Part 4

_Difficult to Estimate Cost_

No accurate information is available as to whether the European parcels posts are in reality self-supporting. They certainly are nearly so, and in some instances are regarded as profitable government ventures. Everywhere the service is characterized by prompt transmission and prompt delivery. The percentages of loss are very small. The several national constituencies that have a parcels post system would no more relinquish such privileges than American cities would relinquish electric lights or automobiles. One European enthusiast pronounced the establishment of the parcels post “a service to mankind only less splendid than that of the transmission of thought.”

In England it is claimed that the parcels post service would be a source of profit but for the amounts paid to the railroads for transportation, the share of 55 per cent of the receipts being regarded as exorbitant. Generally the parcels post is so joined with the rest of the mail service that its entire cost can not be counted.

The international business has grown to enormous proportions. The figures collected at Berne for 1904, in connection with the Postal Union, show that the parcels mailed across the frontiers of 36 nations and colonies that year numbered something like 38,000,000. The small percentage of that total, where the value was declared, showed an aggregate of about $162,000,000 worth of property. In that list the United States would have stood about eleventh on the showing for the fiscal year of 1906, when 264,438 parcels of an average weight of 2⅔ pounds were sent from this country abroad. Tunis sent more according to the figures than the United States. Germany, leading all other nations both in the dispatch and receipt of parcels in international mails, sent a total of 11,675,385, of which 11,343,516 were classed as “ordinary,” and 331,869 were “with a declared value” of $23,352,378. Austria, enjoying close postal relations with Germany, dispatched 10,659,300 parcels to other countries, of which 1,082,430 had a declared value of $68,396,578.

_Has Become Great Factor_

The totals of “receipts” and “dispatches” of course balance for the 36 countries in question, but are not the same for each country represented. The rank in parcels dispatched runs: Germany, Austria, France, Hungary, Great Britain, Switzerland, Italy, Belgium, Netherlands, Tunis, British India, Bosnia-Herzegovina, Russia, Denmark, Luxemburg, Japan, and Egypt; in parcels received the order is: Germany, Hungary, Austria, Switzerland, France, Italy, Great Britain, Belgium, Russia, Netherlands, Denmark, Roumania, Spain, Bosnia-Herzegovina, Sweden, Norway, Luxemburg, Tunis, and so on. Switzerland in 1904 received across her borders 2,788,406 parcels by post, of which 2,635,090 were “ordinary” and 133,316 were declared of a value of $9,863,886. Of 6,352,360 parcels that came over the Austrian frontier, 778,380 had a declared value of $64,788,927. Germany received 7,337,404 parcels in international mails, of which 482,472 had a declared value of $35,901,435. The parcels received by post in the United States during the fiscal year 1906 from abroad were recorded as 131,064, of an average weight of 2.73 pounds. Probably the actual number was much larger, perhaps twice as large.

Sufficient figures have been given to indicate what a great factor the parcels post has become in the trade of the world. The value of the merchandise thus transported can only be roughly estimated, but it will probably exceed half a billion dollars annually.

This business is transacted across frontiers, causing little or no friction with customs officers. Boxes with declared value are subject to the legislation of the country of origin or destination as regards payment of stamp duties on articles exported and as regards the control of stamp and customs duties on articles imported. The stamp duties and charges for examination by customs officers involved in the importation are collected from the addressees when the articles are delivered.

_Provision for Insurance_

Practically the same rules apply for all parcels post. There is provision for insurance and also for “trade charges,” which latter term means that goods can be sent c. o. d., the maximum value being f.1000. The limit of weight is 5 kilograms, or 11 pounds. The cost of conveyance comprises a charge of 10 cents for each country participating in the territorial transit, a graduated distance tax for sea conveyance and extra rates for cumbersome parcels, and may be increased under certain conditions by delivery fees and, in case of declared values, by insurance fees. Weights under 2 pounds, however, are transported for a maximum of 1 franc. Special forms are provided for registering for customs declaration, for certificate of prepayment, when that is desired, and for trade charges.

The United States is not a party to this comprehensive parcels post convention, by which a vast quantity of merchandise is carried to different parts of the world annually, but Argentina, Bolivia, Chile, Colombia, Guatemala, Uruguay, and Venezuela are among the signatories. But the United States has parcels post conventions with 33 different countries on somewhat different but fairly liberal terms. It keeps the postage for parcels it sends to other countries and they in turn retain the postage on parcels sent here. That saves in bookkeeping and has been found economical, whereas the more comprehensive convention, under which most of the European and Asiatic countries operate, divide the postage receipts pro rata. The United States will not transmit through its mails parcels en route from one foreign country to another. Among the latest parcels post conventions the President has ratified under statute authority are those with Sweden, Peru, Denmark, Ecuador, and Bermuda.

_Customs Easily Collected_

The popularity in this country of the parcels post is well demonstrated by the great growth in the use of international facilities. The dispatches from this country for the fiscal year ending June 30, 1905, amounted to 560,228 pounds and for the year ending June 30, 1906, was 721,164 pounds, an increase of 28.73 per cent. Only one-fifth of the dispatches of the last mentioned fiscal year went to Europe, which indicates that a good share of the parcels business was with Mexico and Central South America. Parcels for Germany, Hongkong, Japan, Norway, Belgium, Great Britain, Sweden, and Denmark are accepted only for a maximum weight of 4 pounds and 6 ounces, where the maximum weight for the other countries with which the Postoffice Department now has conventions is 11 pounds.

The customs officials say that the parcels post business with foreign countries is increasing by leaps and bounds. Within recent months better facilities for the collection of customs dues have been inaugurated, with the result it is said, that many packages which hitherto passed without being noted are now being examined and recorded. There are offices of exchange, so called, in several of the larger post-offices of the United States where customs officials are stationed to attend to the collection of duties on these parcels from abroad. In the Washington City post-office this foreign parcels post business is said to have increased 300 per cent within the last twelve months. The Treasury Department keeps about 25 customs employees now on duty at the New York City post-office to attend to the foreign parcels post business which goes through that office. Dutiable packages to minor offices are handled from exchange offices. Such mail addressed to Plymouth, Mass., for instance, would be held till the addressee had forwarded to the postmaster at Boston the amount of duty required.

Post-office, Our Mutual Express Company. pp. 1-3.

William S. Bennet.

MR. CHAIRMAN: In connection with this subject I take pleasure in submitting the following views of the Postal Progress League:

_The Post-Office, Our Mutual Express Company_

From the foundation of our national government, the people of the United States, through their representatives in Congress, have always determined the scope of their postal service, the pay of their mail carriers, their own postal rates; and from the first they seem to have provided for the postal transport of merchandise in very small sealed parcels at very high rates--by the act of 1792, 24 cents an ounce for distances up to 30 miles, higher rates for greater distances. In 1810 they fixed the postal weight limit at 3 pounds, and it so remained for many years. In 1863 the postal rates were made uniform regardless of distance, and since 1863 Congress has definitely provided for the transport of merchandise in unsealed parcels, but still with a weight limit so low and rates so high as to be practically prohibitive.

In the old era of household industries when the peddler, with his pack on his back, or driving his own team, was the chief agency of commercial intercourse, these postal limitations worked little harm, but their continuance in our day, when every industry needs a continent for its development, is no longer endurable. The common welfare demands the widest possible extension, the most efficient and economic administration of our great mutual express company.

In its report of January 28, 1907, the Postal Commission of the Fifty-ninth Congress declared that: “Upon the postal service, more than upon anything else, does the general economic as well as the social and political development of the country depend.” And yet the United States merchandise post of to-day is limited to 4-pound parcels at rates: Sealed parcels 2 cents an ounce, 32 cents a pound, with no insurance against loss or damage unless registered; and unsealed parcels, with no insurance under any conditions, at rates:

_Third-Class Matter_

Some specific kinds of merchandise; printed books; Christmas cards printed on paper; advertisements on ordinary paper; seeds, bulbs, etc., for planting, 1 cent for 2 ounces, 8 cents per pound.

_Fourth-Class Matter_

General merchandise; blank books; Christmas cards of any other substance than paper; advertisements on blotting paper; seeds, bulbs for food, etc., 1 cent per ounce, 16 cents per pound.

In 1874 third-class matter covered all merchandise at one-half the present general merchandise rate.

The Postal Report of 1904, pages 593-595, shows the effect of these limitations on the free rural service. In its daily 24-mile course, visiting over 100 families, the average rural post-wagon handles less than 26 pounds of mail per day, collected and delivered; it collects less than 1 pound. The average rural family posts hardly one merchandise parcel a year. Its total merchandise traffic dispatched and received is less than 10 parcels a year. The postal revenue from its entire merchandise traffic is less than 50 cents a year. The total cancellations of the average carrier in 1904 amounted to only $10.64 a month; to less than $132 a year. With the same limitations in 1909, his postal income must remain practically the same. Meanwhile the 4,000,000 families on the rural routes go to and from their post towns and their homes, carrying their supplies and their produce at a needless expense--estimated at only 50 cents a week per family--of over $100,000,000 a year.

And the postal weighings of 1907 disclose a similar state of things in the general-merchandise traffic of the post-office. Of the general postal business, the merchandise traffic represents:

Per cent. In number of parcels 1.12 In weight 4.79 In revenue 4.44

The weight of the average merchandise postal parcel is 5.45 ounces; its average haul is 687 miles. The merchandise tax, 1 cent per ounce or fraction thereof, amounts in practice to 17.23 cents per pound. The average family posts less than 9 parcels a year--less than 3 pounds--and pays for the service about 50 cents a year.

The local merchandise mailed in October, 1907, at 17 representative post-offices of Alabama weighed only 65 pounds, at 16 representative post-offices of Arkansas only 14 pounds, at 18 representative post-offices of Iowa only 116 pounds, at 16 representative post-offices of New Hampshire only 27 pounds, at 16 representative post-offices of North Carolina only 30 pounds, at 14 representative post-offices of Oregon only 1 pound, at 14 representative post-offices of Montana only 1 pound, at 14 representative post-offices of Nevada only 4 pounds, at 12 representative post-offices of South Dakota only 15 pounds, and at 14 representative post-offices of Wyoming only 1 pound.

The weight of the parcels posted in October, 1907, by the 4,000,000 people of New York City in their local traffic amounted to only 55,918 pounds, less than 1¼ ounces per family, and in their total traffic to only 469,111 pounds, about 8 ounces per family.

The post-office is the most important department of our national government. Its system of rates--regardless of distance, regardless of the character or volume of the matter transported, rates determined by the representatives of the rate payers in Congress assembled on the basis of the cost of the service rendered--its system of uniform rates places our whole country on a plane of the most perfect commercial equality. Up to its limits there can be no possible discriminations either as to persons, places or things. Up to its limits, the humblest citizen on the most out-of-the-way rural route is guaranteed the transport of his supplies and his produce at the same rates as the biggest corporation in our greatest metropolis. These rates moreover, may be steadily reduced with the improvement of our transport machinery and its administration. And yet by our own limitation of this mighty service we deny ourselves its use almost altogether in local traffic, and in through traffic confine it to parcels of less than 6 ounces.

Meantime we pay private express companies what “the traffic will bear” for the transport of our large parcels, and in our local traffic cheerfully carry our small parcels in our pockets or hand bags or dispatch them by private messengers or private vehicles. Such petty work is beneath the notice of our great private express companies. In many small places they have no offices. Even in our great cities they have no regular daily courses, save in a few business districts. If the ordinary city resident would dispatch a parcel by express, he must go after an express wagon on foot or by telephone. The post-man--our public expressman--comes to our doors one, two, three, four times a day, or oftener. We have but to substitute a machine post for our overburdened foot post and, with a perfected system of collection and delivery of insured parcels at reasonable rates, we shall have a postal express at hand, ready and competent to do our bidding on our own terms and conditions.

The possibilities of such a service were illustrated some years ago, when James L. Cowles, of the Postal Progress League, dispatched an 11-pound suit case from New York City to New Haven, Conn. Prepaid as a sealed parcel, with a special-delivery stamp affixed, the suit case was mailed at a branch post-office on Fifth avenue about 5 o’clock in the afternoon; it was delivered at its address in New Haven before 10 o’clock the same evening. On another occasion Mr. Cowles telegraphed from Philadelphia about noon for a parcel of stationery to be sent him from his office, 361 Broadway, New York City. The Philadelphia postman delivered the parcel at Mr. Cowles’ hotel before 8 o’clock the same evening.

In his testimony before the congressional committee on railway mail pay, in 1898, Mr. H. S. Julier, of the American Express Company, testified that the weight of the average express parcel is 25 pounds; its average charge is 50 cents; its average haul in the eastern states is 100 to 125 miles; in the central states a little more; in the western states from 175 to 200 miles. In local traffic the ordinary express charge on the smallest merchandise parcel is 15 cents; in general traffic, 25 cents. The private express service is chiefly confined to traffic between cities. To be successful, a business requiring express service must be located in a large city, where the different express companies have their headquarters; otherwise their parcels will often be subjected to two or three express charges before they reach their destination. The private express company, with its rates based on the value of the service rendered and determined according to volume of business, is deadly to the small place and the small dealer.

Under the growing differentiation of industry there is a steadily growing demand for a door-to-door express service of parcels ordered by telephone, telegram, or by mail. The business can not be done by private express companies to the public satisfaction. Their machinery does not reach the rural districts. An extended postal service is the only public choice.

As long ago as December 6, 1898, the Merchants’ Association of New York issued the following statement to the merchants, manufacturers, and shippers of the State of New York:

A very large part of every dollar paid by you for express charges is exorbitant and exacted to pay a monstrous profit to an unrestrained monopoly.

Many of you are compelled by present conditions of competition to use the express service on a large part of your shipments, and to pay express charges which are from 300 to over 20,000 per cent of corresponding freight charges. The express charges on many classes of goods average from 5 to 15 per cent of the value of the merchandise transported.

These are the charges that you pay. But many of your strongest competitors are favored by discriminating rates and pay much less.

The express companies are now uncontrolled by law and you have no recourse against exorbitant charges; you must ship by express and must pay whatever the express companies see fit to charge.

On the 10th of February, 1909, the Merchants’ Association of New York again returned to their attack upon the express companies. Note their charges:

_Exorbitant Rates_

Rates so high in the case of the Adams Express Company as to enable them to pay dividends of over 80 per cent a year on the amount actually invested in their business. In 1907 they made a dividend of $24,000,000.

Excessive charges for collection and delivery varying, on 100-pound parcels, from 27 cents to $7.79 for similar services.

Unreasonable restrictions of free delivery service.

Unreasonable regulation as to size of parcels.

Unreasonable regulation as to packing.

Delays in delivery.

Failure to notify shippers of nondelivery.

Delays in settlements of claims.

Delays in returns of undelivered goods.

Marking parcels 1 to 5 pounds over actual weight, and compelling consignees to pay for the fictitious increase.

System of Postal Express.

David J. Lewis.

MR. CHAIRMAN: In December the government issued its first annual report on the statistics of express companies for the year 1909, which developed the fact that the average pay of the express companies to the railways for carrying express matter was about three-quarters (0.74) of a cent a pound, while the postal reports show that the government paid for its letter or mail transportation about 4 (4.06) cents a pound, barring the weight of equipment in both cases. It was apparent to me at once that the parcels function could not be successfully or economically discharged by the government on the basis of letter-transportation rates. And then the economic significance of another fact developed: It was that the express companies’ service was at a disadvantage, even greater than that of the post office, in regard to the nonrailway transportation of its parcels. The express companies have no agency and at present rates can not secure an agency to reach nonrailway or rural points. In short, it appeared that the express companies had exclusive control of one of the absolutely essential conditions of fast package transport, the express rate of three-quarters of a cent a pound, while the post office had equally exclusive possession of the other great agency of necessary service--the rural delivery system. Common sense indicated what the solution must be; these two advantages, the railway express transportation rate and the rural delivery system must be made cooperative; must be united under one control. The express railway transportation rate would, if the government parcels amounted to but one-fourth of the express business, save it, if in its control, at least $50,000,000 a year, while the addition of rural delivery to the express business would add to this great service the farming population of our country at practically no cost to them or the country. The bill I have introduced for postal express is the result of these conditions.

_Principal Provisions of the Postal Express Bill_

As I have said, the idea of the bill is to unite in one service the two great instrumentalities above named, in order that a greatly cheapened and an even more extended service to the public may be had. For this purpose the bill provides for the compulsory purchase by condemnation of the railway-express company contracts and franchises, as well as the equipment and property devoted to the express business per se, and their subsequent employment by the postal department in connection with rural delivery and the postal system. The express-railway transportation privileges are all the subjects of contracts between the railways and express companies. They constitute the primary condition of the express service, and while the equipment and other facilities are only immediately necessary to a running plant, and their acquisition is provided for, it is the contracts which constitute the conditions sine qua non of the service. Happily, there can be no legal question as to the right of the government to acquire these contracts and other facilities upon providing just compensation.

_Necessity for Postal Express_

In addition to those grave needs for such a service, which the majority of national communities have recognized, as commending its adoption domestically and internationally, there exist in the United States supplementary reasons which it is believed render the institution uncommonly necessary.

Briefly summarized, they are:

(_a_) The greater area over which our population is distributed and correlatively greater transportation distances which consume so much time by freight that a fast or express service needs to be resorted to in a larger number of instances than if the journey were short.

(_b_) The 100-pound minimum and corresponding charge in railway practice and the inadaptability of railway methods to diminutive consignments.

(_c_) The prohibitive minimum charge of the express companies in respect to small consignments.

(_d_) Absence of railway “collect and delivery” service and absence of “collect and delivery” service by express companies as to our farming population and a large portion of our urban population.

(_e_) Incalculable waste of transportation effort, so far as made, in movement of necessaries of life from the farms to points of consumption, a serious factor in our high cost of living.