AUGUST 21, 1914. Hon. JONATHAN BOURNE, Jr., Chairman Joint Committee on Postage on Second-Class DEAR MR. CHAIRMAN: In signing the report made by the Joint Committee on Postage on Second-Class Mail Matter and Compensation for the Transportation of Mail, which I have done, I wish to have this letter included to indicate that I am not entirely in sympathy with some of the strictures of the Post Office Department and its employees which the report contains. This especially applies to paragraphs on pages 19, 31, 81, 111, 112, 113, 114, 115, 116, 117, 119, and 121. It is undoubtedly true that the Post Office Department undertook the study of the railway mail pay question just as the railroads did, without having at hand suitable information on which to base a conclusion, and it has only been through long and scrutinizing hearings which have been given by the commission that both of these elements have reached conclusions which it may be assumed are sound. I do not think the present employees of the Post Office Department are entirely responsible for this condition, and I am not disposed to charge lack of good faith against the officers of that department in the reports which they have submitted to Congress at different times, as well as those to the commission, although I am confident that the department originally and perhaps down to the present time has approached this important question in a manner which induced attempts to demonstrate the contention that the railroads were receiving more pay than was justified by the service which they were performing. This is not unnatural, however, because it is the duty of the Government's officers to conduct all service at as low a cost as possible, but from the standpoint of the impartial observer the tendency to reduction of pay has been more marked than fairness would seem to warrant. It must be remembered that the department has been in the position of an advocate of the Government's interests while of course the railroads have been in a directly opposite position, each hoping that they would gain something by the evidence which they, from time to time, submitted to the commission. Yours, very truly, JOHN W. WEEKS. INTRODUCTION. To the Senate and House of Representatives of the United States of America in Congress assembled: The Joint Committee on Postage on Second-Class Mail Matter and Compensation for the Transportation of Mail herewith respectfully submits the following report on compensation to steam railroads for the transportation of mail. Because of the extreme technicality of this subject and of the general impression that the railroads have been greatly overpaid by the Government for transportation of mail, we deem it advisable to make an exhaustive report, in which we may subject ourselves to the criticism of repetition. We are confident we have worked out a scientific, sound, and reasonable plan, herewith presented in the shape of a concrete bill, the sections of which are so correlated that in our opinion it is absolutely necessary for it to be adopted as a whole to secure the benefits resultant from such legislation. The elimination of any of its features or modification of same will materially affect the benefits that would follow the enactment of the bill. After submitting our explanation of its construction and reasons therefor under Chapter I, we will submit in this report a series of chapters dealing with various phases of the subject, as follows: Chapter II. A historical review of previous investigations of the subject of railway mail pay and a résumé of the testimony and arguments submitted before our joint committee. Chapter III. The weight basis and its defects-The space basis. Chapter IV. The department's claim that the railroads are overpaid for carrying mail. Chapter V. What is a reasonable and just rate for transporting mail by railroads? Chapter VI. Comparison of mail and express earnings. Chapter VII. Comparison of earnings from passenger and mail traffic. Chapter VIII. Comparison of mail and Pullman earnings. Chapter IX. Analysis of the bill prepared by the joint committee. Chapter XI. Inadequacy of departmental data. In an appendix to the report is presented an itemized statement of all the expenditures made from the appropriation of $25,000 available for the use of this committee. The total expenditures to August 1, 1914, were $6,560.50, leaving a balance of $18,439.50. RAILWAY MAIL PAY. CHAPTER I. EXPLANATION OF CONSTRUCTION AND DRAFT OF A BILL DIRECTING THE POSTMASTER GENERAL TO READJUST THE COMPENSATION OF STEAM RAILROAD COMPANIES FOR THE TRANSPORTATION OF MAIL. At present, compensation for railway mail pay is based partially on space and partially on weight, about 90 per cent of the payments made to the railroads being determined by weight and the other 10 per cent by space as represented by the R. P. O. cars. The average weight is ascertained by quadrennial weighings, at an annual cost of approximately $400,000 to the Government. The country is divided into four divisions, weighings being made in each division every four years. This method is antiquated, unscientific, and unsatisfactory, as a quadrennial weighing in a postal division must be unfair to the Government in cases where there is a decrease in the volume of mail in the four-year period and unfair to the railroads in case there is an increase. No actual data are obtainable as to the actual increase or decrease in the weight of mail, though under a weight system the lack of this information in the Post Office Department was a great surprise to your committee. The annual post-office reports show, however, an average increase in mail revenue of 7 per cent for the past 10 years; hence, undoubtedly, there has been an annual increase in the volume of mail during the same period. If the increase in weight has been proportional to the increase in revenue, then under the present quadrennial weighing system the railroads of the country have received no compensation whatever from the Government for about 14 per cent of the mail carried by them during each four-year period. Guesses have been made by departmental and railroad representatives that the probable increase in volume of business in weight of mail was about 44 per cent per annum. Two methods of payment now exist, one for the weight of the mail carried and the other for a special service performed by the railroads at the request of the Post Office Department in what are known as railway post-office cars. These two methods of payment have been bewildering to the people of the country and have led to the impression that there was a graft in the R. P. O. pay. This impression probably resulted from a declaration issued by Postmaster General Vilas in 1887, which was entirely unfounded, as we think we demonstrate on pages 105 to 110 of this report. Realizing the weaknesses of our present method of railway mail ascertainments and payments, our committee has endeavored, and we think successfully, to evolve a scientific, specific, and simple plan and just rates which, if adopted, will be clearly understood by the American people; will minimize the possibility of any injustice being done to either party in interest, the Government or the railroads; avoid temptations to either party in interest to deplete or pad the mails during weighing periods and tend toward standardization of the service and development of desirable economies in administration. The substitution of space for weight as the measure of the service rendered in railway mail transportation has appealed for many years to many students of the subject and has been several times suggested though never adopted. From the beginning of our study the desirability of substitution of space for weight strongly appealed to our committee, and our effort has been to work out a plan practical of application and administration. Our first effort was to work out a general plan; our second, to work out rates under the plan that would give just compensation for the services rendered. Recognizing the dangers of our present tendency toward a government by rule and regulation instead of a government by law, our committee successfully endeavored to construct a bill without any authorization of departmental power to create rules and regulations, which too frequently result in the vetoing of congressional action or the emasculation of the purposes intended by Congress in its legislation. Early in our study we realized the lack of reliable data and information based upon operation on the part of the Post Office Department, the Interstate Commerce Commission, and the railroads themselves, and recognized the fact that we would have to make an independent study of our own, which presented great difficulties because of the extreme technicality of the subject. We deemed it wise to secure the services and cooperation of the best obtainable statistician in order to check the figures and data presented by both the Post Office Department and the railroads. We all deem ourselves extremely fortunate in our ability to arrange with the Interstate Commerce Commission that we might have intermittently, and exclusively for a period of three months, the services and cooperation of Mr. M. O. Lorenz, associate statistician of said commission, and we desire to thank the Interstate Commerce Commission for its courtesy, and to express to Mr. Lorenz our appreciation of his assistance and our admiration for the ability he has shown, the fairness he has evinced, and his breadth of horizon. After several months study of our subject Mr. Lorenz made a suggestion, the value of which strongly appealed to our whole committee, namely, the establishment of two charges for railway mail transportation, one a terminal charge and the other a line charge. The adoption of these two charges will greatly equalize the present inequality in payments between the short-line railroads as compared with the trunk lines. This same principle was recognized in the construction of the parcel-post bill, where the pick-up and delivery charge was one charge and the transportation was the other. We therefore adopted and strongly recommend to Congress our plan of two charges, for the reason that the relative cost of reception and delivery of mail at terminals, depots, or stations on railroads is the same, regardless of the distance that the mail may be hauled, while the second or line charge varies according to the distance the mail is hauled. |