American express companies are prohibitively excessive, and such
as to disqualify this service as a national economic agency. The
instances given represent merchandise carried by passenger trains
in all instances, and while higher charges for both the express and
freight tonnage in America are justified by the longer haul, there is
no necessary economic reason for a higher ratio of express charges
to freight charges. The presence of the “express company” is the
only circumstance distinguishing express transportation here from
that of the instances cited. In those the “express company” has no
part; the work is done exclusively by the railways. As we shall see
later, the deficiencies of the express companies are constitutional,
not gratuitous merely, and are such as can not be remedied through
corporate agencies.
_Inadequacy of Various Proposals--Regulation_
We have seen that the present express fails to reach the farm, in
itself a fundamental objection to its adequacy. It may be suggested
that where its high charges are such as to inhibit the traffic, they
might be corrected by appeals for reductions to the Interstate Commerce
Commission. A glance at the express report for 1909, it is true, will
show that the profits of the companies are clearly out of normal
proportion to the investment. But it will also show that such profits
amount to but 8.44 per cent of the gross receipts, i. e., to only 8.44
per cent of the rates charged. So that even if all the profits were
taken away, the modified rates would show but a wholly inadequate
reduction; so that the desired relief could not thus be obtained. As a
matter of course, no such reduction would even be asked. No one would
wish that they conduct the business without a profit. But in practice
even when the justification for a reduction is present, and the power
and purpose active, the regulating board will always hesitate to even
substantially reduce a rate in the fear of unduly trenching on private
rights.
It was this principle which Bismarck had in mind when in connection
with a similar subject he spoke of--
The attempts to bring about reform by (regulatory) laws have
shown the futility of hoping for a satisfactory improvement
through legal (regulatory) measures, without trenching
materially on established rights and interests. (Parsons, The
Railways and the People, p. 318.)
With a margin of but 8 per cent of the rate to work on, the board would
feel this constraint in a marked way; for under substantially reduced
rates a very slight perturbation of the customary traffic might place
in danger the whole net return. Substantial relief in the way of
regulation is thus shown to be wholly impracticable.
_Various Parcels-Post Schemes_
There remains to discuss the numerous proposals for limited carriage of
parcels up to 11 pounds, and so forth, by the postal department. These
all concern the present railway status quo of the post office. It is
apparent that such proposals can only result in two things--the express
companies taking the major portion of the short-haul, profitable
traffic and the postal department getting the long-haul and losing
traffic. But there is another fact recently disclosed by the express
report--a fact rendering any of these proposals, so far as they involve
railway transportation, wholly untenable.
The Post Office Department pays an average of 4 (4.06) cents per pound
to the railways for carrying the mail, excluding equipment.
The express companies pay an average of three-quarters (0.74) of a cent
per pound for carriage of express matter, excluding equipment.
It is manifest that not even the government could render substantial
service under conditions so utterly unequal. It could not pay--what
we shall see when we come to consider the length of the express and
the mail hauls amounts to--about three times as much as the express
companies pay to the railways for carrying its parcels. One is mail
service, which is naturally more costly; the other more closely
resembles a fast freight service, which lies midway between the mail
and the freight in the weight cost of railway movement.
Other difficulties in such proposals, based on the status quo of the
post office, need only be suggested:
(_a_) The government would have to install urban delivery wagons at a
cost its traffic might not justify.
(_b_) The express companies still in the field, the wastes of service
would merely be increased by the entrance of the Postal Department, and
the people would have to pay it all.
(_c_) The government, being a moral agent with the inelastic rate
proposed, would be at the mercy of its unrestrained competitors.
(_d_) The express companies’ contracts with the railways permit them
to reduce their compensation to the railways to the point of 150 per
cent of the freight rate--i. e., from the present ratio of about 8
(7.80) to 1 of the freight rate to about 1½. Of course, they could not
go to this extreme without destroying their own profits, but their
contracts permit them to go as far as they might wish. Thus, while the
government in the beginning might have to pay about three times as much
to the railways for its parcels per pound, in a struggle the express
companies could exaggerate this disparity to any point they wished for
the purpose of destroying the postal department as a competitor.
_Essential Elements of an Adequate System_
For the sake of brevity we state these elements categorically:
(_a_) Fast service.
(_b_) Greatest economically feasible extension of delivery and collect
service, necessitating coordination with both urban and rural free
delivery systems.
(_c_) Express railway contracts to secure the relatively low railway
rates.
(_d_) Cheap capital charges.
(_e_) Reliable public-service motive.
(_f_) Economies of single organization, in which all existing
serviceable plants should be merged.
With regard to the element of fast service, discussion is unnecessary.
It is now commonly rendered by the railways for the express companies
in connection with the passenger service. It seems worthy of
suggestion, however, that a single organization like the post office
might on the strong lines of traffic, where carload lots might be
regularly obtainable, employ for certain kinds of matter the fast
freight service, profiting enough on the carload rate reductions to
fully cover the expense of delivery and collection, the regular railway
100-pound charges to be paid to the postal express by the shipper. It
is further suggested that in this way agricultural products might be
received through the rural free delivery in small allotments from
the truck gardeners and farmers, consolidated into carload lots and
conveyed on the trunk lines to the branch lines and distributed over
the branches to destination by passenger trains. The Prussians do,
in fact, have this latter service, for which the charge is based on
a tariff of twice the freight rate, the regular service by passenger
train calling for a charge of four times the freight rate. The railways
would now perform such service if, of course, the collect service
existed to gather the shipments from the country and assemble them.
It is obvious that the element most wanting is the service described
as “collect and delivery,” necessary between consignor and railway at
the beginning and railway and consignee at the conclusion of the act of
transportation. Our country is utterly deficient in this respect as to
the “country” or farming population. In towns of about 3,000 or 4,000
population up the present express companies do render this service
for such traffic as their rates permit to move; but what is required
is a service as extensive as the postal agency, which reaches cities,
towns, and country with the degrees of efficiency of the urban and
rural deliveries, conceded to far excel such delivery as the express
companies give.
There can be no doubt that with regard to this collect and delivery the
postal department is the only agency to which we can look for a service
sufficiently extensive to be really efficient. It only remains to
observe that with regard to the farming part of the country the service
already exists in the form of rural free delivery, equipped and paid
for, and actually waiting with empty wagons to receive and execute the
work.
_Advantages of Postal Express_
In three years under a postal administration it is believed that the
reformed system will produce:
(a) A minimum charge of 7 cents for the first pound, graduated to 17
cents for a 11-pound package, for average distances.
(b) General reductions of about 28 per cent in all merchandise charges.
(c) The extension of the service to the out-of-town and agricultural
population.
(d) The elevation of the employees to the plane of the postal service.
(e) The coordination of country supply of the vital necessaries with
urban demand by a cheap and regular collect and delivery service.
(f) As a result, a greater attractiveness in rural life and improved
highways.
(g) In 10 years’ time, with the development of the traffic, a reduction
of rates to about one-half of the present rates.
It is as difficult to describe in detail the manifold economic
and social results of a great agency like this as to give a bill
of particulars of the benefits of the postal system. And in this
connection it seems not irrelevant to suggest that a proper
coordination of the railway mail with the railway express service may
indeed render penny postage feasible. As things are now the rural
free-delivery agency does not bring a direct fiscal return to pay
for itself. In a few years, as the traffic develops in parcels and
agricultural products, the proposed system would enable it to do so.
This would assure a considerable financial gift to the account of penny
postage.
_The Agricultural Post_
In the present state of things the truck farmer must devote a large
part of his time to marketing; that is, to the transportation of his
product, however little it may be, to the place of demand. He must
also for this purpose provide himself with transportation facilities,
however small his business. These involve a horse, and its maintenance
and care, and a barn; and the expense of both during the unproductive
seasons. And yet in a socio-economic sense his work and expense of
transportation is the smallest element in his service to the public,
although it requires the maximum of upkeep work and expense, if not
of capital. The proposed postal collect and delivery eliminates all
these, and would enable the truck farmer to enter into the business on
a minimum of capital, and pursue it on a minimum of labor and expense.
The field service of a horse he could hire as occasion might require.
Thus the truck-farming industry would receive a necessary impetus and
the cost of such foods be greatly reduced to the consumer, saying
nothing of the advantage in quality coming from a speedier forwarding
to the market by daily allotments instead of the delays now incurred to
garner a worth-while load.
This application of postal express, with its thoroughly articulated
service and regular schedules, may be taken as illustrative of the
close relations which may be established between the rural producer and
town consumer, as well as between producers and merchants generally.
It is manifestly unfair to the proposition to judge its social value
on a mere computation of the savings in rates which may be made. While
this saving would amount to some $35,000,000 a year on the traffic of
1909, and from seventy to a hundred millions a year when the traffic
reaches its normal dimensions, yet as large benefits will follow in
clearing the prohibitive rate clogs from this necessary conduit of
commerce that it may freely discharge its normal output, in placing the
50,000 express employees on a postal basis, in rendering it easier to
engage in and market food production, to relieve the towns and cities
of high prices for necessaries of life, and relieve them, too, of the
overplus of labor, and, perhaps, too, in aiding in reversing that
tendency of population movement from the country to urban centers to
which is due the most aggravated and most discouraging social problems
of our time.
Hearings before the Committee on the Post-Office and Post-Roads. April
20-29, 1910. pp. 296-7.
Postal Savings Bank and Parcels Post.
Letter of Dr. Barth.
Whilst the postal savings-banks system became firmly established
some time ago in Belgium, France, Great Britain, Italy, Holland,
Austro-Hungary, Russia, and Sweden, all efforts have failed to
introduce the system into the German Empire. In the year 1885 the
draft of a postal savings-bank law was laid before the Reichstag. The
draft never came out of the committee. The principal reason of this
opposition lay in the competitive interest of the many local savings
banks existing in Germany, which are generally under the control of
commercial boards of directors. Since the frustration of the plans for
the law in the year 1885 no further serious efforts have been made to
introduce postal savings banks.
All the greater has been the development of the parcels-post traffic
with us. This traffic dates in Prussia back to the eighteenth century.
Under Frederick William I there already had been introduced a postal
monopoly (the exclusive right of the mail to forward packages) for
packages up to 20 pounds. Under Frederick the Great this monopoly was
increased to 40 pounds. By a postal law of June 5, 1852, it was again
reduced to 20 pounds, and only entirely abolished by the law of March
20, 1860. This postal monopoly has never been revived in Germany;
nevertheless, the parcel postal traffic has developed tremendously
without the protection of a monopoly. In Germany the weight for postal
parcels has now been set at 50 kilograms (110 3-10 pounds); while, as
is well known, there has also existed since 1885 European international
parcels-post traffic with a maximum weight limit of 5 kilograms (about
11 pounds). Only very few articles within the aforementioned weight
limits are excluded from the postal traffic. Even live singing birds,
fish, crabs, fresh flowers, grapes, etc., are sent by us in postal
parcels. The parcels-post service in Berlin employs about 1,000
officials. The rate within the postal territories of Germany and
Austro-Hungary is 25 pfennigs (6 cents) for packages up to 5 kilograms
(about 11 pounds) in weight and 10 geographical miles in distance: at
50 pfennigs (12 cents) for further distances. With heavier parcels the
rate increases rapidly for every kilogram (2½ pounds) in excess of 11
pounds with the growing distance, so that, for instance, at a distance
of 150 geographical miles every kilogram over 5 costs 50 pfennigs (12
cents) more. This rate proves that the post lays its principal stress
on receiving parcels up to 5 kilograms (11 pounds) in weight.
The parcels-post traffic in 10-pound packages is therefore the normal
one. For many trades and producing branches a very strong direct
traffic between the producer and the consumer has grown up in these
10-pound packages, and many articles which in the locality in which
they were produced were either not utilizable, or forced to sale at
a very low figure, have found a market which without the cheap 50
pfennig (12 cents) postage they would never have attained. Mushrooms
gathered in the forests of Masuren near the Russian frontier come to
Berlin in postal parcels. Large crabs caught in the waters of western
Prussia come even to Paris. We ourselves, for example, obtain for our
household through the parcels post meat from Silesia, butter from
eastern Prussia, eggs from Mecklenburg, melons from Hungary, etc. For
the household this is not only cheaper but also more convenient than
the purchase in the market halls, for the post brings the parcels
(for delivery sum of 15 pfennigs; 3½ cents) to the door, also calls
for parcels, cashes in the amount in c. o. d. deliveries, in short,
makes it extremely convenient for the order. It is clear that this
postal traffic forced out many middlemen; the retailers especially in
small places have been made to feel very keenly the competition of
the large forwarding houses in the capital cities. Their complaints
therefore were formerly directed very actively against the cheap
parcels postage. But since the flat land in turn could derive benefits
for its agricultural products, such as fruits, meats, butter, eggs,
etc., from these self-same cheap rates, the complaints of the retailers
became silenced after awhile as far as the question refers to the
cheap parcels rates. They now turn so much the livelier against large
warehouses and forwarding businesses for whom one is seeking through
all sorts of lawful tricks to make the competition more difficult.
The parcels-post traffic has meanwhile become so firmly rooted that
it seems impossible to upset it. Considered from a politic-economic
viewpoint it presents itself as a most important and very beneficent
branch of the whole system transport.
Following the German example in the United States would, I believe,
be of enormous advantage, particularly for the agricultural districts
surrounding the large cities. For the producer of eggs, poultry,
butter, vegetables, fruits there would develop, with a cheap
parcels-post rate, entirely new market possibilities; also the
decentralization of many branches of industry would to a certain degree
become a possibility.
Monthly Consular and Trade Reports. No. 329. pp. 104-6. February, 1908.
German Parcels Post.
Consul W. T. Fee, of Bremen, states that the parcels post system of
Germany, as well as most of the railroads, is owned by and is under the
control and operation of the Imperial government. He adds:
The express companies in Germany are less developed than those in the
United States, where the largest part of parcels forwarded are handled
by these companies. Under the German parcel-post system, parcels are
divided into five classes namely: (1) Parcels with value declared; (2)
registered parcels; (3) common parcels, value neither declared nor
registered; (4) collect-on-delivery parcels; and (5) urgent parcels.
Each shipment of parcels must be accompanied by a waybill called
“packet addressee”; and no more than three packages which must be of
the same class, and which must bear the same address, are to be entered
on one waybill. Each c. o. d. or urgent package, however, must have its
own waybill.
Forms of waybills, with the respective postage stamp of the amount
of the charge printed thereon, are furnished by the postoffices at
the price of the postage charge, while waybills, without this stamps
imprint, are sold by the postoffices at the price of 1.19 cents for
five pieces. Forms of waybills, which are purchased from other sources,
must conform in every respect with those furnished by the postoffice
department. There are two different kinds of waybills in use, foreign
and domestic.
At times of increased postal traffic, before Easter, Whitsuntide
and Christmas, a waybill for each package is required. The prices
charged by the postoffice for forwarding parcels vary according to the
weight of the packages and distance. The fees charged are shown in the
following statement:
For distance up to-- over
46 92 230 461 702
miles miles miles miles miles
For parcels weighing up to--
cents
11 pounds 5.9 11.9 11.9 11.9 11.9
15.4 pounds 7.1 14.2 16.6 19.0 23.8
17.6 pounds 8.3 16.6 21.4 26.18 35.7
19.8 pounds 10.7 21.4 30.9 40.4 59.5
22 pounds 11.9 23.8 35.7 47.6 71.4
additional 2.2 pounds 1.1 2.38 4.76 7.1 11.9
The maximum weight for parcels to be forwarded by post is 110 pounds.
For registered packages an additional fee of 4.76 cents is charged,
while the insurance fee for packages with declared value is 1.19 cents
for each $71.40 or fraction thereof. For “not-prepaid” parcels up to
11 pounds a collection fee of 2.38 cents is levied. Besides this, in
places where there is delivery to the house, an extra fee of 3.5 cents
is charged for packages weighing up to 11 pounds.
Packages may be sent c. o. d. in the German Empire if the amount to be
collected does not exceed $190.40. These c. o. d. packages, if payment
is not made at presentation, will be held for seven days. Meanwhile
another request will be made on the consignee to pay the amount
charged, and then if payment is refused the package is returned to the
consignor. The fee charged for c. o. d. packages in addition to the
ordinary postage is 2.38 cents, and the fee for the postal money order,
by means of which the amount collected is returned to the consignor is
charged. The charges for these money orders for amounts not exceeding
$1.19 are 2.38 cents; not to exceed $23.80, 4.76 cents; $47.60, 7.14
cents; $95.20, 9.52 cents; $142.80, 11.9 cents; and $190.40, 14.28.
Printed matter, samples without value, newspapers and business cards do
not come under the heading of parcels or packages, different rates of
postage and also different limits of weight and measure being provided
for these classes.
In case of loss the postoffice refunds for common packages at the
maximum rate of 71.4 cents per 1.1 pounds, and for a registered package
at least $10.
Parcels are handled by the postoffice entirely separate from letters
and other mail matter. A request may be sent to the postoffice on an
unfranked postal card to call for a package, whereupon the parcelpost
wagon will call at the place designated in the request. An extra charge
of 2.38 cents is made for this service, regardless of the size or
weight of the package.
Under ordinary circumstances, a package sent from Bremen to Munich,
Bavaria, a distance of 470 miles, thus crossing Germany from north
to south, will be delivered on the evening of the second or on the
morning of the third day. If it weighs up to 11 pounds, it will cost
11.9 cents. If it is a c. o. d. package for $142.80 it will cost 11.9
cents for postage, 2.38 cents for collection fee, 11.9 cents for return
money order, and 1.19 cents for delivery charge for the money order, in
all 27.37 cents. The same package could be sent at the same rate from
Bremen to Königsberg, a distance of 579 miles.
There is no restriction as to the size of the packages to be shipped
within the German Empire, as long as they are not cumbersome, but the
size of packages to foreign countries, as a rule, must not exceed 23.6
inches in each dimension. Exceptions from this rule are made for goods
like umbrellas, canes, charts, furs, plants, etc., which may measure
39.37 inches in length, if they do not exceed 7.87 inches in breadth
and height. Besides this there is a space limit of 25 cubic decimeters
(1 cubic decimeter = .035 cubic foot) for packages destined for
Algiers, Tunis, Santo Domingo, and the French colonies, and 20 cubic
decimeters for packages to Bolivia, Brazil, and Canada, while packages
for Great Britain and nearly all its colonies may measure one meter in
each dimension, with a space limit of 54 cubic decimeters. Packages to
foreign countries, exceeding the before-mentioned limit in weight and
measurement, may be shipped as “postal freight.” The rates for such
shipments, however, vary too much to be quoted here, and they are, in
most instances, subject to contracts of the postoffice department with
prominent forwarding agents.
For packages to the United States--that is New York, Jersey City,
and Hoboken--the charges are from 30 cents for 2.2 pounds up to 64
cents for 11 pounds. To all other places in the United States, Alaska
excepted, the rates are 55 cents for 2.2 pounds up to 88 cents for 11
pounds.
According to a postal treaty between the United States and Germany,
which is in force since October 1, 1907, packages, which for any reason
cannot be delivered will not be returned after a period of thirty days,
as heretofore, but the consignor will be informed of this fact by the
postoffice in order to give him a chance to dispose of the package in
some other way. If the consignor has not disposed of the package within
two months it will be returned to him as undeliverable.