dissent, demand a parcels post service; and that if put to popular
vote, this demand would be exprest by a majority of 90 to 1 the
country over. The people are growing impatient over delay, and they
are expressing this impatience very loudly. We believe that the coming
Congress will hardly find it possible to ignore this desire. We quite
agree with one of our contemporaries who says that the next step of
social and economic progress in the United States is unquestionably
bringing the producer and consumer closer together by reducing the cost
of carrying small parcels.
People Demand a General Parcels Post. pp. 7-12.
William Sulzer.
Absence of a parcels-post law enables the railroad companies, through
subsidiary companies called express companies, to eliminate all
competition and prevent all regulation in one branch of transportation
and to escape compliance with the laws that are being enforced against
them in other branches of transportation by the several state commerce
commissions and the Interstate Commerce Commission.
That the owners of the securities of these express companies have made
enormous profits is a recognized fact. One hundred per cent, even 200
per cent, profit when an express company “cuts a melon” no longer
excites surprise when found in the news columns of our evening paper.
No one objects to a fair profit for good service, but conditions seem
to indicate that the transportation companies are not satisfied with
the first and are not giving us the second, while developments before
commerce commission hearings indicate that their backwardness in
adopting economical and scientific business methods causes a tremendous
unnecessary expense. This they are meeting by maintaining and even
increasing already exorbitant rates for service that many believe are
discriminatory, and that grave injury and injustice to business and to
the general public results.
As an example, W. P. Dickinson, of the Burlington Railway, is quoted in
the Railway Record as saying at a public hearing that the expenditures
of the Burlington traffic department for printing and stationery in
the fiscal year 1910 was $222,000. Assuming that they are typical for
all the railways in the United States, the cost of printing railroad
tariffs alone under present methods, is $6,000,000 to $10,000,000.
In modern transportation methods, as, for instance, those in vogue
in Germany, this expense is so trifling as to be scarcely worth
considering. Freights move in Germany on a uniform tariff, based
entirely upon bulk, weight, and distance, discrimination is impossible,
and any shipper can learn in a moment, by referring to the table,
the exact freight charge to any point, and can ship knowing that his
competitors must pay the same price for the same service.
In the United States the shipper can not know all the tariffs that are
published or how they affect rates. He is supplied with a few easily
understood tables, but it is not within human possibility for him to
even read, to say nothing of comprehending, the millions that are filed
with the commission every year and how they affect the cost of the
transportation he buys.
So it seems this extraordinary printing expense of millions, whatever
its purpose may be, operates to keep the average shipper ignorant
about rates. Ignorance is always dangerous, and particularly so in
transportation matters.
Harrington Emerson, the expert, testified at the hearing before the
Interstate Commerce Commission at Washington last November, that
$300,000,000 annually in railroad operating expenses in this country
would be saved if the railroads adopted better business methods of
management.
To save for the consumers that enormous sum, no better beginning can be
made than for the government to establish a satisfactory parcels post
and adopt scientific business methods in its management.
That the interests that control our railroads also own and control
the express companies and that their separate incorporation is merely
a device to cover extortion and discrimination by complex contract
relations is indicated by Senate Document No. 278, pages 53, 54, and 55:
Stock held by railways in express companies $20,668,000
Railway securities held by express companies 34,542,950
Holdings of express companies in the stock of express
companies 11,618,125
----------
Total intercorporate ownership express companies
June 20, 1906 66,829,075
_Express Company Rates Cause Loss to Shippers--Express Company Methods
Cause Loss to the Postal Department_
The peculiar, graduated, increasing rate for small-weight parcels is
absolutely prohibitive for express transportation except at an actual
loss for a considerable proportion of business. Most express shipments
are in small parcels. They therefore pay the higher scale. This
increased rate is exacted for both terminal and haulage service and is
as high as 37½ times the first-class freight charge.
The express companies take from the Post Office Department the
profitable business and pocket millions of profits, but leave the
unprofitable for the Post Office Department. The profits from a parcels
post would stop the post-office deficit and give us a 1-cent letter
rate. The annual surplus of the British post-office department about
equals our annual postal deficit. The British have a serviceable
parcels post.
The men in the mail service have a record of one error in 18,000 pieces
handled. Compare that with your experience with the express companies.
_The Parcels Post Not Openly Opposed by the Beneficiaries of Present
Methods_
The opposition to the parcels post at the late congressional hearing
was made by persons who appeared in the name of American Hardware
Manufacturers’ Association, Illinois Retail Merchants’ Association,
National Association of Retail Druggists, National Association Retail
Grocers, National Retail Hardware Association, National Federation of
Retail Implement & Vehicle Dealers’ Associations, Wholesale Dry Goods
Association, Paint Manufacturers’ Association of the United States.
There was no direct opposition by the express companies to the parcels
post.
_Misdirected Energy Benefits Express Companies and Catalogue Houses_
Since the members of the above commercial associations can not to
any important degree be beneficiaries of the present confiscatory
and restrictive system that has a monopoly of the transportation of
merchandise in packages of 4 pounds to 20 pounds, some other reason
for their opposition to the parcels post must be found, and in that
connection the testimony given by these gentlemen at the hearing is
interesting.
The main objection to the parcels post was that it would build up
catalogue houses to the injury of retail businesses.
In reply to questions by members of the congressional committee,
however, some of their specific objections applied only to the rural
free delivery now firmly established and which nobody dreams of
abolishing.
The other objections advanced were also to conditions already in
existence, some of which at least it would seem would be less
objectionable if we had a serviceable parcels post.
For instance, the mailing of catalogues by the catalogue houses. That
can be done now to the farmer’s door for one-half cent an ounce, but
even that low rate does not always get the business. I have seen the
catalogue of Sears, Roebuck & Co. and the Chicago House Wrecking Co.
that were sent by each of these firms to addressees who did not specify
how he wished them sent. They were received since the date of the
hearing; both catalogues came by prepaid express.
Had we a parcels post competing with the express companies and reducing
their extortionate charges the express companies would be less able to
deprive the government of that revenue by underbidding the Post Office
Department rate on catalogues.
_Catalogue Houses Don’t Need the Parcels Post, and Oppose It_
At the congressional hearing so much was said by the opponents of the
parcels post about the catalogue houses, how they were behind the
parcels post--that it was for their sole benefit, etc., etc.--that I
went to Chicago and succeeded in getting an interview with Mr. Julius
Rosenwald, president of Sears, Roebuck & Co. He declined to support the
parcels post. He said they were very well satisfied with conditions as
they are, under which they had built up their immense business, which
was done entirely by catalogue and without salesmen or commission. He
explained that only an insignificant amount of their sales went by
mail, that what did was unprofitable, as it cost as much to make ready
and handle such little sales as larger shipments, jewelry being the
only exception, and even for that they advised express.
Evidence that catalogue houses do not want or need, and do oppose, the
parcels post was not lacking at the hearing.
For example: Marcus M. Marks, of the Merchants’ Association of New
York, after stating that the Merchants’ Association is not in favor of
a general parcels post and has frequently placed itself in opposition
thereto he quoted one of the large Chicago catalogue houses as in
opposition, and for this reason: “The result would be that instead
of shipping goods in large bulk it would tend to create a demand for
small shipments, which would increase his expense of doing business.”
Marshall Field & Co., one of the largest concerns in this country,
were referred to by both J. G. Baker, president National Federation of
Retail Implements, etc., and H. L. McNamary, of the Hardware Dealers’
Association, as opposed to the parcels post.
All the opponents of the parcels post at the hearing, mostly retailers
in heavy-weight goods, were very insistent to impress upon the minds
of the committee the great injury that is being done their business
by the big catalogue houses, who, they claimed, are underselling them
and are doing a very large and increasing percentage of the business
that belongs to and should go to the retail dealer. But is it correct
to charge to the parcels post this great loss of trade which has
occurred while we have no parcels post and that has been brought about
by conditions that can claim no assistance from a parcels post? Is it
reasonable to say that a parcels post would produce such conditions
when no such conditions do exist as above noted where the parcels post
has been in operation for many years?
Hampton’s. 26: 261-4. February, 1911.
Let Us Have a Parcels Post.
There would be some shadow of excuse for refusing to accept so great a
convenience as the parcels post if, in accepting it, we would destroy
a large investment in the business of the express companies. But, in
fact, we would not destroy any legitimate values in these companies.
They own practically nothing on which they would lose a dollar. Most
of their money is not in the business of transporting freight, but
in banking and investment enterprises. These would not be interfered
with. Their tangible property actually used in transportation would
be required, and would undoubtedly be taken over at good figures by
the government, when it established a parcels post business. Their
investments in stocks, bonds and banking business would be undisturbed.
The express companies would lose nothing except their graft--the
privilege of charging outrageous rates for the service they render. In
morals and equity that ought to be ended as soon as possible.
The truth is that it is not the political and financial influences of
the express companies which keeps Congress from giving this nation
a parcels post. It is the pathetic and benighted ignorance of a
considerable section of our own people, who have been led to believe
that the parcels post would injure them. It is well-nigh impossible
to believe that there can still be millions of intelligent Americans
who doubt that national prosperity must be promoted by every increase
of the facilities and cheapening of the cost of transportation. Yet
there is such a section of the American public. Misguided and ignorant,
it has permitted itself to become the chief bulwark of protection to
the express companies’ graft. It persists in believing, in the face of
nearly a century of world experience to the contrary, that there is
danger in too easy, too cheap and too universal transportation!
_Unwise Opposition of the Small Merchant_
Reference, of course, is had to the fears which the merchants of the
country towns entertain as to the effect of the parcels post upon their
business. The country merchant has come to accept on this point the
sophistical, disingenuous and dishonest arguments of the express lobby,
skillfully put out through agencies whose real purpose is concealed.
The argument that cheap transportation of parcels will injure the
country towns is exactly as reasonable as the contention that London
and New York, Hamburg and Liverpool, Seattle and Sidney, must be
injured by the railways and steam-ships which, bringing all parts of
the world into close and easy communication, would make it impossible
for great and dominating centers of population, commerce and industry
to exist. Everybody can see how absurd such an argument would be.
The best possible transportation facilities constitute the first
requisite to making a great city. Commercial centers are prosperous and
important, in proportion as they have adequate, efficient and cheap
transportation. This is as true of the country town with a single
railroad line as it is of a continent’s metropolis with half a hundred
great railroad systems pouring their tonnage into its terminals and
with the ships of all the seven seas unloading their cargoes at its
wharves.
It is an axiom that good, ample and cheap transportation actually
makes commerce. The country town which has no railroad always wants
one. The hamlet which has no post-office is forever riding the neck
of its congressman until it gets one. Great cities vote millions to
build artificial harbors, to provide wharfage, and to increase every
possible facility for cheap and rapid transportation.
There are no communities which need improvement of transportation so
much as the country towns which have been misled into opposing the
parcels post. The country merchant has been made to believe that the
parcels post would take his business away from him and give it to the
mail-order house in the great city. It would do nothing of the kind. On
the contrary, it would give the country merchant the one facility which
he does not now have: it would place him on a parity with the merchant
in a great city.
Quick, cheap transportation would enable him to buy better and cheaper.
He could sell many articles from catalogues instead of having to carry
them in stock. He could create a mail-order business of his own in his
surrounding territory. The local merchant who conducts his business
well has nothing to fear from the mail-order house. Farmers and
citizens prefer dealing with the home man, and the parcels post will
give him many advantages that will enable him to increase his trade to
proportions which are now impossible.
Of course, this does not apply to the country merchant who buys his
goods badly or at high prices, and who gives long credits and sells at
long prices. Parcels post or not, his day is doomed. More alert men,
with better business ideas, will soon occupy his place. The alert,
hustling merchant will use the parcels post so effectively that the old
sleepy head’s day will end just that much sooner.
The proof of the pudding is in the eating. Every enlightened country
except the United States has a parcels post. No country would think
of abandoning it, any more than it would think of disestablishing its
letter postal service. In the experience of all the world the argument
about injuring the country town is sweepingly and completely refuted.
The small town would gain vastly more than the large town by this
tremendous increase and improvement of its transportation facilities.
The whole public would benefit, for precisely the same reason that it
benefits by having fast steamships instead of sailing vessels, limited
passenger trains instead of stage coaches, two-cent letter postage
instead of five-cent.
_Part Played by the Express Companies_
The people who oppose the parcels post are the innocent and unwitting
dupes of the express monopoly. This is the one point in the parcels
post argument that cannot be too constantly emphasized. When the dupes
are brought to understand their true interests, Congress will not dare
stand for a single session as the protector of express graft.
Small wonder that the express companies are fighting with every
resource against the parcels post. They constitute one of the greatest
groups of financial power in the country. They are united firmly.
Most of the companies are large stock-holders in the others. Thus the
United States Express Company was shown by the report of the Public
Service Commission of New York, issued in 1908, to be capitalized
at $10,000,000. Of this, the Adams Express Company owned nearly
$1,000,000, the American Express Company exactly $1,000,000, and the
Southern Express Company, $70,000. How tremendously profitable the
business of the United States Express Company has been is shown by the
fact that whereas the company claimed an investment of only $2,042,000
in real estate and equipment, it had $7,464,000 in investments,
$895,000 in cash holdings, and $2,000,000 in collateral and other
loans! That is to say, while this company had very little more than
$2,000,000 invested in its transportation business, it had more than
$10,000,000, representing surplus and undivided profit, in general
investments!
It has accumulated such vast profits because it has been for many years
charging unconscionable and scandalous rates for its service.
The Adams Express Company is shown by the current number of Moody’s
Manual to have $12,000,000 capital. After paying large regular
dividends and numerous extra dividends for many years, the company in
1907 found itself with such a tremendous surplus that it actually paid
a special dividend of 200 per cent in 4-per-cent bonds! Every holder
of a one-hundred-share of stock was presented with two hundred dollars’
worth of 4-per-cent bonds! The present, of course, represented in part
the excessive charges which the company had been permitted to collect
from the public.
But the most startling statistics of express accumulations are the
financial statements of Wells Fargo and Company. For many years this
company’s capital stock was $8,000,000. Its most recent statement,
as published in Moody’s Manual, listed these assets: Real property,
$4,100,000; equipment used in transportation, $2,044,000; stocks owned
as investments, $3,211,000; bonds owned as investment, $3,750,000;
loans, $17,165,000; cash on hand and in the bank, $5,459,000.
Such were the accumulations of this company whose own statement
admitted that the equipment actually used in its transportation
business represented only $2,044,000. The company has always paid
large dividends. Its star performance in this line was the payment,
early in 1910, of a cash dividend of 300 per cent. Every holder of a
one-hundred-dollar share of stock was given three hundred dollars cash!
This was not all. The stock of the company was worth in the market
exceedingly high prices. In addition to giving this 300-per-cent
cash dividend, the company increased its stock from $8,000,000 to
$24,000,000, and gave the holders of the original $8,000,000 the right
to subscribe at par for two shares of the new issue for each share of
their previous holding.
_Enormous Profits of the Express Companies_
These figures suggest the profits express companies have been making.
They have been making them because our government is the only
government which permits such a monopoly. It is a monopoly which not
only extorts millions upon millions every year from the people, but
which enables railroad companies, through their intimate business and
financial relations with the express companies, to conceal a very
considerable part of their earnings. The express companies are large
holders of one another’s stock, and also of railway stock; in turn,
the men who control the great railway combinations are themselves big
owners of express-company stocks and bonds. The express companies lease
from the railroads the right to transport freight over the railroad
lines. The terms of these leases represent, not a reasonable and
fair charge for the service, but an elaborate project of covering up
excessive earnings and extortionate charges in a maze of complicated
intercorporation transactions.
The worst penalty that the American public pays in order that the
express grafters may make these huge profits and conduct these
manipulations, does not lie in the excessive charges. It lies rather
in the stunting and depressing effect upon general business, which is
a necessary and manifest result of a policy that denies the freest and
cheapest transportation facilities to the entire community.
Good Housekeeping. 53: 2-10. July, 1911.
Housekeeping by Parcels Post.
Isabel G. Curtis.
What would a parcels post mean to the American housekeeper? The
suburban or rural family could receive the bulk of its supplies by
mail--clothing, food, even eggs and butter and fresh meat. And the
country household that had something to sell could, by availing itself
of the parcels post, eliminate the expensive middleman and ship direct
to the consumer. Thus the city housekeeper could receive eggs, butter
and other things by mail at much less than she pays now. In scores
of ways the parcels post would tend greatly to decrease the cost of
living, for it would revolutionize the present cumbrous and expensive
methods of retail business.
The United States Postoffice authorities will accept a package of not
more than twelve pounds in weight and not more than three and one-half
feet wide by six feet long for delivery at any postoffice in England,
Germany or in any one of the thirty-nine foreign countries blessed with
the parcels-post system, at a rate of twelve cents a pound. But you are
denied the privilege of sending the same package to any destination
in your own country at any price. A four-pound package sent to a local
point will cost the sender sixty-four cents while the same package can
be sent to New Zealand or Costa Rica for forty-eight cents.
The parcels-post rates in foreign countries are very moderate. In
Germany, for instance, weight and distance determine the amount of the
charge. The distance charge is fixed by means of zones, the first zone
having a radius of ten geographical miles from the sending point, the
second twenty, etc. The charge for an eleven-pound parcel is six cents
within the first zone and twelve cents for every greater distance.
For parcels weighing more, the charge is the same for the first five
kilograms, but varies proportionately for each additional kilogram. In
Germany, the weight limit is one hundred pounds, in England eleven, in
France twenty-two and in Belgium one hundred and thirty-two pounds.
That there is no good economic reason why any civilized community
cannot have a parcels post seems to be proved conclusively by the
earnings of the postal departments of the governments that have tried
it. The postoffice departments of Germany and France each has a yearly
surplus of more than $14,000,000, and England enjoys a surplus of more
than $20,000,000--a striking contrast to our own Postoffice Department,
with its annual deficit of millions.
“Then why don’t we have a parcels post?” you ask. The answer given
to this question many years ago by Mr. John Wanamaker, when he was
Postmaster General, means just as much today as it did then.
“There are just four reasons against the establishment of a parcels
post,” said he. “They are the American, the Adams, the United States,
and the Wells Fargo Express Companies.”
It has been said by some congressmen and postoffice officials that
there is no parcels post because the public has not demanded it. Why
not demand it now? Let every woman write to her husband’s congressman
and speak her mind!