Postal Riders and Raiders

by W. H. Gantz

I have no doubt that if a proper weighing of the mails was observed, and if the railways were to carry the mails at a reasonable rate, this distribution could be made at a cost approximately that which I have named, as illustrated by the cost of distribution in Washington City, which is an undisputed fact.

After presenting the publishers’ “Exhibit A,” in which they refute Mr. Hitchcock’s unfounded assertions of colossal profits in the magazine publishing business—a subject which I treat elsewhere—the Senator presents their “Exhibit B,” which counters the Postmaster General’s claim that the proposed increase in rate would yield a large revenue to the government. “Exhibit B” reads as follows:—

It has been shown from the original books of account of the five most prominent magazines that the proposed measure charging 4 cents a pound postage on all sheets of magazines on which advertising is printed would tax these magazines, the most powerful group, best able to meet such a shock, nearly the whole of their entire net income. This means that the new postal rate could not be paid. There is not money enough in the magazine business to pay it. Magazines would simply be debarred from the United States mails.

But assume, for the sake of argument, that this would not be the case, and that the money could be found to pay the new postage bills, what, theoretically, would be the increased revenue of the Postoffice Department, for the sake of which it is proposed to take more than all the profits of the industry that has been built up since 1879?

The Postmaster General, in his statement given to the Associated Press, and published in the newspapers Tuesday morning, February 14, claims that the proposed postal increase on periodical advertising would amount to less than 1 cent flat on the weight of the whole periodical. This is not the way the ambiguously worded amendment works out literally; but, accepting the Postmaster General’s figures and applying them to the weights, given in his annual report, of the second-class mail classifications affected by the increase, let us pin the Postoffice Department down to what it hopes to gain from a measure that would confiscate the earnings of an industry.

Mr. Hitchcock in his statement gives 800,000,000 pounds as the total weight of second-class matter. In his report for 1909 he gives the percentage of this weight of the classifications that could possibly be affected by this proposed increase as 20.23 per cent for magazines, 6.4 per cent for educational publications, 5.91 per cent for religious periodicals, 4.94 per cent for trade journals, and 5 per cent for agricultural periodicals, making 42.97 per cent altogether of the 800,000,000 pounds that might be affected by the proposed increase, or 343,760,000 pounds. Of course, this includes the periodicals publishing less than 4,000 pounds weight per issue, and exempted by the amendment.

But, making no deduction whatsoever for these exemptions, and none for the great expense of administering this complex measure, with its effect of conferring despotic power, certain to be disputed, the Postmaster General claims that this figures out only 1 cent increased revenue on 343,760,000 pounds, or a gross theoretical gain to the Postoffice Department of $3,437,600. These are the Postmaster General’s figures, not the publishers’.

But from this figure of 343,760,000 pounds the Postmaster General would have to subtract the weight of all the periodicals exempted, and also subtract all the new expense involved for a large force of clerks.

There will also be a great increase of work for inspectors, as the proposed measure puts a premium on dishonesty. There will be constant temptation for unscrupulous people, who try to take the place of the present reputable publishers, to publish advertising in the guise of legitimate reading matter. There will be extra legal expenses for the disputes that arise between publishers and the Postoffice Department over matters in which the publishers may believe the department is using the despotic power given by this measure to confiscate the property of publishers. In the hearings before the Weeks committee, it was frankly admitted by members of the House Committee on Postoffices and Postroads that the government postoffice service could never be run with the economy and efficiency of a private concern.

With all the expense of this new scheme subtracted from such a small possible gain as is claimed by Mr. Hitchcock, what revenue would remain to justify the wiping out of an industry built up in good faith through thirty-two years of an established fundamental postoffice rate?