In speaking to the same point as applied to the United States Express Company, Mr. Atwood calls attention to the fact that 55 per cent of its “stockholders” have entered suit to wind up the company’s affairs on charges of mismanagement by its dominating officers. Mr. Atwood further writes:
Although the gravest of charges of mismanagement and waste of assets have repeatedly been made against the directors of the United States Express Company, a profit of almost 15 per cent was earned by the company on the capital invested in the express business in the year 1909. This profit would have been still greater had general trade been normal, and had there not been a hiatus between the loss of one large contract and the securing of another. That the stockholders have not received all the profits proves nothing. Millions have gone into unnecessary real estate investment and large salaries have been paid, but earnings on the capital actually invested have clearly shown that even under a management whose good faith and ability is being challenged in the courts there is an ample return.
As long ago as 1875 a writer in Harper’s Magazine said the express business had already created fifty millionaires, a statement which does not tax the credulity of anyone who casts a glance at the dividend record of these companies. To use the calmly judicial words of the Census Bureau: “In no other business is it probable that so little money, comparatively, is invested where the gross receipts are so large.” We have seen that new capital is not a necessity of the express business. Unlike the railroads, new security issues to raise capital are never sold to the investing public.
The cappers for railroad and express interests, keep the atmosphere agitated with talk about the “uncertainty and irregularity” of the quantity of express matter to be carried, “the excessive taxes paid,” etc. In answer to such bubble, Mr. Atwood has this to say:
While this may be theoretically true, the experience of years has shown that the patronage of these companies has been fairly regular, remunerative and growing. Not only will a study of the gross receipts prove this contention, but further confirmation will be found in the remarkable series of excessive dividends. “We do not feel that any extravagant return should be permitted upon the business of these companies,” said the Interstate Commerce Commission in Kinde v. Adams et al., “for it involves none of the elements which entitle an investment to a high return.”
When the Adams Express Company enriched its shareholders with a 200 per cent extra dividend in 1907, stress was laid upon the increase in taxation throughout the country. How ridiculous this is can be seen from the fact that the Adams Company paid only $145,184 in taxes in the entire fiscal year of 1909, and $202,234 in 1910, although its extra dividend alone amounted to $24,000,000. Profits on stock and bond speculation amounted to $418,979 in the year 1909, and $1,943,889 in 1910. The American Express Company, with its huge resources, paid but $283,951 in taxes in 1909. In the same year the volume of its banking business alone amounted to more than $250,000,000. In at least one important state, the express companies paid no taxes until a few years ago and in Indiana the companies had the audacity to tell the Tax Commissioner that they had little or no tangible property in that state. When Congress voted to put a tax of two cents on every express transaction to raise revenue for the Spanish War the companies made the shipper pay, and when the shippers objected fought the case to the highest courts.
At this point the question naturally arises as to how the express companies have been able to carry on for so many years such a perfect system of extracting money from the public without being seriously molested. The answer involves a knowledge of the relations existing between the railroads and the express companies, and a knowledge of the complete monopoly which exists in the express business—a monopoly made possible only because of these very relations.
In Pearson’s Magazine appeared two forcefully written articles by Mr. Allen L. Benson on the parcels post. The articles appeared in Pearson’s in February and March, 1911. In his February opening and closing Mr. Benson says some things to us and says them with a kindly bluntness which we should appreciate:
Is it a pleasure to you to be treated as if you were a fool? Do you never tire of acting like an organ-grinder’s begging monkey?
These questions are put to you in good faith. I have no desire to insult you. I know you are not a fool. I know you don’t like to beg. Yet here you are again, with your little red cap on and your little tin cup out, begging for a parcels post. Begging from those whom you should order. And the gentlemen from whom you beg treat you as if you were a fool.