Cosmopolitan. 36: 497*-9*. March, 1904.
Who Will Be Benefited by a Parcels Post?
John B. Walker.
Those who have been appointed to defend the Post-Office Department in the sacrifice it has made of the American people in the matter of postal parcels delivery have replied to the argument in the last issue of The Cosmopolitan by claiming that but very few people will be benefited by a parcels delivery equal to that of Germany. It is therefore necessary to consider this question: “Who are the people who will be benefited?”
First. There will be a gross saving amounting to more than two hundred and fifty millions of dollars per annum. This annual addition to our national wealth constitutes an economic factor of the highest importance.
Second. While this sum will be distributed equally among the people in proportion to their purchases—especially among those who make small purchases—the direct benefit will be first appreciable in the business of the following classes:
I. The Small Storekeepers of the Country Towns and Villages. One of the arguments used by those who have been placed in the Post-Office Department for the protection of special interests, is that a parcels post would injure the country storekeeper. The very slightest consideration of the problem, however, would have shown that no one is so likely to be its beneficiary as he. The chief difficulties with which the small merchant has to contend are these:
1. Insufficient capital.
2. Distance from wholesale centers.
3. Cost of expressage on small parcels.
The country merchant has the acquaintance of his customers; he knows their wants and enjoys their good-will, and would have their patronage if he could be placed in a situation where he could give them equal, or approximately equal, advantages with a merchant who buys on a large scale. If one of his customers is driven to go elsewhere, it is not only because the merchant cannot afford to keep in stock the particular class of goods desired, but because he cannot afford to ship these goods in small quantities, on account of the prohibitive rates of the government’s postal parcels charges of sixteen cents per pound, or the almost equally prohibitive rates of the express companies.
The country storekeeper has the experience of his customer’s wants, and he has a knowledge of the best goods, knows what is a fair price for an article. He is in a position to advise his customer as to his needs, and if he were not handicapped by lack of capital and cost of transportation for parcels, he could, in nine times out of ten, supply the wants of the customer.
In addition to the trade he has now, the country storekeeper would, with the advantage of a first-class postal parcels system, be able to keep in touch with all the great wholesale distributing agencies of the country. He would earn a reasonable commission on all goods ordered, and would be in a position to secure, within a very brief time, by postal parcels, the goods which the customer, after looking over the catalogues and receiving the advice of the merchant, should decide to order.
There would be no investment and no risk, such as is involved in carrying a stock of goods which may become unsalable. Without large capital, he is now handicapped by being compelled, on account of the discrimination against him as a shipper, to lose the sale of all those articles which he cannot carry in stock in quantities, and which may, under present arrangements, only be shipped in bulk. If he attempts to use the mails, the rate of sixteen cents per pound is prohibitive, while the fact that the bulk is limited to four pounds is almost equally so; and the express companies’ charges are so high that in the majority of cases he cannot utilize their services.
Let us suppose that, instead of the United States’ charges for postal parcels being six thousand per cent. greater than Germany’s they were on a par, and that the country merchant could receive parcels weighing from one ounce to one hundred and eleven pounds for a quarter of a cent a pound. It is not even necessary that the rate should be so low. Let it be made four times as great as that of Germany, or one cent per pound, and let us see what advantage the country merchant would have. One hundred and ten pounds covers nine-tenths of the articles which he would be likely to sell. Instead of a store equipped with comparatively few articles, the country merchant would be able to carry, in addition to his regular stock, an extensive line of samples. He would familiarize himself with the best that there is in the market, be able to advise his customer to his advantage, and then, receiving the order, could, within a brief time, have the goods sent by parcels post directly to the customer’s home, saving the expense of handling two or three times—making more money by a small commission than he does now by the larger margin on the goods which he is compelled to carry constantly in stock.
Good organization is the trend of modern business, and this is good organization—saving two or three handlings, truckage, some bookkeeping, et cetera.
II. The Manufacturers. Next to the country merchant, the manufacturer will be the largest beneficiary of the postal parcels delivery. Take, for instance, the hardware business. The manufacturer is obliged, under the existing conditions of trade, to maintain large stocks in an endless number of cities scattered over the country, or do what is the equivalent of directly maintaining the stocks—that is, to give extended credit. This is because there is no way of handling small parcels of hardware without a cost that is so excessive as to force shipments of hardware to be made in bulk. With a one-cent-per-pound rate, more than fifty per cent. of the stocks now carried could be eliminated and orders sent by the hardware merchant directly to the manufacturer to be shipped by package. One hundred and ten pounds would cover the greater portion of the trade, and leave only nails, barbed wire, and similar articles, for bulk handling.
In cotton goods, instead of shipping from the Mills to New York, trucking them there through the streets, breaking bulk, repacking, retrucking and reshipping to the merchant there would be but one operation. A single piece of goods would go direct from the factory by parcels post at a total cost for handling not to exceed twenty per cent. of the charges now engendered by our clumsy, costly and inconceivably stupid method.
The same thing would happen in the grocery business. A factory in Rochester or Pittsburg, manufacturing canned articles, must ship in bulk to New York, or Chicago, or St. Louis. There the car-load, after being hauled to a warehouse, is broken up and transshipped. There is no reason for this transshipment, no possible excuse for this waste of money, except that the ownership of the express by a few private companies has prevented the organization of a parcels post upon lines which have long been recognized as absolutely successful in Europe.
The question here will be asked: Would this shipment direct from the factory interfere with the business of the wholesale merchants whose task it is now to repack and reship? On the contrary, it would simplify their work and reduce expenses from every point of view. Their business primarily is one of distribution of credits. They have certain customers who receive from them certain lines of credit. They furnish the capital between the manufacturer and the retail dealer. If tomorrow they could order by letter or telegraph, directly from the factory, for shipment to the retail dealer by postal parcels, their business would be greatly simplified and their profits increased.
III. The Merchants in Large Cities. Perhaps to no class will the boon of a parcels post be greater than the merchants in the large cities. All the way from four cents to fifty cents is now paid for the delivery of a parcel within a radius of thirty miles around the leading cities of this country. Experiments have shown that it is possible, where the interests of a considerable number of merchants are combined, to deliver an average dry-goods parcel, thirty miles out, at a cost not to exceed four cents.
As conducted today, the business of delivering parcels consists in sending the wagon of one dry-goods house to follow another into a city block, and deliver each its parcel; then each wagon goes off to another block, and delivers its parcel. In New York city thousands of wagons meander through the two or three thousand miles of streets, each firm doing its work independently of the others, and each wasting money by lack of cooperation.
It is altogether probable that with thorough organization city delivery could be conducted, within a radius of thirty miles, upon a basis not to exceed one half cent per pound. This would mean but two cents per package for the average four-pound dry-goods parcel, including, of course, the large number which are transported but a few blocks. But that is not the only advantage. It would take from the merchants the constant effort which the maintenance of good delivery systems involves. I have personally studied the delivery systems of nearly all the leading merchants in New York, Philadelphia, and Boston, and have spent a day in the delivery department of Marshall Field in Chicago. Everywhere I heard the same complaint—that the brains consumed in managing the parcels delivery was one of the most expensive items in the cost of operating a great establishment.
IV. Book Publishers. The cost of delivering a book by mail is now eight cents per pound. This, for a four-pound book, means a tax of thirty-two cents. Just how far this retards the development of intelligence in the people is not difficult to estimate.
V. Stationers’ Supplies. The large class of manufacturers and wholesalers who are engaged in supplying the stationery trade would find the parcels post a great convenience in receiving supplies and in delivering to customers; a matter of lessened capital, lessened trouble, and greatly increased profits.
VI. The Railways. At first sight it might appear that the interests of the railways would not be favored by a postal parcels law. But the briefest analysis of the problem shows that the benefit to them would perhaps be greatest of all.
To-day vast numbers of freight-cars stand idle, waiting carload shipments. These bulk shipments are necessarily made at the very minimum of cost. In the low price of bulk shipments, American railways lead the world. Even at existing prices, however, water transportation carries off a large part of the burden.
The benefits to the railways, by transferring freight from the class of bulk to parcels, would be:
1. Goods being shipped in a constant stream of packages, instead of intermittently by car-load or train-bulk;
2. A higher price would be obtained from shipments of the same freight in parcels as compared with the previous cost in bulk;
3. The large increase in traffic due to better, cheaper, speedier and more direct, and in every way infinitely more convenient, facilities;
4. The additional prosperity which a saving of anywhere from two hundred and fifty to six hundred millions of dollars per annum would mean to the country at large.
There are to-day far-seeing railway officials who have given this problem serious consideration, and who have arrived at the conclusion just stated.
VII. The Farmer. Last, but not least in importance, comes the farmer. To-day, cut off from parcel delivery, he is the victim of bad government, both in his bad roads and lack of postal facilities. The one step of progress that the United States post-office has made of recent years, that is worthy of respect, is the rural postal delivery. As proposed, however, it is ridiculous. The idea was advanced by some politicians for the purpose of creating additional patronage. Merely to deliver letters and newspapers to the farmer would, of course, be to operate a service without hope of placing it on a profitable basis. It would be as if the New York merchants would keep a thousand wagons traveling around the streets of New York to deliver nothing but kid gloves and lace veils—nearly empty, while other wagons would be carrying the burden of the goods sold.
Rural free delivery is absolutely impossible unless accompanied by a postal parcels law. Giving a rate even four times as high as that of Germany, the entire rural delivery could be put on a paying basis to-morrow.
Here again would be an advantage to the country merchant. The farmer to-day, when he wishes to buy, hitches up a pair of horses, drives four or five miles, and makes a few purchases. If the United States had the postal parcels law of Austro-Hungary, the farmer would draw a postal check, mail it free, the merchant would deliver the goods to the post-office, and a few hours later they would be in the hands of the farmer.
The life of the farm, which has so many drawbacks, would thus be made vastly more comfortable. It is impossible to estimate in dollars how great the saving to the country would be in this one particular.
It would be easy to show the endless ramifications of this beneficial service; but space need not here be taken up for that purpose. Sufficient has been indicated to show that there is no man or woman, however poor, however rich, who would not be vastly benefited and convenienced by a government postal parcels system.