We have seen that the present express fails to reach the farm, in itself a fundamental objection to its adequacy. It may be suggested that where its high charges are such as to inhibit the traffic, they might be corrected by appeals for reductions to the Interstate Commerce Commission. A glance at the express report for 1909, it is true, will show that the profits of the companies are clearly out of normal proportion to the investment. But it will also show that such profits amount to but 8.44 per cent of the gross receipts, i. e., to only 8.44 per cent of the rates charged. So that even if all the profits were taken away, the modified rates would show but a wholly inadequate reduction; so that the desired relief could not thus be obtained. As a matter of course, no such reduction would even be asked. No one would wish that they conduct the business without a profit. But in practice even when the justification for a reduction is present, and the power and purpose active, the regulating board will always hesitate to even substantially reduce a rate in the fear of unduly trenching on private rights.
It was this principle which Bismarck had in mind when in connection with a similar subject he spoke of—
The attempts to bring about reform by (regulatory) laws have shown the futility of hoping for a satisfactory improvement through legal (regulatory) measures, without trenching materially on established rights and interests. (Parsons, The Railways and the People, p. 318.)
With a margin of but 8 per cent of the rate to work on, the board would feel this constraint in a marked way; for under substantially reduced rates a very slight perturbation of the customary traffic might place in danger the whole net return. Substantial relief in the way of regulation is thus shown to be wholly impracticable.
Various Parcels-Post Schemes
There remains to discuss the numerous proposals for limited carriage of parcels up to 11 pounds, and so forth, by the postal department. These all concern the present railway status quo of the post office. It is apparent that such proposals can only result in two things—the express companies taking the major portion of the short-haul, profitable traffic and the postal department getting the long-haul and losing traffic. But there is another fact recently disclosed by the express report—a fact rendering any of these proposals, so far as they involve railway transportation, wholly untenable.
The Post Office Department pays an average of 4 (4.06) cents per pound to the railways for carrying the mail, excluding equipment.
The express companies pay an average of three-quarters (0.74) of a cent per pound for carriage of express matter, excluding equipment.
It is manifest that not even the government could render substantial service under conditions so utterly unequal. It could not pay—what we shall see when we come to consider the length of the express and the mail hauls amounts to—about three times as much as the express companies pay to the railways for carrying its parcels. One is mail service, which is naturally more costly; the other more closely resembles a fast freight service, which lies midway between the mail and the freight in the weight cost of railway movement.
Other difficulties in such proposals, based on the status quo of the post office, need only be suggested: