NOTE 1--This estimate is based on the following considerations. For the
fiscal year ending June 30, 1911, the official report of the Interstate
Commerce Commission gives the average charge per shipment of the Adams
and the United States Express Companies on August 18, 1909, and December
22, 1909, respectively--namely, $.4962 and $.4999, or an average of
$.4980-1/2 per shipment in 1909. (Many shipments contain more than one
parcel.) By dividing this sum into the known total amount of money
collected by the express companies for the express services, we can
obtain the total number of shipments for that year.
But with the establishment of the parcel post in 1913 the character of
the express business underwent a radical change. The fact that the
parcel-post limits its shipments to parcels under a certain weight and
under a certain size is one factor of the situation tending to transfer
to the parcel-post from the express companies a larger number of smaller
packages than of larger packages, and hence to make the average charge
per package of the express company in 1917 higher than in 1909. A second
factor tending in the same direction is the fact that the parcel-post
limits the amount of insurance which may be placed on a valuable
package, while the express company has no such limit, thereby keeping
with the express company most of the valuable packages on which the high
insurance makes a high rate. A third factor tending similarly is the
fact that for shorter distances the parcel-post rate is lower on the
whole than the express rate, whereas for longer distances the express
rate is lower on the whole than the parcel-post rate; and accordingly
the express companies' average haul was longer and hence at a higher
rate in 1917 than in 1909, although not so much longer as might be
expected, as has been shown above. A fourth factor of similar effect is
the railroad congestion in 1917, causing the expressage of many heavy
shipments which had formerly been dispatched as freight, especially in
the latter part of the year.
The chief factor moving in the opposite direction is that of the
reduction of 16% in express rates effective in 1914; but there is every
evidence that the effect of the first four factors outweighs to a
considerable extent the effect of the last. So that we should not go far
wrong if we assume that the average charge _per parcel_ of the express
companies in 1917 was $.80. This estimate is supported by an
investigation of the Interstate Commerce Commission for April, 1917, in
which the average charge _per shipment_ (often including more than one
parcel) was found to be $.85.
By dividing $.80 into the total transportation revenues of the express
companies in 1917, we get 280,000,000 as the number of parcels carried
by them in that year.
The accuracy of this estimate of the number of express parcels may be
gauged from an investigation of the Interstate Commerce Commission for
the number of parcels carried by express companies during the month of
April, 1917. In that month, some 21,100,000 shipments were carried, from
which a total of some 250,000,000 _shipments_ for the whole year may be
deduced. Remembering, however, that the freight congestion of last
winter increased toward the end of the year the normal acceleration of
the number of shipments dispatched, and remembering also that many
_shipments_ contain more than one _parcel_, there would seem to be
little variation required from our first estimate of 280,000,000 parcels
carried by the express companies in 1917.
NOTE 2--Many, if not most, shippers, especially in the smaller cities
and towns, are able to transport their parcels to the parcel-post
station without additional cost to themselves. The fee collected from
them should therefore not cover also the cost of collecting packages
from other shippers. This statement holds especially for the person who
ships parcels only occasionally, not primarily as a business
transaction, and who has little difficulty in taking or sending them to
the dispatching station. On the other hand, without the pick-up feature
of the express service, vehicles would be necessary to convey larger
packages or a great number of smaller packages from other shippers; so
that this feature of express service is as necessary for certain
shippers as it is unnecessary for others and should hence not be
included in the charges levied on the latter. Again, in theory there
would seem to be little reason why the cost of collecting the express
fee from the consignee on delivery should be distributed among the
express fees on packages which are prepaid. This situation obtains in
the present practice of the express companies, where the one fee
includes all services except those of an especial nature. But in
practice the present parcel-post method of charging a separate fee for
collecting on delivery will have to be radically simplified and
cheapened if a Government postal express is to follow this separate fee
arrangement. For in 1917 less than 1% of the parcels sent by the
parcel-post were dispatched C. O. D. The question is one
of administrative efficiency, and in practice the present
one-fee-for-normal services system of the express companies might prove
more desirable than the theoretically more desirable separate C. O. D.
fee of the present parcel-post.
In other countries, practises in this respect vary. In Austria, Italy,
Rumania and Switzerland, a special fee is charged for collecting on
delivery. Belgium renders this service free for packages upon which the
postage is above ten cents and Denmark, when the weight of the package
is above ten pounds. Germany collects free upon packages above ten
pounds and renders the service at a fee upon packages under that amount.
NOTE 3--The possibility of economy in a postal express as contrasted
with the express companies may be readily understood by a glance at the
following table of the equipment required and utilized in 1917 by the
express companies of the United States:
Cars 256
Horses 19,986
Automobiles 2,886
Wagons 14,907
Sleighs and Buggies 3,563
Trucks 56,924
In 1917 there were about 1,800 railway postal cars in operation. These
are furnished the Post Office Department by the railroads. As has been
said, other corresponding equipment used by the Post Office Department
is usually owned by private contractors who furnish transportation by
wagon and by automobiles on contract, so that it is impossible to get
accurate figures concerning it. Some idea of the equipment needed,
however, may be gleaned from the postal operations within the cities of
Chicago, Pittsburgh, Philadelphia, Detroit, Washington, St. Louis,
Indianapolis and Nashville. In these cities all the transportation of
mail between the railroad stations and the post offices as well as in
the collection and delivery services is performed by automobiles owned
by the Post Office Department itself. The number of automobiles required
for the service in these cities and operated in them in 1917 was 541.
This method of conveying postal matter within the cities mentioned
represents a departure from the contract system which the
Postmaster-General asserts should be and will be extended. Accordingly,
more and more the economies under this head in consolidating the express
service in the Postal System would accrue to the Post Office Department
directly rather than indirectly.
NOTE 4--The example of the United Kingdom substantiates the last
surmise. For in the United Kingdom the railroads, all privately owned,
are given 55% of the total charges on all _parcel-post parcels_ carried
by them, irrespective of distance. (And there is evidence that this
remuneration is expressly considered too generous in the United
Kingdom.) Now, the parcel-post charges in the United Kingdom are
considerably lower than the express charges in the United States not
only absolutely, but also relatively to the different values of money in
the two countries. But the railroads' service in carrying a parcel-post
package, aside from furnishing mail cars, is no more expensive than
their service of carrying an express package of the same weight. If the
railroads of the United States were to carry parcels at 55% of the
_parcel-post charges_ or at that percentage of the parcel-post charges
in this country which, considering the difference of conditions in the
two countries, would correspond to 55% of the parcel-post charges in the
United States, they obviously would be receiving much less than 50% of
the _total express charges_. Nor should the fact that express packages
on the whole may travel farther and weigh more than parcel-post packages
invalidate the argument, for the present contracts with the railroads
have not been altered to any extent so as to meet any such condition due
to the advent of the parcel-post--in the year before the parcel-post was
established the railroads got 49% of the net express charges and in
1917, 51%. So that the question as to whether the railroads of the
United States obtain on the whole too high a proportion of the express
rates because of unduly high percentage clauses in the express
company-railroad company contracts is, if not thus answered, at least
illumined.