One Cent Letter Postage, Second Class Mail Rates, and Parcels Post. pp. 14-22.
Charles W. Burrows.
Paternalistic, socialistic legislation does not diminish the expense account, but simply transfers it from one person’s shoulders to those of others. It is with a people as with a person. If a father gives to his boy a pair of shoes, the shoes cost the lad nothing, they are to him as if they had descended from the skies, but the cost is a charge upon the father, unless he stole them, and even if acquired dishonestly the cost has simply been moved back upon the shoulders of the merchant. The compensation for the labor of producing the pair of shoes and of transporting them to the place where they are put to service is just as much a charge upon the community whether one individual pays for them or another. Similarly if the users of any governmental service do not pay a high enough tariff for that service somebody else must foot the bill.
Now to endeavor to demonstrate that whether the rates imposed for such service be high or low the government will inevitably be a loser and in large amount. To this end let us examine for a moment the parcels post systems of foreign countries.
In Germany a zone system prevails, but the tariff is always low. In England, a flat rate prevails, and this also is extremely moderate. And low rates prevail in other foreign countries.
But circumstances alter cases, and with other things we should bear in mind that the total area of Germany is but 208,000 square miles, while the area of the one state of Texas is 265,000; in other words, Germany is but four-fifths the size of Texas. The area of France is almost exactly that of Germany, again but four-fifths the size of Texas. The area of England is 50,000 square miles, less than one-fifth the size of Texas. We have 26 states, any of which is larger than England, and several many times larger. The area of Switzerland is just under 16,000 square miles, and you can put nearly seventeen Switzerlands into the one state of Texas. The area of Belgium is but 11,000 square miles; you can put 24 of it in the state of Texas. Again the density of population in England is over 550 to the square mile; that of Belgium, more than 600 to the square mile; of Germany nearly 300 to the square mile.
Moreover, no haul in England can be long and but few hauls in the United States would be short. You may perhaps be able to take 550 parcels from a central originating point like London, carry them for an average haul of 41 miles, which is the case in that country, and deliver them all within one square mile of territory at a small tariff per parcel without material loss, though even England is losing money upon this service with all conditions favoring.
But remember that the density of population of the United States by the last census was under 25 to the square mile, and that the parcels post service would not be mainly operative in densely populated Rhode Island and near the large cities like Boston, New York, Philadelphia, etc. If we imagine that 550 parcels are sent from New York city over a long haul of more than 1,500 miles to the state of Wyoming, where the density of population is one to the square mile, and have to be distributed to 550 distinct individuals resident in 550 separate square miles of territory, no sane business man can doubt that at any tariff likely to be imposed the government would be a heavy loser.
According to one expert’s estimate, it is possible to carry the second-class mail matter for short distances on dense traffic routes, and in quantity lots to one address, that of a news dealer, for example, as is done for the average daily paper for the part of its circulation that goes by mail, up to 45 miles with little loss even at this low 1c a pound rate, though first-class mail at the rate paid by it can be transported nearly 5,000 miles before the service shows a loss, and post cards over 11,000 miles.
Now let us suppose a parcels post statute to be enacted, and that the rate be put at anything you please from 5c per pound to 10c per pound. Even at the low rate of 5c per pound the express companies will do the nearby business. If the rate be 10c per pound, the government will have less to do, but it will still have much with the weight limit considerably increased over the present amount. And if the rate be put at 12c per pound, still the government will not make money, not on a single parcel that it carries. All service that can be rendered at a cost of less than the government charge will be handled by the express companies.
We cannot have as does Germany a zone system. But without the operation of a zone system, or a monopoly as on first-class matter, the government will get all of the losing business and none of the remunerative.
A friend of mine made a visit a few years ago to the state of Washington. First he took from Cleveland a 2,000 miles railroad ride. He then had a day and a half steamboat ride up the Columbia river, following that a two days’ stagecoach ride to the remote locality that he was visiting.
He remarked to me in connection with this trip that he should like to see the government handle a parcels post service for that country at a profit, even at a rate of 25c a pound, and added that every pound of anything that went in there would most assuredly be handled by the government were a parcels post service in operation, for it would be the cheapest method of getting things there.
Now, the only reason we can have a flat rate upon first-class mail is because the government makes that a monopoly, and you can send your letters in no other way than through the post office. Hundreds of millions of profitable short haul letters carried between the largest cities of the country where traffic is very dense take care of the proportionately small number of expensive long hauls.
To show how necessary this may be, permit me to inform you that the first batch of letters the government sent to Circle City, Alaska, though each was carried upon a 2c stamp, cost the department some $450 per letter. And it is solely due to the fact that the carriage of first-class mail is a monopoly that inheres in the government that, in spite of such expensive occasional service as this to Alaska just cited, a large part of the receipts from first-class mail are net profit.
Now, even at the low 1c per pound rate accorded to the monthly magazines and other periodicals, not all of their wares are sent by mail. There is you know no monopoly of carriage. The publisher can send packages of his magazine ahead of time by slow freight at less than the 1c per pound tariff, this freight service being used for the large lots going over main transportation lines between the great cities and without expensive changes of route. But upon the quarter hundreds and half dozens and single copies that go for long distances by expensive changes of route and to remote rural localities from back of Portland, Maine, to back of Portland, Oregon, from the upper peninsula of Michigan to the everglades of Florida, and to the crossroads and rural free delivery customers of Ohio, New York and other states of the Union, the government gets the losing job of carrying the periodicals.
I have endeavored in the explanation above to show that the difference in social condition, density of population, length of haul, ability to inaugurate a zone system, etc., will operate against our doing at a profit what may be attempted though even there unsuccessfully, in Great Britain, Germany, etc.
In Great Britain they pay for transportation but 55% of the charge, having thus automatically 45% left for other expenses, and if anybody can do the work at a profit they certainly are in position to attempt it.
Again the average pay of a British postman is only one-half what we give our carriers, which is another feature that must be reckoned with.
The first year they had this service in operation, it showed a heavy loss. They were keeping account of the business, so much in detail that if a man worked in two different branches they divided his salary. The eminent gentleman who fathered the system, then said: “Oh, well, you can’t expect that it should be profitable the first year. This year we will make it profitable.” The next year the loss was more than doubled. “Well,” said he, “bookkeeping is expensive, let us discard bookkeeping.” And since that time they have kept no expense account on the parcels post system.
Now let us examine what would result in the United States if we were to enact parcels post legislation and attempt to get it in successful operation.
I wish to make a quotation from the “Catholic World” of June, 1905, describing the operation of the parcels post system of Germany by a writer who favors its establishment here. He says:
“Anyone who has stood in a German post-office, and has seen the constant stream of men, women and children, pouring in through the doors with packages of all descriptions and sizes, and lining up in never-ending rows before half a dozen and more receiving officials; who has watched heavy wagons driving up to the doors and depositing hundreds of packages, and who has noticed the mountains of parcels heaped up in rear rooms of the post-office, cannot but have been forcibly struck with the magnitude of the parcels post system of transportation in Germany.”
Does it not occur to the most casual thinker that if a comparable service were enacted in this country the postal facilities of every city would be inadequate to the work? Why, you would have to have in New York city one hundred times as great an amount of space at your disposal as the Post Office Department has or can readily get at present. It would involve a thorough readjustment and enormous expansion of the post office facilities in every large and small city of the United States, involving an equipment expenditure which would run to hundreds of millions of dollars—this irrespective of the question whether it would produce a profit or a loss in operating expenses.
There are in the United States more than 50,000 fourth-class postmasters of these 50 per cent get $100 per annum or less, and 25 per cent of them get less than $50.00 per annum. How long would it be before they would demand an increase of salary to something like $75.00 per month or more?
The Vice-President of the J. F. Stevens Arms and Tool Co., told me that if such a service were inaugurated as that of Great Britain, it would change entirely the methods of distribution of his own house. They would be obliged to discontinue their present freight shipments of arms in carload lots to the Pacific Coast at a rate of $3.00 per hundred pounds upon a twenty-day time schedule for transportation, and take advantage of the pound rate that the government would give to them upon a six-day time schedule; that while it would involve increasing their office force from less than 50 to more than 500 to handle the work, the savings would be so large that they would have to do this and to inaugurate many other most radical and far-reaching changes in organization.
If this meant that the service was going to be reduced in cost, while at the same time shortening the time schedule by more than two-thirds, always an important factor in increasing rather than in diminishing expense account, we should all of us find it our duty to welcome the innovation, great a wrench as it might give to our business connections. But the costs of the service will not be changed, simply it will be a different set of people who pay them and no longer would all the costs be paid by the proper parties—the manufacturer and his customer, the consumer—but a large proportion by the public at large in some way or other.