and several thousand state and local organizations--generally
affiliated with some of these national bodies. These embrace
practically every line of retail merchandising and the ramifications
of various interests among them. The individual, due paying membership
in some of these larger organizations, like the National Association
of Retail Grocers, the National Retail Hardware Association and the
National Association of Retail Druggists, is from 50,000 to more
than 100,000 each. I have never heard of any association of retail
dealers that is not on record against the extension of the domestic
parcels post in any form, especially the R. F. D. “entering wedge,”
except the organized department stores in one or two cities (such as
“The Merchants’ Association of New York”), who want this practical
government subsidy for the benefit of their mail order departments and
for cheaper local and suburban delivery.
I have mentioned only retailers’ organizations, whose resolutions on
this subject, during the convention season, crowd the pages of all the
trade journals. Nevertheless, practically all the organizations of
wholesalers and manufacturers, besides many local commercial and civic
associations, are opposed to the parcels post, and like the retailers,
have been fighting it for years. Conspicuous among these is the Chicago
Chamber of Commerce, the leading members of which, thru the “American
League of Associations,” are pushing a national campaign “to assist
the retail merchant and to co-operate with other associations in the
protection and development of home trade, and (the italic emphasis is
theirs), _specifically, this organization is now opposing the proposed
parcels post legislation_.”
These dealers, jobbers, manufacturers and others interested in the
maintenance and the improvement of the local stores and the local
community, and who oppose any extension of the domestic parcels post,
vie with its advocates in denunciation of the extortionate charges of
the express companies. But they go further--their associations are
fighting in many states to secure state regulation of express rates
and classification; and they are making practical progress, with every
prospect that their appeals for national regulation will be recognized
by the Interstate Commerce Commission, which has just won its fight
to regulate sleeping car charges. The opponents of parcels post want
lower and equitable rates for the transportation of small packages
of merchandise, but they believe that these rates, like those on the
transportation of larger packages, should be investigated and regulated
by the Interstate Commerce Commission, especially as various state
railway boards have recently demonstrated the fact that the express
companies are chiefly owned by the railroads and are merely vehicles
to bring into the coffers of the railroads larger profits than can be
secured thru government regulated freight rates.
That any one can find an example for the United States in the parcels
post systems over government owned railways in European countries,
the largest of which is smaller than Texas, is incomprehensible to
the average business man who is not asking for a government subsidy
to arbitrarily annihilate distance and the natural local advantages
of thousands of local business communities in order to increase the
present $200,000,000 mail order business; and this in a nation that
maintains a high tariff wall that may or may not “protect” the American
manufacturer, farmer and workman, but the chief effect of which, so far
as the distributor, the dealer, is concerned is to place him between
the upper and nether millstones--the butt of criticism, the subject of
Congressional inquiry on the high cost of living!
The mail order houses want a general parcels post; the general business
community is opposed to it. Suppose that both are actuated by selfish
reasons, one to gain an arbitrary advantage and the other to prevent
it--where do the people come in, those besides the mail order men and
the million retailers and their families?
Further Thoughts on Parcels Post pp. 3-5.
Charles W. Burrows.
Postmaster-General Meyer in an address to the New England Postmasters’
Association, Boston, October, 1907, and elsewhere, made recommendations
urging legislation giving to the Postal Department a greatly extended
parcels carrying service. The recommendations made were mainly two.
First. That the present rate of sixteen cents per pound for the mail
carriage of merchandise with a weight limit of four pounds per parcel
as the maximum shall be changed, reducing the rate to twelve cents per
pound (with fractions at rates from one cent up) and increasing the
weight limit to eleven pounds. The recommendation was that this should
be, like the letter charge, a flat rate to prevail anywhere within
the United States and its possessions irrespective of distance or
accessibility.
In support of this, his first proposition, he calls attention to
certain inconsistencies now existing in the service. He states that
an individual entering any post office in the country with a parcel
weighing four pounds, addressed to New York city will be obliged to
pay sixty-four cents for its carriage by post. If on the other hand it
is to pass through New York city to any one of the thirty-three foreign
countries with which we have postal conventions, the charge will be
but forty-eight cents. Further, should the package weigh more than
four pounds, it will be denied admission to the mails in this country
while it will be accepted and forwarded to any of these foreign lands
if it weighs up to four pounds six ounces, and in the case of some,
twenty-four of the countries it will be accepted even if it weighs so
much as eleven pounds, and it is on account of these inconsistencies
that he urges his legislation.
Let us first examine this point. General Meyer is quite correct in his
statement that it does cost more to send, for example, a pair of shoes
weighing just four pounds from Brockton, Massachusetts, to New York
city, than it would cost to send the same pair of shoes through New
York city to any one of the thirty-three foreign countries with which
we have postal conventions.
General Meyer, however, fails to state that while there is this large
number of foreign countries with which we have postal conventions, yet
not a single one of the twenty-four countries with which we have an
eleven-pound convention is on the map of Europe. They are all of the
nature of Jamaica, the Windward Isles, Venezuela, Barbados, Costa Rica,
Danish West Indies, etc., countries with which we do not do any great
volume of business.
It may further be stated that the weight limit with the remaining nine
countries, most of which are European, is in reality intended to be the
nearest approximation to our own domestic four-pound limit, that is,
it is two kilograms--about four pounds six ounces--and the European
countries all closely scrutinize this weight limit as the business is
one that involves a loss in its operation. Germany, for example, for a
number of years recognized an eleven-pound limit but changed to the two
kilograms about three years ago.
It should be borne in mind, moreover, that the exchange of parcels
between these countries and our own is made as a matter of comity or
international courtesy, and is permitted because the amount involved
is small. The work is done, too, in connection with the carriage of
first-class mail which produces a large profit.
To illustrate this matter, Great Britain carried in her parcels post
last year 104,819,000 parcels. Of these only 2,575,000 (less than 2½
per cent) went out of the country to all foreign countries, her own
colonial dependencies included, and to the United States she sent only
61,000 and we sent to her 89,000 only. The difference which is after
all what we make or lose upon, was some 28,000, and that was but a
fraction of a tenth of 1 per cent of the whole business. With some of
the other countries in question, we exchanged less than 1,000 parcels
in the last fiscal year, and with one of them it was less than 100,
while with all of them aggregated it was a total of but 330,000 parcels
dispatched and 181,000 received; so when we examine this question of
inconsistencies microscopically we find that it is truly of microscopic
proportion only, and may be disregarded as having no important bearing
upon the general question.
One Cent Letter Postage, Second Class Mail Rates, and Parcels Post. pp.
14-22.
Charles W. Burrows.
Paternalistic, socialistic legislation does not diminish the expense
account, but simply transfers it from one person’s shoulders to those
of others. It is with a people as with a person. If a father gives to
his boy a pair of shoes, the shoes cost the lad nothing, they are to
him as if they had descended from the skies, but the cost is a charge
upon the father, unless he stole them, and even if acquired dishonestly
the cost has simply been moved back upon the shoulders of the merchant.
The compensation for the labor of producing the pair of shoes and of
transporting them to the place where they are put to service is just as
much a charge upon the community whether one individual pays for them
or another. Similarly if the users of any governmental service do not
pay a high enough tariff for that service somebody else must foot the
bill.
Now to endeavor to demonstrate that whether the rates imposed for such
service be high or low the government will inevitably be a loser and in
large amount. To this end let us examine for a moment the parcels post
systems of foreign countries.
In Germany a zone system prevails, but the tariff is always low. In
England, a flat rate prevails, and this also is extremely moderate. And
low rates prevail in other foreign countries.
But circumstances alter cases, and with other things we should bear in
mind that the total area of Germany is but 208,000 square miles, while
the area of the one state of Texas is 265,000; in other words, Germany
is but four-fifths the size of Texas. The area of France is almost
exactly that of Germany, again but four-fifths the size of Texas. The
area of England is 50,000 square miles, less than one-fifth the size
of Texas. We have 26 states, any of which is larger than England, and
several many times larger. The area of Switzerland is just under 16,000
square miles, and you can put nearly seventeen Switzerlands into the
one state of Texas. The area of Belgium is but 11,000 square miles; you
can put 24 of it in the state of Texas. Again the density of population
in England is over 550 to the square mile; that of Belgium, more than
600 to the square mile; of Germany nearly 300 to the square mile.
Moreover, no haul in England can be long and but few hauls in the
United States would be short. You may perhaps be able to take 550
parcels from a central originating point like London, carry them for
an average haul of 41 miles, which is the case in that country, and
deliver them all within one square mile of territory at a small tariff
per parcel without material loss, though even England is losing money
upon this service with all conditions favoring.
But remember that the density of population of the United States by
the last census was under 25 to the square mile, and that the parcels
post service would not be mainly operative in densely populated Rhode
Island and near the large cities like Boston, New York, Philadelphia,
etc. If we imagine that 550 parcels are sent from New York city over
a long haul of more than 1,500 miles to the state of Wyoming, where
the density of population is one to the square mile, and have to be
distributed to 550 distinct individuals resident in 550 separate
square miles of territory, no sane business man can doubt that at any
tariff likely to be imposed the government would be a heavy loser.
According to one expert’s estimate, it is possible to carry the
second-class mail matter for short distances on dense traffic routes,
and in quantity lots to one address, that of a news dealer, for
example, as is done for the average daily paper for the part of its
circulation that goes by mail, up to 45 miles with little loss even at
this low 1c a pound rate, though first-class mail at the rate paid by
it can be transported nearly 5,000 miles before the service shows a
loss, and post cards over 11,000 miles.
Now let us suppose a parcels post statute to be enacted, and that the
rate be put at anything you please from 5c per pound to 10c per pound.
Even at the low rate of 5c per pound the express companies will do the
nearby business. If the rate be 10c per pound, the government will
have less to do, but it will still have much with the weight limit
considerably increased over the present amount. And if the rate be put
at 12c per pound, still the government will not make money, not on a
single parcel that it carries. All service that can be rendered at a
cost of less than the government charge will be handled by the express
companies.
We cannot have as does Germany a zone system. But without the
operation of a zone system, or a monopoly as on first-class matter,
the government will get all of the losing business and none of the
remunerative.
A friend of mine made a visit a few years ago to the state of
Washington. First he took from Cleveland a 2,000 miles railroad ride.
He then had a day and a half steamboat ride up the Columbia river,
following that a two days’ stagecoach ride to the remote locality that
he was visiting.
He remarked to me in connection with this trip that he should like to
see the government handle a parcels post service for that country at
a profit, even at a rate of 25c a pound, and added that every pound
of anything that went in there would most assuredly be handled by the
government were a parcels post service in operation, for it would be
the cheapest method of getting things there.
Now, the only reason we can have a flat rate upon first-class mail is
because the government makes that a monopoly, and you can send your
letters in no other way than through the post office. Hundreds of
millions of profitable short haul letters carried between the largest
cities of the country where traffic is very dense take care of the
proportionately small number of expensive long hauls.
To show how necessary this may be, permit me to inform you that the
first batch of letters the government sent to Circle City, Alaska,
though each was carried upon a 2c stamp, cost the department some $450
per letter. And it is solely due to the fact that the carriage of
first-class mail is a monopoly that inheres in the government that,
in spite of such expensive occasional service as this to Alaska just
cited, a large part of the receipts from first-class mail are net
profit.
Now, even at the low 1c per pound rate accorded to the monthly
magazines and other periodicals, not all of their wares are sent by
mail. There is you know no monopoly of carriage. The publisher can send
packages of his magazine ahead of time by slow freight at less than
the 1c per pound tariff, this freight service being used for the large
lots going over main transportation lines between the great cities and
without expensive changes of route. But upon the quarter hundreds and
half dozens and single copies that go for long distances by expensive
changes of route and to remote rural localities from back of Portland,
Maine, to back of Portland, Oregon, from the upper peninsula of
Michigan to the everglades of Florida, and to the crossroads and rural
free delivery customers of Ohio, New York and other states of the
Union, the government gets the losing job of carrying the periodicals.
I have endeavored in the explanation above to show that the difference
in social condition, density of population, length of haul, ability to
inaugurate a zone system, etc., will operate against our doing at a
profit what may be attempted though even there unsuccessfully, in Great
Britain, Germany, etc.
In Great Britain they pay for transportation but 55% of the charge,
having thus automatically 45% left for other expenses, and if anybody
can do the work at a profit they certainly are in position to attempt
it.
Again the average pay of a British postman is only one-half what we
give our carriers, which is another feature that must be reckoned with.
The first year they had this service in operation, it showed a heavy
loss. They were keeping account of the business, so much in detail that
if a man worked in two different branches they divided his salary.
The eminent gentleman who fathered the system, then said: “Oh, well,
you can’t expect that it should be profitable the first year. This
year we will make it profitable.” The next year the loss was more than
doubled. “Well,” said he, “bookkeeping is expensive, let us discard
bookkeeping.” And since that time they have kept no expense account on
the parcels post system.
Now let us examine what would result in the United States if we were
to enact parcels post legislation and attempt to get it in successful
operation.
I wish to make a quotation from the “Catholic World” of June, 1905,
describing the operation of the parcels post system of Germany by a
writer who favors its establishment here. He says:
“Anyone who has stood in a German post-office, and has seen
the constant stream of men, women and children, pouring in
through the doors with packages of all descriptions and sizes,
and lining up in never-ending rows before half a dozen and
more receiving officials; who has watched heavy wagons driving
up to the doors and depositing hundreds of packages, and who
has noticed the mountains of parcels heaped up in rear rooms
of the post-office, cannot but have been forcibly struck with
the magnitude of the parcels post system of transportation in
Germany.”
Does it not occur to the most casual thinker that if a comparable
service were enacted in this country the postal facilities of every
city would be inadequate to the work? Why, you would have to have
in New York city one hundred times as great an amount of space at
your disposal as the Post Office Department has or can readily get
at present. It would involve a thorough readjustment and enormous
expansion of the post office facilities in every large and small
city of the United States, involving an equipment expenditure which
would run to hundreds of millions of dollars--this irrespective of
the question whether it would produce a profit or a loss in operating
expenses.
There are in the United States more than 50,000 fourth-class
postmasters of these 50 per cent get $100 per annum or less, and 25
per cent of them get less than $50.00 per annum. How long would it be
before they would demand an increase of salary to something like $75.00
per month or more?
The Vice-President of the J. F. Stevens Arms and Tool Co., told me
that if such a service were inaugurated as that of Great Britain, it
would change entirely the methods of distribution of his own house.
They would be obliged to discontinue their present freight shipments
of arms in carload lots to the Pacific Coast at a rate of $3.00 per
hundred pounds upon a twenty-day time schedule for transportation, and
take advantage of the pound rate that the government would give to them
upon a six-day time schedule; that while it would involve increasing
their office force from less than 50 to more than 500 to handle the
work, the savings would be so large that they would have to do this
and to inaugurate many other most radical and far-reaching changes in
organization.
If this meant that the service was going to be reduced in cost, while
at the same time shortening the time schedule by more than two-thirds,
always an important factor in increasing rather than in diminishing
expense account, we should all of us find it our duty to welcome
the innovation, great a wrench as it might give to our business
connections. But the costs of the service will not be changed, simply
it will be a different set of people who pay them and no longer would
all the costs be paid by the proper parties--the manufacturer and his
customer, the consumer--but a large proportion by the public at large
in some way or other.
Parcels Post. pp. 6-15.
John A. Ordway.
I question whether there is a man in this hall who actually believes
that one cent of benefit will come to the farmer through reduction in
his cost price of anything he buys because of postal delivery. Each one
of us knows from practical experience that even should the method of
distribution be shifted, still the expense of reaching the consumer
would increase by the methods advocated, which combined with the
profits of inevitable monopoly would cause the poor farmer to wonder
whether this alluring vision of substantial comfort had vanished. Yet
this sham shibboleth of benefit to the farmer has other advocates
besides this small percentage of theorists. The most persistent,
continuous, noisy clamor has proceeded from those whose selfish
self-seeking is as plain to the searcher for motives as the printed
types upon their pages. The editors of various magazines and newspapers
not in touch with the cost and expenses of mercantile life have
almost universally used their columns to create a public sentiment to
accomplish this commercial revolution. Their solicitude for the farmer,
their keen distress at what they term his unfortunate dilemma in being
forced to supply his present needs through present channels, would
wring the stoutest heart, were it not for the perhaps uncharitable
suspicion that their tears were of the crocodile variety, and their
anguish a thin disguise for rank cupidity. “The poor farmer,” more
advertisements; “the unfortunate farmer,” for more advertisements; “we
love and would protect the farmer,” still more advertisements; “we will
organize and preach of deliverance,” for more advertisements; and so
on and so forth shall be our cry until the jobbers’ percentage and the
retailers’ narrow margin shall be diverted into “more advertisements,”
has been the wailing but insistent note everywhere. “No matter if the
actual cash loss of second class matter in 1909 did show a grand total
of $64,128,000, what care we? Still shall our cry be, ‘Help the poor
farmer.’” Shame on such transparent hypocrisy from a public press that
should lead and inspire by truth untainted by the virus of debased
commercialism.
_The Consumer Will Buy Goods No Cheaper_