as now organized and operated would be utterly unable to compete with
express companies upon purely a business basis.
Furthermore, it should not be expected that the express companies
would quietly drop out of business. They would make a tremendous fight
for existence, and would at all events retain such portions of the
business as they are now doing at less than the lowest postal rates.
The equipment for the express service would, therefore, have to be
duplicated in every town and village of the United States. It is folly
to presume that the public would not in the end be required to pay
for the enormous loss which would be involved in such an uneconomical
procedure.
Would it not, therefore, be better to place the proper safeguards
around the existing organizations which are fitted to perform the
transportation service by the best and most economical means, rather
than that the government should undertake the impossible, i. e.,
competition with private companies upon a purely business basis?
Parcels Post Problem. p. 20.
Parcels Post in England.
One of the most concise and yet comprehensive reviews of the operation
of the parcels post system in England is that of I. A. Fleming, taken
from an exchange, and it is as follows:
“American friends of so-called ‘postal reforms’ point to the absence
of express companies in the Kingdom of Great Britain as one of the
good results that have been obtained, and say this is entirely due to
the existing postal laws. But if there are no express companies in
Great Britain, there are scores and hundreds of forwarding agents that
perform the functions of our American express companies. The railroads
are themselves engaged in the forwarding business, making low rates
for service by fast express, exceeding in limit of weight and size of
packages received by the limitations of the postal service by many
pounds even by hundreds of pounds.
“Any attempt at comparison between carrying methods in Great Britain
with those in vogue in the United States is useless, because of the
very short distance between points in the former.
“I asked the managers of some of the leading stores in Ireland,
Scotland and England if parcels post offered great opportunities for
them to send business into the country, and without exception they
admitted that the business by post was decreasing, while the express by
rail and by forwarding agents looking for assignments was increasing.
“Eleven pound packages and under are but a small quantity of package
shipments.
“From the best information at hand, it is evident that the big carriers
have nullified parcels post in Great Britain, and what they have left
the railroads have picked up. These carriers receive all manner of
parcels, put hundreds in baskets, and thus get the very lowest rates
of transportation. They give their patrons lower rates than they could
otherwise obtain, and because of their concessions charge them four
cents on each consignment, a ‘booking charge’ which gives the carrier a
very fair return for his kindness to the shipper. Little packages go
by parcels post as a rule, and many of the larger department stores use
the mails for delivering goods to out of town customers.
“These rates but add to the burdens of the merchants of the interior.
The independent retailer in the country has few friends. Cheap rates,
co-operative stores, chain stores, mail-order houses by the thousand,
fares paid entirely, special excursions (such as Harrods of London are
now running to the sales) with fares paid and ‘tontine’ establishments
tend but to make the independent merchant, be he a grocer or ‘draper’
as they call dry goods dealers, only a small potato of the kind that
are many in the hill.
“Our mutual friends, the English general merchant, the independent
grocer, and the small retailer, have been almost completely relegated
to a parsimonious living by co-operation, mail-order retailing,
the carrier or forwarding agent, and last but not least, by cheap
excursions to the cities.
“That these same evils will, if they obtain a foothold in the United
States accomplish the same results for the American general merchant
and retailer I firmly believe.”
A. B. C. of Parcels Post. pp. 4-5.
C. W. Spofford.
Q. What is the plan of the rural parcels-post proposed by
Postmaster-General Meyer?
A. It proposes to carry packages originating at a local office of
a rural route for 5 cents for the first pound and 2 cents for each
additional pound, with a limit of 11 pounds. Thus, an 11-pound package
would be carried to any point on a rural route for 25 cents. It is
significant that the rates are the same as those proposed by advocates
of a parcels-post applicable to distances within the United States and
its insular possessions. This proposal seems to be but an entering
wedge for general parcels-post.
Q. Why was rural parcels-post proposed?
A. It was proposed by the Postmaster General as a special favor to
country merchants.
Q. Have country merchants asked for any such special favor?
A. No. On the contrary, they are opposed to it on the following grounds:
1. They do not seek class legislation.
2. The plan would be impracticable in its operations.
3. It would discriminate between towns, favoring the town with the
greatest number of rural routes, regardless of its trading advantages.
Q. Would rural parcels-post be of any benefit to the farmer?
A. No. For the following reasons:
1. The farmer can now arrange with the rural carrier for the delivery
of packages over 4 pounds at rates mutually satisfactory.
2. The proposed rates would be prohibitive on groceries, machinery
repairs and on the bulky merchandise most likely to be delivered under
this new arrangement.
3. To secure the rural parcels-post service, the farmer would be
compelled to buy his goods at the particular town where he gets his
mail, when he might prefer to buy elsewhere.
Parcels Post. pp. 3-9.
F. E. French.
I have the distinguished and pleasing honor of being here today
upon your invitation as a representative of the American League of
Associations, which includes representative wholesalers in nearly every
important city in the United States. The creation of this League has
for its object the development and advancement of the general welfare
and mercantile interest of retail merchants in the smaller communities.
The relations of its members to all retail merchants are intimate and
personal. The retailers desire to buy merchandise from the wholesaler.
The wholesaler desires to sell merchandise to the retailer. In short,
whatever conserves, promotes and advances the merchandising ability and
success of the former, is a direct proportionate benefit to the latter.
Whatever relaxes the intimacy between these interests, deprives the
retailers of their truest and best facilities as merchants and money
makers. The thoughtful and progressive wholesaler and retailer believe
that any rural parcels post bill will unmistakably impair, curtail and
finally dissolve this relationship, which in reality is a partnership
between the wholesaler and the retailer. The proposed parcels post
legislation will gradually eliminate the country store and the very
heart and pulse of country life. Believing this to be absolutely and
unmistakably true, we should stand as a unit in opposition to any
extension of the parcels post system, upon rural routes, even upon an
experimental basis. If the country merchants will co-operate with the
wholesalers in an unyielding resistance to any congressional action
that would in any way interfere with the present system of rural
deliveries, the proposed legislation will be defeated.
In official words, it is contended that rural parcels post will enable
local merchants to hold and increase their trade. On the contrary, the
well informed wholesaler, manufacturer and retailer contend, and the
entire orthodox system of trade distribution replies, that any parcels
post, whether it be a general parcels post law or a rural parcels post
law, although intended to be of benefit to the retailers and a boon to
the rural population, would, in reality, be a great detriment to both.
Mark well how the camel enters the tent: First his head, next his
neck, and last his huge and unwelcome body. First on a few routes only
and in experiment only, a local parcels post; next a complete rural
parcels post; and finally a general parcels post. Let us beware of
the beginning lest in the end we be overcome. During the inauguration
of the first and experimental stage, those interests most to be
profited by this perilous innovation will remain silent, while from
the experiment no safe deductions could perhaps be made which would
indicate the effect of parcels post extension upon your prosperity and
posterity. Finally you will discover that the currents of trade are
running past your door rather than through it, and in that day your
elimination becomes a certainty. In that day also every wholesaler who
has so long found in the country merchants a sure and steady outlet
will know even better than he knows now that rural parcels post, and,
much more, the general parcels post is a dangerous blow to country life.
At the risk of telling you much that you know, let me state some of the
factors of this great problem so that we may think as one man over its
solution.
The mail order houses, some of the farmers, and various other people
who reason narrowly, even with generous intent are sustaining the
government in its purpose to go into business in behalf of a class
of the American people at the expense of the whole American people,
and through a bill in Congress they ask all of the people to sanction
a trial of this new species of government aid in certain selected
places. Our government reasons that if it is made more practicable for
rural free delivery routes to become shipping lines between their own
termini, everybody depending for income and outgo on such routes will
profit by this enlarged service. On the contrary, the American League
of Associations holds that everybody will eventually suffer.
The great problem about which we are all trying to think clearly
and think together, has been summarized so effectually by a retail
merchants’ paper in the central west, that I do not hesitate here to
quote its protest against parcels post, endorsed by thousands of retail
merchants in every section of America. The protest reads as follows:
“Parcels post is wholly unnecessary, since rural delivery carriers are
authorized to carry parcels weighing over 4 pounds, and the matter
of compensation is decided by carrier and merchant or by carrier and
farmer. Merchants and farmers generally have not availed themselves of
this service, for the very good reason that there is no need for it.
“If adopted, parcels post will be immediately seized upon as a delivery
outlet by mail order houses which would ship orders by freight or
express in bulk lots to local agents for deposit in the post office to
be forwarded by the rural deliveries. The catalogue houses have already
many of these agents selected, and they have been busily engaged in
distributing catalogues for weeks past. As soon as a rural parcels
delivery became effective, these agents would become active in the
solicitation of business in unfair competition with home merchants, as
these agents would have no taxes, no rent, no salaries, etc., to pay.
“Rural parcels post is admittedly merely an entering wedge for
extension along European lines. That would mean severe demoralization
of our country towns which are dependent almost wholly upon the farmer
trade for existence, and which afford the farmer a good home market for
every dollar’s worth of products he has to sell. If he does not buy
his supplies where he sells his products, he not only demoralizes the
business of his home town, but he also deprives himself of his home
market. If his home market town dwindles into insignificance through
the gradual loss of trade, necessitating the closing of stores and the
emigration of merchants and clerks, then the income will shrink so
seriously that there will be insufficient funds to provide for schools,
churches, libraries, hospitals, good roads, etc.
“Every farming community and its market center are interdependent. It
is impossible to injure one without injuring the other. The parcels
post would injure both farmers and country merchants. We protest
against it as being designed to further the formation of a mail
order trust that could eventually control all important channels of
distribution and thus levy upon the people any desired tribute.”
Today the people’s problem is to conserve our natural resources and
keep the farmer on the farm. Will the gradual impoverishing of the
village storekeeper keep the farmer on the farm? Will the decline of
the social center, the decline of the schools and the decline of the
church facilities keep the farmer on the farm? Will long distance
shopping do more for isolated communities than the sight of real goods
and the warm touch of living people? Will the picture catalogue or the
hearty salesman do more to keep vital the currents between seller and
buyer? Would a heavily laden parcels post messenger, running between a
mail order agency and a distant farm, often through a foot or two of
mud or snow, compensate for the disappearance of the mart and congress
of our country’s rural life--the independent, thriving, hospitable
store?
Fellow merchants, it is our duty to sustain that store, and to do it
now. That store is imperiled by pending legislation, whether by the
institution of a local or a general parcels post. If this new service
be established by the government, even with the best of motives, we
must admit that:
The postal deficit will be increased,
The country’s commercial system revolutionized,
The delivery of legitimate mail delayed,
The population of rural communities depleted, and their progress
retarded.
And that the government will promote class legislation, for in seeking
to favor the farmer who needs no such preferment, it will subsidize a
commercial interest whose basic business principle is hostility to the
best trade distribution.
Every thinking individual agrees that rural free delivery has been
of great benefit, but the masses of the people do not agree that a
financially unprofitable service shall be put upon its feet at the cost
of the man who has been the mainstay of the farmer in season and out of
season--the country storekeeper.
Why Parcels Post Is Not a Good Thing for This Country. pp. 1-5.
W. P. Bogardus.
Parcels post is a scheme in which it is proposed to utilize the post
office facilities to carry merchandise. Packages under the proposed
bills up to 11 pounds are to be carried in the mails for that sum
varying according to weight, from 2c to 25c. It is claimed by the
friends of parcels post that by adopting the measure the deficit in
the Post Office Department will be wiped out, and a handsome surplus
will result. Claims are easily made. But facts have more value in a
discussion like this. We are cited to the results in Germany as a
substantial proof that post parcels is a paying proposition. They
forget to mention that in Germany there are 340 people to the mile and
an average haul of mail of but 41 miles, while in this country the
average haul of mail is 540 miles and there are less than 23 people
to the mile, and they ignore the difference of conditions in the two
countries.
But let us look at the report from the German budget. For the year
ending March 31st, 1910, the income, in round numbers, from the Post
Office Department was $168,000,000 and that included the revenue from
the telegraph business. The expenditures were $148,000,000. This on
the face shows a surplus of $20,000,000, but in the statement of
expenditures there is no account taken of the cost for transportation,
on the ground that the government owns the railroads. In this country
it costs 20 per cent. to transport the mails. That is, one-fifth of
the cost of the Post Office Department is for transporting the mails.
Now add 20 per cent to the expenditures and you have $177,600,000, or
a deficit of $9,000,000. In England, the friends of parcel post claim
that there is a surplus of $24,000,000 in the Post Office Department.
But that includes the receipts from the telegraph messages. In England
the average charge for packages is 9.8c per pound. In this country it
is proposed to send parcels post packages over a territory 30 times
larger than England at an average of not quite 3c per pound to a
population only about twice as large as there is in England.
When the blind Postmaster General of England first introduced post
parcels he reported the results of the measure, but found that there
was an increasing deficit each year, and the reports were discontinued.
It does not seem possible to get exact figures as to the cost of the
system in England, but the presumption is that if there was a large
profit in the plan they would parade the fact. As it is, can we expect
to make parcels post in this country a profitable scheme? With an
average haul of 540 miles to a population of but 23 to the mile, is it
possible to carry goods at less than 3c per pound at a profit, if it
cannot be done in those thickly settled countries at a much higher rate?
If it cannot be done at a profit, why should the government undertake a
scheme that will result in a loss? Rural free delivery is costing the
country $28,000,000 more than it is getting for the service, and only
about one half of the rural population is supplied with the service.
If the government enters into the plan, it must needs have a monopoly,
if successful, of the carriage of packages up to the limit of 11 lbs.,
else the express companies will take all the short haul packages
and leave the long haul packages for the government to carry. Such
conditions prevail at present. The express companies take all the short
haul packages for less than the government charges and leave the long
haul packages for the government to carry, with the result that there
is no profit in the business to the government.
If there is a monopoly established on packages up to 11 pounds, what is
to hinder the government raising the limit of weight?
Are we prepared to let our government enter into competition with
private enterprise? Is it a function of the government to transport
freight? Is it a province of the government to correct abuses of
private corporations, in transportation and other lines, by entering
into competition with them, and using the power the entire people has
given it, to force corporations to be less greedy? It would seem that
the recent decisions by the Supreme Court would justify us in believing
that there is power enough in the laws of the land to protect the
people’s rights.
Perhaps in Australia the government enters into more radical schemes
than in any other country. And this fact is being developed. That the
extension of the control of industry and business, and the activities
in every field of production and distribution is but an incentive
for a greater demand on the government for further movements in the
same direction. The outcome of such policies is a final ending up
in complete socialism. Do we want our government to be a paternal
one? Are we ready to look to it for our transportation facilities?
If we are is there any reason to feel that the government will stop
at transportation? Will there not be other avenues of commercial
enterprise taken over by the government? One of the great dangers to
us, as a people, is the tendency to a centralization of power in the
government at Washington and a willingness of a great many people to
lean on the government for a solution of many problems that they should
solve without the aid of the government.
Parcels Post and Postal Savings Banks, pp. 1-2.
Gilbert N. Haugen.
MR. CHAIRMAN: I want to direct attention to the suggestions made
in a very able and interesting address delivered by Mr. Meyer,
Postmaster-General, at a banquet of the New England Postmasters’
Association, Boston, Mass., October 12, 1907, a part of which I will
read:
To illustrate the incongruities that exist: Any individual
entering the post-office here in Boston or in any other city or
town in the country, with two parcels, each weighing 4 pounds,
can send one parcel to New York for 64 cents, while for the
other parcel, which is addressed to some one in a foreign land
and goes via New York, he will have to pay but 48 cents, for
the reason that the rate to foreign countries is 12 cents a
pound, while the rate to our own people is 16 cents a pound....
Therefore I assume that our Representatives in Congress will
realize that they can not afford to stand for a policy that
compels our own people to pay 4 cents more on packages to
people living in the United States.
This statement is indeed misleading: not that I charge the
Postmaster-General with any intent to deceive or mislead, for I regard
him as a gentleman of integrity, intelligence, ability, and actuated
with the highest motives and with a determination to do justice to all,
and I am not questioning his motives, but will endeavor to present the
facts in the light that I see them. When we have all of the facts, I
will venture to assume that Representatives in Congress will realize
that they can afford to stand for a policy that compels people living
in foreign lands to pay more than people living in our own country. The
Postmaster-General’s statement as to the sending of two pieces, each
weighing 4 ounces, is correct in some cases, and the domestic rate in
some cases is higher than the foreign; but in the majority of cases
foreign rates are the highest. In his excellent address to enlighten
members of the New England Postmasters’ Association and the country,
he might have gone further by saying: “To illustrate the incongruities
that exist, any individual entering the post-office here in Boston,
or in any other city or town in the country, with two parcels, each
weighing 1 ounce, can send one parcel to New York for 1 cent, while for
the other parcel, which is addressed to somebody in foreign lands via
New York, he will have to pay 12 cents, for the reason that the rate
to foreign countries is 12 cents per pound or fraction thereof, while
the rate to our own people is only 1 cent per ounce. Therefore the rate
on the parcel addressed to somebody in foreign lands is 12 times as
great as is the rate on the parcel addressed to New York.” And he might
have referred to the report of the Second Assistant for the year ending
June 30, 1907, pages 25 and 26: