| Fiscal Year | Total railway mail pay | Average railway mail pay per $100.00 of postal receipts. |
| 1901 | $38,158,969 | $34.18 |
| 1904 | 43,971,848 | 30.62 |
| 1907 | 49,758,071 | 27.10 |
| 1910 | 49,405,311 | 22.04 |
| 1911 | 50,583,123 | 21.26 |
The foregoing shows that the Post Office Department expended for railway transportation, in 1901, $34.18 in order to earn $100.00 in gross and that by 1911 this expenditure had been reduced 37.8 per cent. to $21.26.
This notable reduction was the consequence (first) of the operation of the law fixing mail pay under which the average payment per unit of service decreases as the volume of mail increases; (second) of the Acts of Congress of March 2, 1907, and May 12, 1910, and (third) of administrative changes effected by the Post Office Department which, without decreasing the services required of the railways or enabling those services to be rendered at any lower cost, greatly reduced the payment therefor. Chief among these administrative changes was the Postmaster-General's order known as the "Divisor" order (No. 412 of June 7, 1907, superseding Order No. 165 of March 2, 1907) radically lowering the basis for calculating the annual payments for transportation. No official estimate of the reduction in the aggregate annual payment produced by the operation of the law fixing the scheme of payment has been made but from time to time the Department has published estimates of the reductions otherwise effected. None of these estimates is now up to date, and to make them comparable with the present volume of mail substantial increases would be necessary, but they are given below as representing an amount substantially less than the lowest possible statement of the total present annual reduction.
| Cause of reduction | Amount of annual reduction. |
| Natural operation of the law | No estimate. |
| Acts of March 2, 1907, and May 12, 1910 | $2,723,658.90 |
| Withdrawal of pay for special facilities | 167,005.00 |
| Postmaster-General's divisor order | 4,941,940.34 |
| Other administrative changes | 699,544.51 |
| ——————— | |
| Total (with no allowance for the first item above) | $8,532,148.75 |
No one will contend for a moment that there has been any net reduction in the cost of supplying railway mail services and facilities since 1901, the year in which the report of the Joint Commission to Investigate the Postal Service was made. In fact, all changes in railway operating costs, except those due to increased efficiency of organization and management, which can have little if any effect in connection with mail traffic, have been in the opposite direction. During the years characterized by these reductions the railways have been called upon continually to improve the character of their postal service and the Post Office Department will not deny that the railways are now rendering better, more frequent, and more expeditious postal service than in 1901, or any intermediate year, and are doing so at greatly increased cost to themselves.
In view of these thoroughly substantiated facts the drastic reductions of recent years afford unanswerable proof that railway mail pay is now too low.
IX. THE ADMINISTRATION OF THE POST OFFICE DEPARTMENT HAS NOT, IN THE LAST TWELVE YEARS, EFFECTED ANY REDUCTION IN THE ANNUAL TOTAL OF ITS EXPENSES FOR OTHER PURPOSES THAN RAILWAY TRANSPORTATION OR IN THE PROPORTION OF ITS REVENUES REQUIRED FOR SUCH OTHER EXPENSES, BUT THE WHOLE SAVING WHICH HAS NEARLY ELIMINATED THE ANNUAL DEFICIT OF THE DEPARTMENT IS REPRESENTED BY THE REDUCED PAYMENTS, PER UNIT OF SERVICE, TO THE RAILWAYS.
That the recent savings of the postal service have been wholly at the expense of the railways is shown by the following: