Postal Riders and Raiders

by W. H. Gantz

THE HUGHES COMMISSION.

First, however, I must introduce a few paragraphs here in summary of the work done by the Hughes Commission at its August session in New York City. The commission comprised Associate Justice Hughes, President Lowell of Harvard University, and H. A. Wheeler, President of the Chicago Association of Commerce. That this triumvirate of gentlemen will act disinterestedly and fairly, so far as their knowledge and the evidence relating to postal affairs extends, there is here no question.

That they have not and will not dig up and uncover facts and data relating to the haulage and handling of second-class mail matter, beyond that already known to and on file with government officials, is equally certain. No finer trinity of men could well have been selected by President Taft, but the fact is none of the three has had any opportunity to make a study of the federal mail service, second-class or other. Or if they have had such opportunity, the press of official and private business in other lines and directions preventing, in large extent, their study of postal service costs and affairs. No doubt, these three gentlemen will do the very best and fairest they can—or know how to do—with the evidence presented to them. Still, I am of the opinion that they will discover little which has not already been discovered—which, as Congressman Moon said on the floor of the House last March (1911), “has already been discovered and filed for departmental and official reference.” Each of them is a man of high academic training but neither of them, so far as The Man on the Ladder has been able to learn, had made, as previously stated, any qualifying study of federal postal affairs. So the best we have a right to expect from them is that they will tell the story, draped in new or different verbiage, told by predecessor commissions on second-class postal rates, costs of haulage and handling the same, etc.

Incidentally it may be said with all due courtesy and respect that the Hughes Commission will probably succeed in spending the $50,000 appropriated for its expenses, subsistence, incidentals, etc. The present commission would not be loyal to precedent if it permitted any of that $50,000 to return to the general fund as an “unexpended balance.”

Just here I desire to introduce a few items from the testimony of Mr. Wilmer Atkinson before the Hughes Commission, which, in August last began strenuous efforts to spend $50,000 and to discover and report upon facts anent the cost of hauling and handling second-class mail matter—which facts have already been collected, collated and filed with labored, likewise expensive, care somewheres in the government’s archives. I have quoted from Mr. Atkinson several times in forward pages. I desire to quote here from his testimony before this Hughes Commission, because the Hughes Commission is the latest and “best seller” on the second class mail shelf and because I recognize in Mr. Atkinson one of the first and most dependable authorities in the country on the cost of carriage, handling and distribution of mail—whether of the second or any other class. Especially do I desire to quote part of his testimony before the Hughes Commission because I am of the opinion that the reader, as well as the Commission, must necessarily gather forcefully pertinent facts from it:

To ascertain what second-class matter costs has been found to be a puzzling proposition. Many have tried to solve the puzzle and all have failed.

The Joint Congressional Commission consisting of Penrose, Carter and Clay for the Senate, and Overstreet, Moon and Gardner for the House, with the aid of numerous expert accountants, at a cost of a quarter of a million dollars (according to the President’s statement), attempted it and gave it up. All these gentlemen are on record as declaring that it is a task impossible of accomplishment.

Senator Bristow, a former Assistant Postmaster General, who has given postal questions much careful study, said in a recent speech that “It does not cost nine cents a pound, nor can the Department ascertain with even approximate accuracy what is the cost of handling any special class of mail. It would be just as easy for the Pennsylvania Railroad to state in dollars and cents what it costs to haul a ton of coal from Harrisburg to Pittsburgh, or 100 pounds of silk from Pittsburgh to Indianapolis, as for the Postoffice Department to state what it costs the Department to handle newspapers or magazines. Anyone familiar with transportation knows that such calculations cannot be made with accuracy, because there are so many unassignable expenses that must be considered—expenditures that cannot be subdivided and assigned to the different classes of freight. The same is true as to the different classes of mail.”

Postal officials have exhausted conjecture as a basis for a correct solution of this problem. Nearly every year there has been a new guess. Mr. Madden, Third Assistant Postmaster-General for seven years up to 1907, guessed that it cost 4 cents a pound. His successor, Mr. Lawshe, guessed 2½ cents and then the next year 4 cents. For the last two years the Department’s guess has been 9 cents.

The Penrose-Overstreet Commission declared, while it is impossible to ascertain with certainty what the cost is, the members of the Commission gave it as their opinion that “One cent a pound is approximately adequate compensation for handling and transporting second-class matter.”

I am confident that there is a better way of solving the problem than has heretofore been tried. This consists in the direct application of plain, old-fashioned common sense to it. A little gumption in such a matter as this is far better than fanciful guessing or astute figuring by experts, who are bent on finding something that is not there.

In working out this problem I have adopted a method quite different and have obtained results quite unlike the foregoing. I show the relation of second-class mail to stamp mail extending over a period of 25 years, from 1885 to 1910. This covers the entire period since the institution of the cent a pound rate.

I go back still further to 1876 when the postage rate on newspapers was 4 times greater than now, when the sale of stamps was less than one-eleventh what it is now, and while deficits were larger.

The highest point reached in the weight of second-class matter previous to the institution of the present rate, was 101,057,963 pounds.

It has been repeatedly declared officially that second-class matter originates large quantities of other classes of mail, and in the official figures we have the proof.

While population increased from 1885 to 1910 only a little more than double, the revenue from the sale of stamps, etc., and the weight of second-class matter, each increased over 5 times. No other possible reason can be assigned for the increase in stamp mail, and the tremendous development of every branch of the postal business 5 times faster than the growth of population, than the increased circulation and influence of the newspaper and periodical press, brought about by the reduced postage rate.

Second-Class matter would have long ago wiped out all deficits and created an enormous annual surplus had it not been for the great burdens which weighed the service down.

There would have been a surplus, instead of a deficit, every year since 1901, had allowance been made for the extraordinary cost of free rural delivery, and in 1910, the surplus would have been $31,075,170.12.

If also allowance had been made for free government matter, other than the Postoffice Department’s own free matter, being sent stamped as first-class matter is, the surplus for 1910 would have been $51,075,470.12 and these figures like all others here given, are from official reports.

A VAST INCREASE OF EXPENDITURES.

Not only did stamp mail, under the stimulus of the steady and enormous increase of second-class matter, enable the Department to meet the cost of rural delivery while reducing the deficit, but it also met and overcame the immense increase of the annual expenditures for railroad transportation which grew from $33,523,902.18 in 1901 to $44,654,515.97 in 1910: of salaries to postmasters, assistants and clerks which grew from $32,790,253.39 in 1901 to $65,582,533.57 in 1910, of the railway mail service which grew from $9,675,436.52 to $19,385,096.97 in 1910, and of the city delivery service which grew from $15,752,600 in 1901 to $36,841,407.40 in 1910. In these four items alone there was an increase in annual expenditures in the last ten years of $74,721,361.82, for which second-class matter was only in a very limited way responsible.

Entirely too much stress has been placed upon the cost of second-class matter, for it makes little difference whether it costs 2½ cents or 4 cents or 9 cents, or even more, if it produce results commensurate with its cost, and this it would do if the cost were double the highest guess yet made. The Government could afford to carry it free rather than not carry it at all, for without it the bottom would drop out of the Postal Establishment. As long as the people get the benefit of the low rate, as they are doing now, for which we have official testimony, it matters not what the rate is except that it should be kept at the very bottom notch.

WHY THE POSTAGE RATE WAS MADE LOW.

Even if the cost of second-class matter should be declared to be more than one cent per pound, it would not be good public policy for Congress to increase it, because much reading matter would be placed out of the reach of many who now are receiving the benefit of it.

Postmaster-General Meyer said in his report for 1908: “The charge for carrying second-class mail matter was intentionally fixed below cost for the purpose of encouraging the dissemination of information of educational value to the people, and the benefit of the cheap rate of postage is passed on to the subscriber in a lower subscription price than would otherwise be possible.”

The Hon. Charles Emory Smith truly declared: “Our free institutions rest on popular intelligence, and it has from the beginning been our fixed and enlightened policy to foster and promote the general diffusion of public information. Congress has wisely framed the postal laws with this just and liberal conception.

“It has uniformly sought to encourage intercommunication and the exchange of intelligence. As facilities have cheapened, it has gradually lowered all postage rates. It has never aimed to make the postal service a source of profit, but simply to make it pay its own way and to give the people the benefit of all possible advancement.

“In harmony with this sound and judicious policy, it has deliberately established a low rate of postage for genuine newspapers and periodicals, with the express design of encouraging and aiding the distribution of the recognized means and agencies of public information.

“It is not a matter of favor, but of approved judgment. It is not for the publishers, but for the people.”

The testimony of Senator Bristow is that, “I am glad we have got a one-cent rate of postage for the legitimate newspapers and magazines of the country, and I would rather decrease it than raise it. The beneficiaries are the poor people themselves, who now get daily papers at from $2 to $4 a year, when they used to pay from $10 to $12. They now get magazines from $1 to $1.50, when they used to pay $4 to $6 per year for magazines of no higher grade.” …

And I would remind the Commission that there are millions of laboring men and women who cannot afford to add to their living expenses the cost of any but the very cheapest reading matter, and many not even that. After buying food and clothing and providing shelter there is scarcely anything left in the home for cultivating the intellect and informing the mind.

When sickness intervenes, then comes the stress of debt, and if death follow, the future has to be drawn upon to give the dead a burial such as love would provide. Are these people, the bone and sinew of the land, those in the humble walks of life, not to be considered when it is proposed to add to the cost of the family reading?

It surely should not be made more difficult for the poor to obtain that which is so essential to their welfare and that of the Republic of which they form an important part.…

“But here I cannot forbear to recommend,” said George Washington, in his message to Congress, on November 6, 1792, “a repeal of the tax on the transportation of public prints. There is no resource so firm for the government of the United States as the affections of the people, guided by an enlightened policy; and to this primary good, nothing can conduce more than a faithful representation of public proceedings diffused without restraint throughout the United States.”

NEWSPAPERS AND PERIODICALS.—THE DIFFERENCE.

An effort was made in the closing hours of the 61st Congress to increase the postage rate on magazines. It is my opinion that the postage rate should remain uniform as it is now upon all classes of publications. There should be no partiality shown, there should be no discrimination. A proposal to increase the rate on magazines alone, is not one that should have the endorsement of this Commission nor the approval of Congress, as I shall endeavor to show.

Under Section 432 of the Postal Laws and Regulations, “A newspaper is held to be a publication regularly issued at stated intervals of not longer than one week; a periodical is held to be a publication regularly issued at stated intervals less frequently than weekly.”

A magazine is nowhere defined in the Postal Laws and Regulations. A law that would increase the postage rate on “magazines,” without an explicit definition of the word, would apply to just such publications as the Postmaster-General might select in the administration of the law, and none others. No such power of discrimination should be vested in any official. The Postmaster-General is an executive, not a judicial officer, nor a lawmaker.

It has been wisely and aptly said that this is a government of laws and not of men; that there is no arbitrary power located in any individual or body of individuals; but that all in authority are guided and limited by those provisions which the people have, through the organic law, declared shall be the measure and scope of all control exercised over them.

There seems to be no good reason why a newspaper, which is carried in the mails once a day or once a week, should pay a less rate than a monthly or quarterly. If the Government really loses money in handling and transporting second-class matter, the loss would be greater on the former than on the latter, because a daily goes through the mails 365 times a year, a weekly 52 times, while a monthly only goes 12 times, and a quarterly 4 times.

We learn from official records that daily newspapers comprise 40.50 per cent. of all second-class matter, weeklies 15.23 per cent., papers devoted to science 1.30, to education .64, religious 5.91, trade 4.94, agriculture 5, magazines 20.23, and miscellaneous 6.25. Note that it is stated that 20.23 of the whole consists of magazines; but what is a magazine? We are nowhere told, and the percentage quoted has the appearance of being founded upon conjecture.…

This Commission may not be aware of the fact that the Pennsylvania Railroad will take, and does take, packages of papers for all of the great newspapers that are published along its lines, and transports them in the baggage cars for one-quarter of a cent per pound, to any station on the line, whether it is ten miles from the place of origin, or 1,000 miles from the place of origin. And yet the Department is paying the railroads approximately two cents a pound for hauling the newspapers of the country.

The papers are delivered by the publishers to the train just the same as the publisher delivers his newspapers to the train when they are sent by mail. These packages are delivered to the depots of the railroads, and the parties to whom they are sent call at the depots for the packages. If they are sent by mail the publisher delivers them at the train, and the parties to whom they are addressed call at the postoffice for the packages. The postoffice Department does not go to the newspaper office and get the mail. The publisher delivers the newspapers to the mail trains, the same as he delivers them to baggage cars for the railroad company.

And possibly the Commission has not been informed that the express companies have a contract with the American Publishers’ Association whereby they agree to receive newspaper packages of any size, and deliver them to their destination within a limit of 500 miles, for one-half cent per pound. The express company does not call at the newspaper office for the papers. The publisher delivers them to the express car, the same as he delivers his papers to the mail car. The express company then takes these newspapers, consisting of packages of any size, from a single wrapper to a 100-pound bundle, and delivers them at the other end of the line to the addresses, if the distance is not greater than 500 miles, for half a cent a pound, and by its contract with the railroad the express company pays the railroad only a quarter of a cent a pound.

The Department figures show that the average distance which newspapers are hauled is less than 300 miles. Yet the Department is paying about two cents a pound to the railroad for that which the express companies pay but a quarter of a cent a pound. The express companies only charge the publisher one-half cent a pound, while the Government charges him one cent a pound. The express companies pay the railways one-fourth a cent a pound, while the Government pays about two cents—eight times as much—for exactly the same service. The express companies are glad to get the business, and render more service than the Postoffice Department, because they deliver the packages of any size at the other end, which the Department does not do.

Senator Bristow is authority for the above statements concerning the railroad and express contracts.

…

Now I would not have this (class) newspaper and its annexes deprived of the low postage rate, but as the Postoffice Department has within the past ten years denied admission to the mails of 11,563 of other publications, and 32,000 others have been ruled out or died from the hard conditions imposed, I would respectfully request this Commission to ascertain and report to the President for transmission to Congress why there has never been a single publication of this class shut out or even molested in the slightest degree?

I do not say it is, but is it, because such papers are politically powerful, that they have the ear of the public, that they hold a monopoly of the news, and that they can make or unmake the reputation of public officials at will, and that therefore they are immune from interference?…

I have here a copy of the Police Gazette, which I take to be a superior paper of its class. It is held to be a newspaper, entitled to transmission through the mails at a cent a pound. It has never been proposed to raise the postage rate on this paper.…

This Commission should endeavor to find out and report to the President for transmission to Congress, why the postage rate on one-half of the periodicals devoted to agriculture should be increased from one cent to three cents, and the postage rate on the Police Gazette should remain at one cent.