Part 10

The proof of the pudding is in the eating. Every enlightened country except the United States has a parcels post. No country would think of abandoning it, any more than it would think of disestablishing its letter postal service. In the experience of all the world the argument about injuring the country town is sweepingly and completely refuted. The small town would gain vastly more than the large town by this tremendous increase and improvement of its transportation facilities. The whole public would benefit, for precisely the same reason that it benefits by having fast steamships instead of sailing vessels, limited passenger trains instead of stage coaches, two-cent letter postage instead of five-cent.

_Part Played by the Express Companies_

The people who oppose the parcels post are the innocent and unwitting dupes of the express monopoly. This is the one point in the parcels post argument that cannot be too constantly emphasized. When the dupes are brought to understand their true interests, Congress will not dare stand for a single session as the protector of express graft.

Small wonder that the express companies are fighting with every resource against the parcels post. They constitute one of the greatest groups of financial power in the country. They are united firmly. Most of the companies are large stock-holders in the others. Thus the United States Express Company was shown by the report of the Public Service Commission of New York, issued in 1908, to be capitalized at $10,000,000. Of this, the Adams Express Company owned nearly $1,000,000, the American Express Company exactly $1,000,000, and the Southern Express Company, $70,000. How tremendously profitable the business of the United States Express Company has been is shown by the fact that whereas the company claimed an investment of only $2,042,000 in real estate and equipment, it had $7,464,000 in investments, $895,000 in cash holdings, and $2,000,000 in collateral and other loans! That is to say, while this company had very little more than $2,000,000 invested in its transportation business, it had more than $10,000,000, representing surplus and undivided profit, in general investments!

It has accumulated such vast profits because it has been for many years charging unconscionable and scandalous rates for its service.

The Adams Express Company is shown by the current number of Moody’s Manual to have $12,000,000 capital. After paying large regular dividends and numerous extra dividends for many years, the company in 1907 found itself with such a tremendous surplus that it actually paid a special dividend of 200 per cent in 4-per-cent bonds! Every holder of a one-hundred-share of stock was presented with two hundred dollars’ worth of 4-per-cent bonds! The present, of course, represented in part the excessive charges which the company had been permitted to collect from the public.

But the most startling statistics of express accumulations are the financial statements of Wells Fargo and Company. For many years this company’s capital stock was $8,000,000. Its most recent statement, as published in Moody’s Manual, listed these assets: Real property, $4,100,000; equipment used in transportation, $2,044,000; stocks owned as investments, $3,211,000; bonds owned as investment, $3,750,000; loans, $17,165,000; cash on hand and in the bank, $5,459,000.

Such were the accumulations of this company whose own statement admitted that the equipment actually used in its transportation business represented only $2,044,000. The company has always paid large dividends. Its star performance in this line was the payment, early in 1910, of a cash dividend of 300 per cent. Every holder of a one-hundred-dollar share of stock was given three hundred dollars cash!

This was not all. The stock of the company was worth in the market exceedingly high prices. In addition to giving this 300-per-cent cash dividend, the company increased its stock from $8,000,000 to $24,000,000, and gave the holders of the original $8,000,000 the right to subscribe at par for two shares of the new issue for each share of their previous holding.

_Enormous Profits of the Express Companies_

These figures suggest the profits express companies have been making. They have been making them because our government is the only government which permits such a monopoly. It is a monopoly which not only extorts millions upon millions every year from the people, but which enables railroad companies, through their intimate business and financial relations with the express companies, to conceal a very considerable part of their earnings. The express companies are large holders of one another’s stock, and also of railway stock; in turn, the men who control the great railway combinations are themselves big owners of express-company stocks and bonds. The express companies lease from the railroads the right to transport freight over the railroad lines. The terms of these leases represent, not a reasonable and fair charge for the service, but an elaborate project of covering up excessive earnings and extortionate charges in a maze of complicated intercorporation transactions.

The worst penalty that the American public pays in order that the express grafters may make these huge profits and conduct these manipulations, does not lie in the excessive charges. It lies rather in the stunting and depressing effect upon general business, which is a necessary and manifest result of a policy that denies the freest and cheapest transportation facilities to the entire community.

Good Housekeeping. 53: 2-10. July, 1911.

Housekeeping by Parcels Post.

Isabel G. Curtis.

What would a parcels post mean to the American housekeeper? The suburban or rural family could receive the bulk of its supplies by mail--clothing, food, even eggs and butter and fresh meat. And the country household that had something to sell could, by availing itself of the parcels post, eliminate the expensive middleman and ship direct to the consumer. Thus the city housekeeper could receive eggs, butter and other things by mail at much less than she pays now. In scores of ways the parcels post would tend greatly to decrease the cost of living, for it would revolutionize the present cumbrous and expensive methods of retail business.

The United States Postoffice authorities will accept a package of not more than twelve pounds in weight and not more than three and one-half feet wide by six feet long for delivery at any postoffice in England, Germany or in any one of the thirty-nine foreign countries blessed with the parcels-post system, at a rate of twelve cents a pound. But you are denied the privilege of sending the same package to any destination in your own country at any price. A four-pound package sent to a local point will cost the sender sixty-four cents while the same package can be sent to New Zealand or Costa Rica for forty-eight cents.

The parcels-post rates in foreign countries are very moderate. In Germany, for instance, weight and distance determine the amount of the charge. The distance charge is fixed by means of zones, the first zone having a radius of ten geographical miles from the sending point, the second twenty, etc. The charge for an eleven-pound parcel is six cents within the first zone and twelve cents for every greater distance. For parcels weighing more, the charge is the same for the first five kilograms, but varies proportionately for each additional kilogram. In Germany, the weight limit is one hundred pounds, in England eleven, in France twenty-two and in Belgium one hundred and thirty-two pounds. That there is no good economic reason why any civilized community cannot have a parcels post seems to be proved conclusively by the earnings of the postal departments of the governments that have tried it. The postoffice departments of Germany and France each has a yearly surplus of more than $14,000,000, and England enjoys a surplus of more than $20,000,000--a striking contrast to our own Postoffice Department, with its annual deficit of millions.

“Then why don’t we have a parcels post?” you ask. The answer given to this question many years ago by Mr. John Wanamaker, when he was Postmaster General, means just as much today as it did then.

“There are just four reasons against the establishment of a parcels post,” said he. “They are the American, the Adams, the United States, and the Wells Fargo Express Companies.”

It has been said by some congressmen and postoffice officials that there is no parcels post because the public has not demanded it. Why not demand it now? Let every woman write to her husband’s congressman and speak her mind!

As pointed out by an Englishman recently in New York, one of the great advantages of the parcels post is its celerity. “Before it came into vogue,” he said, “customers often had to wait days for their goods. Now, within the London radius, it is a case of only a few hours, for the parcels post makes several deliveries daily. By paying a small additional fee, ‘immediate delivery’ is secured.

“The great retail houses, in increasing numbers, employ the parcels post for sending home the purchases of customers, instead of using their own delivery wagons. They find the government does the work for them cheaper and better than they can do it for themselves. The price charged, which is paid, of course, in postage stamps, varies from two cents for a parcel weighing under two pounds to twenty-two cents for a parcel not exceeding eleven pounds. Many of the London laundries now send home the week’s washing by parcels post for the same reason that the big stores are taking to it. The service cost less than that which they had previously provided themselves.”

This gentlemen dwells upon the importance of the fact that goods thus conveyed by the government are virtually insured up to the value of most packages sent.

Housekeeper. 31: 11-35. August, 1908.

Parcels Post. George E. Miller.

Now what are the advantages and disadvantages of the parcel post? The advantages can perhaps best be illustrated by reference to the work done by the parcels post abroad. There, especially in Germany and Great Britain, this great modern convenience has been brought to the greatest perfection. And there it is worth studying.

In the first place, it has been demonstrated there that the parcels post is the greatest stimulant of domestic trade ever devised by man. In the next place, it has made life in the country, in both Germany and England as comfortable and convenient as in the city. And lastly, it has proven so great a blessing in the cities, towns and villages that in many instances merchants have disposed of their delivery wagons and they depend upon the parcels post exclusively for the delivery of merchandise to their customers, except in the matter of goods of too much weight or bulk to go through the mails.

In London the government runs motor wagons in all directions into the country for many miles for the delivery of parcels, and this service is being extended until presently it will cover the country. Parcels up to the weight of eleven pounds are carried through the British mails, while in some other countries the limit is much higher, Italy, Chile, Cuba, the Netherlands, and New Zealand are the only other countries holding the weight to the same maximum as Britain. In Germany and Austria packages weighing one hundred and ten pounds are received, and in Belgium the limit is one hundred and thirty-two pounds. In France it is thirty-two pounds. In the United States alone the limit is as low as four pounds while the rate with us is so high, sixteen cents a pound, as to make the service prohibitive for ordinary use. Abroad the rates vary, but they are always aimed to be not much above cost, and they are materially lower than the rate now charged here, and much lower even, than the rate proposed by the president, which is twelve cents a pound.

No more enticing tale is told by the traveler returned from abroad than that relating to the parcels post. In England, Germany, and some of the other countries, the housewife particularly luxuriates in the joint convenience of the telephone and the liberal mail service. Does she want a spool of thread of a certain color and texture, or a bottle of medicine, or a cake or loaf of bread from the bakery, or any one of a thousand small needs, the necessity for which may come with all too much suddenness, she simply steps to the phone and makes her request and by the next visit of the postman she receives that which she ordered. And yet, she may be ten or twenty miles from the nearest town.

The farmers of those countries likewise receive untold benefit from the same service. Not long ago a gentleman called at the post-office department in Washington to relate a circumstance coming under his observation.

“I saw a Yankee demonstrating an American potato digging device to a farmer in Germany,” he said. “Suddenly one of the parts of the machine broke. It looked like bad business for the Yankee, but he, with real American resourcefulness, sprang to the telephone and ordered a duplicate part from his repository in a village two miles away, and in twenty minutes the postman delivered it to him and the demonstration of the digger proceeded to a successful conclusion. Of course, this was an exceptional instance. Everything connected with it happened luckily for the man selling the digger. His agent in the repository happened to be right on the spot when the telephone message came, and the postman happened to be just on the point of starting in the right direction to make a speedy delivery. But it seemed to me to tell an eloquent story of the parcels post, and its effectiveness.”

A red-headed, freckled, vivacious manufacturer from Detroit was in Germany not long ago and he also brought back a fund of parcels post stories. But his most significant statement was in regard to the effect of the service upon the country merchant.

“No man,” he said, “can study this question abroad and retain the belief that the parcels post will ruin the country merchant. On the contrary, it has been the making of him. The country merchant of Germany is far more solid and substantial since the introduction of the parcels post than he ever was before. It has made him a permanent, fixed cog in the industrial scheme of that country and given him an opportunity which he never had before of making himself indispensable to the community in which he does business.

“How did this happen? By the natural evolution of events. Nothing else. The wholesale houses of Germany simply stepped into the field themselves and issued catalogues as fine as any the mail order houses could produce. And these they placed with the country merchants in every town and village in the empire. The result was that each merchant had several dozen catalogues upon his counters for the benefit of his customers. He was authorized to say to all who came: ‘Here I am. You all know me. You know whether I am responsible. If you give me your order and the goods do not prove to be exactly as represented, you need not take them and I will refund your money. If you want goods of the same grade as those sold by the mail order houses, I can sell them to you, and at the same price. And I also have better goods which will cost you more. But I can give you exactly what you want, and as cheaply as any one.’

“In the meantime the country merchants have been able to greatly reduce the stocks carried in their stores. This reduced the amount of capital tied up in their business. And yet, by means of the catalogues, their customers were able to select from as large an assortment as they could in the largest stores, in Berlin.

“And this latter fact is amply recognized by the people of Germany. They step into a store in the most remote village of the country, and make their selections and place their orders, securely confident that they have seen all they could have seen if they had made the journey to one of the large cities. And they are all satisfied. They regard their mercantile system as the very best on earth, and I think it is. I had occasion, while visiting at a house out in the country one hundred miles from Berlin to need a dress suit, and I didn’t have one on that side of the Atlantic. I rode to the nearest village one morning, stepped into a little store, was measured by the storekeeper, and by mail that afternoon received a very fair ready-made evening suit. I was both pleased and surprised but the circumstance was a matter of course to the people I was visiting.”

These are some of the advantages of the parcels post. Now, about the disadvantages. These would, in this country fall exclusively upon the express companies. These unaccommodating friends, who have been with us so long, and who deliver nothing at your door unless you chance to live in a large city, would doubtless suffer the fate of the German mail order houses if the government of the United States were to inaugurate a parcels post upon the same scale as that in Germany. They would have to go, for who would pay the higher price to have a parcel sent by the nondelivering express company when the mails would be both cheaper and would deliver the parcel at your door in city or country?

As for the country merchant, of course, he would demand the German system, and equally, of course, he would get it. Otherwise, he also might have to walk the plank and the wholesalers of the United States would never permit that. They could not afford to.

NEGATIVE DISCUSSION

Perils of Parcels Post Extension. pp. 13-31.

George H. Maxwell.

_A Heavy Deficit Inevitable_

The commercial advocates of larger bulk and lower rates by domestic parcels post for the shipment of merchandise by mail do not want either a distance rate or a system limited by territorial zones. They want the privilege of shipping from any factory or central store or warehouse, wherever located, anywhere in the United States, to any customer or consumer, at any postoffice, however remote or inaccessible, in any state or territory. The rate desired is a flat rate of so much per pound without regard to distance.

It is urged that the same rate should be charged by Uncle Sam for carrying merchandise by parcels post from a New England factory to the distant mountain mining camps in Idaho or Oregon, or to the prairie towns of Texas, as would be charged for delivering the same package from the same factory by local trolley car service to a nearby postoffice in the immediate suburbs of the New England city where the factory happened to be located.

_Government Bears the Burden_

The national government in each and every case would pay the full actual cost of transportation and delivery to the point of destination, whether it were by trolley, railroad, stage-coach, wagon, pack-horse, mule, sled or snowshoes. Of course it is not contended that the government could secure an average or flat rate for the cost to it of transporting merchandise by mail, the same to all points in the United States, as it is urged that it should charge. On every package mailed the government would of necessity pay the full cost of carrying it from the point of shipment by mail to the place of delivery to the consignee, no matter how great the distance or how costly the character of the transportation.

In other words, while the government is expected to and of course must itself pay the full distance cost of transportation and delivery in every case, and could not give the service unless it did so, it is expected to look for reimbursement wholly to an average flat rate, like the rate for letter postage, or the present rate of the existing domestic parcels post for small parcels--a rate that is the same everywhere, without regard to the distance from point of mailing to point of destination.

_Averages Are Misleading_

The argument of averages is relied on to meet this insuperable objection. It has been suggested that the average haul of all second-class matter (which comprises only regularly entered publications, periodicals and magazines) was 540 miles in 1907, as shown by the report of the Postoffice Department, and on that as a basis it was estimated that an average rate of 5½ cents per pound or $29.70 per ton for other transportation charges, and $165.00 for labor and supplies, a total of $212.00 a ton, would leave a profit to the government of $27.00 a ton from a general parcels post rate of 12 cents a pound, which would produce a revenue of $240 a ton.

The estimates given above were embodied in an address by the Postmaster General before the Union League Club at Philadelphia on October 26, 1907.

For reasons based on facts that are undeniable and unquestionable, these averages and the estimates based on them, would prove utterly delusive and misleading when put to the test of a practical application of the proposed extension of the domestic parcels post to include merchandise in larger bulk and at lower rates than those now authorized by the postal laws. It is not necessary that the proposed extensions should be actually tried to demonstrate the deceptiveness of these average estimates. The conditions are before us and arise from facts so clearly known and established that he who runs may read.

_The Average Haul_

The average haul of second-class mail matter, made up of printed reading matter, for every copy of which a regular subscription must be paid, is fixed by and is in proportion to the average density of the population.

To illustrate this, take the city of New York as a starting point. It is the leading publication center in the country, and a larger number of publications entered as second-class matter are issued from the city of New York than from any other one city of the country.

The population of New York state in 1906 was estimated to be 8,226,990. The population of the state of New York alone is as large as that of the whole western half of the United States, and yet that whole western half of our territorial area contains only about one-tenth of the entire population of the country.

The average number of subscribers receiving regular publications through the mails as second-class matter in proportion to population is as large in the one state of New York as in the entire western half of the United States. So the Postoffice Department would serve in New York state, within an area of 48,204 square miles of closely settled territory, as many subscribers for second-class mail matter as it would be compelled to serve over a sparsely settled region in the west covering 1,513,394 square miles, that being the area of the western half of the United States, not including Hawaii and Alaska.

_Second-Class Mail Matter_

An average length of haul of second-class mail matter now carried by the national government would be much greater if limited to the one state of New York and the western half of the United States, than if applied to the entire country; for the very simple reason that the vast sparsely settled area in the west would comprise one-half of the total number of subscribers served; whereas if the whole United States were included, then the western half with its sparse population would embrace only one-tenth of the whole number served, and nine-tenths would be located in the more closely settled eastern half of the United States.

In other words, in averaging the length of haul of second-class matter, nine-tenths of the people served are in closely settled territory, where they are reached by the short haul, and only one-tenth in the thinly settled western half of the country, to be served by the long haul, and oftentimes by the most difficult and expensive methods of transportation.

_Conditions That Control Are Reversed_