the Government. If necessary, additional legislation might be sought; nor after the activities of the Government during the Great War would there be much likelihood of such legislation being declared unconstitutional.
ECONOMY IN OPERATION
It has been seen that about 50% of the charges collected by the express companies for the transportation of packages go to the railroads, 50% remaining to the express companies. To be exact, in 1917 the sum of $222,860,373 represented the collection charges by the express companies, of which $113,535,059, or 51%, went to the railroads, leaving to the express companies from transportation, $109,325,314. Revenues of the express companies from operations other than transportation brought their total revenues up to $115,920,129. Their operating expenses were $113,721,057. In other words, for every 10% by which Government operation of the express service might decrease the operating expenses of the express service, even if the present contracts with the railroads are assumed by the Government, there should be a saving in the amount of express rates assessed the public of no less than 5%.
Such savings seem inevitable under a Government postal express. Vast as is the extent of the parcel-post operations, there is no evidence that all or even most of its ramifications have yet reached that point of magnitude where the addition of new business means an increasing instead of a decreasing cost per unit. Let it be remembered that the parcel-post carried in 1917 some 1,120,000,000 parcels and the express companies some 280,000,000; so that, taking into account the secondary features of the express service not performed at present by the post office, the inclusion of the express service in the parcel post would increase the latter's activities not much more than 25%. Certainly, it may be fairly assumed that any such services in which the law of increasing costs per unit might hold would be at least counter-balanced by services in which the law of diminishing costs per unit would hold; so that we may consider the economies of a Government postal express absolutely instead of relatively.