GOVERNMENT POSTAL EXPRESS VS. PRIVATE EXPRESS COMPANIES

At certain periods of each year, the Post Office Department takes a count of the packages mailed in the parcel-post, the postage collected on them, and their total weight. These periods of count are the first two weeks in April and the first two weeks in October. By multiplying their sum by 13, we can thus obtain a fairly accurate figure for the total number of parcels mailed within the year in 1917—roughly 1,120,000,000. On the other hand, the number of parcels carried in that year by the express companies may be put at 280,000,000. (Note 1.)

Accordingly in 1917 the number of parcels expressed in the United States was roughly as follows:

By Parcel-Post 1,120,000,000

By Express Companies 280,000,000

But in 1912, if the average express charge was the same as in 1909, and no reason is known why it should not have been, the number of parcels carried by the express companies was about 320,000,000. In that same year the number of parcels carried by the post office, under the four-pound limit, was 240,000,000. In other words, the effect of the entrance of the Government into what had been a field of private enterprise resulted within five years in an increase of more than 450% in the extent of the service rendered by the Government, whereas the express company's services to the public in that time actually decreased 12½%, although the extent of the total services rendered by the two combined agencies increased 250%.

Nor can the increase in the parcel-post business be explained by the assertion that the Government performs this business at a great loss. The balance sheet of the Post Office Department since 1912 has been as follows:

1912 $1,781,435 deficit

1913 4,551,984 surplus

1914 4,390,796 surplus

1915 11,297,861 deficit

1916 5,853,655 surplus

1917 9,887,398 surplus

Now, it is obvious that the financial account of the entire Post Office Department is composed of too many divergent elements for the financial account of the parcel-post alone to have any conclusive bearing upon it. But it is equally obvious that if so extensive and particularly so expensive a function of the Postal System as the parcel-post had been conducted at a considerable loss, the fact would be reflected, to some extent, at least, in a growing deficit of the Department as the parcels conveyed grew in number from 240,000,000 in 1912 to 1,120,000,000 in 1917. Nor have the railroads made good before the courts or before the Interstate Commerce Commission their contention that their recompense for carrying parcels is unfairly low.

COMPARISON WITH OTHER COUNTRIES

Similar findings on the comparative value of the Government service and the private companies' service in the express fields may be obtained from another source. Up to January 1, 1913, outside of parcels weighing less than four pounds, the private express companies had unchallenged exploitation of the express service of the United States. How did the extent of our service in 1912 compare with the extent of the service in other lands in which our private express companies found no counterparts?

Obviously, there is no absolute basis for fruitful comparison. Greater distances, more sparsely settled territory, greater wealth, greater geographical specialization of function and hence greater need for integration between different sections, higher standards of living, more diversified demands—these are some of the features of the problem here as compared with the problem abroad which make an absolute comparison of express services valueless. But practically every feature of the express situation would affect also the freight traffic of the United States as compared with the freight traffic abroad. In other words, the express traffic of the United States before 1913 should have had the same ratio to the freight traffic of the United States as the express traffic of other lands to the freight traffic of other lands, in case the United States express companies were as efficient in comparison with foreign express agencies as the railroads of the United States in comparison with railroads.

In a hearing before a committee of Congress in 1912, Mr. David J. Lewis, then a congressman from Maryland, presented the evidence, which he had obtained from the original reports of the railways of the countries concerned:

Pounds Pounds Ratio

Freight Express Express

Shipped Shipped Shipped to

Country Date Per Capita Per Capita Freight

Argentina 1909 10,680 165.4 1 to 64

Austria 1908 11,260 116.6 1 to 97

Belgium 1909 16,320 199 1 to 82

Germany 1909 15,980 140.4 1 to 113

France 1908 7,480 140.6 1 to 53

Hungary 1908 5,540 67.8 1 to 84

United States 1909 16,300 99 1 to 165

In other words, the express facilities of the United States were used 50% less than in the country above showing the lowest development of express service and about 200% less than in the country showing the highest development of express service. When it is remembered that express is much quicker and more convenient than freight, although more expensive, and that the industrial processes of the United States have long been and still are characterized by a keener demand for speed and convenience, irrespective of cost, than the industrial processes of other countries, the above table becomes eloquent with significance.

With respect to the costs of the express service, the same basis for comparison may be used.

Ratio

Average Average Freight

Freight Express Charges

Charge Charge to Express

Country Date Per Ton Per Ton Charges

Argentina 1909 $1.95 $6.51 1 to 3.2

Austria 1908 .74 3.77 1 to 5

Belgium 1909 .53 4.92 1 to 9.3

France 1908 .95 6.88 1 to 7.2

Germany 1908 .76 3.80 1 to 5

Hungary 1908 .93 3.68 1 to 3.9

United States 1909 1.90 31.20 1 to 16.4

And yet the statesmen at Washington have disposed and doubtless will still endeavor to dispose of the proposal to have the Government own and manage the express service of the land by speeches on texts to the effect that the spirit of America demands individual freedom; that that is the best Government which governs the least; that incentive to productive endeavor is possible only in private establishments and completely disappears in the public service; to which will now doubtless be added the charge that such a proposal smacks of Socialism and that every red-blooded American understands that anything and everything Socialistic is undeniably un-American!

The implication of the above figures, however, is undeniable for the man who trusts thought as well as emotions. The Postal System has gone into the express field and, in competition with the express companies, by their respective showings, has in five years rendered to the American public far more valuable service than that rendered by the express companies. The opponents of Government ownership and management have been ruthlessly confuted. They predicted graft—there has been none. They prophesized inefficiency—the figures give them the lie. They foretold unwholesome political intrusions—whatever may be the unwholesome features of the present operations of our postal system, those operations are less unwholesomely attached to political influences than ever before. There is accordingly every reason a priori to assume that the Government would render more valuable service than that rendered by the express companies in the remaining section of the express field unoccupied by it and still occupied only by the express companies.

But there is no necessity for relying upon a priori reasoning. The results to be achieved by the consolidation of the express service of the land into the postal system of the land are definite and demonstrable.

EXPRESS SERVICE VS. PARCEL-POST

Before defining and demonstrating the advantages of a Government postal express, however, it may be necessary to discuss more fully the features which differentiate at present the parcel-post from the express service.

They fall into two classes, (a) Special forms of service, and (b) Rates.

Under (a):

Express Company Parcel Post

1. Collects the parcel free of charge. 1. ——

2. The fee includes insurance up to $50 without charge; additional insurance up to any amount may be contracted for by special fees 2. Special fees for all insurance—insurance limit, $100.

3. All sizes and weights are accepted. 3. Weight limit—70 lbs. (300miles). Size limit—84 inches, length and girth combined.

4. Collects fee from consignee at destination free of charge. 4. Collects fee from consignee at destination at a fee.

5. Collects cost of article itself to any amount. 5. Collects cost of article up to $100.

6. Buys articles for customers at a fee. 6. ——

7. Sells articles for customers at a fee. 7. ——

It will be immediately realized that some of the features of the express service which are not rendered at present by the parcel-post could be and should be rendered by the parcel-post for one fee without separate charges. On the other hand, it will be realized that some of these features should be rendered by the parcel-post only as separate privileges for which separate fees should be charged, as, for instance, the service of collecting parcels from the shipper. (Note 2.)

For instance, there seems to be no good reason for limits upon the size and weight of the packages in the parcel-post. These limits have steadily been expanded in the parcel-post system from its inception, and the process has so strikingly demolished whatever arguments for size and weight limits may have previously been considered that they no longer seem valid.

In Austria, Belgium, Denmark, Germany, Hungary, Norway, Rumania, the old Russia and Switzerland, packages weighing up to 110 pounds may be sent by parcel-post (and after 100 pounds the freight service of the railroads is readily available in the United States as elsewhere). In 1915 France and Italy imposed weight limits of 22 pounds. In Belgium, Germany, Hungary, Norway, Rumania and Sweden there is no size limit, except that in certain cases special fees are charged for unusually large sizes. In Italy, the limit is 24 inches in any one dimension, although in certain cases packages 41 inches long are accepted. The limit in Denmark is 39 inches in any dimension. In France, the limit is 60 inches in any direction. With no limits upon weight and size, the parcel-post might handle the problem of especially cumbersome articles whose size is disproportionately large for their weight by following the example of the express companies, charging a special rate twice as large as the normal rate. And as to shipments so bulky that especial transportation facilities are needed for them another page might be taken from the books of the express companies, and special preliminary arrangements stipulated before such shipments are accepted.

Moreover, the experience of other countries proves that there is no insurmountable obstacle to removing the limit upon the amount for which a package may be insured. Merely, special provisions might be necessary, and perhaps an additional fee above the normal insurance fee charged, for articles such as jewelry, for which space in safes would have to be reserved, and for bullion, etc. The following countries seem to have no insurance limit: Austria, Denmark, Germany, Hungary, Portugal, Rumania, the old Russia, Sweden, Switzerland. The limit in France is $1,000; in Italy, $200. In addition, some countries give automatic indemnity without separate insurance fee, up to a small amount.

Similarly, now that the parcel-post experiments for small amounts have proved successful, the limit upon the amount collected from the consignee for the expressed article itself could be and should be either removed or greatly advanced, the fee for this service advancing with the amount collected. Nor does any cogent barrier present itself against a separate division in the parcel-post system to sell articles consigned to it, or even to buy them, the fee again synchronizing with the amount of the principal involved.

The features inherent in the express service and not now in the parcel-post, as the express service and the parcel-post now function, might be preserved by either of two methods. They might be added to the present parcel-post as separate features to be utilized only when especially desired and for which separate fees would be levied. Or else the Government postal express might be organized into two separate divisions—one for the services now rendered by the parcel-post, with possibly certain additional fees for certain secondary features, to be determined by experience in administration; and the other for the services now rendered by the express companies, except those proved by experience in administration to be homogeneous with the parcel post service proper, and hence properly adhering to the first division. Either the method of complete consolidation or the method of two divisions would meet the exigencies of the service—only the results of experience and experiment could award greater merit to one or the other.

The fact that these separate functions of the express service are of too great value and in too great demand to be eliminated is seen by a study of the relation of the express shipments and the parcel-post shipments to the express and the parcel-post rates, this constituting the second point of departure (b) between the public method and the private method of transporting parcels. The differences between the express rates and the parcel-post rates may be graphically realized from a comparative table. As will be seen, the differences between the two sets of rates may be roughly summarized in one sentence—as a rule, the parcel-post rates are lower than the express rates for the shorter distances and the smaller parcels.

Accordingly, if the value of the service rendered by the two systems were nearly identical, the express company's shipments would be almost entirely of larger parcels and for the greater distances. But as a matter of fact it is generally known that a large proportion, a very large proportion, of the shipments sent by express are at weights and for distances at which the parcel-post rates are lower than the express rates, often decidedly lower. Only the need to a shipper of all, some, or any one of the above-discussed features of express service not duplicated at present in the parcel-post system can explain this situation. It is therefore imperative that the Government make provision for all these features in establishing a Government postal express.