It is therefore respectfully submitted that any comprehensive consideration of the express service field in the United States can point only in one direction—toward the consolidation of the express service of the United States with the Postal System of the United States, under the control and management of the Post Office Department.
METHODS OF ESTABLISHING A GOVERNMENT POSTAL EXPRESS
Many studies advocating Government ownership and management of public utilities find it necessary to hitch their program to one definite mode of procedure. In the case of the express service, however, no such necessity exists. Several modes of procedure are open, and if one of them seems preferable, none of them is impossible, inadequate or inefficient. The most desirable method now available of substituting a Government postal express for our express companies would seem to be a legal and constitutional confiscation of their property and rights, with adequate compensation. The adequacy of the compensation would naturally entail much discussion—on the one side would stand those insisting that the Government pay for only the contemporaneous value of the physical property taken over; and on the other side would stand those insisting that the contracts with the railroads, good will, and other intangible assets of the express companies possess true value despite their intangible nature and should accordingly be purchased. Supporting the first group would be the policy of the present Government which, as we shall see, has placed the capital of the express combination temporarily handling the express business of the country at $30,000,000, or approximately the value of the actual physical property represented by that combination. Supporting the second group is the Interstate Commerce Commission, through its representative, Franklin K. Lane, in its 1912 decision in the matter of the express rates.
A third method presents itself, but its adoption could be considered only as deplorable, even as reprehensible—namely, purchase of the express companies at their paper valuation. As we have seen, the capitalization of the express companies bears no relation to the value of their property, and chiefly represents, not money invested, but profits accumulated. As a matter of fact, the Supreme Court of the United States some years ago decided that capitalized excess profits may not be used as a basis of computing fair rates of dividends upon capital as against the state. Possibly Congress might find it wise to settle the whole problem in any bill providing for Government acquisition by abiding in the judgment of the Interstate Commerce Commission, leaving the Government or the express companies, or both, the right to appeal to the Supreme Court if dissatisfied.
The express service would represent too unimportant and too different an activity from railroad freight service to be efficiently handled now by the railroads. And mere regulation, as has been seen, affords no solution, for the profits and the equipment represent but an infinitesimal part of the operating expenses.
At this point, the Socialist or the socialist or the person who falls loosely into the category of "radical" or perhaps even the merely "liberal" advocate of the public ownership of public utilities will doubtless exclaim: "But why compensate at all? Isn't it bad enough to have so long permitted a group of entrepreneurs to grow rich by exploiting for their own gain a field which all experience outside the confines of North America proves a field of public endeavor? Why add insult to injury by actually paying them for rendering unto the people the things which belong to the people? Why shall not the Government establish its own express service, as it established the parcel-post, and leave the express companies, so long unchallenged in their activities, to meet Government competition as best they may? If they can meet it, well and good—if they can't, the essentially parasitic nature of their business is proved beyond cavil."
Very good, gentlemen; and if he may be permitted a personal reference, the writer of these lines is in perfect accord with you. The rates of the private express companies under your plan would still be under the control of the Interstate Commerce Commission, and accordingly these private agencies would be unable to compete unfairly with the new Government service by establishing along any of the more popular routes rates far below the cost of the service, in order to cripple the Government service along these routes and hence in its entirety. Moreover, there is every probability that the legislative grant to the Government of a monopoly of the express service of the United States would be upheld by the courts, for a good case could be made out for the essential nature of the express business as a part of the mail business in which the Government has been granted a monopoly. Indeed, monopoly was originally granted the Government mail service to prevent the competition which the Wells-Fargo Company soon after its organization was conducting in the business of carrying letters.
But, gentlemen, what are the chances that a sufficient number of your fellow-countrymen can be brought into accord with you—not merely in their intellectual convictions, but in convictions, intellectual and emotional, so strong that they can be transmuted into a sufficient number of votes in the ballot box to make our lawmakers at Washington give heed—at least in the immediate future? For the problem of the express companies will come up for adjudication, temporary or long-enduring, within some months, or at least within a year or two. Obviously, the present status of the express companies, as described below, will end soon after the war. And Government ownership of the express service, as has been indicated, is so infinitely more advantageous than private ownership, that if Government ownership can be obtained only by your (and my) method, and if we divide our ranks by refusing to support any other method short of one vicious in both principle and practice, the country may return once more to the private express company method. As has been indicated, the whole problem concerns scarcely ten or twenty millions of dollars in a business whose operations amount to more than two hundred millions; and whatever method be adopted, it can hardly effect a difference of 5% one way or another in express rates. If the question were one similar to the Government ownership of railroads, it would indeed be worth delay to obtain a comprehensively adequate method of taking them over by the Government, for marked differences in rates would then result. But the differences in express rates involved in different methods of purchasing the companies would hardly recompense for the delay involved in the postal service's mastery of a new technique, in its assimilation of details which can be mastered only through experience, in tedious litigation, in political wirepulling and manipulation, and in determination of constitutionality, all of which features will accompany the establishment of a new Government postal express independent of the present express companies.