advantages of the parcels post is its celerity. “Before it came into
vogue,” he said, “customers often had to wait days for their goods.
Now, within the London radius, it is a case of only a few hours, for
the parcels post makes several deliveries daily. By paying a small
additional fee, ‘immediate delivery’ is secured.
“The great retail houses, in increasing numbers, employ the parcels
post for sending home the purchases of customers, instead of using
their own delivery wagons. They find the government does the work for
them cheaper and better than they can do it for themselves. The price
charged, which is paid, of course, in postage stamps, varies from two
cents for a parcel weighing under two pounds to twenty-two cents for a
parcel not exceeding eleven pounds. Many of the London laundries now
send home the week’s washing by parcels post for the same reason that
the big stores are taking to it. The service cost less than that which
they had previously provided themselves.”
This gentlemen dwells upon the importance of the fact that goods thus
conveyed by the government are virtually insured up to the value of
most packages sent.
Housekeeper. 31: 11-35. August, 1908.
Parcels Post. George E. Miller.
Now what are the advantages and disadvantages of the parcel post? The
advantages can perhaps best be illustrated by reference to the work
done by the parcels post abroad. There, especially in Germany and Great
Britain, this great modern convenience has been brought to the greatest
perfection. And there it is worth studying.
In the first place, it has been demonstrated there that the parcels
post is the greatest stimulant of domestic trade ever devised by man.
In the next place, it has made life in the country, in both Germany and
England as comfortable and convenient as in the city. And lastly, it
has proven so great a blessing in the cities, towns and villages that
in many instances merchants have disposed of their delivery wagons
and they depend upon the parcels post exclusively for the delivery of
merchandise to their customers, except in the matter of goods of too
much weight or bulk to go through the mails.
In London the government runs motor wagons in all directions into the
country for many miles for the delivery of parcels, and this service is
being extended until presently it will cover the country. Parcels up
to the weight of eleven pounds are carried through the British mails,
while in some other countries the limit is much higher, Italy, Chile,
Cuba, the Netherlands, and New Zealand are the only other countries
holding the weight to the same maximum as Britain. In Germany and
Austria packages weighing one hundred and ten pounds are received, and
in Belgium the limit is one hundred and thirty-two pounds. In France it
is thirty-two pounds. In the United States alone the limit is as low as
four pounds while the rate with us is so high, sixteen cents a pound,
as to make the service prohibitive for ordinary use. Abroad the rates
vary, but they are always aimed to be not much above cost, and they are
materially lower than the rate now charged here, and much lower even,
than the rate proposed by the president, which is twelve cents a pound.
No more enticing tale is told by the traveler returned from abroad
than that relating to the parcels post. In England, Germany, and some
of the other countries, the housewife particularly luxuriates in the
joint convenience of the telephone and the liberal mail service. Does
she want a spool of thread of a certain color and texture, or a bottle
of medicine, or a cake or loaf of bread from the bakery, or any one of
a thousand small needs, the necessity for which may come with all too
much suddenness, she simply steps to the phone and makes her request
and by the next visit of the postman she receives that which she
ordered. And yet, she may be ten or twenty miles from the nearest town.
The farmers of those countries likewise receive untold benefit from
the same service. Not long ago a gentleman called at the post-office
department in Washington to relate a circumstance coming under his
observation.
“I saw a Yankee demonstrating an American potato digging device to a
farmer in Germany,” he said. “Suddenly one of the parts of the machine
broke. It looked like bad business for the Yankee, but he, with real
American resourcefulness, sprang to the telephone and ordered a
duplicate part from his repository in a village two miles away, and in
twenty minutes the postman delivered it to him and the demonstration of
the digger proceeded to a successful conclusion. Of course, this was
an exceptional instance. Everything connected with it happened luckily
for the man selling the digger. His agent in the repository happened to
be right on the spot when the telephone message came, and the postman
happened to be just on the point of starting in the right direction to
make a speedy delivery. But it seemed to me to tell an eloquent story
of the parcels post, and its effectiveness.”
A red-headed, freckled, vivacious manufacturer from Detroit was in
Germany not long ago and he also brought back a fund of parcels post
stories. But his most significant statement was in regard to the effect
of the service upon the country merchant.
“No man,” he said, “can study this question abroad and retain the
belief that the parcels post will ruin the country merchant. On the
contrary, it has been the making of him. The country merchant of
Germany is far more solid and substantial since the introduction of
the parcels post than he ever was before. It has made him a permanent,
fixed cog in the industrial scheme of that country and given him an
opportunity which he never had before of making himself indispensable
to the community in which he does business.
“How did this happen? By the natural evolution of events. Nothing
else. The wholesale houses of Germany simply stepped into the field
themselves and issued catalogues as fine as any the mail order houses
could produce. And these they placed with the country merchants in
every town and village in the empire. The result was that each merchant
had several dozen catalogues upon his counters for the benefit of his
customers. He was authorized to say to all who came: ‘Here I am. You
all know me. You know whether I am responsible. If you give me your
order and the goods do not prove to be exactly as represented, you need
not take them and I will refund your money. If you want goods of the
same grade as those sold by the mail order houses, I can sell them to
you, and at the same price. And I also have better goods which will
cost you more. But I can give you exactly what you want, and as cheaply
as any one.’
“In the meantime the country merchants have been able to greatly reduce
the stocks carried in their stores. This reduced the amount of capital
tied up in their business. And yet, by means of the catalogues, their
customers were able to select from as large an assortment as they could
in the largest stores, in Berlin.
“And this latter fact is amply recognized by the people of Germany.
They step into a store in the most remote village of the country, and
make their selections and place their orders, securely confident that
they have seen all they could have seen if they had made the journey
to one of the large cities. And they are all satisfied. They regard
their mercantile system as the very best on earth, and I think it is. I
had occasion, while visiting at a house out in the country one hundred
miles from Berlin to need a dress suit, and I didn’t have one on that
side of the Atlantic. I rode to the nearest village one morning,
stepped into a little store, was measured by the storekeeper, and by
mail that afternoon received a very fair ready-made evening suit. I was
both pleased and surprised but the circumstance was a matter of course
to the people I was visiting.”
These are some of the advantages of the parcels post. Now, about the
disadvantages. These would, in this country fall exclusively upon the
express companies. These unaccommodating friends, who have been with us
so long, and who deliver nothing at your door unless you chance to live
in a large city, would doubtless suffer the fate of the German mail
order houses if the government of the United States were to inaugurate
a parcels post upon the same scale as that in Germany. They would have
to go, for who would pay the higher price to have a parcel sent by the
nondelivering express company when the mails would be both cheaper and
would deliver the parcel at your door in city or country?
As for the country merchant, of course, he would demand the German
system, and equally, of course, he would get it. Otherwise, he also
might have to walk the plank and the wholesalers of the United States
would never permit that. They could not afford to.
NEGATIVE DISCUSSION
Perils of Parcels Post Extension. pp. 13-31.
George H. Maxwell.
_A Heavy Deficit Inevitable_
The commercial advocates of larger bulk and lower rates by domestic
parcels post for the shipment of merchandise by mail do not want either
a distance rate or a system limited by territorial zones. They want the
privilege of shipping from any factory or central store or warehouse,
wherever located, anywhere in the United States, to any customer or
consumer, at any postoffice, however remote or inaccessible, in any
state or territory. The rate desired is a flat rate of so much per
pound without regard to distance.
It is urged that the same rate should be charged by Uncle Sam for
carrying merchandise by parcels post from a New England factory to
the distant mountain mining camps in Idaho or Oregon, or to the
prairie towns of Texas, as would be charged for delivering the same
package from the same factory by local trolley car service to a nearby
postoffice in the immediate suburbs of the New England city where the
factory happened to be located.
_Government Bears the Burden_
The national government in each and every case would pay the full
actual cost of transportation and delivery to the point of destination,
whether it were by trolley, railroad, stage-coach, wagon, pack-horse,
mule, sled or snowshoes. Of course it is not contended that the
government could secure an average or flat rate for the cost to it of
transporting merchandise by mail, the same to all points in the United
States, as it is urged that it should charge. On every package mailed
the government would of necessity pay the full cost of carrying it
from the point of shipment by mail to the place of delivery to the
consignee, no matter how great the distance or how costly the character
of the transportation.
In other words, while the government is expected to and of course must
itself pay the full distance cost of transportation and delivery in
every case, and could not give the service unless it did so, it is
expected to look for reimbursement wholly to an average flat rate,
like the rate for letter postage, or the present rate of the existing
domestic parcels post for small parcels--a rate that is the same
everywhere, without regard to the distance from point of mailing to
point of destination.
_Averages Are Misleading_
The argument of averages is relied on to meet this insuperable
objection. It has been suggested that the average haul of all
second-class matter (which comprises only regularly entered
publications, periodicals and magazines) was 540 miles in 1907, as
shown by the report of the Postoffice Department, and on that as a
basis it was estimated that an average rate of 5½ cents per pound or
$29.70 per ton for other transportation charges, and $165.00 for labor
and supplies, a total of $212.00 a ton, would leave a profit to the
government of $27.00 a ton from a general parcels post rate of 12 cents
a pound, which would produce a revenue of $240 a ton.
The estimates given above were embodied in an address by the Postmaster
General before the Union League Club at Philadelphia on October 26,
1907.
For reasons based on facts that are undeniable and unquestionable,
these averages and the estimates based on them, would prove utterly
delusive and misleading when put to the test of a practical application
of the proposed extension of the domestic parcels post to include
merchandise in larger bulk and at lower rates than those now authorized
by the postal laws. It is not necessary that the proposed extensions
should be actually tried to demonstrate the deceptiveness of these
average estimates. The conditions are before us and arise from facts so
clearly known and established that he who runs may read.
_The Average Haul_
The average haul of second-class mail matter, made up of printed
reading matter, for every copy of which a regular subscription must be
paid, is fixed by and is in proportion to the average density of the
population.
To illustrate this, take the city of New York as a starting point. It
is the leading publication center in the country, and a larger number
of publications entered as second-class matter are issued from the city
of New York than from any other one city of the country.
The population of New York state in 1906 was estimated to be 8,226,990.
The population of the state of New York alone is as large as that of
the whole western half of the United States, and yet that whole western
half of our territorial area contains only about one-tenth of the
entire population of the country.
The average number of subscribers receiving regular publications
through the mails as second-class matter in proportion to population
is as large in the one state of New York as in the entire western half
of the United States. So the Postoffice Department would serve in New
York state, within an area of 48,204 square miles of closely settled
territory, as many subscribers for second-class mail matter as it
would be compelled to serve over a sparsely settled region in the west
covering 1,513,394 square miles, that being the area of the western
half of the United States, not including Hawaii and Alaska.
_Second-Class Mail Matter_
An average length of haul of second-class mail matter now carried by
the national government would be much greater if limited to the one
state of New York and the western half of the United States, than if
applied to the entire country; for the very simple reason that the
vast sparsely settled area in the west would comprise one-half of the
total number of subscribers served; whereas if the whole United States
were included, then the western half with its sparse population would
embrace only one-tenth of the whole number served, and nine-tenths
would be located in the more closely settled eastern half of the United
States.
In other words, in averaging the length of haul of second-class matter,
nine-tenths of the people served are in closely settled territory,
where they are reached by the short haul, and only one-tenth in the
thinly settled western half of the country, to be served by the long
haul, and oftentimes by the most difficult and expensive methods of
transportation.
_Conditions That Control Are Reversed_
The principle that controls the average in estimating the length of the
haul of second-class matter is that as the proportion of density of
population increases the average length of the haul is decreased.
It is naturally assumed that the same principle would control in
fixing the average haul of transporting merchandise by mail if the
movement for an extension of the domestic parcels post should prevail;
but strange as it may seem at first thought, the exact contrary would
happen. The principle that controls the average haul in the case of
second-class matter would be reversed in the case of parcels post
extension. The greater the distance the more remote the territory,
the more sparse the population the larger would be the proportion of
merchandise shipments by mail as compared with the whole volume of such
shipments.
The reasons for this are, first, because the express companies with
their flexible distance rate system would practically surrender the
distant territory and make a rate on nearby points so much lower than
the government rate that the short haul service would go to them,
leaving the long haul shipments for the government; and, second,
because it is the distant market that merchants and manufacturers
desiring to trade by mail wish to reach by the parcels post system of
delivery and which they would exploit if the opportunity were created.
_Impossibility of Adjustment_
Every effort of the national government to readjust an average flat
rate so as to meet this condition, and command for the parcels post the
desired proportion of nearby business, would simply be to get out of
the frying pan into the fire. To lower the average flat rate so as to
compete with express companies in nearby territory and on the short
hauls would stimulate the volume of long distance shipments and still
keep the balance on the wrong side of the ledger. To raise the average
flat rate, so as to secure a larger revenue from the long distance
shipments, would widen the circle within which the express companies
would be able to command the business by a lower rate and reduce the
government revenue by taking away from it more of the short haul
business.
It has been urged that one reason why the proposed extension of the
domestic parcels post should be adopted is that it would lower the
express rates. If that should occur the rates would, of course, be
lowered in the territory, where by lowering their rates the express
companies could command still more of the short haul business, and
thereby increase the proportion of long haul business that the
government would have to carry at a loss. Every time the express
companies lowered their rates it would increase the annual deficit that
would be incurred by the government. No business proposition could be
more simple. The government would be in the position of having entered
into a competitive business. It would have done this after adopting
at the start a system that made it impossible for it to cope with its
competitors. Whatever flat rate the government established would be
met by a lower distance rate by the express companies that would take
the short haul business from which the government could earn a profit,
leaving to the government the long haul business that it could only
conduct at a loss. Nothing that the government could do would prevent
this, because it would make the conditions worse one way or the other
every time it either lowered or raised its flat rate. If the flat rate
were lowered, the proportion of long haul business would be increased,
and the losses be as great as ever. If the flat rate were raised the
proportion of short haul business would decrease, and the average cost
would still create a heavy deficit.
_Act With Open Eyes_
The fact is, the United States government cannot carry merchandise by
parcels post without having to meet an enormous annual deficit for
conducting the service, and the service should not be undertaken by the
government unless such a deficit is to be deliberately and knowingly
created and assumed by the people at large. The government is asked to
undertake an impossibility, if it is expected to make the service pay
for itself, when it is asked to adopt the proposed extensions of the
domestic parcels post.
A flat rate system of charge cannot, in the very nature of things, be
operated in this country without loss. The only way to avoid such loss
would be the adoption of a distance tariff by the government, just as
is charged by the express companies. The proponents of domestic parcels
post extensions do not advocate such a distance tariff system and it
will be time enough to consider its merits if it ever comes before the
people for serious consideration. The fatal defect in the reasoning
of the advocates of the proposed parcels post extensions is that they
disregard the fact that we live in a country as broad as a continent
and extending for over three thousand miles from ocean to ocean, and
that in all that vast territory we have a population of only something
over eighty million people.
_A Subsidy to a Favored Class_
Should the mail trade have a government subsidy?
That is a very plain and simple question, and the answer to it
will also answer the question whether the shipment and delivery of
merchandise by mail should be facilitated and undertaken by the
government as advocated by the proponents of domestic parcels post
extension.
If there is any good reason why the mail trade should be encouraged
by government subsidy, it has never been set forth by any advocate of
parcels post extension.
And yet, that is exactly what the proposition amounts to in its
practical application. It would not be a subsidy that would create new
business where there was none before. If it would do that it might be
an argument in its favor. Instead of doing so, it would take the trade
from the merchants, both wholesale and retail, who are now doing it,
and transfer it to new and wholly different agencies, who would be
enabled to secure the trade because of a direct advantage given to the
new agencies by the national government at the expense of the general
public.
_Who Are the Favored Class?_
Whether the seller or the consumer, under this system of a government
subsidy for the mail trade, were to be regarded as the favored class,
the result would be the same. A favored class would be benefited at
the expense of the people at large, and without any advantage to the
general public that would warrant it.
For many reasons the consumer in the long run would be injured more
than benefited by the establishment of such a system for doing the
business of the country, and ought for this reason to be eliminated in
defining the favored class. Temporarily, and considering only immediate
cheapness of needed merchandise, the consumer might imagine himself
benefited, and probably would, but that benefit would be involved and
submerged in far greater indirect losses in the future.
So the favored class, in the last analysis, would be the great
catalogue concerns, and manufacturers who desire to eliminate the
jobber and the retailer and country merchant and sell direct to the
consumer, using the mail as the agency of transportation and delivery
to the purchaser.
Without regard to any of the many serious objections to this system of
trading, based on social and economic reasons, there is no possible
ground upon which a subsidy for the encouragement of this mail trade
should be given out of the United States Treasury and at the expense of
the people at large.
_Effect of a Subsidy_
And when the effect of that subsidy would be to break down long
established commercial customs, and divert the trade from institutions
now successfully and satisfactorily conducting it, there is no more
justification for such a mail trade subsidy than there would be for
the government to carry some new brand of flour cheaper than the old
established brands--in order to enable the manufacturer of the new
brand to introduce and sell the product of his mills.
The growth of the mail trade, under its present limitations, has been
stupendous, and multitudes of retail and country merchants have been
injured, and many driven to the wall by it. But its future growth
would sweep over the country with an irresistible force and wipe out
of existence many thousands of now prosperous retail and general
merchandise stores, if a subsidy were granted to the mail trade in the
form of the proposed extensions of the parcels post.
There are many manufacturers who are doing business along the regularly
established lines, selling goods to the jobber or the retailer, who
are not now seeking or advocating any change in the channels of trade,
but those manufacturers would change their system and enter the field
of the mail trade if the advantages advocated by others were gained
for it. If the avalanche of mail shipments that would follow the
inauguration of such a mail trade system were ever once started no
one could foresee the end or define the limits of the evils it would
ultimately accomplish.
Independent. 70: 72-3. January 12, 1911.
Objections to the Parcels Post. Allan W. Clark.