Per cent SpacePer cent EarningsShould Earn on SpaceDid Earn.Passenger72.8485.64$4,800$5,643Mail17.387.511,145495Express9.786.85644451$6,589
Mail earnings (26 days), $495 per month, or $19 per day.
Four trains on this road carry mail daily, two each way, two in a twenty-five-foot mail apartment and two in a thirty-foot mail apartment, an average earning rate of 7.88 cents per car mile.
The passenger cars on this branch carry an average of 24 passengers each, and earn 48 cents per car mile. The average mail apartment furnished is half a passenger coach.
These four apartment cars, at the same rate as the passenger cars (24 cents per mile), would earn $18,029 per year.
The passenger train earnings on the branch are $79,000 a year. The mails demand 17.38 per cent of the facilities, and on that basis should earn for the company $13,730.
The mail earnings were $5,940, this being the annual compensation after a reduction of nine and one-half per cent through the Cortelyou order, requiring the aggregate of 90 weighings to be divided by 105 to ascertain the "average."
Route 164,004. Edgemont to Billings (Wyoming). 366 Miles. Average Daily Weight, 8,087 Pounds.
Per cent SpacePer cent EarningsShould Earn on SpaceDid Earn.Passenger85.7989.22$85,476$88,895Mail10.436.1810,3926,156Express3.784.603,7664,583$99,634
Two 60-foot postal cars are run daily each way.
The mail earnings are $6,156 per month, or $205 per day.
The total earnings of the passenger trains on this road are $1,195,000 a year, and the mails required 10.43 per cent of the passenger train facilities; on this basis they ought to pay $125,000 a year.
These post office cars are hauled 534,000 miles every year. The Postmaster-General estimates that the actual cost to the railroads of operating a sixty-foot postal car is 18 cents per mile. At this rate the Burlington Company should be paid $96,000 a year for the service of the postal cars only.
It is, in fact, paid for all the mail service on this road $73,872 annually.
Route 135,010. Galesburg to Quincy (Ills.). 99.93 Miles. Average Daily Weight, 19,727 pounds.
Per cent SpacePer cent EarningsShould Earn on SpaceDid Earn.Passenger69.4579.44$28,864$33,015Mail19.708.458,1873,511Express10.8512.114,5095,034$41,560
Mail earnings from all sources $3,511 per month, or $117 per day.
The service is performed in three 60-foot postal cars, two 16-foot apartments and one 27-foot apartment, each way daily; also one 44-foot postal car and one full storage car, daily except Sunday, in addition to some space furnished for closed pouches in ordinary baggage cars.
The car space provided for the mails on this route is equivalent to ten full sixty-foot cars daily, over the whole length of the route, or 365,000 car miles a year. At 18 cents per mile the pay would be $65,700, whereas the actual pay is only $42,132. If the Government paid for the service in proportion to the facilities it demands and receives, it would pay $98,244.
Route 135,007. Chicago to Burlington (205 Miles). Average Daily Weight, 192,540 pounds.
Per cent SpacePer cent EarningsShould Earn on SpaceDid Earn.Passenger73.1474.72$210,134$214,671Mail17.1913.7449,38739,462Express9.6711.5427,78233,170$287,303
On the basis of space used and facilities provided for the mails, the Burlington road is underpaid $119,000 a year on this route.
Two-thirds of the weight of mail is carried in special trains run at great speed and unusual expense, for which no extra allowance is made. The extension of the route to Omaha is across Iowa, where it is "Land Grant," and subject to land grant deductions.
The Government made a "gift" to the company in 1856 of lands amounting to 358,000 acres and then valued at $1.25 per acre, or $447,500.
The mail pay deductions to June 1, 1910, on account of this Iowa land grant aggregate $1,650,000, and still continue at the rate of $62,000 a year.
Neither in the foregoing six statements of results upon separate mail routes, nor in the general statement of results upon the Burlington Road has any allowance been made for the expense to the company of what is called the "Mail Messenger Service."
At all points where the post office is not over one-fourth of a mile from the railroad station the railroad company must have all the mails carried to and from the post office.
What an important item of expense this amounts to appears in the following extract from the Report of the Wolcott Commission, which states:
"Out of 27,000 stations supplied by messenger service 7,000 are paid for by the Department at a cost of between $1,000,000 and $1,100,000 per annum, leaving the other 20,000 stations to be supplied by and at the expense of the railroads."
"Out of 27,000 stations supplied by messenger service 7,000 are paid for by the Department at a cost of between $1,000,000 and $1,100,000 per annum, leaving the other 20,000 stations to be supplied by and at the expense of the railroads."
Investigation has shown that on mail routes, where the average mail pay of the railroad company is $900 a year, the average cost of this mail messenger service is $400, calculating only $100 as the expense for each station wherethey are required to perform the service. There are instances where the company pays in cash each year, for delivering the mails between station and post office, considerably more than the Government pays for the entire mail service over its line of road. There is no such feature in the express service.
The question is sometimes asked why the railroads continue to carry the mails if there is no profit in the business. Carrying the mails is not the only traffic which railroads take upon terms that would bankrupt them if applied to all their business.
There is no profit in running passenger trains on most railroads; that is, the receipts from all the traffic carried on passenger trains are not sufficient to pay a train mileage or car mileage share of operating expenses and taxes and charges for the use of capital. But a large part of this cost of conducting the business of a railroad, such as taxes, interest, maintenance of roadway, general office expenses, and many others, would continue substantially the same if the passenger trains were discontinued. Having the railroad, and its taxes, and interest, and maintenance expenses to meet, anyhow, no railroad can afford to refuse any income from passenger trains that amounts to more than their train operating cost. On the same principle they accept low rates per mile as a share of through passenger fares which, if applied to all passenger fares, would show a loss. The road is there, the trains are running, and the cars only partially loaded; the addition of through passengers may not materially increase the expense, and the road is better off to accept the business at less than the average cost, rather than to reject it. But whatever thepassenger trains lose must be made up by the freight trains if the road is to continue in business.
The constant aim of the managers of the railroad is to secure from each class of traffic not only the operating cost peculiar to that traffic, but a proportion of the general cost; but business is not necessarily rejected on which it is impossible to secure such proportion.
Many of the reasons which impel them to run passenger trains without profit apply to their acceptance of the Government mails. They facilitate the freight business; it is better to carry them at a loss than not to carry them at all.
But is that any reason why the Government should not pay fair value for what it receives? Is it good policy for the Government to force upon the companies the alternative of carrying the mails at a loss or refusing to carry them at all?
What are the mails?
They are the letters and packets that are conveyed from one post office to another under public authority.
Who conveys them? The railroads convey nine-tenths of them.
The railroads are the mail service of this country. The Post Office Department states that it receives from the people who use the mails eighty-four dollars on every one hundred pounds of letters and post cards. Who makes that money for them? The railroads. The railroads convey those letters and cards from post office to post office—not the Government.
For a service like that the Government can afford to pay.
What does it pay?
On the great bulk of the business the railroad companies which do the work and earn the money receive less than two dollars a hundred. On every pound of first-class mail the Government collects eighty-four dollars a hundred.
The fact that the Congress, for purposes of general education or other reasons, thinks it is good public policy to carry the magazines and other second-class matter at one dollar a hundred is something about which the railroads have nothing to do and nothing to say.
The mail pay of the railroads has been reduced in the past four years more than eight million dollars a year. Part of this was done by act of Congress, but the greater part came from the arbitrary and illegal Cortelyou order.
These reductions were made without any hearing being granted to the railroads. Hearings were refused by the Committee which reduced the pay three and a half millions, and no pretense of a hearing was made by Secretary Cortelyou when his autocratic order was issued reducing the mail pay approximately five million dollars a year. This order was an arbitrary and unwarranted and illegal exercise of executive power.
The last hearing allowed to the railroad companies on this subject was by the Wolcott Commission, 1897 to 1900, composed of eminent Senators and Representatives. They reported, after two years' investigation, that the mail pay was reasonable and should not be reduced. Upon the question whether railroads should be asked to carry the mails at a loss their report expressed the following views:
"It seems to the Commission that not only justice and good conscience, but also the efficiency of the postal service and the best interests of the country demand that the railway-mail pay shall be so clearly fair and reasonable that while, on the one hand, the Government shall receive a fullquid pro quofor its expenditures and the public treasury be not subjected to an improper drain upon its funds, yet, on the other hand, the Railway Mail Service shall bear its due proportion of the expenses incurred by the railroads in the maintenance of their organization and business as well as in the operations of their mail trains."The transaction between the Government and the railroads should be, and in the opinion of the Commission is, a relation of contract; but it is a contract between the sovereign and a subject as to which the latter has practically no choice but to accept the terms formulated and demanded by the former; and, therefore, it is incumbent upon the sovereign to see that it takes no undue advantage of the subject, nor imposes upon it an unrighteous burden, nor 'drives a hard bargain' with it. The Commission, therefore, believes that the determination whether the present railway mail pay is excessive or not should be reached, as near as may be, upon a business basis, and in accordance with the principles and considerations which control ordinary business transactions between private individuals."
"It seems to the Commission that not only justice and good conscience, but also the efficiency of the postal service and the best interests of the country demand that the railway-mail pay shall be so clearly fair and reasonable that while, on the one hand, the Government shall receive a fullquid pro quofor its expenditures and the public treasury be not subjected to an improper drain upon its funds, yet, on the other hand, the Railway Mail Service shall bear its due proportion of the expenses incurred by the railroads in the maintenance of their organization and business as well as in the operations of their mail trains.
"The transaction between the Government and the railroads should be, and in the opinion of the Commission is, a relation of contract; but it is a contract between the sovereign and a subject as to which the latter has practically no choice but to accept the terms formulated and demanded by the former; and, therefore, it is incumbent upon the sovereign to see that it takes no undue advantage of the subject, nor imposes upon it an unrighteous burden, nor 'drives a hard bargain' with it. The Commission, therefore, believes that the determination whether the present railway mail pay is excessive or not should be reached, as near as may be, upon a business basis, and in accordance with the principles and considerations which control ordinary business transactions between private individuals."
The wide credence which has been given to the statement that the Government is paying to the railroads an annual rent for postal cars equal to the cost of building them is remarkable.
The Government does not pay a rental for any car. The idea is an erroneous one, and is based upon ignorance regarding the payment of what is called "Post Office Car Pay."
Originally, the mail business on railroads was the transportation of mail bags, and was essentially a freight traffic. But its character has entirely changed.
The business now consists almost wholly in providing moving post offices, expensive to build and expensive to operate, in which the average weight for which pay is received is about two tons in full postal cars and six hundred pounds in apartment cars.
The Post Office Department weighed all the mails carried in all postal cars and apartment cars in the country during October, 1907, and the average weight of mail onthe Burlington road loaded in a forty-foot postal car was found to be less than 2,000 pounds; in fifty-foot cars it was 2,500 pounds; and in sixty-foot cars it averaged less than 4,500 pounds; in apartment cars it was 607 pounds.
The average load carried in an ordinary freight car on the Burlington road is from 36,000 to 40,000 pounds. Railroads, as a rule, haul a ton of paying or productive freight for every ton of dead or unproductive load. In the Government mail business they carry nineteen tons of dead weight for each ton of paying weight.
These cars are fitted up as post offices and are used for distribution en route in order to expedite and facilitate the prompt transmission and delivery of mails. They largely take the place of very expensive distribution offices in cities.
The railroads provide cars for freight traffic, but refused to build, and maintain, and haul these moving post offices with their clerks and paraphernalia, without pay. That is the post office car pay of which so much is said.
The truth regarding this feature of the subject is clearly stated in the following recent letter from the Postmaster-General:
(Congressional Record, March 5, 1910, 61st Congress, Second Session, Vol. 45, No. 61, Page 2852.)
Letter of the Postmaster-General Relative to the Cost of Furnishing and Operating Railway Post Office Cars."Office of the Postmaster-General,Washington, D.C., March 2, 1910."Hon.John W. Weeks,Chairman Committee on Post Offices andPost Roads, House of Representatives."My Dear Sir: In response to your inquiry made of the Second Assistant Postmaster-General in regard to the cost of maintaining and operating railway post office cars and its relation to the compensation received by railroad companies for the same and your reference to the speech delivered by Senator Vilas on the subject in the United States Senate, February 13, 1895, I have the honor to advise you as follows:"The Department has not at this time sufficient information upon this point to give from its own records a reliable estimate. As you are aware, we have recently asked railroad companies to submit answers to inquiries with reference to the cost of operating the mail service, and it is believed that when these shall have been received we will be in a position to furnish such information. Inasmuch, however, as it may be of importance to you to have estimates made from time to time by others and such incomplete information as we have at present, I submit the following:"The cost of operating a railway post office car has been variously estimated (but not officially by the Department) as from 15 to 30 cents a car mile. The average run per day of such a car is about 300 miles. Estimating the cost at 18 cents a car mile, the totalcost of operating such car for one year would be $19,710."The specific items which constitute this total cost are not definitely known to the Department. However, as to the cost of lighting, cleaning, repairs, etc., the General Superintendent of Railway Mail Service furnished the following estimates before the Commission to investigate the postal service in 1899, viz.: Lighting, $276; heating, $365; cleaning, water, ice, oil, etc., $365; repairs, $350; proportion of original cost of car (estimating the life of a car at fifteen years and the original cost at $6,000), $400; total, $1,756. Recent inquiry gives the following as the approximate cost of maintaining a car at the present time: Lighting (electric), $444; heating, $150; cleaning, $360; repairs, $300; oil and brasses, $120; interest on cost of car (at $7,500), $300; annual deterioration (estimating the life of a car at twenty years), $375; total, $2,049. These figures give the cost of a car built according to the Department's standard specifications. The cost of modern steel cars being built by some of the railroad companies is from $14,000 to $15,000."The compensation received by a railroad company for operating a car and carrying the mails in it would be approximately as follows:"The pay for a 60-foot car at $40 a track mile per annum, for a track mileage of 150 miles, would be $6,000. The average load of a 60-foot car, according to statistics obtained recently, is 2.83 tons. The rate per ton of an average daily weight of 50,000 pounds carried over the route is $25.06. At this rate the company would receive $10,637.97 per annum for the average load of mail hauled in the car. This sum added to the specific rate for the railway post office car ($6,000), makes the total pay for the car and its average load $16,637.97 per annum."Senator Vilas' argument was based upon the theory that the rates fixed for railroad transportation alone, based on the weights of the mails carried, are adequate compensation for all services rendered, including the operation of railway post office cars, andthat, therefore, the railroad companies would be required to operate postal cars owned by the Post Office Department for the compensation allowed by law for the weight of mails alone, including apartment-car space and facilities. Such theory is not justified by the facts, as will appear from the following:"A careful perusal of the debates in both Houses of Congress which led to the enactment of the present law fixing the rate of pay for railroad transportation of the mails and for railway post office cars clearly indicates that the additional compensation for railway post office cars was intended to cover the additional expense imposed upon the railroad companies for building, maintaining, and hauling such cars. The companies at that time insisted that these cars, which were practically traveling post offices, did not carry a remunerative load, and that therefore the amount of pay, based on weight, did not compensate them for their operation. This led to the specific appropriation for railway post office cars. In this connection it should be borne in mind that the purpose of the railway post office car is to furnish ample space and facilities for the handling and distribution of mails en route. Therefore, the space required is much greater than would be required for merely hauling the same weight of mails."In regard to any proposal for Government ownership of postal cars, other facts as well as the above should be given consideration. Such cars must be overhauled, cleaned, and inspected daily. It would be necessary to either arrange with the railway companies for this service or for the Department to employ its own inspectors, repair men, and car cleaners at a large number of places throughout the country, which would probably be more expensive than the cost to the railway companies in that respect at present. It would hardly be feasible to establish a Government repair shop. Therefore, the Department would be compelled to use the shops of the several railway companies throughout the country. Without the closest supervision and attention of the Government's inspectors it could scarcely be expected that our cars wouldreceive the same consideration in railroad shops as those owned by the railway companies. These shops are frequently congested, and it is probable that the railroad work would be given the preference."Yours very truly,"Frank H. Hitchcock,"Postmaster-General."
Letter of the Postmaster-General Relative to the Cost of Furnishing and Operating Railway Post Office Cars.
"Office of the Postmaster-General,Washington, D.C., March 2, 1910.
"Hon.John W. Weeks,Chairman Committee on Post Offices andPost Roads, House of Representatives.
"My Dear Sir: In response to your inquiry made of the Second Assistant Postmaster-General in regard to the cost of maintaining and operating railway post office cars and its relation to the compensation received by railroad companies for the same and your reference to the speech delivered by Senator Vilas on the subject in the United States Senate, February 13, 1895, I have the honor to advise you as follows:
"The Department has not at this time sufficient information upon this point to give from its own records a reliable estimate. As you are aware, we have recently asked railroad companies to submit answers to inquiries with reference to the cost of operating the mail service, and it is believed that when these shall have been received we will be in a position to furnish such information. Inasmuch, however, as it may be of importance to you to have estimates made from time to time by others and such incomplete information as we have at present, I submit the following:
"The cost of operating a railway post office car has been variously estimated (but not officially by the Department) as from 15 to 30 cents a car mile. The average run per day of such a car is about 300 miles. Estimating the cost at 18 cents a car mile, the totalcost of operating such car for one year would be $19,710.
"The specific items which constitute this total cost are not definitely known to the Department. However, as to the cost of lighting, cleaning, repairs, etc., the General Superintendent of Railway Mail Service furnished the following estimates before the Commission to investigate the postal service in 1899, viz.: Lighting, $276; heating, $365; cleaning, water, ice, oil, etc., $365; repairs, $350; proportion of original cost of car (estimating the life of a car at fifteen years and the original cost at $6,000), $400; total, $1,756. Recent inquiry gives the following as the approximate cost of maintaining a car at the present time: Lighting (electric), $444; heating, $150; cleaning, $360; repairs, $300; oil and brasses, $120; interest on cost of car (at $7,500), $300; annual deterioration (estimating the life of a car at twenty years), $375; total, $2,049. These figures give the cost of a car built according to the Department's standard specifications. The cost of modern steel cars being built by some of the railroad companies is from $14,000 to $15,000.
"The compensation received by a railroad company for operating a car and carrying the mails in it would be approximately as follows:
"The pay for a 60-foot car at $40 a track mile per annum, for a track mileage of 150 miles, would be $6,000. The average load of a 60-foot car, according to statistics obtained recently, is 2.83 tons. The rate per ton of an average daily weight of 50,000 pounds carried over the route is $25.06. At this rate the company would receive $10,637.97 per annum for the average load of mail hauled in the car. This sum added to the specific rate for the railway post office car ($6,000), makes the total pay for the car and its average load $16,637.97 per annum.
"Senator Vilas' argument was based upon the theory that the rates fixed for railroad transportation alone, based on the weights of the mails carried, are adequate compensation for all services rendered, including the operation of railway post office cars, andthat, therefore, the railroad companies would be required to operate postal cars owned by the Post Office Department for the compensation allowed by law for the weight of mails alone, including apartment-car space and facilities. Such theory is not justified by the facts, as will appear from the following:
"A careful perusal of the debates in both Houses of Congress which led to the enactment of the present law fixing the rate of pay for railroad transportation of the mails and for railway post office cars clearly indicates that the additional compensation for railway post office cars was intended to cover the additional expense imposed upon the railroad companies for building, maintaining, and hauling such cars. The companies at that time insisted that these cars, which were practically traveling post offices, did not carry a remunerative load, and that therefore the amount of pay, based on weight, did not compensate them for their operation. This led to the specific appropriation for railway post office cars. In this connection it should be borne in mind that the purpose of the railway post office car is to furnish ample space and facilities for the handling and distribution of mails en route. Therefore, the space required is much greater than would be required for merely hauling the same weight of mails.
"In regard to any proposal for Government ownership of postal cars, other facts as well as the above should be given consideration. Such cars must be overhauled, cleaned, and inspected daily. It would be necessary to either arrange with the railway companies for this service or for the Department to employ its own inspectors, repair men, and car cleaners at a large number of places throughout the country, which would probably be more expensive than the cost to the railway companies in that respect at present. It would hardly be feasible to establish a Government repair shop. Therefore, the Department would be compelled to use the shops of the several railway companies throughout the country. Without the closest supervision and attention of the Government's inspectors it could scarcely be expected that our cars wouldreceive the same consideration in railroad shops as those owned by the railway companies. These shops are frequently congested, and it is probable that the railroad work would be given the preference.
"Yours very truly,"Frank H. Hitchcock,"Postmaster-General."
The Wolcott Commission carefully investigated the whole subject of Postal Car Pay and their conclusions regarding this form of compensation and its reasonableness are set forth in their report in the following language:
"Until a comparatively short time prior to 1873 the distribution of the mails in transitu was unknown. Prior to the late sixties the railroads simply transported the mails, which were delivered at the post offices and there distributed. Accordingly, 'weight' as the basis of compensation was at the time of its adoption and long thereafter entirely adequate."For a few years, however, prior to 1873 the distribution of the mails in transitu had been practiced to a sufficient extent to satisfy the Post Office Department and Congress that it was a desirable innovation and a branch of the postal service that should be very much enlarged. But it was recognized that if the railroads were not only to transport the mail itself, but also to supply, equip, and haul post offices for the distribution of the mails, the compensation upon weight basis that had obtained up to that time was not entirely adequate and just, and therefore the law of 1873, as already indicated, contained a provision allowing additional compensation for railway post office cars. At first these cars were mostly not exceeding 40 or 45 feet in length and of light construction, similar to baggage and express cars."From the policy of the Department, however, of constantly demanding better and better facilities from the railroads and the introduction of every improvement that could be discovered, it has come to pass that,today, the railroad post office cars, with the exception of a few obsolete ones that are being discontinued as rapidly as practicable, are elaborate structures, weighing between 90,000 and 100,000 pounds; built as strongly and fitted up, so far as suitable to the purpose for which it is intended, as expensively as the best Pullman and parlor cars; costing from $5,200 to $6,500; maintained at a cost of $2,000 per year; traveling on an average of 100,000 miles per annum; provided with the very best appliances for light, heat, water, and other comforts and conveniences; placed in position for the use of the postal authorities from two and a half to seven hours before the departure of the train upon which they are to be hauled, and owing to the small space allowed in them for the actual transportation of the mails, accompanied on the denser lines by storage cars for which no additional compensation is paid by the Government and on the less dense lines the larger bulk of mails is carried in the baggage cars without additional compensation for the car."These cars are constructed and fitted up by the railroads in accordance with plans and specifications furnished by the Department, and the amount of mail transported therein is determined exclusively by the postal authorities. From these two facts it results that the railroad must haul 100,000 pounds of car when the weight of the mail actually carried therein is only from 3,500 to 5,000 pounds—often very much less, and occasionally somewhat more."Taking in view all these facts, as disclosed by the testimony filed herewith, we are of opinion that the 'prices paid * * * as compensation for the postal-car service' are not excessive, and recommend that no reduction be made therein so long as the methods, conditions, and requirements of the postal service continue the same as at present."
"Until a comparatively short time prior to 1873 the distribution of the mails in transitu was unknown. Prior to the late sixties the railroads simply transported the mails, which were delivered at the post offices and there distributed. Accordingly, 'weight' as the basis of compensation was at the time of its adoption and long thereafter entirely adequate.
"For a few years, however, prior to 1873 the distribution of the mails in transitu had been practiced to a sufficient extent to satisfy the Post Office Department and Congress that it was a desirable innovation and a branch of the postal service that should be very much enlarged. But it was recognized that if the railroads were not only to transport the mail itself, but also to supply, equip, and haul post offices for the distribution of the mails, the compensation upon weight basis that had obtained up to that time was not entirely adequate and just, and therefore the law of 1873, as already indicated, contained a provision allowing additional compensation for railway post office cars. At first these cars were mostly not exceeding 40 or 45 feet in length and of light construction, similar to baggage and express cars.
"From the policy of the Department, however, of constantly demanding better and better facilities from the railroads and the introduction of every improvement that could be discovered, it has come to pass that,today, the railroad post office cars, with the exception of a few obsolete ones that are being discontinued as rapidly as practicable, are elaborate structures, weighing between 90,000 and 100,000 pounds; built as strongly and fitted up, so far as suitable to the purpose for which it is intended, as expensively as the best Pullman and parlor cars; costing from $5,200 to $6,500; maintained at a cost of $2,000 per year; traveling on an average of 100,000 miles per annum; provided with the very best appliances for light, heat, water, and other comforts and conveniences; placed in position for the use of the postal authorities from two and a half to seven hours before the departure of the train upon which they are to be hauled, and owing to the small space allowed in them for the actual transportation of the mails, accompanied on the denser lines by storage cars for which no additional compensation is paid by the Government and on the less dense lines the larger bulk of mails is carried in the baggage cars without additional compensation for the car.
"These cars are constructed and fitted up by the railroads in accordance with plans and specifications furnished by the Department, and the amount of mail transported therein is determined exclusively by the postal authorities. From these two facts it results that the railroad must haul 100,000 pounds of car when the weight of the mail actually carried therein is only from 3,500 to 5,000 pounds—often very much less, and occasionally somewhat more.
"Taking in view all these facts, as disclosed by the testimony filed herewith, we are of opinion that the 'prices paid * * * as compensation for the postal-car service' are not excessive, and recommend that no reduction be made therein so long as the methods, conditions, and requirements of the postal service continue the same as at present."
No feature of this question has been more persistently misrepresented than the relative value to the railroads of the mail business and the express business.
As elsewhere shown, the express business is 52 per cent more valuable to the Burlington road than the Government mails on the mere basis of space used and facilities furnished in passenger trains. There are many other considerations which increase this disparity of value in favor of the express, but reference to them is omitted in order to direct public attention to the following statements of the Postmaster-General in his recent letter upon the subject:
(Congressional Record, March 4, 1910, 61st Congress, Second Session, Vol. 45, No. 60, Page 2802.)
Letter of the Postmaster-General Relative to the Service Rendered by the Railroad Companies in Connection With the Mails and With Express."Office of the Postmaster-General,"Washington, D.C., January 31, 1910."Hon.John W. Weeks,Chairman Committee on Post Offices andPost Roads, House of Representatives."My Dear Sir: In response to your inquiry as to the difference between the service rendered the Post Office Department by railroad companies in the carriage and handling of the mails, and that rendered express companies, I would state that from such information as we have been able to obtain in regard to the service rendered to express companies, the difference is substantially as follows:"The Post Office Department requires the railroad company to take the mail from the post office wherever the office is within 80 rods of the depot, and the company has an agent, and in many cases to perform the terminal service regardless of the distance between the post office and the station. Wherever the terminal service is taken up by the Department, by means of regulation or screen-wagon service, the contractor delivers the mail at a specified place at the depot, and from that point the railroad employees transport it to the cars, and if the amount is so great that it would impose a hardship upon the postal employees to load and store this mail, the railroad company is called upon to furnish porters to do the work. Where the mail messenger or contractor can drive direct to the cars, he does so. The express companies haul all of their matter to the railroad stations and put it in the cars, using their own employees and their own trucks."The cars furnished the Post Office Department and those furnished the express companies differ very materially. The former are built according to specifications furnished by the Department, and are fully equipped with letter cases, paper racks, drawers, and lockers for registered mail and supplies, and all of the equipment necessary for the distribution of mail en route. The cars furnished the express companies have very little, if any, interior furnishings, and are more like the cars used for the transportation of baggage. In both cases the cars used are owned by the railroad company."The number of employees transported for the Post Office Department is very much greater than for the express companies. There are frequently five or six clerks in the postal cars, and on fast mail trains, where there are two or three working cars to a train, the number runs up as high as 23. The express seldom requires more than two men in a car."The Post Office Department claims as much space at depots without specific payment therefor as may be required for the storing and handling of mail in transit. The express companies are required to pay the railroad companies for all space used at depots."On smaller lines a separate apartment must be furnished for the mails other than baggage mails. The express matter is usually placed in the baggage car."Upon arrival at terminals the railroad company may be required to unload a mail car, if the quantity is such as to impose a hardship upon the clerks, and to see that it is loaded into the contractor's wagons; or, if the terminal service devolves upon the railroad company, that it is delivered into the post office. The express company unloads and handles its own matter."The railroad and express companies frequently use a joint employee to handle baggage and express, thereby economizing in cost of help. That can very seldom be done in connection with the postal service."The railroad company has charge of all baggage mails in transit and receives them into and delivers them from the cars. It also handles other mails when necessary to transfer them between cars or trains. It is held responsible for reasonable care in their transportation. Deductions are made for failures to perform service according to contract, and fines are imposed for delinquencies. The company is required to keep a record of all pouch mails carried on trains in charge of their employees and handled at stations where more than one regular exchange pouch is involved and no mail transfer clerk is located, and to prepare and forward shortage slips when a pouch is due and not received. They are required to make monthly affidavits as to performance of service. It is understood that the company never assumes control of express matter. The Department is not informed as to the terms of contracts between railroad and express companies, and therefore can not state what responsibility is imposed as to transportation."Mail cranes for the exchange of mail at points where trains do not stop are erected and kept in repair by and at the expense of the railroad company, whose employees must hang the mail bag on the crane and adjust it for catching at points where the companyprovides side service. The mail catchers are also furnished by them. No service of this character is rendered express companies."A railroad company is required by law to carry the mails upon any train that may be run, when so ordered by the Postmaster-General, without extra charge therefor, and as a result the mails are carried on the fastest trains and with great frequency. Express matter is not as a rule carried on the fast limited passenger trains, nor with the frequency with which mails are carried."In this connection your attention is invited to pages 84 to 94, 516, 517, 860 to 863, part 1, and pages 687 to 696, part 2, of the testimony before the Congressional Commission which investigated the postal service in 1900—Wolcott-Loud Commission."Yours very truly,"F. H. Hitchcock,"Postmaster-General."
Letter of the Postmaster-General Relative to the Service Rendered by the Railroad Companies in Connection With the Mails and With Express.
"Office of the Postmaster-General,"Washington, D.C., January 31, 1910.
"Hon.John W. Weeks,Chairman Committee on Post Offices andPost Roads, House of Representatives.
"My Dear Sir: In response to your inquiry as to the difference between the service rendered the Post Office Department by railroad companies in the carriage and handling of the mails, and that rendered express companies, I would state that from such information as we have been able to obtain in regard to the service rendered to express companies, the difference is substantially as follows:
"The Post Office Department requires the railroad company to take the mail from the post office wherever the office is within 80 rods of the depot, and the company has an agent, and in many cases to perform the terminal service regardless of the distance between the post office and the station. Wherever the terminal service is taken up by the Department, by means of regulation or screen-wagon service, the contractor delivers the mail at a specified place at the depot, and from that point the railroad employees transport it to the cars, and if the amount is so great that it would impose a hardship upon the postal employees to load and store this mail, the railroad company is called upon to furnish porters to do the work. Where the mail messenger or contractor can drive direct to the cars, he does so. The express companies haul all of their matter to the railroad stations and put it in the cars, using their own employees and their own trucks.
"The cars furnished the Post Office Department and those furnished the express companies differ very materially. The former are built according to specifications furnished by the Department, and are fully equipped with letter cases, paper racks, drawers, and lockers for registered mail and supplies, and all of the equipment necessary for the distribution of mail en route. The cars furnished the express companies have very little, if any, interior furnishings, and are more like the cars used for the transportation of baggage. In both cases the cars used are owned by the railroad company.
"The number of employees transported for the Post Office Department is very much greater than for the express companies. There are frequently five or six clerks in the postal cars, and on fast mail trains, where there are two or three working cars to a train, the number runs up as high as 23. The express seldom requires more than two men in a car.
"The Post Office Department claims as much space at depots without specific payment therefor as may be required for the storing and handling of mail in transit. The express companies are required to pay the railroad companies for all space used at depots.
"On smaller lines a separate apartment must be furnished for the mails other than baggage mails. The express matter is usually placed in the baggage car.
"Upon arrival at terminals the railroad company may be required to unload a mail car, if the quantity is such as to impose a hardship upon the clerks, and to see that it is loaded into the contractor's wagons; or, if the terminal service devolves upon the railroad company, that it is delivered into the post office. The express company unloads and handles its own matter.
"The railroad and express companies frequently use a joint employee to handle baggage and express, thereby economizing in cost of help. That can very seldom be done in connection with the postal service.
"The railroad company has charge of all baggage mails in transit and receives them into and delivers them from the cars. It also handles other mails when necessary to transfer them between cars or trains. It is held responsible for reasonable care in their transportation. Deductions are made for failures to perform service according to contract, and fines are imposed for delinquencies. The company is required to keep a record of all pouch mails carried on trains in charge of their employees and handled at stations where more than one regular exchange pouch is involved and no mail transfer clerk is located, and to prepare and forward shortage slips when a pouch is due and not received. They are required to make monthly affidavits as to performance of service. It is understood that the company never assumes control of express matter. The Department is not informed as to the terms of contracts between railroad and express companies, and therefore can not state what responsibility is imposed as to transportation.
"Mail cranes for the exchange of mail at points where trains do not stop are erected and kept in repair by and at the expense of the railroad company, whose employees must hang the mail bag on the crane and adjust it for catching at points where the companyprovides side service. The mail catchers are also furnished by them. No service of this character is rendered express companies.
"A railroad company is required by law to carry the mails upon any train that may be run, when so ordered by the Postmaster-General, without extra charge therefor, and as a result the mails are carried on the fastest trains and with great frequency. Express matter is not as a rule carried on the fast limited passenger trains, nor with the frequency with which mails are carried.
"In this connection your attention is invited to pages 84 to 94, 516, 517, 860 to 863, part 1, and pages 687 to 696, part 2, of the testimony before the Congressional Commission which investigated the postal service in 1900—Wolcott-Loud Commission.
"Yours very truly,"F. H. Hitchcock,"Postmaster-General."
The Government does not own any railroad, but, under the present system, the Post Office Department dictates to the railroad companies upon what passenger trains and in what kind of cars the mails shall be carried. It insists on such space and facilities as it deems necessary for the mails being furnished on the fastest and most expensive trains and demands that these trains keep their fast schedules; this means that all other trains on the road are side-tracked and delayed whenever that is necessary in order to expedite the mails.
There are no such features in the express business.
Demanding a preference traffic, the Government ought to be willing to pay for it more than express rates. In fact, it pays much less than express rates.
The ablest and most competent witness who appeared before the Wolcott Commission on this subject was Henry S. Julier, Vice-President and General Manager of theAmerican Express Company, who said: "Without question, the Government has the cheaper service by far."
Mr. Julier further stated that seven pounds is the average weight of packages sent by express, and the seven pound package is the typical express package, and therefore the earnings from carrying such packages are the true index of the rates actually received. Some railroads receive as their compensation fifty per cent of the express company's earnings; the C. B. & Q. receives fifty-seven and a half per cent.
Mr. Julier was asked by the Commission to file statements showing from the rates in force exactly the revenue received per hundred-weight by the railroad company from the express in comparison with the mail rates. He filed the following:
Table Showing Rates Received by Railways Per Hundred-weight for Mails and Rates Received for Express Between Points Named.
Distance.MAIL.Rate per 100 pounds allowed railroad companies under last weighing, including the pay for post office cars.EXPRESS.50 per cent of express companies' earnings on fourteen 7-pound packages weighing in the aggregate 100 pounds, yields the railroad companies the rate per 100 pounds noted below.New York toBuffalo440$1.58$2.80Chicago9803.574.55Omaha1,4805.385.95Indianapolis9063.274.55Columbus7612.493.85East St. Louis1,1714.384.90Portland, Me.3471.332.80Chicago toMilwaukee85.342.10Minneapolis4211.833.85New Orleans9225.275.95Detroit2841.342.80Cincinnati3061.203.15Cincinnati toSt. Louis3741.613.15Chicago3061.203.15Cleveland2631.262.80Since the filing of these statistics, the rates paid to railroads for carrying the mails have been reduced almost a fifth.The statements of the Postmaster-General and the statistics confirm the evidence of these returns that theexpress business is much more valuable to railroad companies than the Government mail business.W.W. Baldwin,Vice-President.John DeWitt,General Mail Agent.May, 1910.
Distance.MAIL.Rate per 100 pounds allowed railroad companies under last weighing, including the pay for post office cars.EXPRESS.50 per cent of express companies' earnings on fourteen 7-pound packages weighing in the aggregate 100 pounds, yields the railroad companies the rate per 100 pounds noted below.New York toBuffalo440$1.58$2.80Chicago9803.574.55Omaha1,4805.385.95Indianapolis9063.274.55Columbus7612.493.85East St. Louis1,1714.384.90Portland, Me.3471.332.80Chicago toMilwaukee85.342.10Minneapolis4211.833.85New Orleans9225.275.95Detroit2841.342.80Cincinnati3061.203.15Cincinnati toSt. Louis3741.613.15Chicago3061.203.15Cleveland2631.262.80
Since the filing of these statistics, the rates paid to railroads for carrying the mails have been reduced almost a fifth.
The statements of the Postmaster-General and the statistics confirm the evidence of these returns that theexpress business is much more valuable to railroad companies than the Government mail business.
W.W. Baldwin,Vice-President.
John DeWitt,General Mail Agent.May, 1910.
Exhibit A.
[Form 2601.]
There are on file in the Post Office Department one hundred and two separate statements showing, for the month of November as to each mail route on the Burlington system, the space occupied and used for mail and for express and for passengers.
In order to make a comparison it was, of course, necessary to reduce each item of space used in each car to a common basis of feet, and the following table shows what are the actual facilities furnished in passenger trains for the three classes of traffic reduced to linear car-foot space:
Car Foot Mileage.
Mail.Passengers.Express.62,246,130428,164,92039,525,540(11.75%)(80.8%)(7.45%)
Exhibit B.
[Form 2602.]
Station Facilities Furnished for the Mails and Express and the Value of Other Items of Service Rendered.
Mail Expense.
Monthly Cost of Handling Mail at Stations, labor, etc.$14,241.67Monthly rental value of mail rooms in stations1,008.61Monthly rental value of tracks occupied by mail cars for advance distribution157.69Cost of lighting and heating mail cars for advance distribution114.25Value of 309,827 miles of free transportation to post office employees, not including postal clerks in charge of mail6,196.54Switching mail cars for advance distribution2,795.80Total for November$24,514.56
The foregoing does not include the rental value of space furnished by the railroad company to the Government for handling mails and mail trucks on station platforms, and for storing the mails on platforms at large terminals. This is a large item, but statistics of such space used were not called for. At Chicago Station platform space to the amount of over 6,500 square feet is devoted exclusively to mails handled by the Burlington and Pennsylvania.
In addition to the foregoing, the Burlington Company transported on its trains during November postal clerks in charge of mail for the Government a distance of 3,109,747 miles in the aggregate.
If the Government had paid their fare at two cents per mile the amount paid would have been $62,174.94.
These items of station facilities and other service rendered to the Government for the mails amounted to $86,689 for November, or at the rate of more than one million dollars annually.