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diff --git a/.gitattributes b/.gitattributes new file mode 100644 index 0000000..6833f05 --- /dev/null +++ b/.gitattributes @@ -0,0 +1,3 @@ +* text=auto +*.txt text +*.md text diff --git a/36464-8.txt b/36464-8.txt new file mode 100644 index 0000000..ebd3476 --- /dev/null +++ b/36464-8.txt @@ -0,0 +1,2032 @@ +Project Gutenberg's The Mail Pay on the Burlington Railroad, by Anonymous + +This eBook is for the use of anyone anywhere at no cost and with +almost no restrictions whatsoever. You may copy it, give it away or +re-use it under the terms of the Project Gutenberg License included +with this eBook or online at www.gutenberg.org + + +Title: The Mail Pay on the Burlington Railroad + +Author: Anonymous + +Editor: Post-Office Department + +Release Date: June 19, 2011 [EBook #36464] + +Language: English + +Character set encoding: ISO-8859-1 + +*** START OF THIS PROJECT GUTENBERG EBOOK MAIL PAY *** + + + + +Produced by Jeannie Howse, Adrian Mastronardi, The +Philatelic Digital Library Project at http://www.tpdlp.net +and the Online Distributed Proofreading Team at +http://www.pgdp.net (This file was produced from images +generously made available by The Internet Archive/American +Libraries.) + + + + + + + + + +THE MAIL PAY ON THE +BURLINGTON RAILROAD + +Statements of Car Space and all Facilities Furnished +for the Government Mails and for Express and +Passengers in all Passenger Trains on +the Chicago, Burlington and +Quincy Railroad + + + + +Prepared in accordance with requests of the Post-Office Dept. + + + + +THE MAIL PAY + +ON THE + +Chicago, Burlington & Quincy Railroad + + +The present system under which the Government employs railroads to +carry the mails was established in 1873, thirty-seven years ago. Under +this system, the Post Office Department designates between what named +towns upon each railroad in the country a so-called "mail route" shall +be established. Congress prescribes a scale of rates for payment per +mile of such mail route per year, based upon the average weight of +mails transported over the route daily, "with due frequency and +speed," and under "regulations" promulgated from time to time by the +Post Office Department. To this is added a certain allowance for the +haulage and use of post office cars built and run exclusively for the +mails, based upon their length. The annual rate of expenditure to all +railroads for mail service on all routes in operation June 30, 1909, +was $44,885,395.29 for weight of mail, and for post office cars +$4,721,044.87, the "car pay," so-called, being nine and five-tenths +per cent of the total pay. The payment by weight is, therefore, the +real basis of the compensation to railroads. The rate itself, however, +varies upon different mail routes to a degree that is neither +scientific nor entirely reasonable. The rate per ton or per hundred +pounds upon a route carrying a small weight is twenty times greater +than is paid over a route carrying the heaviest weight. The Government +thus appropriates to its own advantage an extreme application of the +wholesale principle and demands a low rate for large shipments, which +principle it denounces as unjust discrimination if practiced in favor +of private shippers by wholesale. The effect of the application of +this principle has been to greatly reduce the average mail rate year +by year as the business increases. This constant rate reduction was +described by Hon. Wm. H. Moody (now Mr. Justice Moody of the United +States Supreme Court) in his separate report as a member of the +Wolcott Commission in the following language: + + "The existing law prescribing railway mail pay automatically + lowers the rate on any given route as the volume of traffic + increases. Mr. Adams shows that by the normal effect of this law + the rate per ton mile is $1.17, when the average daily weight of + mail is 200 pounds, and, decreasing with the increase of volume, + it becomes 6.073 cents when the average daily weight is 300,000 + pounds." + +NOTE.--Since 1907 the railroads have been paid at much reduced rates. +On the heavy routes the pay is now 5.54 cents per ton per mile. + +Post Office Department officials have announced, as their conclusion +from the results of the special weighing in 1907, that the average +length of haul of all mail is 620 miles. + +The bulk of the mail is now carried on the heavy routes at 5.54 cents +per ton per mile, or $34.34 per ton for the average haul, that is, for +one and seven-tenths cents per pound. + +The railroads, therefore, receive less than one and three-fourths +cents per pound for carrying the greater part of the mails. + + * * * * * + +But the rate reduction for wholesale quantities has not had the effect +of reducing the actual remuneration of the railroads for carrying the +mails to nearly so great an extent as the increasing requirements for +excessive space for distributing mails en route. This feature was +likewise discussed by Judge Moody in his report in the following +language: + + "The rule of transportation invoked is based upon the assumption + that the increase of traffic permits the introduction of + increased economy, notably, the economy which results in so + loading cars that the ratio of dead weight to paying freight is + decreased. Yet this economy is precisely what our method of + transporting mail denies to the railroads. Instead of permitting + the mail cars, whether apartment or full postal cars, to be + loaded to their full capacity, the Government demands that the + cars shall be lightly loaded so that there may be ample space + for the sorting and distribution of mail en route. In other + words, instead of a freight car, a traveling post office." + +An illustration of the extent to which the reductions have been +carried, as shown upon one railroad system, is set forth in the letter +of January 21, 1909, addressed to the Committee on Post Offices and +Post Roads of the House of Representatives by Mr. Ralph Peters, +President of the Long Island Railroad, who states that the actual cost +to his company of carrying the United States mail for the year was +$122,169, while the total compensation for that service paid by the +Government was $41,196. Mr. Peters says: + + "The Long Island Company received from the Government for mail + service performed in expensive passenger trains one-half the + rate received by it per car mile for average class freight in + slow-moving freight trains." + +The Long Island Company notified the Government that it would decline +to carry the mails by the present expensive methods, unless Congress +makes some provision for a more adequate compensation. A notification +of similar import has been given by The New York, New Haven & Hartford +Railroad Company, the principal carrier in New England. Their position +in this matter will undoubtedly be taken by other roads, because the +same condition of inadequate compensation prevails upon hundreds of +small railroads and mail routes, especially in the Southern and +Western States. + +Notwithstanding these facts, a powerful interest, which commands the +public ear and derives great profit from the one-cent-per-pound rate +of postage, has, in order to divert public attention from itself, for +years industriously and systematically circulated false statistics and +false statements among the people regarding the railroad mail pay, and +is now circulating them. + +The extent to which the public is being deceived regarding the +railroad mail pay is disclosed daily. In a recent hearing before the +Senate Committee on Post offices and Post-Roads, Senator Carter of +Montana said: + + "We are all getting letters on this subject. I received the + other day a letter from a very intelligent lady in Montana + claiming that the Government is paying to the Northern Pacific + Railway on that branch line for carrying the mail $97,000 per + year. On inquiring at the Post Office Department, I find that + the total compensation of the Northern Pacific Company for mail + service on that line is $3,070 per year." + +This state of things was a sufficient reason for the Post Office +Department to institute the present series of inquiries tending to +show the space in passenger trains upon the railroads demanded and +used by the Government for the mails in comparison with the space +devoted to express and passenger service, and the relative rates of +compensation in each class of service and the extent to which the +roads are receiving for carrying the mails the cost to them of +performing the service. In order to give these facts fair +consideration, it is not necessary to admit that "space" is, or is +not, a better and more workable basis for determining what is +reasonable mail pay than "weight," nor to admit that the companies are +only entitled to be paid by the Government for the service rendered to +it the bare cost of rendering that service, that is, to receive back +the train operating cost. Questions of speed and facilities furnished, +and the preference character of the traffic and the exceptional value +of the service, and other elements, must be considered as well as +space and cost, but that is no reason why the relative proportion of +space used and the relation of compensation to cost should not be +ascertained and given due weight, in the consideration of the +important question of what is adequate mail pay to the railroads. + +The following pages are based upon answers to the interrogatories of +the Post Office Department and contain a statement of the mail service +performed by the Chicago, Burlington and Quincy Railroad Company, a +system extending westward from Chicago into eleven different States +and embracing approximately ten thousand miles of main and branch +lines. + +The two principal tables of interrogatories were sent out under date +of September 28, 1909, by the Post Office Department as the basis for +this investigation. + +These tables indicate the minute and thorough manner which the +Department employed in making this inquiry. + +Some questions having arisen regarding the meaning and scope of the +word "authorized" in connection with the returns of space occupied and +used for the mails in Post Office cars and apartment cars, and in +certain other features, the Department, under date October 23, 1909, +issued an important supplementary letter of instructions. + +Pursuant to these interrogatories, instructions and requests the +Burlington Company has filed with the Department the exact and +detailed statements, train by train and car by car, of the mail +service upon each of the one hundred and two mail routes on its +system, large and small, for the month of November, 1909, which were +thus called for. These answers state the facts and state them in the +manner prescribed wherever possible. Every inch of space on passenger +trains and cars which in these tables is shown to be occupied or used +for mail or express or for passengers is set down from actual +measurements made, car by car, and not upon any "estimate" or +"consist" basis. + +In the appendix will be found four tables prepared under the direction +and supervision of Mr. DeWitt which contain the results of this +investigation into the mail service upon the Burlington, as disclosed +in these statements. + +Exhibit A is a statement of the car facilities or space used in every +car in service on the road during the month of November for mail, and +for express or occupied by passengers based upon replies to questions +prescribed in Form 2601. + +Exhibit B is a statement of the station facilities, furnished for the +mail, prepared on Form 2602. + +Exhibit C is a statement of Revenues and Expenses and of train and car +mileage, prepared on Form 2603. + +Exhibit D is a statement of the number, and cost, and present value of +Post Office cars and Apartment cars, prepared on Form 2605. + + +THE INTEGRITY OF THE RETURNS. + +In November, 1909, all the service rendered in all passenger trains +and cars of the Burlington system, reduced to a common basis of car +foot miles (that is, each foot of linear space that was carried one +mile), amounted to 529,936,590 car foot miles, divided as follows: + + In Passenger + Service. Mails. Express. + 428,164,920 62,246,130 39,525,540 + (80.8%) (11.75%) (7.45%) + +The original circular of the Post Office Department contained certain +"notes," to the effect that in reporting the length of postal cars and +apartment cars, and the space therein used for mails, the railroad +companies should only report the length or space "authorized" by the +officials of the Department; also that in reporting space used in cars +for what is known as the "Closed Pouch Service," the railroads should +make an arbitrary allowance of six linear inches across the car for +the first 200 pounds or less of average daily weight of pouch mail and +three linear inches for each additional 100 pounds. + +These directions were modified by the subsequent circular letter of +the Department, dated October 23, 1909. + +This letter, among other things, directs the company to take credit +for "surplus" space in post office cars and apartment cars, if +actually used for the storage of mails. + +The practical difficulties attending the measurement and proper +allotment of the space used for the mails in postal and other cars run +on a passenger train will be better understood when it is known that +such space is or may be described in at least eight different ways, +and is actually used on the Burlington road as follows, namely: + +1. Space in post office cars specially "authorized" (43.03%). + +2. Space in apartment cars specifically "ordered" (20.69%). + +3. Space ordered in post office cars operated in lieu of apartment +cars (4.3%). + +4. Additional space actually used for storage of mails when the +railroad company operates larger post office or apartment cars than +the authorization calls for (1.5%). + +5. Space in storage cars actually used for mails (12.87%). + +6. Space in baggage cars used for closed pouch mails (4.06%). + +7. The return deadhead movement of space ordered and required in one +direction only (8.35%). + +(Ninety-five per cent of all the "space" shown in these returns for +the Burlington, as used for the mails, comes within the foregoing +seven classes, as properly authorized space about which no question +can arise.) + +8. "Surplus" space; that is, space furnished to the Government in post +office and apartment cars in excess of actual requirements (5.2%). + +This five per cent is the only portion of the space claimed as used +for mails regarding which any question can be raised, affecting the +integrity of these returns. + +What is the correct view as to this five per cent? + +It is manifestly against the interest of the railroad company to +furnish space for mails that is not required, and it will never +furnish such space if it can be avoided. But the "requirements" of the +Post Office Department are not fixed and certain quantities, by any +means. It is entirely impracticable for any railroad company to keep +on hand at all times a supply of cars of all lengths in order to meet +exactly the requirements of the Department officials. + +These statistics have been called for by the Post Office Department to +enable it to make accurate comparisons between the space used and the +facilities furnished on passenger trains for the three classes of +service performed, that is, for express companies, for the Government +in mail carriage, and for passengers. The point of the whole inquiry +is this: + +Does the Government contribute to the cost of the passenger train +service upon the railroads of the country its fair share, that is, in +proportion to the space and facilities it demands and requires the +companies to furnish for the mails? + +In making the comparison all the car space in all passenger trains +must be measured and tabulated and has been measured and tabulated in +the tables here submitted. + +A passenger car may have seats to accommodate eighty persons; the +average load it carries may be fifteen persons. But in making up these +returns of "space," all the empty space in that car is credited as +passenger space. That car may likewise be loaded only one way and +returned "dead head," but these returns have credited such return +movement as passenger space. + +The same is true of the express service in these returns. All space in +all baggage and express cars set aside for the express company's use +is, in these tables of statistics, credited to express, whether in +fact loaded or "surplus," or "dead head" space. + +How is a comparison possible, unless the space credited to the mails +is recorded in the same way? As stated above, only five per cent of +the whole space is involved in the question of "surplus" space, and if +that five per cent should be entirely thrown out, the percentage +results would not be materially changed. + + +RESULTS UPON THE BURLINGTON ROAD. + +The Government cannot justly ask a railroad company to carry the mails +without profit. + +The passenger business on the Burlington road is conducted without +profit if it is charged with the expenses assignable to passenger +traffic, and a proper proportion of the expenses not thus specifically +assignable, and a fair share of the taxes and the charges for capital +in the form of interest on bonds and dividends on stock. The profit in +the business comes from the freight. + +This fact gives force to the present inquiry of the Post Office +Department to determine whether the Government, in proportion to the +service and facilities it requires from the roads on passenger trains, +is contributing a fair proportion of the passenger train earnings. If +the passenger train business, as a whole, is carried on at a loss, the +Government ought, in fairness, to stand at least its share of the +loss. + +The earnings of the Burlington Company from all passenger train +service in November were $2,242,099. + +The following table shows the earnings from passengers, from mail and +express, and the space used in passenger trains by the three classes +of traffic and the proportion of earnings contributed for facilities +so used: + + _Earnings._ _Car Foot Miles._ + Passengers $1,859,839 (82.95%) 428,164,920 (80.80%) + Express 187,825 ( 8.38%) 39,525,540 ( 7.45%) + Mails 194,435 ( 8.67%) 62,246,130 (11.75%) + ---------- ----------- + Total $2,242,099 529,936,590 + +This table shows that for each one thousand feet of space used in +passenger trains the three classes of passenger traffic contributed in +earnings as follows: + + Passengers $4.34 139.1% + Express $4.75 152.2% + Mails $3.12 100% + +In proportion to the space occupied and facilities used on passenger +trains, the Burlington road receives from passengers 39 per cent more +than the Government pays for mail transportation, and from the Adams +Express Company 52 per cent more; that is, the express business pays +the railroad company better than the Government pays for carrying the +mails by 52 per cent. + +If the Government had paid to the railroad company as much as the +express company for each foot of space required and used on passenger +trains, it would, for November, have paid $101,233 more than it did +pay, or an increase in annual mail pay of more than a million dollars. + + * * * * * + +It may be of interest to note that the returns for the Pennsylvania +System just being filed show the following: + + _Earnings._ _Car Foot Miles._ + Passengers 79.8% 76.2% + Express 12.6% 13.7% + Mails 7.6% 10.1% + +For each 1,000 feet of passenger train space used on the Pennsylvania +the traffic contributed in earnings as follows: + + Passengers $4.45 139% + Express 3.91 122% + Mails 3.20 100% + +On the Pennsylvania the passenger business is worth to that company 39 +per cent more than the Government mail business, and the express +business is worth 22 per cent more than the mails, indicating that +express rates are relatively higher in the West than the East, but +that neither in the East nor in the West is it a paying business to +carry the mails at present rates. + + + + +IS THE GOVERNMENT PAYING THE RAILROADS FOR CARRYING THE MAILS THE COST +OF DOING THE WORK? + + +No. The Government paid the C. B. & Q. for carrying the mails in +November $194,435, or at the rate of $2,333,220 annually. + +The total operating expenses of the road for that month were +$5,452,830. + +The items of passenger train operating expense strictly assignable +were as follows: + + Transportation Expense $454,208 + Fuel passenger engines $132,709 + Salaries passenger engineers 100,511 + Salaries passenger trainmen 87,557 + Train supplies, etc. 55,664 + Injuries to persons 19,904 + Station employees 17,160 + Joint yards and terminals 15,610 + Miscellaneous 25,093 + -------- + Maintenance of Equipment $107,626 + Repairs, passenger cars $67,650 + Depreciation, passenger cars 39,639 + Miscellaneous 337 + ------- + Traffic Expense $48,971 + Advertising $17,249 + Outside agencies 16,673 + Superintendence 10,272 + Miscellaneous 4,777 + ------- + Maintenance of Way, etc. $12,970 + Buildings and grounds $7,053 + Joint tracks, etc. 4,440 + Miscellaneous 1,477 + ------ + General Expense $13,580 + Salaries, clerks, etc. $8,994 + Insurance 2,478 + Legal expense 1,153 + Miscellaneous 955 + ------ -------- + Total $637,355 + + Proportion operating expense not assignable $1,278,016 + ---------- + Total $1,915,371 + +A large part of the operating expenses of every railroad, such as +maintenance of roadway, station expense, general office expense and +the like, are common to both the freight and passenger service, and it +seems impossible to assign all of them specifically. The Post Office +Department, in the circular under which the roads are reporting, +recognizes this condition and calls for the "proportion" of the +expense "not directly assignable and the basis of such apportionment." + +The apportionment of non-assignable expense on the Burlington has been +made on the basis of train mileage. + +In the month of November the mileage of passenger trains was +forty-five and four-tenths per cent of the total train mileage, and +the foregoing sum ($1,278,016) of non-assignable expense is forty-five +and four-tenths per cent of the operating expenses for that month, +common to both kinds of traffic, and therefore incapable of specific +assignment to either. + +These two classes of passenger expense (assignable and non-assignable) +aggregate $1,915,371 monthly, or at the rate of $22,984,452 per year, +and 11.75 per cent of this sum, or $2,700,675, is the annual operating +cost to the Burlington Company of transporting the Government mails. + + Cost of carrying the mails $2,700,675 + Earnings from carrying the mails 2,333,220 + ---------- + Loss $367,455 + +These figures show that, in proportion to the service rendered, the +Government paid to that company $367,455 less than the actual cost of +doing the work, not including anything for taxes, nor for interest +paid by the company upon its funded debt, which was necessary to be +paid, in order to preserve the property, to say nothing of a return +upon the capital represented by the capital stock. + +The correct mail's proportion of taxes and interest for the year is +$634,713, which added to the $367,455 loss above operating expenses, +shows a loss of $1,002,168: + + Loss, operating expenses over revenue $367,455 + 11.75% of taxes and interest 634,713 + ---------- + Annual loss on mails $1,002,168 + +This takes no account of the annual value at two cents per mile of the +transportation of inspectors and postal employees, other than clerks +in charge of the mails ($74,352), nor of clerks in charge of the mails +($746,340). + +These two items of service rendered to the Government by the C. B. & +Q. road are of the admitted value of $820,692 annually. + +The railroad company has the same duty and legal responsibility +towards these clerks as towards passengers. + + * * * * * + +Is there another fair way of testing this question? + +In a letter dated March 2, 1910, from Hon. Frank H. Hitchcock, +Postmaster-General, to Hon. John W. Weeks, Chairman of the Post Office +Committee of the House, printed in full herewith, he states it is +estimated that the average annual cost to the railroads of operating a +post office car for the Government is $19,710, including $2,049 for +lighting, heating, repairs, etc., and that the total average pay +received for the car and its contents including post office car pay, +is $16,638 per annum, showing a loss in this branch of the service of +$3,073 per car. There are 1,111 full postal cars in actual service in +the country, and the loss thereon, therefore, aggregates $3,414,103, +to say nothing of the 231 postal cars in reserve. + +But that is the smaller part of the loss. There were 3,116 apartment +cars in actual use in 1909, averaging twenty feet in length, and the +cost of operating each of these, according to Mr. Hitchcock's figures, +would be one-third of $19,710, or $6,570. + +The average haul of apartment cars is 48 miles, and the average load +in a twenty-foot apartment car is officially stated as 607 pounds, +making the rate per mile on routes carrying an average daily weight of +only 607 pounds, $68.40 per annum, and the average earnings, +therefore, $3,283 per year, an average loss of $3,287 per car and an +actual loss per year from operating the 3,116 apartment cars of +$10,642,292, to say nothing of the 639 apartment cars in reserve. + +The C. B. & Q. has 76 full post office cars and 104 apartment cars, +and applying to them the foregoing figures given in Mr. Hitchcock's +letter, the loss from operating them in 1909 was $575,396, adding to +which $634,713, the mail's proportion of taxes and interest, that +must be included in estimating "cost," in which the Government's +business should share, the estimated loss on the business was +$1,210,109, compared with $1,002,168, arrived at by charging the +Government business with 11.75 per cent of the passenger expense, that +being its proportion of the space used in passenger trains. + +The Government should be willing to pay fairly for what it exacts from +the railroads, and it exacts from the C. B. & Q. 11.75 per cent of its +passenger train facilities. If it had paid 11.75 per cent of the +passenger train expenses of the road in 1909, it would have paid +approximately a million dollars more than it did pay. + +The Government which demands from the railroads that they build and +transport daily over their roads for its benefit 5,100 traveling post +offices as full postal cars and apartment cars should be willing to +pay what the Postmaster-General estimates to be the actual cost of +operating those cars, and a fair proportion of the taxes and interest. + +If it had paid such cost in 1909, it would have paid to the C. B. & Q. +approximately a million dollars more than it did pay. + + +RESULTS ON VARIOUS MAIL ROUTES. + +The foregoing are statements of results on the Burlington System as a +whole, showing earnings and expenses and facilities furnished to the +Government mail service. + +It may be of interest, and throw light on the situation, to show +results for November upon several separate mail routes in the system, +ranging from small routes carrying 200 pounds of mail daily, up, +through routes carrying weights, respectively, of 1,300, and 8,000, +and 20,000 pounds daily, to the heaviest route carrying 192,000 +pounds, covering the fast mail service from Chicago to Omaha. + +Weights of express packages are not kept on separate mail routes and +statements therefore of express earnings for such separate mail routes +are necessarily estimated, but, as given in the following tables, they +are approximately correct and corroborate the comparative results for +the Burlington system as a whole, which results are based upon exact +figures for express as well as for mails and for passengers. + + +I. + +Route 157,030, Kenesaw to Kearney (Nebraska), 24.68 miles. Average +Daily Weight 216 Pounds. + + _Percentage _Percentage _Should Earn _Did + of Space of on Basis of Actually + Occupied._ Earnings._ Space Used._ Earn._ + Passenger 83.79 88.90 $1,238 $1,314 + Mail 9.37 6.02 139 89 + Express 6.84 5.08 101 75 + ------ + $1,478 + +The mail earnings on this route are $89 per month, or $3.44 daily. The +service for the Government is performed in an apartment car fifteen +feet long, and closed pouch service, four trains carrying mail daily, +except Sunday, giving an actual return to the railroad of three and a +half cents per mile run, or about one passenger fare at three cents +per mile although the Government demands the use of a 15-foot car +fitted up as a post office in which a postal clerk is carried free, +and this car must be lighted, heated and kept in repair, and carried +over the route each way daily, except Sunday. + +On this branch the actual earnings on passengers per passenger car are +55 cents per car mile. + +The post office apartment car equals one-quarter of a passenger car, +and the mail should, on this basis, earn at least 14 cents per mile, +but it does earn, for all the mail service, at the rate of 3-½ cents +per mile, less the expense of delivering mail to and from post +offices. + +During the weighing period the mails are carried on 90 days and +weighed on 90 days, but under the Cortelyou order, these aggregate +weights are divided by 105 and the result is called the "average" and +forms the basis of pay on this route for four years. + +This mail service in a traveling post office on an expensive railroad +is paid about one-third the rate per mile that the Government pays to +a rural route carrier who carries an average of 25 pounds of mail. + + +II. + +Route 157,028. Odell to Concordia, Kansas. 72 Miles. Average Daily +Weight, 282 Pounds. + + _Per cent _Per cent _Should Earn _Did + Space_ Earnings_ on Space_ Earn._ + Passenger 80.82 81.44 $2,482 $2,501 + Mail 11.76 9.38 361 288 + Express 7.42 9.18 228 282 + ------ + $3,071 + +Mail earnings $288 per month (26 days), or $11 per day. + +This service demands a twenty-five-foot apartment car each way for +which the pay amounts to 7.64 cents per car mile run, or about the +fares of two passengers at three cents per mile who may occupy one +seat. + +The service is six days per week, but the aggregate weight carried in +the six days is divided by seven to obtain the Cortelyou "average" on +which the pay is based. + +The payment for a twenty-five-foot traveling post office is a little +over half the pay per mile for a rural route carrier. + + +III. + +Route 135,012. Streator to Aurora (Ills.). 60 Miles. Average daily +weight, 1,303 pounds. + + _Per cent _Per cent _Should Earn _Did + Space_ Earnings_ on Space_ Earn._ + Passenger 72.84 85.64 $4,800 $5,643 + Mail 17.38 7.51 1,145 495 + Express 9.78 6.85 644 451 + ------ + $6,589 + +Mail earnings (26 days), $495 per month, or $19 per day. + +Four trains on this road carry mail daily, two each way, two in a +twenty-five-foot mail apartment and two in a thirty-foot mail +apartment, an average earning rate of 7.88 cents per car mile. + +The passenger cars on this branch carry an average of 24 passengers +each, and earn 48 cents per car mile. The average mail apartment +furnished is half a passenger coach. + +These four apartment cars, at the same rate as the passenger cars (24 +cents per mile), would earn $18,029 per year. + +The passenger train earnings on the branch are $79,000 a year. The +mails demand 17.38 per cent of the facilities, and on that basis +should earn for the company $13,730. + +The mail earnings were $5,940, this being the annual compensation +after a reduction of nine and one-half per cent through the Cortelyou +order, requiring the aggregate of 90 weighings to be divided by 105 to +ascertain the "average." + + +IV. + +Route 164,004. Edgemont to Billings (Wyoming). 366 Miles. Average +Daily Weight, 8,087 Pounds. + + _Per cent _Per cent _Should Earn _Did + Space_ Earnings_ on Space_ Earn._ + Passenger 85.79 89.22 $85,476 $88,895 + Mail 10.43 6.18 10,392 6,156 + Express 3.78 4.60 3,766 4,583 + ------- + $99,634 + +Two 60-foot postal cars are run daily each way. + +The mail earnings are $6,156 per month, or $205 per day. + +The total earnings of the passenger trains on this road are $1,195,000 +a year, and the mails required 10.43 per cent of the passenger train +facilities; on this basis they ought to pay $125,000 a year. + +These post office cars are hauled 534,000 miles every year. The +Postmaster-General estimates that the actual cost to the railroads of +operating a sixty-foot postal car is 18 cents per mile. At this rate +the Burlington Company should be paid $96,000 a year for the service +of the postal cars only. + +It is, in fact, paid for all the mail service on this road $73,872 +annually. + + +V. + +Route 135,010. Galesburg to Quincy (Ills.). 99.93 Miles. Average Daily +Weight, 19,727 pounds. + + _Per cent _Per cent _Should Earn _Did + Space_ Earnings_ on Space_ Earn._ + Passenger 69.45 79.44 $28,864 $33,015 + Mail 19.70 8.45 8,187 3,511 + Express 10.85 12.11 4,509 5,034 + ------- + $41,560 + +Mail earnings from all sources $3,511 per month, or $117 per day. + +The service is performed in three 60-foot postal cars, two 16-foot +apartments and one 27-foot apartment, each way daily; also one 44-foot +postal car and one full storage car, daily except Sunday, in addition +to some space furnished for closed pouches in ordinary baggage cars. + +The car space provided for the mails on this route is equivalent to +ten full sixty-foot cars daily, over the whole length of the route, or +365,000 car miles a year. At 18 cents per mile the pay would be +$65,700, whereas the actual pay is only $42,132. If the Government +paid for the service in proportion to the facilities it demands and +receives, it would pay $98,244. + + +VI. + +Route 135,007. Chicago to Burlington (205 Miles). Average Daily +Weight, 192,540 pounds. + + _Per cent _Per cent _Should Earn _Did + Space_ Earnings_ on Space_ Earn._ + Passenger 73.14 74.72 $210,134 $214,671 + Mail 17.19 13.74 49,387 39,462 + Express 9.67 11.54 27,782 33,170 + -------- + $287,303 + +On the basis of space used and facilities provided for the mails, the +Burlington road is underpaid $119,000 a year on this route. + +Two-thirds of the weight of mail is carried in special trains run at +great speed and unusual expense, for which no extra allowance is made. +The extension of the route to Omaha is across Iowa, where it is "Land +Grant," and subject to land grant deductions. + +The Government made a "gift" to the company in 1856 of lands amounting +to 358,000 acres and then valued at $1.25 per acre, or $447,500. + +The mail pay deductions to June 1, 1910, on account of this Iowa land +grant aggregate $1,650,000, and still continue at the rate of $62,000 +a year. + +Neither in the foregoing six statements of results upon separate mail +routes, nor in the general statement of results upon the Burlington +Road has any allowance been made for the expense to the company of +what is called the "Mail Messenger Service." + +At all points where the post office is not over one-fourth of a mile +from the railroad station the railroad company must have all the mails +carried to and from the post office. + +What an important item of expense this amounts to appears in the +following extract from the Report of the Wolcott Commission, which +states: + + "Out of 27,000 stations supplied by messenger service 7,000 are + paid for by the Department at a cost of between $1,000,000 and + $1,100,000 per annum, leaving the other 20,000 stations to be + supplied by and at the expense of the railroads." + +Investigation has shown that on mail routes, where the average mail +pay of the railroad company is $900 a year, the average cost of this +mail messenger service is $400, calculating only $100 as the expense +for each station where they are required to perform the service. +There are instances where the company pays in cash each year, for +delivering the mails between station and post office, considerably +more than the Government pays for the entire mail service over its +line of road. There is no such feature in the express service. + + +WHY DO RAILROADS CARRY THE MAILS WITHOUT PROFIT? + +The question is sometimes asked why the railroads continue to carry +the mails if there is no profit in the business. Carrying the mails is +not the only traffic which railroads take upon terms that would +bankrupt them if applied to all their business. + +There is no profit in running passenger trains on most railroads; that +is, the receipts from all the traffic carried on passenger trains are +not sufficient to pay a train mileage or car mileage share of +operating expenses and taxes and charges for the use of capital. But a +large part of this cost of conducting the business of a railroad, such +as taxes, interest, maintenance of roadway, general office expenses, +and many others, would continue substantially the same if the +passenger trains were discontinued. Having the railroad, and its +taxes, and interest, and maintenance expenses to meet, anyhow, no +railroad can afford to refuse any income from passenger trains that +amounts to more than their train operating cost. On the same principle +they accept low rates per mile as a share of through passenger fares +which, if applied to all passenger fares, would show a loss. The road +is there, the trains are running, and the cars only partially loaded; +the addition of through passengers may not materially increase the +expense, and the road is better off to accept the business at less +than the average cost, rather than to reject it. But whatever the +passenger trains lose must be made up by the freight trains if the +road is to continue in business. + +The constant aim of the managers of the railroad is to secure from +each class of traffic not only the operating cost peculiar to that +traffic, but a proportion of the general cost; but business is not +necessarily rejected on which it is impossible to secure such +proportion. + +Many of the reasons which impel them to run passenger trains without +profit apply to their acceptance of the Government mails. They +facilitate the freight business; it is better to carry them at a loss +than not to carry them at all. + +But is that any reason why the Government should not pay fair value +for what it receives? Is it good policy for the Government to force +upon the companies the alternative of carrying the mails at a loss or +refusing to carry them at all? + +What are the mails? + +They are the letters and packets that are conveyed from one post +office to another under public authority. + +Who conveys them? The railroads convey nine-tenths of them. + +The railroads are the mail service of this country. The Post Office +Department states that it receives from the people who use the mails +eighty-four dollars on every one hundred pounds of letters and post +cards. Who makes that money for them? The railroads. The railroads +convey those letters and cards from post office to post office--not +the Government. + +For a service like that the Government can afford to pay. + +What does it pay? + +On the great bulk of the business the railroad companies which do the +work and earn the money receive less than two dollars a hundred. On +every pound of first-class mail the Government collects eighty-four +dollars a hundred. + +The fact that the Congress, for purposes of general education or other +reasons, thinks it is good public policy to carry the magazines and +other second-class matter at one dollar a hundred is something about +which the railroads have nothing to do and nothing to say. + +The mail pay of the railroads has been reduced in the past four years +more than eight million dollars a year. Part of this was done by act +of Congress, but the greater part came from the arbitrary and illegal +Cortelyou order. + +These reductions were made without any hearing being granted to the +railroads. Hearings were refused by the Committee which reduced the +pay three and a half millions, and no pretense of a hearing was made +by Secretary Cortelyou when his autocratic order was issued reducing +the mail pay approximately five million dollars a year. This order was +an arbitrary and unwarranted and illegal exercise of executive power. + +The last hearing allowed to the railroad companies on this subject was +by the Wolcott Commission, 1897 to 1900, composed of eminent Senators +and Representatives. They reported, after two years' investigation, +that the mail pay was reasonable and should not be reduced. Upon the +question whether railroads should be asked to carry the mails at a +loss their report expressed the following views: + + "It seems to the Commission that not only justice and good + conscience, but also the efficiency of the postal service and + the best interests of the country demand that the railway-mail + pay shall be so clearly fair and reasonable that while, on the + one hand, the Government shall receive a full _quid pro quo_ for + its expenditures and the public treasury be not subjected to an + improper drain upon its funds, yet, on the other hand, the + Railway Mail Service shall bear its due proportion of the + expenses incurred by the railroads in the maintenance of their + organization and business as well as in the operations of their + mail trains. + + "The transaction between the Government and the railroads should + be, and in the opinion of the Commission is, a relation of + contract; but it is a contract between the sovereign and a + subject as to which the latter has practically no choice but to + accept the terms formulated and demanded by the former; and, + therefore, it is incumbent upon the sovereign to see that it + takes no undue advantage of the subject, nor imposes upon it an + unrighteous burden, nor 'drives a hard bargain' with it. The + Commission, therefore, believes that the determination whether + the present railway mail pay is excessive or not should be + reached, as near as may be, upon a business basis, and in + accordance with the principles and considerations which control + ordinary business transactions between private individuals." + + +THE POSTAL CAR PAY. + +The wide credence which has been given to the statement that the +Government is paying to the railroads an annual rent for postal cars +equal to the cost of building them is remarkable. + +The Government does not pay a rental for any car. The idea is an +erroneous one, and is based upon ignorance regarding the payment of +what is called "Post Office Car Pay." + +Originally, the mail business on railroads was the transportation of +mail bags, and was essentially a freight traffic. But its character +has entirely changed. + +The business now consists almost wholly in providing moving post +offices, expensive to build and expensive to operate, in which the +average weight for which pay is received is about two tons in full +postal cars and six hundred pounds in apartment cars. + +The Post Office Department weighed all the mails carried in all postal +cars and apartment cars in the country during October, 1907, and the +average weight of mail on the Burlington road loaded in a forty-foot +postal car was found to be less than 2,000 pounds; in fifty-foot cars +it was 2,500 pounds; and in sixty-foot cars it averaged less than +4,500 pounds; in apartment cars it was 607 pounds. + +The average load carried in an ordinary freight car on the Burlington +road is from 36,000 to 40,000 pounds. Railroads, as a rule, haul a ton +of paying or productive freight for every ton of dead or unproductive +load. In the Government mail business they carry nineteen tons of dead +weight for each ton of paying weight. + +These cars are fitted up as post offices and are used for distribution +en route in order to expedite and facilitate the prompt transmission +and delivery of mails. They largely take the place of very expensive +distribution offices in cities. + +The railroads provide cars for freight traffic, but refused to build, +and maintain, and haul these moving post offices with their clerks and +paraphernalia, without pay. That is the post office car pay of which +so much is said. + +The truth regarding this feature of the subject is clearly stated in +the following recent letter from the Postmaster-General: + + +(_Congressional Record_, March 5, 1910, 61st Congress, Second Session, +Vol. 45, No. 61, Page 2852.) + + LETTER OF THE POSTMASTER-GENERAL RELATIVE TO THE COST OF + FURNISHING AND OPERATING RAILWAY POST OFFICE CARS. + + "OFFICE OF THE POSTMASTER-GENERAL, + WASHINGTON, D.C., March 2, 1910. + + "Hon. JOHN W. WEEKS, + _Chairman Committee on Post Offices and + Post Roads, House of Representatives_. + + "MY DEAR SIR: In response to your inquiry made of the Second + Assistant Postmaster-General in regard to the cost of + maintaining and operating railway post office cars and its + relation to the compensation received by railroad companies for + the same and your reference to the speech delivered by Senator + Vilas on the subject in the United States Senate, February 13, + 1895, I have the honor to advise you as follows: + + "The Department has not at this time sufficient information upon + this point to give from its own records a reliable estimate. As + you are aware, we have recently asked railroad companies to + submit answers to inquiries with reference to the cost of + operating the mail service, and it is believed that when these + shall have been received we will be in a position to furnish + such information. Inasmuch, however, as it may be of importance + to you to have estimates made from time to time by others and + such incomplete information as we have at present, I submit the + following: + + "The cost of operating a railway post office car has been + variously estimated (but not officially by the Department) as + from 15 to 30 cents a car mile. The average run per day of such + a car is about 300 miles. Estimating the cost at 18 cents a car + mile, the total cost of operating such car for one year would + be $19,710. + + "The specific items which constitute this total cost are not + definitely known to the Department. However, as to the cost of + lighting, cleaning, repairs, etc., the General Superintendent of + Railway Mail Service furnished the following estimates before + the Commission to investigate the postal service in 1899, viz.: + Lighting, $276; heating, $365; cleaning, water, ice, oil, etc., + $365; repairs, $350; proportion of original cost of car + (estimating the life of a car at fifteen years and the original + cost at $6,000), $400; total, $1,756. Recent inquiry gives the + following as the approximate cost of maintaining a car at the + present time: Lighting (electric), $444; heating, $150; + cleaning, $360; repairs, $300; oil and brasses, $120; interest + on cost of car (at $7,500), $300; annual deterioration + (estimating the life of a car at twenty years), $375; total, + $2,049. These figures give the cost of a car built according to + the Department's standard specifications. The cost of modern + steel cars being built by some of the railroad companies is from + $14,000 to $15,000. + + "The compensation received by a railroad company for operating a + car and carrying the mails in it would be approximately as + follows: + + "The pay for a 60-foot car at $40 a track mile per annum, for a + track mileage of 150 miles, would be $6,000. The average load of + a 60-foot car, according to statistics obtained recently, is + 2.83 tons. The rate per ton of an average daily weight of 50,000 + pounds carried over the route is $25.06. At this rate the + company would receive $10,637.97 per annum for the average load + of mail hauled in the car. This sum added to the specific rate + for the railway post office car ($6,000), makes the total pay + for the car and its average load $16,637.97 per annum. + + "Senator Vilas' argument was based upon the theory that the + rates fixed for railroad transportation alone, based on the + weights of the mails carried, are adequate compensation for all + services rendered, including the operation of railway post + office cars, and that, therefore, the railroad companies would + be required to operate postal cars owned by the Post Office + Department for the compensation allowed by law for the weight of + mails alone, including apartment-car space and facilities. Such + theory is not justified by the facts, as will appear from the + following: + + "A careful perusal of the debates in both Houses of Congress + which led to the enactment of the present law fixing the rate of + pay for railroad transportation of the mails and for railway + post office cars clearly indicates that the additional + compensation for railway post office cars was intended to cover + the additional expense imposed upon the railroad companies for + building, maintaining, and hauling such cars. The companies at + that time insisted that these cars, which were practically + traveling post offices, did not carry a remunerative load, and + that therefore the amount of pay, based on weight, did not + compensate them for their operation. This led to the specific + appropriation for railway post office cars. In this connection + it should be borne in mind that the purpose of the railway post + office car is to furnish ample space and facilities for the + handling and distribution of mails en route. Therefore, the + space required is much greater than would be required for merely + hauling the same weight of mails. + + "In regard to any proposal for Government ownership of postal + cars, other facts as well as the above should be given + consideration. Such cars must be overhauled, cleaned, and + inspected daily. It would be necessary to either arrange with + the railway companies for this service or for the Department to + employ its own inspectors, repair men, and car cleaners at a + large number of places throughout the country, which would + probably be more expensive than the cost to the railway + companies in that respect at present. It would hardly be + feasible to establish a Government repair shop. Therefore, the + Department would be compelled to use the shops of the several + railway companies throughout the country. Without the closest + supervision and attention of the Government's inspectors it + could scarcely be expected that our cars would receive the same + consideration in railroad shops as those owned by the railway + companies. These shops are frequently congested, and it is + probable that the railroad work would be given the preference. + + "Yours very truly, + "FRANK H. HITCHCOCK, + "_Postmaster-General_." + +The Wolcott Commission carefully investigated the whole subject of +Postal Car Pay and their conclusions regarding this form of +compensation and its reasonableness are set forth in their report in +the following language: + + "Until a comparatively short time prior to 1873 the distribution + of the mails in transitu was unknown. Prior to the late sixties + the railroads simply transported the mails, which were delivered + at the post offices and there distributed. Accordingly, 'weight' + as the basis of compensation was at the time of its adoption and + long thereafter entirely adequate. + + "For a few years, however, prior to 1873 the distribution of the + mails in transitu had been practiced to a sufficient extent to + satisfy the Post Office Department and Congress that it was a + desirable innovation and a branch of the postal service that + should be very much enlarged. But it was recognized that if the + railroads were not only to transport the mail itself, but also + to supply, equip, and haul post offices for the distribution of + the mails, the compensation upon weight basis that had obtained + up to that time was not entirely adequate and just, and + therefore the law of 1873, as already indicated, contained a + provision allowing additional compensation for railway post + office cars. At first these cars were mostly not exceeding 40 or + 45 feet in length and of light construction, similar to baggage + and express cars. + + "From the policy of the Department, however, of constantly + demanding better and better facilities from the railroads and + the introduction of every improvement that could be discovered, + it has come to pass that, today, the railroad post office cars, + with the exception of a few obsolete ones that are being + discontinued as rapidly as practicable, are elaborate + structures, weighing between 90,000 and 100,000 pounds; built as + strongly and fitted up, so far as suitable to the purpose for + which it is intended, as expensively as the best Pullman and + parlor cars; costing from $5,200 to $6,500; maintained at a cost + of $2,000 per year; traveling on an average of 100,000 miles per + annum; provided with the very best appliances for light, heat, + water, and other comforts and conveniences; placed in position + for the use of the postal authorities from two and a half to + seven hours before the departure of the train upon which they + are to be hauled, and owing to the small space allowed in them + for the actual transportation of the mails, accompanied on the + denser lines by storage cars for which no additional + compensation is paid by the Government and on the less dense + lines the larger bulk of mails is carried in the baggage cars + without additional compensation for the car. + + "These cars are constructed and fitted up by the railroads in + accordance with plans and specifications furnished by the + Department, and the amount of mail transported therein is + determined exclusively by the postal authorities. From these two + facts it results that the railroad must haul 100,000 pounds of + car when the weight of the mail actually carried therein is only + from 3,500 to 5,000 pounds--often very much less, and + occasionally somewhat more. + + "Taking in view all these facts, as disclosed by the testimony + filed herewith, we are of opinion that the 'prices paid * * * as + compensation for the postal-car service' are not excessive, and + recommend that no reduction be made therein so long as the + methods, conditions, and requirements of the postal service + continue the same as at present." + + +MAIL RATES AND EXPRESS RATES. + +No feature of this question has been more persistently misrepresented +than the relative value to the railroads of the mail business and the +express business. + +As elsewhere shown, the express business is 52 per cent more valuable +to the Burlington road than the Government mails on the mere basis of +space used and facilities furnished in passenger trains. There are +many other considerations which increase this disparity of value in +favor of the express, but reference to them is omitted in order to +direct public attention to the following statements of the +Postmaster-General in his recent letter upon the subject: + + +(_Congressional Record_, March 4, 1910, 61st Congress, Second Session, +Vol. 45, No. 60, Page 2802.) + + LETTER OF THE POSTMASTER-GENERAL RELATIVE TO THE SERVICE + RENDERED BY THE RAILROAD COMPANIES IN CONNECTION WITH THE MAILS + AND WITH EXPRESS. + + "OFFICE OF THE POSTMASTER-GENERAL, + "WASHINGTON, D.C., January 31, 1910. + + "Hon. JOHN W. WEEKS, + _Chairman Committee on Post Offices and + Post Roads, House of Representatives_. + + "MY DEAR SIR: In response to your inquiry as to the difference + between the service rendered the Post Office Department by + railroad companies in the carriage and handling of the mails, and + that rendered express companies, I would state that from such + information as we have been able to obtain in regard to the + service rendered to express companies, the difference is + substantially as follows: + + "The Post Office Department requires the railroad company to + take the mail from the post office wherever the office is within + 80 rods of the depot, and the company has an agent, and in many + cases to perform the terminal service regardless of the distance + between the post office and the station. Wherever the terminal + service is taken up by the Department, by means of regulation or + screen-wagon service, the contractor delivers the mail at a + specified place at the depot, and from that point the railroad + employees transport it to the cars, and if the amount is so + great that it would impose a hardship upon the postal employees + to load and store this mail, the railroad company is called upon + to furnish porters to do the work. Where the mail messenger or + contractor can drive direct to the cars, he does so. The express + companies haul all of their matter to the railroad stations and + put it in the cars, using their own employees and their own + trucks. + + "The cars furnished the Post Office Department and those + furnished the express companies differ very materially. The + former are built according to specifications furnished by the + Department, and are fully equipped with letter cases, paper + racks, drawers, and lockers for registered mail and supplies, + and all of the equipment necessary for the distribution of mail + en route. The cars furnished the express companies have very + little, if any, interior furnishings, and are more like the cars + used for the transportation of baggage. In both cases the cars + used are owned by the railroad company. + + "The number of employees transported for the Post Office + Department is very much greater than for the express companies. + There are frequently five or six clerks in the postal cars, and + on fast mail trains, where there are two or three working cars + to a train, the number runs up as high as 23. The express seldom + requires more than two men in a car. + + "The Post Office Department claims as much space at depots + without specific payment therefor as may be required for the + storing and handling of mail in transit. The express companies + are required to pay the railroad companies for all space used at + depots. + + "On smaller lines a separate apartment must be furnished for the + mails other than baggage mails. The express matter is usually + placed in the baggage car. + + "Upon arrival at terminals the railroad company may be required + to unload a mail car, if the quantity is such as to impose a + hardship upon the clerks, and to see that it is loaded into the + contractor's wagons; or, if the terminal service devolves upon + the railroad company, that it is delivered into the post office. + The express company unloads and handles its own matter. + + "The railroad and express companies frequently use a joint + employee to handle baggage and express, thereby economizing in + cost of help. That can very seldom be done in connection with + the postal service. + + "The railroad company has charge of all baggage mails in transit + and receives them into and delivers them from the cars. It also + handles other mails when necessary to transfer them between cars + or trains. It is held responsible for reasonable care in their + transportation. Deductions are made for failures to perform + service according to contract, and fines are imposed for + delinquencies. The company is required to keep a record of all + pouch mails carried on trains in charge of their employees and + handled at stations where more than one regular exchange pouch + is involved and no mail transfer clerk is located, and to + prepare and forward shortage slips when a pouch is due and not + received. They are required to make monthly affidavits as to + performance of service. It is understood that the company never + assumes control of express matter. The Department is not + informed as to the terms of contracts between railroad and + express companies, and therefore can not state what + responsibility is imposed as to transportation. + + "Mail cranes for the exchange of mail at points where trains do + not stop are erected and kept in repair by and at the expense of + the railroad company, whose employees must hang the mail bag on + the crane and adjust it for catching at points where the + company provides side service. The mail catchers are also + furnished by them. No service of this character is rendered + express companies. + + "A railroad company is required by law to carry the mails upon + any train that may be run, when so ordered by the + Postmaster-General, without extra charge therefor, and as a + result the mails are carried on the fastest trains and with + great frequency. Express matter is not as a rule carried on the + fast limited passenger trains, nor with the frequency with which + mails are carried. + + "In this connection your attention is invited to pages 84 to 94, + 516, 517, 860 to 863, part 1, and pages 687 to 696, part 2, of + the testimony before the Congressional Commission which + investigated the postal service in 1900--Wolcott-Loud + Commission. + + "Yours very truly, + "F. H. HITCHCOCK, + "_Postmaster-General_." + +The Government does not own any railroad, but, under the present +system, the Post Office Department dictates to the railroad companies +upon what passenger trains and in what kind of cars the mails shall be +carried. It insists on such space and facilities as it deems necessary +for the mails being furnished on the fastest and most expensive trains +and demands that these trains keep their fast schedules; this means +that all other trains on the road are side-tracked and delayed +whenever that is necessary in order to expedite the mails. + +There are no such features in the express business. + +Demanding a preference traffic, the Government ought to be willing to +pay for it more than express rates. In fact, it pays much less than +express rates. + +The ablest and most competent witness who appeared before the Wolcott +Commission on this subject was Henry S. Julier, Vice-President and +General Manager of the American Express Company, who said: "Without +question, the Government has the cheaper service by far." + +Mr. Julier further stated that seven pounds is the average weight of +packages sent by express, and the seven pound package is the typical +express package, and therefore the earnings from carrying such +packages are the true index of the rates actually received. Some +railroads receive as their compensation fifty per cent of the express +company's earnings; the C. B. & Q. receives fifty-seven and a half per +cent. + +Mr. Julier was asked by the Commission to file statements showing from +the rates in force exactly the revenue received per hundred-weight by +the railroad company from the express in comparison with the mail +rates. He filed the following: + +_Table Showing Rates Received by Railways Per Hundred-weight for Mails +and Rates Received for Express Between Points Named._ + + EXPRESS. + 50 per cent of + MAIL. express companies' + Rate per 100 earnings on fourteen + pounds allowed 7-pound packages + railroad companies weighing in the + under last aggregate 100 + weighing, pounds, yields the + including the pay railroad companies + for post office the rate per 100 + Distance. cars. pounds noted below. + + New York to + Buffalo 440 $1.58 $2.80 + Chicago 980 3.57 4.55 + Omaha 1,480 5.38 5.95 + Indianapolis 906 3.27 4.55 + Columbus 761 2.49 3.85 + East St. Louis 1,171 4.38 4.90 + Portland, Me. 347 1.33 2.80 + Chicago to + Milwaukee 85 .34 2.10 + Minneapolis 421 1.83 3.85 + New Orleans 922 5.27 5.95 + Detroit 284 1.34 2.80 + Cincinnati 306 1.20 3.15 + Cincinnati to + St. Louis 374 1.61 3.15 + Chicago 306 1.20 3.15 + Cleveland 263 1.26 2.80 + + Since the filing of these statistics, the rates paid to + railroads for carrying the mails have been reduced almost a + fifth. + + The statements of the Postmaster-General and the statistics + confirm the evidence of these returns that the express business + is much more valuable to railroad companies than the Government + mail business. + + W.W. BALDWIN, + _Vice-President_. + + JOHN DEWITT, + _General Mail Agent_. + + MAY, 1910. + + + + +APPENDIX. + + +_Exhibit A._ + +[Form 2601.] + +There are on file in the Post Office Department one hundred and two +separate statements showing, for the month of November as to each mail +route on the Burlington system, the space occupied and used for mail +and for express and for passengers. + +In order to make a comparison it was, of course, necessary to reduce +each item of space used in each car to a common basis of feet, and the +following table shows what are the actual facilities furnished in +passenger trains for the three classes of traffic reduced to linear +car-foot space: + + +_Car Foot Mileage._ + + _Mail._ _Passengers._ _Express._ + 62,246,130 428,164,920 39,525,540 + (11.75%) (80.8%) (7.45%) + + +_Exhibit B._ + +[Form 2602.] + +_Station Facilities Furnished for the Mails and Express and the Value +of Other Items of Service Rendered._ + +_Mail Expense._ + + Monthly Cost of Handling Mail at Stations, + labor, etc. $14,241.67 + Monthly rental value of mail rooms in stations 1,008.61 + Monthly rental value of tracks occupied by mail cars + for advance distribution 157.69 + Cost of lighting and heating mail cars for advance + distribution 114.25 + Value of 309,827 miles of free transportation to post + office employees, not including postal clerks in + charge of mail 6,196.54 + Switching mail cars for advance distribution 2,795.80 + ---------- + Total for November $24,514.56 + +The foregoing does not include the rental value of space furnished by +the railroad company to the Government for handling mails and mail +trucks on station platforms, and for storing the mails on platforms at +large terminals. This is a large item, but statistics of such space +used were not called for. At Chicago Station platform space to the +amount of over 6,500 square feet is devoted exclusively to mails +handled by the Burlington and Pennsylvania. + +In addition to the foregoing, the Burlington Company transported on +its trains during November postal clerks in charge of mail for the +Government a distance of 3,109,747 miles in the aggregate. + +If the Government had paid their fare at two cents per mile the amount +paid would have been $62,174.94. + +These items of station facilities and other service rendered to the +Government for the mails amounted to $86,689 for November, or at the +rate of more than one million dollars annually. + +_Express Expense._ + + Rental value of space in station buildings used for + express, for which no rent is paid $488.68 + Rental value of tracks used for advance loading + of express 191.11 + Value of 42,298 miles of free transportation to + Express Company officials and employees at two + cents per mile. 885.96 + --------- + $1,565.75 + +In addition to the foregoing, the agents and employees of the railroad +company in the month of November rendered service at stations in +handling express and in other ways for the Express Company to the +amount of $10,274, but the Express Company paid to the same persons +$14,538 in commissions. + +The Express Company also shared in the salaries paid to certain +baggage men and other joint train employees in November to the amount +of $7,480, in addition to the payment of commissions, as aforesaid. + +All the items of expense to the railroad company on account of the +express in the way of space furnished and free transportation to +employees, and services of station agents, amount to $11,840, while +the cash payments by the Express Company to the railroad Company +indirectly, through payments in commissions to station agents and the +salaries of baggage men amounts to $22,018, a pecuniary gain or income +from express of $10,178 per month, or at the rate of $124,136 +annually, compared with a large outgo annually on account of the mails +as shown in the foregoing items. + + +_Exhibit C._ + +[Form 2603.] + +_Revenues and Expenses and Train and Car Mileage._ + +_Revenues._ + + Receipts in November from all passenger traffic + (not including Mail and Express) $1,859,839 + Receipts from Express 187,825 + Receipts from Mails 194,435 + ---------- + Total $2,242,099 + +_Expenses._ + + Total Operating Expenses of the road for November $5,452,830 + Passenger Operating Expenses, and one-twelfth + of the taxes and one-twelfth of the interest + on the funded debt $2,365,521 + +The passenger operating expenses are distributed as follows: + +_Assignable Expenses._ + + Transportation Expense $454,208 + Fuel passenger engines $132,709 + Salaries passenger engineers 100,511 + Salaries passenger trainmen 87,557 + Train supplies, etc. 55,664 + Injuries to persons 19,904 + Station employees 17,160 + Joint yards and terminals 15,610 + Miscellaneous 25,093 + -------- + Maintenance of Equipment $107,626 + Repairs, passenger cars $67,650 + Depreciation, passenger cars 39,639 + Miscellaneous 337 + -------- + Traffic Expense $48,971 + Advertising $17,249 + Outside agencies 16,673 + Superintendence 10,272 + Miscellaneous 4,777 + -------- + Maintenance of Way, etc. $12,970 + Buildings and grounds $7,053 + Joint tracks, etc. 4,440 + Miscellaneous 1,477 + -------- + General Expense $13,580 + Salaries, clerks, etc $8,994 + Insurance 2,478 + Legal expense 1,153 + Miscellaneous 955 + -------- -------- + Total $637,355 + +_Proportion of Non-Assignable Expenses._ + + Operating Expenses $1,278,016 + Taxes and Interest 450,150 + ---------- + $1,728,166 + ------------- + Total $2,365,521 + +Exhibit A shows that the entire space in all cars run on passenger +trains on the Burlington in November was divided as follows: + + Passengers occupied 80.8 % of the space. + Mail 11.75% of the space. + Express 7.45% of the space. + +If each of these three classes of traffic had contributed earnings and +paid expenses in proportion to the space occupied by it, the result in +comparative profit or loss to the company would have been as follows: + +_Comparative Profit and Loss._ + + _Earnings._ _Expenses._ _Profit._ _Loss._ + Passengers $1,859,839 $1,911,341 $51,502 + Mail 194,435 277,949 83,514 + Express 187,825 176,231 $11,594 + ---------- ---------- + $2,242,099 $2,365,521 + +If the Government had paid to the Burlington Company for carrying the +mails 11.75% of the actual cost of doing the work, and a proportion of +the taxes and interest on the funded debt, it would, for November, +have paid $83,514 more than was paid, indicating that for the year the +Government is paying $1,002,168 less than the actual fair cost of the +service it is receiving. + + +_Exhibit D._ + +[Form 2605.] + +_Statement of Mail Cars and Apartment Cars._ + +_Postal Cars._ + + _Original _Present + _Number Average Average + _Kind of Car_ Owned_ Cost_ Value_ + 60 feet or more in length 49 $5,176.00 $4,669.84 + 50 to 59 feet in length 10 4,116.00 2,595.70 + Less than 50 feet in length 17 2,555.00 2,094.41 + -- --------- --------- + Total 76 $4,451.00 $3,820.84 + +_Apartment Cars._ + + _Original _Present + _Number Average Average + _Kind of Car_ Owned_ Cost_ Value_ + Cars with mail apartments 30 feet + or more in length 27 $3,888.00 $2,112.78 + Cars with mail apartments 25 to + 29 feet in length 21 3,660.00 2,004.95 + Cars with mail apartments 20 to + 24 feet in length 22 3,292.00 1,810.50 + Cars with mail apartments less + than 20 feet in length 31 3,106.00 1,729.35 + --- --------- --------- + Total 104 $3,460.00 $1,901.71 + + * * * * * + + + + + +End of the Project Gutenberg EBook of The Mail Pay on the Burlington Railroad, by +Anonymous + +*** END OF THIS PROJECT GUTENBERG EBOOK MAIL PAY *** + +***** This file should be named 36464-8.txt or 36464-8.zip ***** +This and all associated files of various formats will be found in: + http://www.gutenberg.org/3/6/4/6/36464/ + +Produced 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You may copy it, give it away or +re-use it under the terms of the Project Gutenberg License included +with this eBook or online at www.gutenberg.org + + +Title: The Mail Pay on the Burlington Railroad + +Author: Anonymous + +Editor: Post-Office Department + +Release Date: June 19, 2011 [EBook #36464] + +Language: English + +Character set encoding: ISO-8859-1 + +*** START OF THIS PROJECT GUTENBERG EBOOK MAIL PAY *** + + + + +Produced by Jeannie Howse, Adrian Mastronardi, The +Philatelic Digital Library Project at http://www.tpdlp.net +and the Online Distributed Proofreading Team at +http://www.pgdp.net (This file was produced from images +generously made available by The Internet Archive/American +Libraries.) + + + + + + +</pre> + + +<br /> +<br /> +<br /> +<br /> +<hr /> +<br /> +<br /> +<br /> +<br /> + +<h1>THE MAIL PAY ON THE<br /> +BURLINGTON RAILROAD</h1> + +<hr style="height: 2px; color: black; background-color: black; width: 35%;" /> + +<p class="cen">Statements of Car Space and all Facilities Furnished<br /> +for the Government Mails and for Express and<br /> +Passengers in all Passenger Trains on<br /> +the Chicago, Burlington and<br /> +Quincy Railroad</p> + +<br /> +<br /> +<br /> +<br /> +<br /> +<br /> +<br /> +<br /> +<br /> +<br /> + +<h4>Prepared in accordance with requests of the Post-Office Dept.</h4> + +<br /> +<br /> +<br /> +<br /> +<span class='pagenum'><a name="Page_1" id="Page_1">[1]</a></span><hr /> +<br /> +<br /> +<br /> +<br /> + +<h1>THE MAIL PAY</h1> + +<h4>ON THE</h4> + +<h3>Chicago, Burlington & Quincy Railroad</h3> +<br /> + +<p>The present system under which the Government employs railroads to +carry the mails was established in 1873, thirty-seven years ago. Under +this system, the Post Office Department designates between what named +towns upon each railroad in the country a so-called "mail route" shall +be established. Congress prescribes a scale of rates for payment per +mile of such mail route per year, based upon the average weight of +mails transported over the route daily, "with due frequency and +speed," and under "regulations" promulgated from time to time by the +Post Office Department. To this is added a certain allowance for the +haulage and use of post office cars built and run exclusively for the +mails, based upon their length. The annual rate of expenditure to all +railroads for mail service on all routes in operation June 30, 1909, +was $44,885,395.29 for weight of mail, and for post office cars +$4,721,044.87, the "car pay," so-called, being nine and five-tenths +per cent of the total pay. The payment by weight is, therefore, the +real basis of the compensation to railroads. The rate itself, however, +varies upon different mail routes to a degree that is neither +scientific nor entirely reasonable. The rate per ton or per hundred +pounds upon a route carrying a small weight is twenty times greater +than is paid over a route carrying the heaviest weight. The Government +thus appropriates to its own advantage an extreme application of the<span class='pagenum'><a name="Page_2" id="Page_2">[2]</a></span> +wholesale principle and demands a low rate for large shipments, which +principle it denounces as unjust discrimination if practiced in favor +of private shippers by wholesale. The effect of the application of +this principle has been to greatly reduce the average mail rate year +by year as the business increases. This constant rate reduction was +described by Hon. Wm. H. Moody (now Mr. Justice Moody of the United +States Supreme Court) in his separate report as a member of the +Wolcott Commission in the following language:</p> + +<div class="block"><p>"The existing law prescribing railway mail pay automatically +lowers the rate on any given route as the volume of traffic +increases. Mr. Adams shows that by the normal effect of this law +the rate per ton mile is $1.17, when the average daily weight of +mail is 200 pounds, and, decreasing with the increase of volume, +it becomes 6.073 cents when the average daily weight is 300,000 +pounds."</p></div> + +<p><span class="sc">Note.</span>—Since 1907 the railroads have been paid at much +reduced rates. On the heavy routes the pay is now 5.54 cents per ton +per mile.</p> + +<p>Post Office Department officials have announced, as their conclusion +from the results of the special weighing in 1907, that the average +length of haul of all mail is 620 miles.</p> + +<p>The bulk of the mail is now carried on the heavy routes at 5.54 cents +per ton per mile, or $34.34 per ton for the average haul, that is, for +one and seven-tenths cents per pound.</p> + +<p>The railroads, therefore, receive less than one and three-fourths +cents per pound for carrying the greater part of the mails.</p> + +<br /> +<hr /> +<br /> + +<p>But the rate reduction for wholesale quantities has not had the effect +of reducing the actual remuneration of the railroads for carrying the +mails to nearly so great an extent as the increasing requirements for +excessive space for <span class='pagenum'><a name="Page_3" id="Page_3">[3]</a></span>distributing mails en route. This feature was +likewise discussed by Judge Moody in his report in the following +language:</p> + +<div class="block"><p>"The rule of transportation invoked is based upon the assumption +that the increase of traffic permits the introduction of +increased economy, notably, the economy which results in so +loading cars that the ratio of dead weight to paying freight is +decreased. Yet this economy is precisely what our method of +transporting mail denies to the railroads. Instead of permitting +the mail cars, whether apartment or full postal cars, to be +loaded to their full capacity, the Government demands that the +cars shall be lightly loaded so that there may be ample space +for the sorting and distribution of mail en route. In other +words, instead of a freight car, a traveling post office."</p></div> + +<p>An illustration of the extent to which the reductions have been +carried, as shown upon one railroad system, is set forth in the letter +of January 21, 1909, addressed to the Committee on Post Offices and +Post Roads of the House of Representatives by Mr. Ralph Peters, +President of the Long Island Railroad, who states that the actual cost +to his company of carrying the United States mail for the year was +$122,169, while the total compensation for that service paid by the +Government was $41,196. Mr. Peters says:</p> + +<div class="block"><p>"The Long Island Company received from the Government for mail +service performed in expensive passenger trains one-half the +rate received by it per car mile for average class freight in +slow-moving freight trains."</p></div> + +<p>The Long Island Company notified the Government that it would decline +to carry the mails by the present expensive methods, unless Congress +makes some provision for a <span class='pagenum'><a name="Page_4" id="Page_4">[4]</a></span>more adequate compensation. A notification +of similar import has been given by The New York, New Haven & Hartford +Railroad Company, the principal carrier in New England. Their position +in this matter will undoubtedly be taken by other roads, because the +same condition of inadequate compensation prevails upon hundreds of +small railroads and mail routes, especially in the Southern and +Western States.</p> + +<p>Notwithstanding these facts, a powerful interest, which commands the +public ear and derives great profit from the one-cent-per-pound rate +of postage, has, in order to divert public attention from itself, for +years industriously and systematically circulated false statistics and +false statements among the people regarding the railroad mail pay, and +is now circulating them.</p> + +<p>The extent to which the public is being deceived regarding the +railroad mail pay is disclosed daily. In a recent hearing before the +Senate Committee on Post offices and Post-Roads, Senator Carter of +Montana said:</p> + +<div class="block"><p>"We are all getting letters on this subject. I received the +other day a letter from a very intelligent lady in Montana +claiming that the Government is paying to the Northern Pacific +Railway on that branch line for carrying the mail $97,000 per +year. On inquiring at the Post Office Department, I find that +the total compensation of the Northern Pacific Company for mail +service on that line is $3,070 per year."</p></div> + +<p>This state of things was a sufficient reason for the Post Office +Department to institute the present series of inquiries tending to +show the space in passenger trains upon the railroads demanded and +used by the Government for the mails in comparison with the space +devoted to express and passenger service, and the relative rates of +compensation in each class of service and the extent to which <span class='pagenum'><a name="Page_5" id="Page_5">[5]</a></span>the +roads are receiving for carrying the mails the cost to them of +performing the service. In order to give these facts fair +consideration, it is not necessary to admit that "space" is, or is +not, a better and more workable basis for determining what is +reasonable mail pay than "weight," nor to admit that the companies are +only entitled to be paid by the Government for the service rendered to +it the bare cost of rendering that service, that is, to receive back +the train operating cost. Questions of speed and facilities furnished, +and the preference character of the traffic and the exceptional value +of the service, and other elements, must be considered as well as +space and cost, but that is no reason why the relative proportion of +space used and the relation of compensation to cost should not be +ascertained and given due weight, in the consideration of the +important question of what is adequate mail pay to the railroads.</p> + +<p>The following pages are based upon answers to the interrogatories of +the Post Office Department and contain a statement of the mail service +performed by the Chicago, Burlington and Quincy Railroad Company, a +system extending westward from Chicago into eleven different States +and embracing approximately ten thousand miles of main and branch +lines.</p> + +<p>The two principal tables of interrogatories were sent out under date +of September 28, 1909, by the Post Office Department as the basis for +this investigation.</p> + +<p>These tables indicate the minute and thorough manner which the +Department employed in making this inquiry.</p> + +<p>Some questions having arisen regarding the meaning and scope of the +word "authorized" in connection with the returns of space occupied and +used for the mails in Post Office cars and apartment cars, and in +certain other features, the Department, under date October 23, 1909, +issued an important supplementary letter of instructions.</p> + +<p>Pursuant to these interrogatories, instructions and requests <span class='pagenum'><a name="Page_6" id="Page_6">[6]</a></span>the +Burlington Company has filed with the Department the exact and +detailed statements, train by train and car by car, of the mail +service upon each of the one hundred and two mail routes on its +system, large and small, for the month of November, 1909, which were +thus called for. These answers state the facts and state them in the +manner prescribed wherever possible. Every inch of space on passenger +trains and cars which in these tables is shown to be occupied or used +for mail or express or for passengers is set down from actual +measurements made, car by car, and not upon any "estimate" or +"consist" basis.</p> + +<p>In the appendix will be found four tables prepared under the direction +and supervision of Mr. DeWitt which contain the results of this +investigation into the mail service upon the Burlington, as disclosed +in these statements.</p> + +<p>Exhibit A is a statement of the car facilities or space used in every +car in service on the road during the month of November for mail, and +for express or occupied by passengers based upon replies to questions +prescribed in Form 2601.</p> + +<p>Exhibit B is a statement of the station facilities, furnished for the +mail, prepared on Form 2602.</p> + +<p>Exhibit C is a statement of Revenues and Expenses and of train and car +mileage, prepared on Form 2603.</p> + +<p>Exhibit D is a statement of the number, and cost, and present value of +Post Office cars and Apartment cars, prepared on Form 2605.</p> + +<br /> + +<h4>THE INTEGRITY OF THE RETURNS.</h4> + +<p>In November, 1909, all the service rendered in all passenger trains +and cars of the Burlington system, reduced to a common basis of car +foot miles (that is, each foot of linear space that was carried one +mile), amounted to 529,936,590 car foot miles, divided as follows:</p> + +<div class="centered"><span class='pagenum'><a name="Page_7" id="Page_7">[7]</a></span> +<table border="0" cellpadding="2" cellspacing="0" width="40%" summary="car foot miles"> + <tr> + <td class="tdc" width="34%">In Passenger Service.</td> + <td class="tdc" width="33%">Mails.</td> + <td class="tdc" width="33%">Express.</td> + </tr> + <tr> + <td class="tdc">428,164,920</td> + <td class="tdc">62,246,130</td> + <td class="tdc">39,525,540</td> + </tr> + <tr> + <td class="tdc">(80.8%)</td> + <td class="tdc">(11.75%)</td> + <td class="tdc">(7.45%)</td> + </tr> +</table> +</div> + +<br /> + +<p>The original circular of the Post Office Department contained certain +"notes," to the effect that in reporting the length of postal cars and +apartment cars, and the space therein used for mails, the railroad +companies should only report the length or space "authorized" by the +officials of the Department; also that in reporting space used in cars +for what is known as the "Closed Pouch Service," the railroads should +make an arbitrary allowance of six linear inches across the car for +the first 200 pounds or less of average daily weight of pouch mail and +three linear inches for each additional 100 pounds.</p> + +<p>These directions were modified by the subsequent circular letter of +the Department, dated October 23, 1909.</p> + +<p>This letter, among other things, directs the company to take credit +for "surplus" space in post office cars and apartment cars, if +actually used for the storage of mails.</p> + +<p>The practical difficulties attending the measurement and proper +allotment of the space used for the mails in postal and other cars run +on a passenger train will be better understood when it is known that +such space is or may be described in at least eight different ways, +and is actually used on the Burlington road as follows, namely:</p> + +<p>1. Space in post office cars specially "authorized" (43.03%).</p> + +<p>2. Space in apartment cars specifically "ordered" (20.69%).</p> + +<p>3. Space ordered in post office cars operated in lieu of apartment +cars (4.3%).</p> + +<p>4. Additional space actually used for storage of mails when the +railroad company operates larger post office or apartment cars than +the authorization calls for (1.5%).</p> + +<p><span class='pagenum'><a name="Page_8" id="Page_8">[8]</a></span>5. Space in storage cars actually used for mails (12.87%).</p> + +<p>6. Space in baggage cars used for closed pouch mails (4.06%).</p> + +<p>7. The return deadhead movement of space ordered and required in one +direction only (8.35%).</p> + +<p>(Ninety-five per cent of all the "space" shown in these returns for +the Burlington, as used for the mails, comes within the foregoing +seven classes, as properly authorized space about which no question +can arise.)</p> + +<p>8. "Surplus" space; that is, space furnished to the Government in post +office and apartment cars in excess of actual requirements (5.2%).</p> + +<p>This five per cent is the only portion of the space claimed as used +for mails regarding which any question can be raised, affecting the +integrity of these returns.</p> + +<p>What is the correct view as to this five per cent?</p> + +<p>It is manifestly against the interest of the railroad company to +furnish space for mails that is not required, and it will never +furnish such space if it can be avoided. But the "requirements" of the +Post Office Department are not fixed and certain quantities, by any +means. It is entirely impracticable for any railroad company to keep +on hand at all times a supply of cars of all lengths in order to meet +exactly the requirements of the Department officials.</p> + +<p>These statistics have been called for by the Post Office Department to +enable it to make accurate comparisons between the space used and the +facilities furnished on passenger trains for the three classes of +service performed, that is, for express companies, for the Government +in mail carriage, and for passengers. The point of the whole inquiry +is this:</p> + +<p>Does the Government contribute to the cost of the passenger train +service upon the railroads of the country its <span class='pagenum'><a name="Page_9" id="Page_9">[9]</a></span>fair share, that is, in +proportion to the space and facilities it demands and requires the +companies to furnish for the mails?</p> + +<p>In making the comparison all the car space in all passenger trains +must be measured and tabulated and has been measured and tabulated in +the tables here submitted.</p> + +<p>A passenger car may have seats to accommodate eighty persons; the +average load it carries may be fifteen persons. But in making up these +returns of "space," all the empty space in that car is credited as +passenger space. That car may likewise be loaded only one way and +returned "dead head," but these returns have credited such return +movement as passenger space.</p> + +<p>The same is true of the express service in these returns. All space in +all baggage and express cars set aside for the express company's use +is, in these tables of statistics, credited to express, whether in +fact loaded or "surplus," or "dead head" space.</p> + +<p>How is a comparison possible, unless the space credited to the mails +is recorded in the same way? As stated above, only five per cent of +the whole space is involved in the question of "surplus" space, and if +that five per cent should be entirely thrown out, the percentage +results would not be materially changed.</p> + +<br /> + +<h4>RESULTS UPON THE BURLINGTON ROAD.</h4> + +<p>The Government cannot justly ask a railroad company to carry the mails +without profit.</p> + +<p>The passenger business on the Burlington road is conducted without +profit if it is charged with the expenses assignable to passenger +traffic, and a proper proportion of the expenses not thus specifically +assignable, and a fair share of the taxes and the charges for capital +in the form of interest on bonds and dividends on stock. The profit in +the business comes from the freight.</p> + +<p><span class='pagenum'><a name="Page_10" id="Page_10">[10]</a></span>This fact gives force to the present inquiry of the Post Office +Department to determine whether the Government, in proportion to the +service and facilities it requires from the roads on passenger trains, +is contributing a fair proportion of the passenger train earnings. If +the passenger train business, as a whole, is carried on at a loss, the +Government ought, in fairness, to stand at least its share of the +loss.</p> + +<p>The earnings of the Burlington Company from all passenger train +service in November were $2,242,099.</p> + +<p>The following table shows the earnings from passengers, from mail and +express, and the space used in passenger trains by the three classes +of traffic and the proportion of earnings contributed for facilities +so used:</p> + +<div class="centered"> +<table border="0" cellpadding="2" cellspacing="0" width="60%" summary="Earnings"> + <tr> + <td class="tdc" width="20%"> </td> + <td class="tdc" width="20%"><i>Earnings.</i></td> + <td class="tdc" width="20%"> </td> + <td class="tdc" width="20%"><i>Car Foot Miles.</i></td> + <td class="tdc" width="20%"> </td> + </tr> + <tr> + <td class="tdl">Passengers</td> + <td class="tdr">$1,859,839</td> + <td class="tdl">(82.95%)</td> + <td class="tdr">428,164,920</td> + <td class="tdl">(80.80%)</td> + </tr> + <tr> + <td class="tdl">Express</td> + <td class="tdr">187,825</td> + <td class="tdl">( 8.38%)</td> + <td class="tdr">39,525,540</td> + <td class="tdl">( 7.45%)</td> + </tr> + <tr> + <td class="tdl">Mails</td> + <td class="tdr bb">194,435</td> + <td class="tdl">( 8.67%)</td> + <td class="tdr bb">62,246,130</td> + <td class="tdl">(11.75%)</td> + </tr> + <tr> + <td class="tdl" style="padding-left: 3%;">Total</td> + <td class="tdr bt">$2,242,099</td> + <td class="tdl"> </td> + <td class="tdr bt">529,936,590</td> + <td class="tdl"> </td> + </tr> +</table> +</div> + +<br /> + +<p>This table shows that for each one thousand feet of space used in +passenger trains the three classes of passenger traffic contributed in +earnings as follows:</p> + +<div class="centered"> +<table border="0" cellpadding="2" cellspacing="0" width="60%" summary="passenger traffic"> + <tr> + <td class="tdl" width="34%">Passengers</td> + <td class="tdl" width="33%">$4.34</td> + <td class="tdl" width="33%">139.1%</td> + </tr> + <tr> + <td class="tdl">Express</td> + <td class="tdl">$4.75</td> + <td class="tdl">152.2%</td> + </tr> + <tr> + <td class="tdl">Mails</td> + <td class="tdl">$3.12</td> + <td class="tdl">100%</td> + </tr> +</table> +</div> + +<br /> + +<p>In proportion to the space occupied and facilities used on passenger +trains, the Burlington road receives from passengers 39 per cent more +than the Government pays for mail transportation, and from the Adams +Express Company 52 per cent more; that is, the express business pays +the railroad company better than the Government pays for carrying the +mails by 52 per cent.</p> + +<p><span class='pagenum'><a name="Page_11" id="Page_11">[11]</a></span>If the Government had paid to the railroad company as much as the +express company for each foot of space required and used on passenger +trains, it would, for November, have paid $101,233 more than it did +pay, or an increase in annual mail pay of more than a million dollars.</p> + +<br /> +<hr /> +<br /> + +<p>It may be of interest to note that the returns for the Pennsylvania +System just being filed show the following:</p> + +<div class="centered"> +<table border="0" cellpadding="2" cellspacing="0" width="60%" summary="passenger traffic"> + <tr> + <td class="tdl"> </td> + <td class="tdl"><i>Earnings.</i></td> + <td class="tdl"><i>Car Foot Miles.</i></td> + </tr> + <tr> + <td class="tdl" width="34%">Passengers</td> + <td class="tdl" width="33%">79.8%</td> + <td class="tdl" width="33%">76.2%</td> + </tr> + <tr> + <td class="tdl">Express</td> + <td class="tdl">12.6%</td> + <td class="tdl">13.7%</td> + </tr> + <tr> + <td class="tdl">Mails</td> + <td class="tdl">7.6%</td> + <td class="tdl">10.1%</td> + </tr> +</table> +</div> + +<br /> + +<p>For each 1,000 feet of passenger train space used on the Pennsylvania +the traffic contributed in earnings as follows:</p> + +<div class="centered"> +<table border="0" cellpadding="2" cellspacing="0" width="60%" summary=" traffic contributed in earnings"> + <tr> + <td class="tdl" width="34%">Passengers</td> + <td class="tdl" width="33%">$4.45</td> + <td class="tdl" width="33%">139%</td> + </tr> + <tr> + <td class="tdl">Express</td> + <td class="tdl"> 3.91</td> + <td class="tdl">122%</td> + </tr> + <tr> + <td class="tdl">Mails</td> + <td class="tdl"> 3.20</td> + <td class="tdl">100%</td> + </tr> +</table> +</div> + +<br /> + +<p>On the Pennsylvania the passenger business is worth to that company 39 +per cent more than the Government mail business, and the express +business is worth 22 per cent more than the mails, indicating that +express rates are relatively higher in the West than the East, but +that neither in the East nor in the West is it a paying business to +carry the mails at present rates.</p> + +<br /> +<br /> +<br /> +<br /> +<hr /> +<span class='pagenum'><a name="Page_12" id="Page_12">[12]</a></span><br /> + +<h3>IS THE GOVERNMENT PAYING THE RAILROADS FOR CARRYING<br /> THE MAILS THE COST +OF DOING THE WORK?</h3> +<br /> + +<p>No. The Government paid the C. B. & Q. for carrying the mails in +November $194,435, or at the rate of $2,333,220 annually.</p> + +<p>The total operating expenses of the road for that month were +$5,452,830.</p> + +<p>The items of passenger train operating expense strictly assignable +were as follows:</p> + +<div class="centered"> +<table border="0" cellpadding="0" cellspacing="0" width="60%" summary="operating expenses"> + <tr> + <td class="tdl" width="60%">Transportation Expense</td> + <td class="tdr" width="20%"> </td> + <td class="tdr" width="20%">$454,208</td> + </tr> + <tr> + <td class="tdlp">Fuel passenger engines</td> + <td class="tdr">$132,709</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Salaries passenger engineers</td> + <td class="tdr">100,511</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Salaries passenger trainmen</td> + <td class="tdr">87,557</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Train supplies, etc.</td> + <td class="tdr">55,664</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Injuries to persons</td> + <td class="tdr">19,904</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Station employees</td> + <td class="tdr">17,160</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Joint yards and terminals</td> + <td class="tdr">15,610</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Miscellaneous</td> + <td class="tdr bb">25,093</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdl">Maintenance of Equipment</td> + <td class="tdr bt"> </td> + <td class="tdr">$107,626</td> + </tr> + <tr> + <td class="tdlp">Repairs, passenger cars</td> + <td class="tdr">$67,650</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Depreciation, passenger cars</td> + <td class="tdr">39,639</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Miscellaneous</td> + <td class="tdr bb">337</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdl">Traffic Expense</td> + <td class="tdr bt"> </td> + <td class="tdr">$48,971</td> + </tr> + <tr> + <td class="tdlp">Advertising</td> + <td class="tdr">$17,249</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Outside agencies</td> + <td class="tdr">16,673</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Superintendence</td> + <td class="tdr">10,272</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Miscellaneous</td> + <td class="tdr bb">4,777</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdl">Maintenance of Way, etc.<span class='pagenum'><a name="Page_13" id="Page_13">[13]</a></span></td> + <td class="tdr bt"> </td> + <td class="tdr">$12,970</td> + </tr> + <tr> + <td class="tdlp">Buildings and grounds</td> + <td class="tdr">$7,053</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Joint tracks, etc.</td> + <td class="tdr">4,440</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Miscellaneous</td> + <td class="tdr bb">1,477</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdl">General Expense</td> + <td class="tdr bt"> </td> + <td class="tdr">$13,580</td> + </tr> + <tr> + <td class="tdlp">Salaries, clerks, etc.</td> + <td class="tdr">$8,994</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Insurance</td> + <td class="tdr">2,478</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Legal expense</td> + <td class="tdr">1,153</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Miscellaneous</td> + <td class="tdr bb">955</td> + <td class="tdr bb"> </td> + </tr> + <tr> + <td class="tdlp3 tdtp">Total</td> + <td class="tdr bt tdpt"> </td> + <td class="tdr bt tdpt">$637,355</td> + </tr> + <tr> + <td class="tdl tdtp" colspan="2">Proportion operating expense not assignable</td> + <td class="tdr bb tdpt">$1,278,016</td> + </tr> + <tr> + <td class="tdlp2 tdpt">Total</td> + <td class="tdr"> </td> + <td class="tdr bt tdpt">$1,915,371</td> + </tr> +</table> +</div> + +<br /> + +<p>A large part of the operating expenses of every railroad, such as +maintenance of roadway, station expense, general office expense and +the like, are common to both the freight and passenger service, and it +seems impossible to assign all of them specifically. The Post Office +Department, in the circular under which the roads are reporting, +recognizes this condition and calls for the "proportion" of the +expense "not directly assignable and the basis of such apportionment."</p> + +<p>The apportionment of non-assignable expense on the Burlington has been +made on the basis of train mileage.</p> + +<p>In the month of November the mileage of passenger trains was +forty-five and four-tenths per cent of the total train mileage, and +the foregoing sum ($1,278,016) of non-assignable expense is forty-five +and four-tenths per cent of the operating expenses for that month, +common to both kinds of traffic, and therefore incapable of specific +assignment to either.</p> + +<p><span class='pagenum'><a name="Page_14" id="Page_14">[14]</a></span>These two classes of passenger expense (assignable and non-assignable) +aggregate $1,915,371 monthly, or at the rate of $22,984,452 per year, +and 11.75 per cent of this sum, or $2,700,675, is the annual operating +cost to the Burlington Company of transporting the Government mails.</p> + +<div class="centered"> +<table border="0" cellpadding="0" cellspacing="0" width="40%" summary="Costs"> + <tr> + <td class="tdl" width="70%">Cost of carrying the mails</td> + <td class="tdr" width="30%">$2,700,675</td> + </tr> + <tr> + <td class="tdl">Earnings from carrying the mails</td> + <td class="tdr bb">2,333,220</td> + </tr> + <tr> + <td class="tdlp2">Loss</td> + <td class="tdr bt">$367,455</td> + </tr> +</table> +</div> + +<br /> + +<p>These figures show that, in proportion to the service rendered, the +Government paid to that company $367,455 less than the actual cost of +doing the work, not including anything for taxes, nor for interest +paid by the company upon its funded debt, which was necessary to be +paid, in order to preserve the property, to say nothing of a return +upon the capital represented by the capital stock.</p> + +<p>The correct mail's proportion of taxes and interest for the year is +$634,713, which added to the $367,455 loss above operating expenses, +shows a loss of $1,002,168:</p> + +<div class="centered"> +<table border="0" cellpadding="0" cellspacing="0" width="40%" summary="Losses"> + <tr> + <td class="tdl" width="70%">Loss, operating expenses over revenue</td> + <td class="tdr" width="30%">$367,455</td> + </tr> + <tr> + <td class="tdl">11.75% of taxes and interest</td> + <td class="tdr bb">634,713</td> + </tr> + <tr> + <td class="tdlp2">Annual loss on mails</td> + <td class="tdr bt">$1,002,168</td> + </tr> +</table> +</div> + +<br /> + +<p>This takes no account of the annual value at two cents per mile of the +transportation of inspectors and postal employees, other than clerks +in charge of the mails ($74,352), nor of clerks in charge of the mails +($746,340).</p> + +<p>These two items of service rendered to the Government by the C. B. & +Q. road are of the admitted value of $820,692 annually.</p> + +<p><span class='pagenum'><a name="Page_15" id="Page_15">[15]</a></span>The railroad company has the same duty and legal responsibility +towards these clerks as towards passengers.</p> + +<br /> +<hr /> +<br /> + +<p>Is there another fair way of testing this question?</p> + +<p>In a letter dated March 2, 1910, from Hon. Frank H. Hitchcock, +Postmaster-General, to Hon. John W. Weeks, Chairman of the Post Office +Committee of the House, printed in full herewith, he states it is +estimated that the average annual cost to the railroads of operating a +post office car for the Government is $19,710, including $2,049 for +lighting, heating, repairs, etc., and that the total average pay +received for the car and its contents including post office car pay, +is $16,638 per annum, showing a loss in this branch of the service of +$3,073 per car. There are 1,111 full postal cars in actual service in +the country, and the loss thereon, therefore, aggregates $3,414,103, +to say nothing of the 231 postal cars in reserve.</p> + +<p>But that is the smaller part of the loss. There were 3,116 apartment +cars in actual use in 1909, averaging twenty feet in length, and the +cost of operating each of these, according to Mr. Hitchcock's figures, +would be one-third of $19,710, or $6,570.</p> + +<p>The average haul of apartment cars is 48 miles, and the average load +in a twenty-foot apartment car is officially stated as 607 pounds, +making the rate per mile on routes carrying an average daily weight of +only 607 pounds, $68.40 per annum, and the average earnings, +therefore, $3,283 per year, an average loss of $3,287 per car and an +actual loss per year from operating the 3,116 apartment cars of +$10,642,292, to say nothing of the 639 apartment cars in reserve.</p> + +<p>The C. B. & Q. has 76 full post office cars and 104 apartment cars, +and applying to them the foregoing figures given in Mr. Hitchcock's +letter, the loss from operating them in 1909 was $575,396, adding to +which $634,713, the <span class='pagenum'><a name="Page_16" id="Page_16">[16]</a></span>mail's proportion of taxes and interest, that +must be included in estimating "cost," in which the Government's +business should share, the estimated loss on the business was +$1,210,109, compared with $1,002,168, arrived at by charging the +Government business with 11.75 per cent of the passenger expense, that +being its proportion of the space used in passenger trains.</p> + +<p>The Government should be willing to pay fairly for what it exacts from +the railroads, and it exacts from the C. B. & Q. 11.75 per cent of its +passenger train facilities. If it had paid 11.75 per cent of the +passenger train expenses of the road in 1909, it would have paid +approximately a million dollars more than it did pay.</p> + +<p>The Government which demands from the railroads that they build and +transport daily over their roads for its benefit 5,100 traveling post +offices as full postal cars and apartment cars should be willing to +pay what the Postmaster-General estimates to be the actual cost of +operating those cars, and a fair proportion of the taxes and interest.</p> + +<p>If it had paid such cost in 1909, it would have paid to the C. B. & Q. +approximately a million dollars more than it did pay.</p> + +<br /> + +<h4>RESULTS ON VARIOUS MAIL ROUTES.</h4> + +<p>The foregoing are statements of results on the Burlington System as a +whole, showing earnings and expenses and facilities furnished to the +Government mail service.</p> + +<p>It may be of interest, and throw light on the situation, to show +results for November upon several separate mail routes in the system, +ranging from small routes carrying 200 pounds of mail daily, up, +through routes carrying weights, respectively, of 1,300, and 8,000, +and 20,000 pounds daily, to the heaviest route carrying 192,000 +pounds, covering the fast mail service from Chicago to Omaha.</p> + +<p><span class='pagenum'><a name="Page_17" id="Page_17">[17]</a></span>Weights of express packages are not kept on separate mail routes and +statements therefore of express earnings for such separate mail routes +are necessarily estimated, but, as given in the following tables, they +are approximately correct and corroborate the comparative results for +the Burlington system as a whole, which results are based upon exact +figures for express as well as for mails and for passengers.</p> + +<br /> + +<h4>I.</h4> + +<p class="cen">Route 157,030, Kenesaw to Kearney (Nebraska), 24.68 miles. Average +Daily Weight 216 Pounds.</p> + +<div class="centered"> +<table border="0" cellpadding="0" cellspacing="0" width="65%" summary="express earnings I."> + <tr> + <td class="tdc" width="20%"> </td> + <td class="tdc" width="20%"><i>Percentage of Space Occupied.</i></td> + <td class="tdc" width="20%"><i>Percentage of Earnings.</i></td> + <td class="tdc" width="20%"><i>Should Earn on Basis of Space Used.</i></td> + <td class="tdc" width="20%"><i>Did Actually Earn.</i></td> + </tr> + <tr> + <td class="tdl">Passenger</td> + <td class="tdrp">83.79</td> + <td class="tdrp">88.90</td> + <td class="tdrp">$1,238</td> + <td class="tdrp">$1,314</td> + </tr> + <tr> + <td class="tdl">Mail</td> + <td class="tdrp">9.37</td> + <td class="tdrp">6.02</td> + <td class="tdrp">139</td> + <td class="tdrp">89</td> + </tr> + <tr> + <td class="tdl">Express</td> + <td class="tdrp">6.84</td> + <td class="tdrp">5.08</td> + <td class="tdrp">101</td> + <td class="tdrp bb">75</td> + </tr> + <tr> + <td class="tdl"> </td> + <td class="tdrp"> </td> + <td class="tdrp"> </td> + <td class="tdrp"> </td> + <td class="tdrp bt tdpt">$1,478</td> + </tr> +</table> +</div> + +<br /> + +<p>The mail earnings on this route are $89 per month, or $3.44 daily. The +service for the Government is performed in an apartment car fifteen +feet long, and closed pouch service, four trains carrying mail daily, +except Sunday, giving an actual return to the railroad of three and a +half cents per mile run, or about one passenger fare at three cents +per mile although the Government demands the use of a 15-foot car +fitted up as a post office in which a postal clerk is carried free, +and this car must be lighted, heated and kept in repair, and carried +over the route each way daily, except Sunday.</p> + +<p>On this branch the actual earnings on passengers per passenger car are +55 cents per car mile.</p> + +<p>The post office apartment car equals one-quarter of a passenger car, +and the mail should, on this basis, earn at <span class='pagenum'><a name="Page_18" id="Page_18">[18]</a></span>least 14 cents per mile, +but it does earn, for all the mail service, at the rate of 3-½ cents +per mile, less the expense of delivering mail to and from post +offices.</p> + +<p>During the weighing period the mails are carried on 90 days and +weighed on 90 days, but under the Cortelyou order, these aggregate +weights are divided by 105 and the result is called the "average" and +forms the basis of pay on this route for four years.</p> + +<p>This mail service in a traveling post office on an expensive railroad +is paid about one-third the rate per mile that the Government pays to +a rural route carrier who carries an average of 25 pounds of mail.</p> + +<br /> + +<h4>II.</h4> + +<p class="cen">Route 157,028. Odell to Concordia, Kansas. 72 Miles. Average Daily +Weight, 282 Pounds.</p> + +<div class="centered"> +<table border="0" cellpadding="0" cellspacing="0" width="65%" summary="express earnings II."> + <tr> + <td class="tdc" width="20%"> </td> + <td class="tdc" width="20%"><i>Per cent Space</i></td> + <td class="tdc" width="20%"><i>Per cent Earnings</i></td> + <td class="tdc" width="20%"><i>Should Earn on Space</i></td> + <td class="tdc" width="20%"><i>Did Earn.</i></td> + </tr> + <tr> + <td class="tdl">Passenger</td> + <td class="tdrp">80.82</td> + <td class="tdrp">81.44</td> + <td class="tdrp">$2,482</td> + <td class="tdrp">$2,501</td> + </tr> + <tr> + <td class="tdl">Mail</td> + <td class="tdrp">11.76</td> + <td class="tdrp">9.38</td> + <td class="tdrp">361</td> + <td class="tdrp">288</td> + </tr> + <tr> + <td class="tdl">Express</td> + <td class="tdrp">7.42</td> + <td class="tdrp">9.18</td> + <td class="tdrp">228</td> + <td class="tdrp bb">282</td> + </tr> + <tr> + <td class="tdl"> </td> + <td class="tdrp"> </td> + <td class="tdrp"> </td> + <td class="tdrp"> </td> + <td class="tdrp bt tdpt">$3,071</td> + </tr> +</table> +</div> + +<br /> + +<p>Mail earnings $288 per month (26 days), or $11 per day.</p> + +<p>This service demands a twenty-five-foot apartment car each way for +which the pay amounts to 7.64 cents per car mile run, or about the +fares of two passengers at three cents per mile who may occupy one +seat.</p> + +<p>The service is six days per week, but the aggregate weight carried in +the six days is divided by seven to obtain the Cortelyou "average" on +which the pay is based.</p> + +<p>The payment for a twenty-five-foot traveling post office is a little +over half the pay per mile for a rural route carrier.</p> + +<span class='pagenum'><a name="Page_19" id="Page_19">[19]</a></span><br /> + +<h4>III.</h4> + +<p class="cen">Route 135,012. Streator to Aurora (Ills.). 60 Miles. Average daily +weight, 1,303 pounds.</p> + +<div class="centered"> +<table border="0" cellpadding="0" cellspacing="0" width="65%" summary="express earnings III."> + <tr> + <td class="tdc" width="20%"> </td> + <td class="tdc" width="20%"><i>Per cent Space</i></td> + <td class="tdc" width="20%"><i>Per cent Earnings</i></td> + <td class="tdc" width="20%"><i>Should Earn on Space</i></td> + <td class="tdc" width="20%"><i>Did Earn.</i></td> + </tr> + <tr> + <td class="tdl">Passenger</td> + <td class="tdrp">72.84</td> + <td class="tdrp">85.64</td> + <td class="tdrp">$4,800</td> + <td class="tdrp">$5,643</td> + </tr> + <tr> + <td class="tdl">Mail</td> + <td class="tdrp">17.38</td> + <td class="tdrp">7.51</td> + <td class="tdrp">1,145</td> + <td class="tdrp">495</td> + </tr> + <tr> + <td class="tdl">Express</td> + <td class="tdrp">9.78</td> + <td class="tdrp">6.85</td> + <td class="tdrp">644</td> + <td class="tdrp bb">451</td> + </tr> + <tr> + <td class="tdl"> </td> + <td class="tdrp"> </td> + <td class="tdrp"> </td> + <td class="tdrp"> </td> + <td class="tdrp bt tdpt">$6,589</td> + </tr> +</table> +</div> + +<br /> + +<p>Mail earnings (26 days), $495 per month, or $19 per day.</p> + +<p>Four trains on this road carry mail daily, two each way, two in a +twenty-five-foot mail apartment and two in a thirty-foot mail +apartment, an average earning rate of 7.88 cents per car mile.</p> + +<p>The passenger cars on this branch carry an average of 24 passengers +each, and earn 48 cents per car mile. The average mail apartment +furnished is half a passenger coach.</p> + +<p>These four apartment cars, at the same rate as the passenger cars (24 +cents per mile), would earn $18,029 per year.</p> + +<p>The passenger train earnings on the branch are $79,000 a year. The +mails demand 17.38 per cent of the facilities, and on that basis +should earn for the company $13,730.</p> + +<p>The mail earnings were $5,940, this being the annual compensation +after a reduction of nine and one-half per cent through the Cortelyou +order, requiring the aggregate of 90 weighings to be divided by 105 to +ascertain the "average."</p> + +<span class='pagenum'><a name="Page_20" id="Page_20">[20]</a></span><br /> + +<h4>IV.</h4> + +<p class="cen">Route 164,004. Edgemont to Billings (Wyoming). 366 Miles. Average +Daily Weight, 8,087 Pounds.</p> + +<div class="centered"> +<table border="0" cellpadding="0" cellspacing="0" width="65%" summary="express earnings IV."> + <tr> + <td class="tdc" width="20%"> </td> + <td class="tdc" width="20%"><i>Per cent Space</i></td> + <td class="tdc" width="20%"><i>Per cent Earnings</i></td> + <td class="tdc" width="20%"><i>Should Earn on Space</i></td> + <td class="tdc" width="20%"><i>Did Earn.</i></td> + </tr> + <tr> + <td class="tdl">Passenger</td> + <td class="tdrp">85.79</td> + <td class="tdrp">89.22</td> + <td class="tdrp">$85,476</td> + <td class="tdrp">$88,895</td> + </tr> + <tr> + <td class="tdl">Mail</td> + <td class="tdrp">10.43</td> + <td class="tdrp">6.18</td> + <td class="tdrp">10,392</td> + <td class="tdrp">6,156</td> + </tr> + <tr> + <td class="tdl">Express</td> + <td class="tdrp">3.78</td> + <td class="tdrp">4.60</td> + <td class="tdrp">3,766</td> + <td class="tdrp bb">4,583</td> + </tr> + <tr> + <td class="tdl"> </td> + <td class="tdrp"> </td> + <td class="tdrp"> </td> + <td class="tdrp"> </td> + <td class="tdrp bt tdpt">$99,634</td> + </tr> +</table> +</div> + +<br /> + +<p>Two 60-foot postal cars are run daily each way.</p> + +<p>The mail earnings are $6,156 per month, or $205 per day.</p> + +<p>The total earnings of the passenger trains on this road are $1,195,000 +a year, and the mails required 10.43 per cent of the passenger train +facilities; on this basis they ought to pay $125,000 a year.</p> + +<p>These post office cars are hauled 534,000 miles every year. The +Postmaster-General estimates that the actual cost to the railroads of +operating a sixty-foot postal car is 18 cents per mile. At this rate +the Burlington Company should be paid $96,000 a year for the service +of the postal cars only.</p> + +<p>It is, in fact, paid for all the mail service on this road $73,872 +annually.</p> + +<span class='pagenum'><a name="Page_21" id="Page_21">[21]</a></span><br /> + +<h4>V.</h4> + +<p class="cen">Route 135,010. Galesburg to Quincy (Ills.). 99.93 Miles. Average Daily +Weight, 19,727 pounds.</p> + +<div class="centered"> +<table border="0" cellpadding="0" cellspacing="0" width="65%" summary="express earnings V."> + <tr> + <td class="tdc" width="20%"> </td> + <td class="tdc" width="20%"><i>Per cent Space</i></td> + <td class="tdc" width="20%"><i>Per cent Earnings</i></td> + <td class="tdc" width="20%"><i>Should Earn on Space</i></td> + <td class="tdc" width="20%"><i>Did Earn.</i></td> + </tr> + <tr> + <td class="tdl">Passenger</td> + <td class="tdrp">69.45</td> + <td class="tdrp">79.44</td> + <td class="tdrp">$28,864</td> + <td class="tdrp">$33,015</td> + </tr> + <tr> + <td class="tdl">Mail</td> + <td class="tdrp">19.70</td> + <td class="tdrp">8.45</td> + <td class="tdrp">8,187</td> + <td class="tdrp">3,511</td> + </tr> + <tr> + <td class="tdl">Express</td> + <td class="tdrp">10.85</td> + <td class="tdrp">12.11</td> + <td class="tdrp">4,509</td> + <td class="tdrp bb">5,034</td> + </tr> + <tr> + <td class="tdl"> </td> + <td class="tdrp"> </td> + <td class="tdrp"> </td> + <td class="tdrp"> </td> + <td class="tdrp bt tdpt">$41,560</td> + </tr> +</table> +</div> + +<br /> + +<p>Mail earnings from all sources $3,511 per month, or $117 per day.</p> + +<p>The service is performed in three 60-foot postal cars, two 16-foot +apartments and one 27-foot apartment, each way daily; also one 44-foot +postal car and one full storage car, daily except Sunday, in addition +to some space furnished for closed pouches in ordinary baggage cars.</p> + +<p>The car space provided for the mails on this route is equivalent to +ten full sixty-foot cars daily, over the whole length of the route, or +365,000 car miles a year. At 18 cents per mile the pay would be +$65,700, whereas the actual pay is only $42,132. If the Government +paid for the service in proportion to the facilities it demands and +receives, it would pay $98,244.</p> + +<br /> + +<h4>VI.</h4> + +<p class="cen">Route 135,007. Chicago to Burlington (205 Miles). Average Daily +Weight, 192,540 pounds.</p> + +<div class="centered"> +<table border="0" cellpadding="0" cellspacing="0" width="65%" summary="express earnings VI."> + <tr> + <td class="tdc" width="20%"> </td> + <td class="tdc" width="20%"><i>Per cent Space</i></td> + <td class="tdc" width="20%"><i>Per cent Earnings</i></td> + <td class="tdc" width="20%"><i>Should Earn on Space</i></td> + <td class="tdc" width="20%"><i>Did Earn.</i></td> + </tr> + <tr> + <td class="tdl">Passenger</td> + <td class="tdrp">73.14</td> + <td class="tdrp">74.72</td> + <td class="tdrp">$210,134</td> + <td class="tdrp">$214,671</td> + </tr> + <tr> + <td class="tdl">Mail</td> + <td class="tdrp">17.19</td> + <td class="tdrp">13.74</td> + <td class="tdrp">49,387</td> + <td class="tdrp">39,462</td> + </tr> + <tr> + <td class="tdl">Express</td> + <td class="tdrp">9.67</td> + <td class="tdrp">11.54</td> + <td class="tdrp">27,782</td> + <td class="tdrp bb">33,170</td> + </tr> + <tr> + <td class="tdl"> </td> + <td class="tdrp"> </td> + <td class="tdrp"> </td> + <td class="tdrp"> </td> + <td class="tdrp bt tdpt">$287,303</td> + </tr> +</table> +</div> + +<br /> + +<p><span class='pagenum'><a name="Page_22" id="Page_22">[22]</a></span>On the basis of space used and facilities provided for the mails, the +Burlington road is underpaid $119,000 a year on this route.</p> + +<p>Two-thirds of the weight of mail is carried in special trains run at +great speed and unusual expense, for which no extra allowance is made. +The extension of the route to Omaha is across Iowa, where it is "Land +Grant," and subject to land grant deductions.</p> + +<p>The Government made a "gift" to the company in 1856 of lands amounting +to 358,000 acres and then valued at $1.25 per acre, or $447,500.</p> + +<p>The mail pay deductions to June 1, 1910, on account of this Iowa land +grant aggregate $1,650,000, and still continue at the rate of $62,000 +a year.</p> + +<p>Neither in the foregoing six statements of results upon separate mail +routes, nor in the general statement of results upon the Burlington +Road has any allowance been made for the expense to the company of +what is called the "Mail Messenger Service."</p> + +<p>At all points where the post office is not over one-fourth of a mile +from the railroad station the railroad company must have all the mails +carried to and from the post office.</p> + +<p>What an important item of expense this amounts to appears in the +following extract from the Report of the Wolcott Commission, which +states:</p> + +<div class="block"><p>"Out of 27,000 stations supplied by messenger service 7,000 are +paid for by the Department at a cost of between $1,000,000 and +$1,100,000 per annum, leaving the other 20,000 stations to be +supplied by and at the expense of the railroads."</p></div> + +<p>Investigation has shown that on mail routes, where the average mail +pay of the railroad company is $900 a year, the average cost of this +mail messenger service is $400, calculating only $100 as the expense +for each station where <span class='pagenum'><a name="Page_23" id="Page_23">[23]</a></span>they are required to perform the service. +There are instances where the company pays in cash each year, for +delivering the mails between station and post office, considerably +more than the Government pays for the entire mail service over its +line of road. There is no such feature in the express service.</p> + +<br /> + +<h4>WHY DO RAILROADS CARRY THE MAILS WITHOUT PROFIT?</h4> + +<p>The question is sometimes asked why the railroads continue to carry +the mails if there is no profit in the business. Carrying the mails is +not the only traffic which railroads take upon terms that would +bankrupt them if applied to all their business.</p> + +<p>There is no profit in running passenger trains on most railroads; that +is, the receipts from all the traffic carried on passenger trains are +not sufficient to pay a train mileage or car mileage share of +operating expenses and taxes and charges for the use of capital. But a +large part of this cost of conducting the business of a railroad, such +as taxes, interest, maintenance of roadway, general office expenses, +and many others, would continue substantially the same if the +passenger trains were discontinued. Having the railroad, and its +taxes, and interest, and maintenance expenses to meet, anyhow, no +railroad can afford to refuse any income from passenger trains that +amounts to more than their train operating cost. On the same principle +they accept low rates per mile as a share of through passenger fares +which, if applied to all passenger fares, would show a loss. The road +is there, the trains are running, and the cars only partially loaded; +the addition of through passengers may not materially increase the +expense, and the road is better off to accept the business at less +than the average cost, rather than to reject it. But whatever the +<span class='pagenum'><a name="Page_24" id="Page_24">[24]</a></span>passenger trains lose must be made up by the freight trains if the +road is to continue in business.</p> + +<p>The constant aim of the managers of the railroad is to secure from +each class of traffic not only the operating cost peculiar to that +traffic, but a proportion of the general cost; but business is not +necessarily rejected on which it is impossible to secure such +proportion.</p> + +<p>Many of the reasons which impel them to run passenger trains without +profit apply to their acceptance of the Government mails. They +facilitate the freight business; it is better to carry them at a loss +than not to carry them at all.</p> + +<p>But is that any reason why the Government should not pay fair value +for what it receives? Is it good policy for the Government to force +upon the companies the alternative of carrying the mails at a loss or +refusing to carry them at all?</p> + +<p>What are the mails?</p> + +<p>They are the letters and packets that are conveyed from one post +office to another under public authority.</p> + +<p>Who conveys them? The railroads convey nine-tenths of them.</p> + +<p>The railroads are the mail service of this country. The Post Office +Department states that it receives from the people who use the mails +eighty-four dollars on every one hundred pounds of letters and post +cards. Who makes that money for them? The railroads. The railroads +convey those letters and cards from post office to post office—not +the Government.</p> + +<p>For a service like that the Government can afford to pay.</p> + +<p>What does it pay?</p> + +<p>On the great bulk of the business the railroad companies which do the +work and earn the money receive less than two dollars a hundred. On +every pound of first-class mail the Government collects eighty-four +dollars a hundred.</p> + +<p><span class='pagenum'><a name="Page_25" id="Page_25">[25]</a></span>The fact that the Congress, for purposes of general education or other +reasons, thinks it is good public policy to carry the magazines and +other second-class matter at one dollar a hundred is something about +which the railroads have nothing to do and nothing to say.</p> + +<p>The mail pay of the railroads has been reduced in the past four years +more than eight million dollars a year. Part of this was done by act +of Congress, but the greater part came from the arbitrary and illegal +Cortelyou order.</p> + +<p>These reductions were made without any hearing being granted to the +railroads. Hearings were refused by the Committee which reduced the +pay three and a half millions, and no pretense of a hearing was made +by Secretary Cortelyou when his autocratic order was issued reducing +the mail pay approximately five million dollars a year. This order was +an arbitrary and unwarranted and illegal exercise of executive power.</p> + +<p>The last hearing allowed to the railroad companies on this subject was +by the Wolcott Commission, 1897 to 1900, composed of eminent Senators +and Representatives. They reported, after two years' investigation, +that the mail pay was reasonable and should not be reduced. Upon the +question whether railroads should be asked to carry the mails at a +loss their report expressed the following views:</p> + +<div class="block"><p>"It seems to the Commission that not only justice and good +conscience, but also the efficiency of the postal service and +the best interests of the country demand that the railway-mail +pay shall be so clearly fair and reasonable that while, on the +one hand, the Government shall receive a full <i>quid pro quo</i> for +its expenditures and the public treasury be not subjected to an +improper drain upon its funds, yet, on the other hand, the +Railway Mail Service shall bear its due proportion of the +expenses incurred by the railroads in the maintenance of their +organization and business as well as in the operations of their +mail trains.</p> + +<p><span class='pagenum'><a name="Page_26" id="Page_26">[26]</a></span>"The transaction between the Government and the railroads should +be, and in the opinion of the Commission is, a relation of +contract; but it is a contract between the sovereign and a +subject as to which the latter has practically no choice but to +accept the terms formulated and demanded by the former; and, +therefore, it is incumbent upon the sovereign to see that it +takes no undue advantage of the subject, nor imposes upon it an +unrighteous burden, nor 'drives a hard bargain' with it. The +Commission, therefore, believes that the determination whether +the present railway mail pay is excessive or not should be +reached, as near as may be, upon a business basis, and in +accordance with the principles and considerations which control +ordinary business transactions between private individuals."</p></div> + +<br /> + +<h4>THE POSTAL CAR PAY.</h4> + +<p>The wide credence which has been given to the statement that the +Government is paying to the railroads an annual rent for postal cars +equal to the cost of building them is remarkable.</p> + +<p>The Government does not pay a rental for any car. The idea is an +erroneous one, and is based upon ignorance regarding the payment of +what is called "Post Office Car Pay."</p> + +<p>Originally, the mail business on railroads was the transportation of +mail bags, and was essentially a freight traffic. But its character +has entirely changed.</p> + +<p>The business now consists almost wholly in providing moving post +offices, expensive to build and expensive to operate, in which the +average weight for which pay is received is about two tons in full +postal cars and six hundred pounds in apartment cars.</p> + +<p>The Post Office Department weighed all the mails carried in all postal +cars and apartment cars in the country during October, 1907, and the +average weight of mail on <span class='pagenum'><a name="Page_27" id="Page_27">[27]</a></span>the Burlington road loaded in a forty-foot +postal car was found to be less than 2,000 pounds; in fifty-foot cars +it was 2,500 pounds; and in sixty-foot cars it averaged less than +4,500 pounds; in apartment cars it was 607 pounds.</p> + +<p>The average load carried in an ordinary freight car on the Burlington +road is from 36,000 to 40,000 pounds. Railroads, as a rule, haul a ton +of paying or productive freight for every ton of dead or unproductive +load. In the Government mail business they carry nineteen tons of dead +weight for each ton of paying weight.</p> + +<p>These cars are fitted up as post offices and are used for distribution +en route in order to expedite and facilitate the prompt transmission +and delivery of mails. They largely take the place of very expensive +distribution offices in cities.</p> + +<p>The railroads provide cars for freight traffic, but refused to build, +and maintain, and haul these moving post offices with their clerks and +paraphernalia, without pay. That is the post office car pay of which +so much is said.</p> + +<p>The truth regarding this feature of the subject is clearly stated in +the following recent letter from the Postmaster-General:</p> + +<br /> + +<p class="cen"><span class='pagenum'><a name="Page_28" id="Page_28">[28]</a></span>(<i>Congressional Record</i>, March 5, 1910, 61st Congress, Second Session, +Vol. 45, No. 61, Page 2852.)</p> + +<div class="block"><p class="schang" style="padding-left: 4em; padding-right: 4em; text-indent: -2em;">Letter of the Postmaster-General Relative to the Cost of +Furnishing and Operating Railway Post Office Cars.</p> + +<p class="right"><span class="sc">"Office of the Postmaster-General, <br /> +Washington, D.C.</span>, March 2, 1910.</p> + +<p class="noin">"Hon. <span class="sc">John W. Weeks</span>,<br /> +<span class="datepad3"><i>Chairman Committee on Post Offices and</i></span><br /> +<span class="datepad4"><i>Post Roads, House of Representatives</i>.</span></p> + +<p>"<span class="sc">My Dear Sir</span>: In response to your inquiry made of the +Second Assistant Postmaster-General in regard to the cost of +maintaining and operating railway post office cars and its +relation to the compensation received by railroad companies for +the same and your reference to the speech delivered by Senator +Vilas on the subject in the United States Senate, February 13, +1895, I have the honor to advise you as follows:</p> + +<p>"The Department has not at this time sufficient information upon +this point to give from its own records a reliable estimate. As +you are aware, we have recently asked railroad companies to +submit answers to inquiries with reference to the cost of +operating the mail service, and it is believed that when these +shall have been received we will be in a position to furnish +such information. Inasmuch, however, as it may be of importance +to you to have estimates made from time to time by others and +such incomplete information as we have at present, I submit the +following:</p> + +<p>"The cost of operating a railway post office car has been +variously estimated (but not officially by the Department) as +from 15 to 30 cents a car mile. The average run per day of such +a car is about 300 miles. Estimating the cost at 18 cents a car +mile, the total <span class='pagenum'><a name="Page_29" id="Page_29">[29]</a></span>cost of operating such car for one year would +be $19,710.</p> + +<p>"The specific items which constitute this total cost are not +definitely known to the Department. However, as to the cost of +lighting, cleaning, repairs, etc., the General Superintendent of +Railway Mail Service furnished the following estimates before +the Commission to investigate the postal service in 1899, viz.: +Lighting, $276; heating, $365; cleaning, water, ice, oil, etc., +$365; repairs, $350; proportion of original cost of car +(estimating the life of a car at fifteen years and the original +cost at $6,000), $400; total, $1,756. Recent inquiry gives the +following as the approximate cost of maintaining a car at the +present time: Lighting (electric), $444; heating, $150; +cleaning, $360; repairs, $300; oil and brasses, $120; interest +on cost of car (at $7,500), $300; annual deterioration +(estimating the life of a car at twenty years), $375; total, +$2,049. These figures give the cost of a car built according to +the Department's standard specifications. The cost of modern +steel cars being built by some of the railroad companies is from +$14,000 to $15,000.</p> + +<p>"The compensation received by a railroad company for operating a +car and carrying the mails in it would be approximately as +follows:</p> + +<p>"The pay for a 60-foot car at $40 a track mile per annum, for a +track mileage of 150 miles, would be $6,000. The average load of +a 60-foot car, according to statistics obtained recently, is +2.83 tons. The rate per ton of an average daily weight of 50,000 +pounds carried over the route is $25.06. At this rate the +company would receive $10,637.97 per annum for the average load +of mail hauled in the car. This sum added to the specific rate +for the railway post office car ($6,000), makes the total pay +for the car and its average load $16,637.97 per annum.</p> + +<p>"Senator Vilas' argument was based upon the theory that the +rates fixed for railroad transportation alone, based on the +weights of the mails carried, are adequate compensation for all +services rendered, including the operation of railway post +office cars, and <span class='pagenum'><a name="Page_30" id="Page_30">[30]</a></span>that, therefore, the railroad companies would +be required to operate postal cars owned by the Post Office +Department for the compensation allowed by law for the weight of +mails alone, including apartment-car space and facilities. Such +theory is not justified by the facts, as will appear from the +following:</p> + +<p>"A careful perusal of the debates in both Houses of Congress +which led to the enactment of the present law fixing the rate of +pay for railroad transportation of the mails and for railway +post office cars clearly indicates that the additional +compensation for railway post office cars was intended to cover +the additional expense imposed upon the railroad companies for +building, maintaining, and hauling such cars. The companies at +that time insisted that these cars, which were practically +traveling post offices, did not carry a remunerative load, and +that therefore the amount of pay, based on weight, did not +compensate them for their operation. This led to the specific +appropriation for railway post office cars. In this connection +it should be borne in mind that the purpose of the railway post +office car is to furnish ample space and facilities for the +handling and distribution of mails en route. Therefore, the +space required is much greater than would be required for merely +hauling the same weight of mails.</p> + +<p>"In regard to any proposal for Government ownership of postal +cars, other facts as well as the above should be given +consideration. Such cars must be overhauled, cleaned, and +inspected daily. It would be necessary to either arrange with +the railway companies for this service or for the Department to +employ its own inspectors, repair men, and car cleaners at a +large number of places throughout the country, which would +probably be more expensive than the cost to the railway +companies in that respect at present. It would hardly be +feasible to establish a Government repair shop. Therefore, the +Department would be compelled to use the shops of the several +railway companies throughout the country. Without the closest +supervision and attention of the Government's inspectors it +could scarcely be expected that our cars would <span class='pagenum'><a name="Page_31" id="Page_31">[31]</a></span>receive the same +consideration in railroad shops as those owned by the railway +companies. These shops are frequently congested, and it is +probable that the railroad work would be given the preference.</p> + +<p class="right"><span class="datepad5">"Yours very truly,</span><br /> +<span class="sc datepad">"Frank H. Hitchcock,</span><br /> +<span class="datepad2">"<i>Postmaster-General</i>."</span></p> +</div> + +<p>The Wolcott Commission carefully investigated the whole subject of +Postal Car Pay and their conclusions regarding this form of +compensation and its reasonableness are set forth in their report in +the following language:</p> + +<div class="block"><p>"Until a comparatively short time prior to 1873 the distribution +of the mails in transitu was unknown. Prior to the late sixties +the railroads simply transported the mails, which were delivered +at the post offices and there distributed. Accordingly, 'weight' +as the basis of compensation was at the time of its adoption and +long thereafter entirely adequate.</p> + +<p>"For a few years, however, prior to 1873 the distribution of the +mails in transitu had been practiced to a sufficient extent to +satisfy the Post Office Department and Congress that it was a +desirable innovation and a branch of the postal service that +should be very much enlarged. But it was recognized that if the +railroads were not only to transport the mail itself, but also +to supply, equip, and haul post offices for the distribution of +the mails, the compensation upon weight basis that had obtained +up to that time was not entirely adequate and just, and +therefore the law of 1873, as already indicated, contained a +provision allowing additional compensation for railway post +office cars. At first these cars were mostly not exceeding 40 or +45 feet in length and of light construction, similar to baggage +and express cars.</p> + +<p>"From the policy of the Department, however, of constantly +demanding better and better facilities from the railroads and +the introduction of every improvement that could be discovered, +it has come to pass that, <span class='pagenum'><a name="Page_32" id="Page_32">[32]</a></span>today, the railroad post office cars, +with the exception of a few obsolete ones that are being +discontinued as rapidly as practicable, are elaborate +structures, weighing between 90,000 and 100,000 pounds; built as +strongly and fitted up, so far as suitable to the purpose for +which it is intended, as expensively as the best Pullman and +parlor cars; costing from $5,200 to $6,500; maintained at a cost +of $2,000 per year; traveling on an average of 100,000 miles per +annum; provided with the very best appliances for light, heat, +water, and other comforts and conveniences; placed in position +for the use of the postal authorities from two and a half to +seven hours before the departure of the train upon which they +are to be hauled, and owing to the small space allowed in them +for the actual transportation of the mails, accompanied on the +denser lines by storage cars for which no additional +compensation is paid by the Government and on the less dense +lines the larger bulk of mails is carried in the baggage cars +without additional compensation for the car.</p> + +<p>"These cars are constructed and fitted up by the railroads in +accordance with plans and specifications furnished by the +Department, and the amount of mail transported therein is +determined exclusively by the postal authorities. From these two +facts it results that the railroad must haul 100,000 pounds of +car when the weight of the mail actually carried therein is only +from 3,500 to 5,000 pounds—often very much less, and +occasionally somewhat more.</p> + +<p>"Taking in view all these facts, as disclosed by the testimony +filed herewith, we are of opinion that the 'prices paid * * * as +compensation for the postal-car service' are not excessive, and +recommend that no reduction be made therein so long as the +methods, conditions, and requirements of the postal service +continue the same as at present."</p></div> + +<span class='pagenum'><a name="Page_33" id="Page_33">[33]</a></span><br /> + +<h4>MAIL RATES AND EXPRESS RATES.</h4> + +<p>No feature of this question has been more persistently misrepresented +than the relative value to the railroads of the mail business and the +express business.</p> + +<p>As elsewhere shown, the express business is 52 per cent more valuable +to the Burlington road than the Government mails on the mere basis of +space used and facilities furnished in passenger trains. There are +many other considerations which increase this disparity of value in +favor of the express, but reference to them is omitted in order to +direct public attention to the following statements of the +Postmaster-General in his recent letter upon the subject:</p> + +<br /> + +<p class="cen">(<i>Congressional Record</i>, March 4, 1910, 61st Congress, Second Session, +Vol. 45, No. 60, Page 2802.)</p> + +<div class="block"><p class="schang">Letter of the Postmaster-General Relative to the Service +Rendered by the Railroad Companies in Connection With the Mails +and With Express.</p> + +<p class="right">"<span class="sc">Office of the Postmaster-General,<br /> +"Washington, D.C.</span>, January 31, 1910.</p> + +<p class="noin">"Hon. <span class="sc">John W. Weeks</span>,<br /> +<span class="datepad3"><i>Chairman Committee on Post Offices and</i></span><br /> +<span class="datepad4"><i>Post Roads, House of Representatives</i>.</span></p> + +<p>"<span class="sc">My Dear Sir</span>: In response to your inquiry as to the +difference between the service rendered the Post Office +Department by railroad companies in the carriage and handling of +the mails, and that rendered express companies, I would state +that from such information as we have been able to obtain in +regard to the service rendered to express companies, the +difference is substantially as follows:</p> + +<p><span class='pagenum'><a name="Page_34" id="Page_34">[34]</a></span>"The Post Office Department requires the railroad company to +take the mail from the post office wherever the office is within +80 rods of the depot, and the company has an agent, and in many +cases to perform the terminal service regardless of the distance +between the post office and the station. Wherever the terminal +service is taken up by the Department, by means of regulation or +screen-wagon service, the contractor delivers the mail at a +specified place at the depot, and from that point the railroad +employees transport it to the cars, and if the amount is so +great that it would impose a hardship upon the postal employees +to load and store this mail, the railroad company is called upon +to furnish porters to do the work. Where the mail messenger or +contractor can drive direct to the cars, he does so. The express +companies haul all of their matter to the railroad stations and +put it in the cars, using their own employees and their own +trucks.</p> + +<p>"The cars furnished the Post Office Department and those +furnished the express companies differ very materially. The +former are built according to specifications furnished by the +Department, and are fully equipped with letter cases, paper +racks, drawers, and lockers for registered mail and supplies, +and all of the equipment necessary for the distribution of mail +en route. The cars furnished the express companies have very +little, if any, interior furnishings, and are more like the cars +used for the transportation of baggage. In both cases the cars +used are owned by the railroad company.</p> + +<p>"The number of employees transported for the Post Office +Department is very much greater than for the express companies. +There are frequently five or six clerks in the postal cars, and +on fast mail trains, where there are two or three working cars +to a train, the number runs up as high as 23. The express seldom +requires more than two men in a car.</p> + +<p>"The Post Office Department claims as much space at depots +without specific payment therefor as may be required for the +storing and handling of mail in transit. The express companies +are required to pay the railroad companies for all space used at +depots.</p> + +<p><span class='pagenum'><a name="Page_35" id="Page_35">[35]</a></span>"On smaller lines a separate apartment must be furnished for the +mails other than baggage mails. The express matter is usually +placed in the baggage car.</p> + +<p>"Upon arrival at terminals the railroad company may be required +to unload a mail car, if the quantity is such as to impose a +hardship upon the clerks, and to see that it is loaded into the +contractor's wagons; or, if the terminal service devolves upon +the railroad company, that it is delivered into the post office. +The express company unloads and handles its own matter.</p> + +<p>"The railroad and express companies frequently use a joint +employee to handle baggage and express, thereby economizing in +cost of help. That can very seldom be done in connection with +the postal service.</p> + +<p>"The railroad company has charge of all baggage mails in transit +and receives them into and delivers them from the cars. It also +handles other mails when necessary to transfer them between cars +or trains. It is held responsible for reasonable care in their +transportation. Deductions are made for failures to perform +service according to contract, and fines are imposed for +delinquencies. The company is required to keep a record of all +pouch mails carried on trains in charge of their employees and +handled at stations where more than one regular exchange pouch +is involved and no mail transfer clerk is located, and to +prepare and forward shortage slips when a pouch is due and not +received. They are required to make monthly affidavits as to +performance of service. It is understood that the company never +assumes control of express matter. The Department is not +informed as to the terms of contracts between railroad and +express companies, and therefore can not state what +responsibility is imposed as to transportation.</p> + +<p>"Mail cranes for the exchange of mail at points where trains do +not stop are erected and kept in repair by and at the expense of +the railroad company, whose employees must hang the mail bag on +the crane and adjust it for catching at points where the +company <span class='pagenum'><a name="Page_36" id="Page_36">[36]</a></span>provides side service. The mail catchers are also +furnished by them. No service of this character is rendered +express companies.</p> + +<p>"A railroad company is required by law to carry the mails upon +any train that may be run, when so ordered by the +Postmaster-General, without extra charge therefor, and as a +result the mails are carried on the fastest trains and with +great frequency. Express matter is not as a rule carried on the +fast limited passenger trains, nor with the frequency with which +mails are carried.</p> + +<p>"In this connection your attention is invited to pages 84 to 94, +516, 517, 860 to 863, part 1, and pages 687 to 696, part 2, of +the testimony before the Congressional Commission which +investigated the postal service in 1900—Wolcott-Loud +Commission.</p> + +<p class="right"><span class="datepad5">"Yours very truly,</span><br /> +<span class="sc datepad">"F. H. Hitchcock,</span><br /> +<span class="datepad2">"<i>Postmaster-General</i>."</span></p> +</div> + +<p>The Government does not own any railroad, but, under the present +system, the Post Office Department dictates to the railroad companies +upon what passenger trains and in what kind of cars the mails shall be +carried. It insists on such space and facilities as it deems necessary +for the mails being furnished on the fastest and most expensive trains +and demands that these trains keep their fast schedules; this means +that all other trains on the road are side-tracked and delayed +whenever that is necessary in order to expedite the mails.</p> + +<p>There are no such features in the express business.</p> + +<p>Demanding a preference traffic, the Government ought to be willing to +pay for it more than express rates. In fact, it pays much less than +express rates.</p> + +<p>The ablest and most competent witness who appeared before the Wolcott +Commission on this subject was Henry S. Julier, Vice-President and +General Manager of the <span class='pagenum'><a name="Page_37" id="Page_37">[37]</a></span>American Express Company, who said: "Without +question, the Government has the cheaper service by far."</p> + +<p>Mr. Julier further stated that seven pounds is the average weight of +packages sent by express, and the seven pound package is the typical +express package, and therefore the earnings from carrying such +packages are the true index of the rates actually received. Some +railroads receive as their compensation fifty per cent of the express +company's earnings; the C. B. & Q. receives fifty-seven and a half per +cent.</p> + +<p>Mr. Julier was asked by the Commission to file statements showing from +the rates in force exactly the revenue received per hundred-weight by +the railroad company from the express in comparison with the mail +rates. He filed the following:</p> + +<p class="cen"><span class='pagenum'><a name="Page_38" id="Page_38">[38]</a></span><i>Table Showing Rates Received by Railways Per Hundred-weight for Mails +and Rates Received for Express Between Points Named.</i></p> + +<div class="block"> + +<div class="centered"> +<table border="0" cellpadding="2" cellspacing="0" width="90%" summary="Rates Received"> + <tr> + <td class="tdl" width="29%"> </td> + <td class="tdl" width="13%">Distance.</td> + <td class="tdl1" width="29%">MAIL.<br /> Rate per 100 pounds allowed railroad companies under last weighing, including the pay for post office cars.</td> + <td class="tdl1" width="29%">EXPRESS.<br /> 50 per cent of express companies' earnings on fourteen 7-pound packages weighing in the aggregate 100 pounds, yields the railroad companies the rate per 100 pounds noted below.</td> + </tr> + <tr> + <td class="tdl">New York to</td> + <td class="tdrp3"> </td> + <td class="tdrp3"> </td> + <td class="tdrp3"> </td> + </tr> + <tr> + <td class="tdlp">Buffalo</td> + <td class="tdrp">440</td> + <td class="tdrp3">$1.58</td> + <td class="tdrp3">$2.80</td> + </tr> + <tr> + <td class="tdlp">Chicago</td> + <td class="tdrp">980</td> + <td class="tdrp3">3.57</td> + <td class="tdrp3">4.55</td> + </tr> + <tr> + <td class="tdlp">Omaha</td> + <td class="tdrp">1,480</td> + <td class="tdrp3">5.38</td> + <td class="tdrp3">5.95</td> + </tr> + <tr> + <td class="tdlp">Indianapolis</td> + <td class="tdrp">906</td> + <td class="tdrp3">3.27</td> + <td class="tdrp3">4.55</td> + </tr> + <tr> + <td class="tdlp">Columbus</td> + <td class="tdrp">761</td> + <td class="tdrp3">2.49</td> + <td class="tdrp3">3.85</td> + </tr> + <tr> + <td class="tdlp">East St. Louis</td> + <td class="tdrp">1,171</td> + <td class="tdrp3"> 4.38</td> + <td class="tdrp3"> 4.90</td> + </tr> + <tr> + <td class="tdlp">Portland, Me.</td> + <td class="tdrp"> 347</td> + <td class="tdrp3"> 1.33</td> + <td class="tdrp3"> 2.80</td> + </tr> + <tr> + <td class="tdl">Chicago to</td> + <td class="tdrp"> </td> + <td class="tdrp3"> </td> + <td class="tdrp3"> </td> + </tr> + <tr> + <td class="tdlp">Milwaukee</td> + <td class="tdrp">85</td> + <td class="tdrp3">.34</td> + <td class="tdrp3">2.10</td> + </tr> + <tr> + <td class="tdlp">Minneapolis</td> + <td class="tdrp">421</td> + <td class="tdrp3">1.83</td> + <td class="tdrp3">3.85</td> + </tr> + <tr> + <td class="tdlp">New Orleans</td> + <td class="tdrp">922</td> + <td class="tdrp3">5.27</td> + <td class="tdrp3">5.95</td> + </tr> + <tr> + <td class="tdlp">Detroit</td> + <td class="tdrp">284</td> + <td class="tdrp3">1.34</td> + <td class="tdrp3">2.80</td> + </tr> + <tr> + <td class="tdlp">Cincinnati</td> + <td class="tdrp">306</td> + <td class="tdrp3">1.20</td> + <td class="tdrp3">3.15</td> + </tr> + <tr> + <td class="tdl">Cincinnati to</td> + <td class="tdrp"> </td> + <td class="tdrp3"> </td> + <td class="tdrp3"> </td> + </tr> + <tr> + <td class="tdlp">St. Louis</td> + <td class="tdrp">374</td> + <td class="tdrp3">1.61</td> + <td class="tdrp3">3.15</td> + </tr> + <tr> + <td class="tdlp">Chicago</td> + <td class="tdrp">306</td> + <td class="tdrp3">1.20</td> + <td class="tdrp3">3.15</td> + </tr> + <tr> + <td class="tdlp">Cleveland</td> + <td class="tdrp">263</td> + <td class="tdrp3">1.26</td> + <td class="tdrp3">2.80</td> + </tr> +</table> +</div> + +<br /> + +<p>Since the filing of these statistics, the rates paid to +railroads for carrying the mails have been reduced almost a +fifth.</p> + +<p>The statements of the Postmaster-General and the statistics +confirm the evidence of these returns that the <span class='pagenum'><a name="Page_39" id="Page_39">[39]</a></span>express business +is much more valuable to railroad companies than the Government +mail business.</p> + +<p class="right"><span class="sc datepad">W.W. Baldwin,</span><br /> +<span class="datepad2"><i>Vice-President</i>.</span></p> + +<p class="noin"><span class="sc">John DeWitt,</span><br /> +<span class="datepad3"><i>General Mail Agent</i>.</span><br /> +<br /> +<span class="sc">May, 1910.</span></p></div> + +<br /> +<br /> +<br /> +<br /> +<hr /> +<span class='pagenum'><a name="Page_40" id="Page_40">[40]</a></span><br /> + +<h3>APPENDIX.</h3> +<br /> + +<p class="cen"><i>Exhibit A.</i></p> + +<p class="cen">[Form 2601.]</p> + +<p>There are on file in the Post Office Department one hundred and two +separate statements showing, for the month of November as to each mail +route on the Burlington system, the space occupied and used for mail +and for express and for passengers.</p> + +<p>In order to make a comparison it was, of course, necessary to reduce +each item of space used in each car to a common basis of feet, and the +following table shows what are the actual facilities furnished in +passenger trains for the three classes of traffic reduced to linear +car-foot space:</p> + +<br /> + +<p class="cen"><i>Car Foot Mileage.</i></p> + +<div class="centered"> +<table border="0" cellpadding="2" cellspacing="0" width="60%" summary="Car Foot Mileage"> + <tr> + <td class="tdc" width="33%"><i>Mail.</i></td> + <td class="tdc" width="34%"><i>Passengers.</i></td> + <td class="tdc" width="33%"><i>Express.</i></td> + </tr> + <tr> + <td class="tdc">62,246,130</td> + <td class="tdc">428,164,920</td> + <td class="tdc">39,525,540</td> + </tr> + <tr> + <td class="tdc">(11.75%)</td> + <td class="tdc">(80.8%)</td> + <td class="tdc">(7.45%)</td> + </tr> +</table> +</div> + +<br /> +<br /> + +<p class="cen"><span class='pagenum'><a name="Page_41" id="Page_41">[41]</a></span><i>Exhibit B.</i></p> + +<p class="cen">[Form 2602.]</p> + +<p class="cen"><i>Station Facilities Furnished for the Mails and Express and the Value +of Other Items of Service Rendered.</i></p> + +<br /> + +<p class="cen"><i>Mail Expense.</i></p> + +<div class="centered"> +<table border="0" cellpadding="2" cellspacing="0" width="60%" summary="Mail Expense"> + <tr> + <td class="tdl" width="80%">Monthly Cost of Handling Mail at Stations, labor, etc.</td> + <td class="tdr" width="20%">$14,241.67</td> + </tr> + <tr> + <td class="tdl">Monthly rental value of mail rooms in stations</td> + <td class="tdrvb">1,008.61</td> + </tr> + <tr> + <td class="tdl hang">Monthly rental value of tracks occupied by mail cars for advance distribution</td> + <td class="tdrvb">157.69</td> + </tr> + <tr> + <td class="tdl hang">Cost of lighting and heating mail cars for advance + distribution</td> + <td class="tdrvb">114.25</td> + </tr> + <tr> + <td class="tdl hang">Value of 309,827 miles of free transportation to post + office employees, not including postal clerks in + charge of mail</td> + <td class="tdrvb">6,196.54</td> + </tr> + <tr> + <td class="tdl">Switching mail cars for advance distribution</td> + <td class="tdrvb bb">2,795.80</td> + </tr> + <tr> + <td class="tdlp">Total for November</td> + <td class="tdrvb bt">$24,514.56</td> + </tr> +</table> +</div> + +<br /> + +<p>The foregoing does not include the rental value of space furnished by +the railroad company to the Government for handling mails and mail +trucks on station platforms, and for storing the mails on platforms at +large terminals. This is a large item, but statistics of such space +used were not called for. At Chicago Station platform space to the +amount of over 6,500 square feet is devoted exclusively to mails +handled by the Burlington and Pennsylvania.</p> + +<p>In addition to the foregoing, the Burlington Company transported on +its trains during November postal clerks in charge of mail for the +Government a distance of 3,109,747 miles in the aggregate.</p> + +<p>If the Government had paid their fare at two cents per mile the amount +paid would have been $62,174.94.</p> + +<p><span class='pagenum'><a name="Page_42" id="Page_42">[42]</a></span>These items of station facilities and other service rendered to the +Government for the mails amounted to $86,689 for November, or at the +rate of more than one million dollars annually.</p> + +<br /> + +<p class="cen"><i>Express Expense.</i></p> + +<div class="centered"> +<table border="0" cellpadding="2" cellspacing="0" width="60%" summary="Express Expense"> + <tr> + <td class="tdl hang" width="80%">Rental value of space in station buildings used for + express, for which no rent is paid</td> + <td class="tdrvb" width="20%">$488.68</td> + </tr> + <tr> + <td class="tdl hang">Rental value of tracks used for advance loading of express</td> + <td class="tdrvb">191.11</td> + </tr> + <tr> + <td class="tdl hang">Value of 42,298 miles of free transportation to + Express Company officials and employees at two cents per mile.</td> + <td class="tdrvb bb">885.96</td> + </tr> + <tr> + <td class="tdl hang"> </td> + <td class="tdrvb bt"> $1,565.75</td> + </tr> +</table> +</div> + +<br /> + +<p>In addition to the foregoing, the agents and employees of the railroad +company in the month of November rendered service at stations in +handling express and in other ways for the Express Company to the +amount of $10,274, but the Express Company paid to the same persons +$14,538 in commissions.</p> + +<p>The Express Company also shared in the salaries paid to certain +baggage men and other joint train employees in November to the amount +of $7,480, in addition to the payment of commissions, as aforesaid.</p> + +<p>All the items of expense to the railroad company on account of the +express in the way of space furnished and free transportation to +employees, and services of station agents, amount to $11,840, while +the cash payments by the Express Company to the railroad Company +indirectly, through payments in commissions to station agents and the +salaries of baggage men amounts to $22,018, a pecuniary gain or income +from express of $10,178 per month, or at the rate of $124,136 +annually, compared with a large outgo annually on account of the mails +as shown in the foregoing items.</p> + +<br /> +<br /> + +<p class="cen"><span class='pagenum'><a name="Page_43" id="Page_43">[43]</a></span><i>Exhibit C.</i></p> + +<p class="cen">[Form 2603.]</p> + +<p class="cen"><i>Revenues and Expenses and Train and Car Mileage.</i></p> + +<p class="cen"><i>Revenues.</i></p> + +<div class="centered"> +<table border="0" cellpadding="1" cellspacing="0" width="60%" summary="Express Expense"> + <tr> + <td class="tdl hang" width="80%">Receipts in November from all passenger traffic (not including Mail and Express)</td> + <td class="tdrvb" width="20%">$1,859,839</td> + </tr> + <tr> + <td class="tdl hang">Receipts from Express</td> + <td class="tdrvb">187,825</td> + </tr> + <tr> + <td class="tdl hang">Receipts from Mails</td> + <td class="tdrvb bb">194,435</td> + </tr> + <tr> + <td class="tdlp3">Total</td> + <td class="tdrvb bt">$2,242,099</td> + </tr> +</table> +</div> + +<br /> + +<p class="cen"><i>Expenses.</i></p> + +<div class="centered"> +<table border="0" cellpadding="1" cellspacing="0" width="60%" summary="Express Expense"> + <tr> + <td class="tdl hang" width="80%">Total Operating Expenses of the road for November</td> + <td class="tdrvb" width="20%">$5,452,830</td> + </tr> + <tr> + <td class="tdl hang">Passenger Operating Expenses, and one-twelfth of the taxes and one-twelfth of the interest on the funded debt</td> + <td class="tdrvb">$2,365,521</td> + </tr> +</table> +</div> + +<br /> + +<p>The passenger operating expenses are distributed as follows:</p> + +<p class="cen"><span class='pagenum'><a name="Page_44" id="Page_44">[44]</a></span><i>Assignable Expenses.</i></p> + +<div class="centered"> +<table border="0" cellpadding="0" cellspacing="0" width="60%" summary="passenger operating expenses"> + <tr> + <td class="tdl" width="60%">Transportation Expense</td> + <td class="tdr" width="20%"> </td> + <td class="tdr" width="20%">$454,208</td> + </tr> + <tr> + <td class="tdlp">Fuel passenger engines</td> + <td class="tdr">$132,709</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Salaries passenger engineers</td> + <td class="tdr">100,511</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Salaries passenger trainmen</td> + <td class="tdr">87,557</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Train supplies, etc.</td> + <td class="tdr">55,664</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Injuries to persons</td> + <td class="tdr">19,904</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Station employees</td> + <td class="tdr">17,160</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Joint yards and terminals</td> + <td class="tdr">15,610</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Miscellaneous</td> + <td class="tdr bb">25,093</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdl">Maintenance of Equipment</td> + <td class="tdr bt"> </td> + <td class="tdr">$107,626</td> + </tr> + <tr> + <td class="tdlp">Repairs, passenger cars</td> + <td class="tdr">$67,650</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Depreciation, passenger cars</td> + <td class="tdr">39,639</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Miscellaneous</td> + <td class="tdr bb">337</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdl">Traffic Expense</td> + <td class="tdr bt"> </td> + <td class="tdr">$48,971</td> + </tr> + <tr> + <td class="tdlp">Advertising</td> + <td class="tdr">$17,249</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Outside agencies</td> + <td class="tdr">16,673</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Superintendence</td> + <td class="tdr">10,272</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Miscellaneous</td> + <td class="tdr bb">4,777</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdl">Maintenance of Way, etc.</td> + <td class="tdr bt"> </td> + <td class="tdr">$12,970</td> + </tr> + <tr> + <td class="tdlp">Buildings and grounds</td> + <td class="tdr">$7,053</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Joint tracks, etc.</td> + <td class="tdr">4,440</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Miscellaneous</td> + <td class="tdr bb">1,477</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdl">General Expense</td> + <td class="tdr bt"> </td> + <td class="tdr">$13,580</td> + </tr> + <tr> + <td class="tdlp">Salaries, clerks, etc.</td> + <td class="tdr">$8,994</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Insurance</td> + <td class="tdr">2,478</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Legal expense</td> + <td class="tdr">1,153</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp">Miscellaneous</td> + <td class="tdr bb">955</td> + <td class="tdr bb"> </td> + </tr> + <tr> + <td class="tdlp3 tdtp">Total</td> + <td class="tdr bt tdpt"> </td> + <td class="tdr bt tdpt">$637,355</td> + </tr> +</table> +</div> + +<br /> + +<p class="cen"><span class='pagenum'><a name="Page_45" id="Page_45">[45]</a></span><i>Proportion of Non-Assignable Expenses.</i></p> + +<div class="centered"> +<table border="0" cellpadding="0" cellspacing="0" width="60%" summary="operating expenses"> + <tr> + <td class="tdl" width="60%">Operating Expenses</td> + <td class="tdr" width="20%">$1,278,016</td> + <td class="tdr" width="20%"> </td> + </tr> + <tr> + <td class="tdl tdtp">Taxes and Interest</td> + <td class="tdr bb tdpt">450,150</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdlp2"> </td> + <td class="tdr bt"> </td> + <td class="tdr bb tdpt">$1,728,166</td> + </tr> + <tr> + <td class="tdlp2">Total</td> + <td class="tdr"> </td> + <td class="tdr bt tdpt">$2,365,521</td> + </tr> +</table> +</div> + +<br /> + +<p>Exhibit A shows that the entire space in all cars run on passenger +trains on the Burlington in November was divided as follows:</p> + +<div class="centered"> +<table border="0" cellpadding="1" cellspacing="0" width="40%" summary="space division"> + <tr> + <td class="tdl" width="50%">Passengers occupied</td> + <td class="tdr" width="50%">80.8 % of the space.</td> + </tr> + <tr> + <td class="tdl">Mail</td> + <td class="tdr">11.75% of the space.</td> + </tr> + <tr> + <td class="tdl">Express</td> + <td class="tdr">7.45% of the space.</td> + </tr> +</table> +</div> + +<br /> + +<p>If each of these three classes of traffic had contributed earnings and +paid expenses in proportion to the space occupied by it, the result in +comparative profit or loss to the company would have been as follows:</p> + +<p class="cen"><i>Comparative Profit and Loss.</i></p> + +<div class="centered"> +<table border="0" cellpadding="1" cellspacing="0" width="60%" summary="Profit and Loss"> + <tr> + <td class="tdl" width="20%"> </td> + <td class="tdr" width="20%"><i>Earnings.</i></td> + <td class="tdr" width="20%"><i>Expenses.</i></td> + <td class="tdr" width="20%"><i>Profit.</i></td> + <td class="tdr" width="20%"><i>Loss.</i></td> + </tr> + <tr> + <td class="tdl">Passengers</td> + <td class="tdr">$1,859,839</td> + <td class="tdr">$1,911,341</td> + <td class="tdr"> </td> + <td class="tdr">$51,502</td> + </tr> + <tr> + <td class="tdl">Mail</td> + <td class="tdr">194,435</td> + <td class="tdr">277,949</td> + <td class="tdr"> </td> + <td class="tdr">83,514</td> + </tr> + <tr> + <td class="tdl">Express</td> + <td class="tdr bb">187,825</td> + <td class="tdr bb">176,231</td> + <td class="tdr">$11,594</td> + <td class="tdr"> </td> + </tr> + <tr> + <td class="tdl"> </td> + <td class="tdr bt">$2,242,099</td> + <td class="tdr bt">$2,365,521</td> + <td class="tdr"> </td> + <td class="tdr"> </td> + </tr> +</table> +</div> + +<br /> + +<p>If the Government had paid to the Burlington Company for carrying the +mails 11.75% of the actual cost of doing the work, and a proportion of +the taxes and interest on the funded debt, it would, for November, +have paid $83,514 more than was paid, indicating that for the year the +Government is paying $1,002,168 less than the actual fair cost of the +service it is receiving.</p> + +<br /> +<br /> + +<p class="cen"><span class='pagenum'><a name="Page_46" id="Page_46">[46]</a></span><i>Exhibit D.</i></p> + +<p class="cen">[Form 2605.]</p> + +<p class="cen"><i>Statement of Mail Cars and Apartment Cars.</i></p> + +<p class="cen"><i>Postal Cars.</i></p> + +<div class="centered"> +<table border="0" cellpadding="2" cellspacing="0" width="65%" summary="Postal Cars"> + <tr> + <td class="tdlvb" width="34%"> <i>Kind of Car</i></td> + <td class="tdcvb" width="22%"><i>Number Owned</i></td> + <td class="tdcvb" width="22%"><i>Original Average Cost</i></td> + <td class="tdcvb" width="22%"><i>Present Average Value</i></td> + </tr> + <tr> + <td class="tdl">60 feet or more in length</td> + <td class="tdcvb">49</td> + <td class="tdrp">$5,176.00</td> + <td class="tdrp">$4,669.84</td> + </tr> + <tr> + <td class="tdl">50 to 59 feet in length</td> + <td class="tdcvb">10</td> + <td class="tdrp">4,116.00</td> + <td class="tdrp">2,595.70</td> + </tr> + <tr> + <td class="tdl">Less than 50 feet in length</td> + <td class="tdcvb bb">17</td> + <td class="tdrp bb">2,555.00</td> + <td class="tdrp bb">2,094.41</td> + </tr> + <tr> + <td class="tdlp">Total</td> + <td class="tdcvb bt">76</td> + <td class="tdrp bt">$4,451.00</td> + <td class="tdrp bt">$3,820.84</td> + </tr> +</table> +</div> + +<br /> + +<p class="cen"><i>Apartment Cars.</i></p> + +<div class="centered"> +<table border="0" cellpadding="2" cellspacing="0" width="75%" summary="Apartment Cars"> + <tr> + <td class="tdlvb" width="40%"> <i>Kind of Car</i></td> + <td class="tdcvb" width="20%"><i>Number Owned</i></td> + <td class="tdcvb" width="20%"><i>Original Average Cost</i></td> + <td class="tdcvb" width="20%"><i>Present Average Value</i></td> + </tr> + <tr> + <td class="tdl">Cars with mail apartments 30 feet or more in length</td> + <td class="tdcvb">27</td> + <td class="tdrp">$3,888.00</td> + <td class="tdrp">$2,112.78</td> + </tr> + <tr> + <td class="tdl">Cars with mail apartments 25 to 29 feet in length</td> + <td class="tdcvb">21</td> + <td class="tdrp">3,660.00</td> + <td class="tdrp">2,004.95</td> + </tr> + <tr> + <td class="tdl">Cars with mail apartments 20 to 24 feet in length</td> + <td class="tdcvb">22</td> + <td class="tdrp">3,292.00</td> + <td class="tdrp">1,810.50</td> + </tr> + <tr> + <td class="tdl">Cars with mail apartments less than 20 feet in length</td> + <td class="tdcvb bb">31</td> + <td class="tdrp bb">3,106.00</td> + <td class="tdrp bb">1,729.35</td> + </tr> + <tr> + <td class="tdlp">Total</td> + <td class="tdcvb bt">104</td> + <td class="tdrp bt">$3,460.00</td> + <td class="tdrp bt">$1,901.71</td> + </tr> +</table> +</div> + +<br /> +<br /> +<br /> +<br /> +<hr /> +<br /> +<br /> +<br /> +<br /> + + + + + + + + + +<pre> + + + + + +End of the Project Gutenberg EBook of The Mail Pay on the Burlington Railroad, by +Anonymous + +*** END OF THIS PROJECT GUTENBERG EBOOK MAIL PAY *** + +***** This file should be named 36464-h.htm or 36464-h.zip ***** +This and all associated files of various formats will be found in: + http://www.gutenberg.org/3/6/4/6/36464/ + +Produced by Jeannie Howse, Adrian Mastronardi, The +Philatelic Digital Library Project at 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You may copy it, give it away or +re-use it under the terms of the Project Gutenberg License included +with this eBook or online at www.gutenberg.org + + +Title: The Mail Pay on the Burlington Railroad + +Author: Anonymous + +Editor: Post-Office Department + +Release Date: June 19, 2011 [EBook #36464] + +Language: English + +Character set encoding: ASCII + +*** START OF THIS PROJECT GUTENBERG EBOOK MAIL PAY *** + + + + +Produced by Jeannie Howse, Adrian Mastronardi, The +Philatelic Digital Library Project at http://www.tpdlp.net +and the Online Distributed Proofreading Team at +http://www.pgdp.net (This file was produced from images +generously made available by The Internet Archive/American +Libraries.) + + + + + + + + + +THE MAIL PAY ON THE +BURLINGTON RAILROAD + +Statements of Car Space and all Facilities Furnished +for the Government Mails and for Express and +Passengers in all Passenger Trains on +the Chicago, Burlington and +Quincy Railroad + + + + +Prepared in accordance with requests of the Post-Office Dept. + + + + +THE MAIL PAY + +ON THE + +Chicago, Burlington & Quincy Railroad + + +The present system under which the Government employs railroads to +carry the mails was established in 1873, thirty-seven years ago. Under +this system, the Post Office Department designates between what named +towns upon each railroad in the country a so-called "mail route" shall +be established. Congress prescribes a scale of rates for payment per +mile of such mail route per year, based upon the average weight of +mails transported over the route daily, "with due frequency and +speed," and under "regulations" promulgated from time to time by the +Post Office Department. To this is added a certain allowance for the +haulage and use of post office cars built and run exclusively for the +mails, based upon their length. The annual rate of expenditure to all +railroads for mail service on all routes in operation June 30, 1909, +was $44,885,395.29 for weight of mail, and for post office cars +$4,721,044.87, the "car pay," so-called, being nine and five-tenths +per cent of the total pay. The payment by weight is, therefore, the +real basis of the compensation to railroads. The rate itself, however, +varies upon different mail routes to a degree that is neither +scientific nor entirely reasonable. The rate per ton or per hundred +pounds upon a route carrying a small weight is twenty times greater +than is paid over a route carrying the heaviest weight. The Government +thus appropriates to its own advantage an extreme application of the +wholesale principle and demands a low rate for large shipments, which +principle it denounces as unjust discrimination if practiced in favor +of private shippers by wholesale. The effect of the application of +this principle has been to greatly reduce the average mail rate year +by year as the business increases. This constant rate reduction was +described by Hon. Wm. H. Moody (now Mr. Justice Moody of the United +States Supreme Court) in his separate report as a member of the +Wolcott Commission in the following language: + + "The existing law prescribing railway mail pay automatically + lowers the rate on any given route as the volume of traffic + increases. Mr. Adams shows that by the normal effect of this law + the rate per ton mile is $1.17, when the average daily weight of + mail is 200 pounds, and, decreasing with the increase of volume, + it becomes 6.073 cents when the average daily weight is 300,000 + pounds." + +NOTE.--Since 1907 the railroads have been paid at much reduced rates. +On the heavy routes the pay is now 5.54 cents per ton per mile. + +Post Office Department officials have announced, as their conclusion +from the results of the special weighing in 1907, that the average +length of haul of all mail is 620 miles. + +The bulk of the mail is now carried on the heavy routes at 5.54 cents +per ton per mile, or $34.34 per ton for the average haul, that is, for +one and seven-tenths cents per pound. + +The railroads, therefore, receive less than one and three-fourths +cents per pound for carrying the greater part of the mails. + + * * * * * + +But the rate reduction for wholesale quantities has not had the effect +of reducing the actual remuneration of the railroads for carrying the +mails to nearly so great an extent as the increasing requirements for +excessive space for distributing mails en route. This feature was +likewise discussed by Judge Moody in his report in the following +language: + + "The rule of transportation invoked is based upon the assumption + that the increase of traffic permits the introduction of + increased economy, notably, the economy which results in so + loading cars that the ratio of dead weight to paying freight is + decreased. Yet this economy is precisely what our method of + transporting mail denies to the railroads. Instead of permitting + the mail cars, whether apartment or full postal cars, to be + loaded to their full capacity, the Government demands that the + cars shall be lightly loaded so that there may be ample space + for the sorting and distribution of mail en route. In other + words, instead of a freight car, a traveling post office." + +An illustration of the extent to which the reductions have been +carried, as shown upon one railroad system, is set forth in the letter +of January 21, 1909, addressed to the Committee on Post Offices and +Post Roads of the House of Representatives by Mr. Ralph Peters, +President of the Long Island Railroad, who states that the actual cost +to his company of carrying the United States mail for the year was +$122,169, while the total compensation for that service paid by the +Government was $41,196. Mr. Peters says: + + "The Long Island Company received from the Government for mail + service performed in expensive passenger trains one-half the + rate received by it per car mile for average class freight in + slow-moving freight trains." + +The Long Island Company notified the Government that it would decline +to carry the mails by the present expensive methods, unless Congress +makes some provision for a more adequate compensation. A notification +of similar import has been given by The New York, New Haven & Hartford +Railroad Company, the principal carrier in New England. Their position +in this matter will undoubtedly be taken by other roads, because the +same condition of inadequate compensation prevails upon hundreds of +small railroads and mail routes, especially in the Southern and +Western States. + +Notwithstanding these facts, a powerful interest, which commands the +public ear and derives great profit from the one-cent-per-pound rate +of postage, has, in order to divert public attention from itself, for +years industriously and systematically circulated false statistics and +false statements among the people regarding the railroad mail pay, and +is now circulating them. + +The extent to which the public is being deceived regarding the +railroad mail pay is disclosed daily. In a recent hearing before the +Senate Committee on Post offices and Post-Roads, Senator Carter of +Montana said: + + "We are all getting letters on this subject. I received the + other day a letter from a very intelligent lady in Montana + claiming that the Government is paying to the Northern Pacific + Railway on that branch line for carrying the mail $97,000 per + year. On inquiring at the Post Office Department, I find that + the total compensation of the Northern Pacific Company for mail + service on that line is $3,070 per year." + +This state of things was a sufficient reason for the Post Office +Department to institute the present series of inquiries tending to +show the space in passenger trains upon the railroads demanded and +used by the Government for the mails in comparison with the space +devoted to express and passenger service, and the relative rates of +compensation in each class of service and the extent to which the +roads are receiving for carrying the mails the cost to them of +performing the service. In order to give these facts fair +consideration, it is not necessary to admit that "space" is, or is +not, a better and more workable basis for determining what is +reasonable mail pay than "weight," nor to admit that the companies are +only entitled to be paid by the Government for the service rendered to +it the bare cost of rendering that service, that is, to receive back +the train operating cost. Questions of speed and facilities furnished, +and the preference character of the traffic and the exceptional value +of the service, and other elements, must be considered as well as +space and cost, but that is no reason why the relative proportion of +space used and the relation of compensation to cost should not be +ascertained and given due weight, in the consideration of the +important question of what is adequate mail pay to the railroads. + +The following pages are based upon answers to the interrogatories of +the Post Office Department and contain a statement of the mail service +performed by the Chicago, Burlington and Quincy Railroad Company, a +system extending westward from Chicago into eleven different States +and embracing approximately ten thousand miles of main and branch +lines. + +The two principal tables of interrogatories were sent out under date +of September 28, 1909, by the Post Office Department as the basis for +this investigation. + +These tables indicate the minute and thorough manner which the +Department employed in making this inquiry. + +Some questions having arisen regarding the meaning and scope of the +word "authorized" in connection with the returns of space occupied and +used for the mails in Post Office cars and apartment cars, and in +certain other features, the Department, under date October 23, 1909, +issued an important supplementary letter of instructions. + +Pursuant to these interrogatories, instructions and requests the +Burlington Company has filed with the Department the exact and +detailed statements, train by train and car by car, of the mail +service upon each of the one hundred and two mail routes on its +system, large and small, for the month of November, 1909, which were +thus called for. These answers state the facts and state them in the +manner prescribed wherever possible. Every inch of space on passenger +trains and cars which in these tables is shown to be occupied or used +for mail or express or for passengers is set down from actual +measurements made, car by car, and not upon any "estimate" or +"consist" basis. + +In the appendix will be found four tables prepared under the direction +and supervision of Mr. DeWitt which contain the results of this +investigation into the mail service upon the Burlington, as disclosed +in these statements. + +Exhibit A is a statement of the car facilities or space used in every +car in service on the road during the month of November for mail, and +for express or occupied by passengers based upon replies to questions +prescribed in Form 2601. + +Exhibit B is a statement of the station facilities, furnished for the +mail, prepared on Form 2602. + +Exhibit C is a statement of Revenues and Expenses and of train and car +mileage, prepared on Form 2603. + +Exhibit D is a statement of the number, and cost, and present value of +Post Office cars and Apartment cars, prepared on Form 2605. + + +THE INTEGRITY OF THE RETURNS. + +In November, 1909, all the service rendered in all passenger trains +and cars of the Burlington system, reduced to a common basis of car +foot miles (that is, each foot of linear space that was carried one +mile), amounted to 529,936,590 car foot miles, divided as follows: + + In Passenger + Service. Mails. Express. + 428,164,920 62,246,130 39,525,540 + (80.8%) (11.75%) (7.45%) + +The original circular of the Post Office Department contained certain +"notes," to the effect that in reporting the length of postal cars and +apartment cars, and the space therein used for mails, the railroad +companies should only report the length or space "authorized" by the +officials of the Department; also that in reporting space used in cars +for what is known as the "Closed Pouch Service," the railroads should +make an arbitrary allowance of six linear inches across the car for +the first 200 pounds or less of average daily weight of pouch mail and +three linear inches for each additional 100 pounds. + +These directions were modified by the subsequent circular letter of +the Department, dated October 23, 1909. + +This letter, among other things, directs the company to take credit +for "surplus" space in post office cars and apartment cars, if +actually used for the storage of mails. + +The practical difficulties attending the measurement and proper +allotment of the space used for the mails in postal and other cars run +on a passenger train will be better understood when it is known that +such space is or may be described in at least eight different ways, +and is actually used on the Burlington road as follows, namely: + +1. Space in post office cars specially "authorized" (43.03%). + +2. Space in apartment cars specifically "ordered" (20.69%). + +3. Space ordered in post office cars operated in lieu of apartment +cars (4.3%). + +4. Additional space actually used for storage of mails when the +railroad company operates larger post office or apartment cars than +the authorization calls for (1.5%). + +5. Space in storage cars actually used for mails (12.87%). + +6. Space in baggage cars used for closed pouch mails (4.06%). + +7. The return deadhead movement of space ordered and required in one +direction only (8.35%). + +(Ninety-five per cent of all the "space" shown in these returns for +the Burlington, as used for the mails, comes within the foregoing +seven classes, as properly authorized space about which no question +can arise.) + +8. "Surplus" space; that is, space furnished to the Government in post +office and apartment cars in excess of actual requirements (5.2%). + +This five per cent is the only portion of the space claimed as used +for mails regarding which any question can be raised, affecting the +integrity of these returns. + +What is the correct view as to this five per cent? + +It is manifestly against the interest of the railroad company to +furnish space for mails that is not required, and it will never +furnish such space if it can be avoided. But the "requirements" of the +Post Office Department are not fixed and certain quantities, by any +means. It is entirely impracticable for any railroad company to keep +on hand at all times a supply of cars of all lengths in order to meet +exactly the requirements of the Department officials. + +These statistics have been called for by the Post Office Department to +enable it to make accurate comparisons between the space used and the +facilities furnished on passenger trains for the three classes of +service performed, that is, for express companies, for the Government +in mail carriage, and for passengers. The point of the whole inquiry +is this: + +Does the Government contribute to the cost of the passenger train +service upon the railroads of the country its fair share, that is, in +proportion to the space and facilities it demands and requires the +companies to furnish for the mails? + +In making the comparison all the car space in all passenger trains +must be measured and tabulated and has been measured and tabulated in +the tables here submitted. + +A passenger car may have seats to accommodate eighty persons; the +average load it carries may be fifteen persons. But in making up these +returns of "space," all the empty space in that car is credited as +passenger space. That car may likewise be loaded only one way and +returned "dead head," but these returns have credited such return +movement as passenger space. + +The same is true of the express service in these returns. All space in +all baggage and express cars set aside for the express company's use +is, in these tables of statistics, credited to express, whether in +fact loaded or "surplus," or "dead head" space. + +How is a comparison possible, unless the space credited to the mails +is recorded in the same way? As stated above, only five per cent of +the whole space is involved in the question of "surplus" space, and if +that five per cent should be entirely thrown out, the percentage +results would not be materially changed. + + +RESULTS UPON THE BURLINGTON ROAD. + +The Government cannot justly ask a railroad company to carry the mails +without profit. + +The passenger business on the Burlington road is conducted without +profit if it is charged with the expenses assignable to passenger +traffic, and a proper proportion of the expenses not thus specifically +assignable, and a fair share of the taxes and the charges for capital +in the form of interest on bonds and dividends on stock. The profit in +the business comes from the freight. + +This fact gives force to the present inquiry of the Post Office +Department to determine whether the Government, in proportion to the +service and facilities it requires from the roads on passenger trains, +is contributing a fair proportion of the passenger train earnings. If +the passenger train business, as a whole, is carried on at a loss, the +Government ought, in fairness, to stand at least its share of the +loss. + +The earnings of the Burlington Company from all passenger train +service in November were $2,242,099. + +The following table shows the earnings from passengers, from mail and +express, and the space used in passenger trains by the three classes +of traffic and the proportion of earnings contributed for facilities +so used: + + _Earnings._ _Car Foot Miles._ + Passengers $1,859,839 (82.95%) 428,164,920 (80.80%) + Express 187,825 ( 8.38%) 39,525,540 ( 7.45%) + Mails 194,435 ( 8.67%) 62,246,130 (11.75%) + ---------- ----------- + Total $2,242,099 529,936,590 + +This table shows that for each one thousand feet of space used in +passenger trains the three classes of passenger traffic contributed in +earnings as follows: + + Passengers $4.34 139.1% + Express $4.75 152.2% + Mails $3.12 100% + +In proportion to the space occupied and facilities used on passenger +trains, the Burlington road receives from passengers 39 per cent more +than the Government pays for mail transportation, and from the Adams +Express Company 52 per cent more; that is, the express business pays +the railroad company better than the Government pays for carrying the +mails by 52 per cent. + +If the Government had paid to the railroad company as much as the +express company for each foot of space required and used on passenger +trains, it would, for November, have paid $101,233 more than it did +pay, or an increase in annual mail pay of more than a million dollars. + + * * * * * + +It may be of interest to note that the returns for the Pennsylvania +System just being filed show the following: + + _Earnings._ _Car Foot Miles._ + Passengers 79.8% 76.2% + Express 12.6% 13.7% + Mails 7.6% 10.1% + +For each 1,000 feet of passenger train space used on the Pennsylvania +the traffic contributed in earnings as follows: + + Passengers $4.45 139% + Express 3.91 122% + Mails 3.20 100% + +On the Pennsylvania the passenger business is worth to that company 39 +per cent more than the Government mail business, and the express +business is worth 22 per cent more than the mails, indicating that +express rates are relatively higher in the West than the East, but +that neither in the East nor in the West is it a paying business to +carry the mails at present rates. + + + + +IS THE GOVERNMENT PAYING THE RAILROADS FOR CARRYING THE MAILS THE COST +OF DOING THE WORK? + + +No. The Government paid the C. B. & Q. for carrying the mails in +November $194,435, or at the rate of $2,333,220 annually. + +The total operating expenses of the road for that month were +$5,452,830. + +The items of passenger train operating expense strictly assignable +were as follows: + + Transportation Expense $454,208 + Fuel passenger engines $132,709 + Salaries passenger engineers 100,511 + Salaries passenger trainmen 87,557 + Train supplies, etc. 55,664 + Injuries to persons 19,904 + Station employees 17,160 + Joint yards and terminals 15,610 + Miscellaneous 25,093 + -------- + Maintenance of Equipment $107,626 + Repairs, passenger cars $67,650 + Depreciation, passenger cars 39,639 + Miscellaneous 337 + ------- + Traffic Expense $48,971 + Advertising $17,249 + Outside agencies 16,673 + Superintendence 10,272 + Miscellaneous 4,777 + ------- + Maintenance of Way, etc. $12,970 + Buildings and grounds $7,053 + Joint tracks, etc. 4,440 + Miscellaneous 1,477 + ------ + General Expense $13,580 + Salaries, clerks, etc. $8,994 + Insurance 2,478 + Legal expense 1,153 + Miscellaneous 955 + ------ -------- + Total $637,355 + + Proportion operating expense not assignable $1,278,016 + ---------- + Total $1,915,371 + +A large part of the operating expenses of every railroad, such as +maintenance of roadway, station expense, general office expense and +the like, are common to both the freight and passenger service, and it +seems impossible to assign all of them specifically. The Post Office +Department, in the circular under which the roads are reporting, +recognizes this condition and calls for the "proportion" of the +expense "not directly assignable and the basis of such apportionment." + +The apportionment of non-assignable expense on the Burlington has been +made on the basis of train mileage. + +In the month of November the mileage of passenger trains was +forty-five and four-tenths per cent of the total train mileage, and +the foregoing sum ($1,278,016) of non-assignable expense is forty-five +and four-tenths per cent of the operating expenses for that month, +common to both kinds of traffic, and therefore incapable of specific +assignment to either. + +These two classes of passenger expense (assignable and non-assignable) +aggregate $1,915,371 monthly, or at the rate of $22,984,452 per year, +and 11.75 per cent of this sum, or $2,700,675, is the annual operating +cost to the Burlington Company of transporting the Government mails. + + Cost of carrying the mails $2,700,675 + Earnings from carrying the mails 2,333,220 + ---------- + Loss $367,455 + +These figures show that, in proportion to the service rendered, the +Government paid to that company $367,455 less than the actual cost of +doing the work, not including anything for taxes, nor for interest +paid by the company upon its funded debt, which was necessary to be +paid, in order to preserve the property, to say nothing of a return +upon the capital represented by the capital stock. + +The correct mail's proportion of taxes and interest for the year is +$634,713, which added to the $367,455 loss above operating expenses, +shows a loss of $1,002,168: + + Loss, operating expenses over revenue $367,455 + 11.75% of taxes and interest 634,713 + ---------- + Annual loss on mails $1,002,168 + +This takes no account of the annual value at two cents per mile of the +transportation of inspectors and postal employees, other than clerks +in charge of the mails ($74,352), nor of clerks in charge of the mails +($746,340). + +These two items of service rendered to the Government by the C. B. & +Q. road are of the admitted value of $820,692 annually. + +The railroad company has the same duty and legal responsibility +towards these clerks as towards passengers. + + * * * * * + +Is there another fair way of testing this question? + +In a letter dated March 2, 1910, from Hon. Frank H. Hitchcock, +Postmaster-General, to Hon. John W. Weeks, Chairman of the Post Office +Committee of the House, printed in full herewith, he states it is +estimated that the average annual cost to the railroads of operating a +post office car for the Government is $19,710, including $2,049 for +lighting, heating, repairs, etc., and that the total average pay +received for the car and its contents including post office car pay, +is $16,638 per annum, showing a loss in this branch of the service of +$3,073 per car. There are 1,111 full postal cars in actual service in +the country, and the loss thereon, therefore, aggregates $3,414,103, +to say nothing of the 231 postal cars in reserve. + +But that is the smaller part of the loss. There were 3,116 apartment +cars in actual use in 1909, averaging twenty feet in length, and the +cost of operating each of these, according to Mr. Hitchcock's figures, +would be one-third of $19,710, or $6,570. + +The average haul of apartment cars is 48 miles, and the average load +in a twenty-foot apartment car is officially stated as 607 pounds, +making the rate per mile on routes carrying an average daily weight of +only 607 pounds, $68.40 per annum, and the average earnings, +therefore, $3,283 per year, an average loss of $3,287 per car and an +actual loss per year from operating the 3,116 apartment cars of +$10,642,292, to say nothing of the 639 apartment cars in reserve. + +The C. B. & Q. has 76 full post office cars and 104 apartment cars, +and applying to them the foregoing figures given in Mr. Hitchcock's +letter, the loss from operating them in 1909 was $575,396, adding to +which $634,713, the mail's proportion of taxes and interest, that +must be included in estimating "cost," in which the Government's +business should share, the estimated loss on the business was +$1,210,109, compared with $1,002,168, arrived at by charging the +Government business with 11.75 per cent of the passenger expense, that +being its proportion of the space used in passenger trains. + +The Government should be willing to pay fairly for what it exacts from +the railroads, and it exacts from the C. B. & Q. 11.75 per cent of its +passenger train facilities. If it had paid 11.75 per cent of the +passenger train expenses of the road in 1909, it would have paid +approximately a million dollars more than it did pay. + +The Government which demands from the railroads that they build and +transport daily over their roads for its benefit 5,100 traveling post +offices as full postal cars and apartment cars should be willing to +pay what the Postmaster-General estimates to be the actual cost of +operating those cars, and a fair proportion of the taxes and interest. + +If it had paid such cost in 1909, it would have paid to the C. B. & Q. +approximately a million dollars more than it did pay. + + +RESULTS ON VARIOUS MAIL ROUTES. + +The foregoing are statements of results on the Burlington System as a +whole, showing earnings and expenses and facilities furnished to the +Government mail service. + +It may be of interest, and throw light on the situation, to show +results for November upon several separate mail routes in the system, +ranging from small routes carrying 200 pounds of mail daily, up, +through routes carrying weights, respectively, of 1,300, and 8,000, +and 20,000 pounds daily, to the heaviest route carrying 192,000 +pounds, covering the fast mail service from Chicago to Omaha. + +Weights of express packages are not kept on separate mail routes and +statements therefore of express earnings for such separate mail routes +are necessarily estimated, but, as given in the following tables, they +are approximately correct and corroborate the comparative results for +the Burlington system as a whole, which results are based upon exact +figures for express as well as for mails and for passengers. + + +I. + +Route 157,030, Kenesaw to Kearney (Nebraska), 24.68 miles. Average +Daily Weight 216 Pounds. + + _Percentage _Percentage _Should Earn _Did + of Space of on Basis of Actually + Occupied._ Earnings._ Space Used._ Earn._ + Passenger 83.79 88.90 $1,238 $1,314 + Mail 9.37 6.02 139 89 + Express 6.84 5.08 101 75 + ------ + $1,478 + +The mail earnings on this route are $89 per month, or $3.44 daily. The +service for the Government is performed in an apartment car fifteen +feet long, and closed pouch service, four trains carrying mail daily, +except Sunday, giving an actual return to the railroad of three and a +half cents per mile run, or about one passenger fare at three cents +per mile although the Government demands the use of a 15-foot car +fitted up as a post office in which a postal clerk is carried free, +and this car must be lighted, heated and kept in repair, and carried +over the route each way daily, except Sunday. + +On this branch the actual earnings on passengers per passenger car are +55 cents per car mile. + +The post office apartment car equals one-quarter of a passenger car, +and the mail should, on this basis, earn at least 14 cents per mile, +but it does earn, for all the mail service, at the rate of 3-1/2 cents +per mile, less the expense of delivering mail to and from post +offices. + +During the weighing period the mails are carried on 90 days and +weighed on 90 days, but under the Cortelyou order, these aggregate +weights are divided by 105 and the result is called the "average" and +forms the basis of pay on this route for four years. + +This mail service in a traveling post office on an expensive railroad +is paid about one-third the rate per mile that the Government pays to +a rural route carrier who carries an average of 25 pounds of mail. + + +II. + +Route 157,028. Odell to Concordia, Kansas. 72 Miles. Average Daily +Weight, 282 Pounds. + + _Per cent _Per cent _Should Earn _Did + Space_ Earnings_ on Space_ Earn._ + Passenger 80.82 81.44 $2,482 $2,501 + Mail 11.76 9.38 361 288 + Express 7.42 9.18 228 282 + ------ + $3,071 + +Mail earnings $288 per month (26 days), or $11 per day. + +This service demands a twenty-five-foot apartment car each way for +which the pay amounts to 7.64 cents per car mile run, or about the +fares of two passengers at three cents per mile who may occupy one +seat. + +The service is six days per week, but the aggregate weight carried in +the six days is divided by seven to obtain the Cortelyou "average" on +which the pay is based. + +The payment for a twenty-five-foot traveling post office is a little +over half the pay per mile for a rural route carrier. + + +III. + +Route 135,012. Streator to Aurora (Ills.). 60 Miles. Average daily +weight, 1,303 pounds. + + _Per cent _Per cent _Should Earn _Did + Space_ Earnings_ on Space_ Earn._ + Passenger 72.84 85.64 $4,800 $5,643 + Mail 17.38 7.51 1,145 495 + Express 9.78 6.85 644 451 + ------ + $6,589 + +Mail earnings (26 days), $495 per month, or $19 per day. + +Four trains on this road carry mail daily, two each way, two in a +twenty-five-foot mail apartment and two in a thirty-foot mail +apartment, an average earning rate of 7.88 cents per car mile. + +The passenger cars on this branch carry an average of 24 passengers +each, and earn 48 cents per car mile. The average mail apartment +furnished is half a passenger coach. + +These four apartment cars, at the same rate as the passenger cars (24 +cents per mile), would earn $18,029 per year. + +The passenger train earnings on the branch are $79,000 a year. The +mails demand 17.38 per cent of the facilities, and on that basis +should earn for the company $13,730. + +The mail earnings were $5,940, this being the annual compensation +after a reduction of nine and one-half per cent through the Cortelyou +order, requiring the aggregate of 90 weighings to be divided by 105 to +ascertain the "average." + + +IV. + +Route 164,004. Edgemont to Billings (Wyoming). 366 Miles. Average +Daily Weight, 8,087 Pounds. + + _Per cent _Per cent _Should Earn _Did + Space_ Earnings_ on Space_ Earn._ + Passenger 85.79 89.22 $85,476 $88,895 + Mail 10.43 6.18 10,392 6,156 + Express 3.78 4.60 3,766 4,583 + ------- + $99,634 + +Two 60-foot postal cars are run daily each way. + +The mail earnings are $6,156 per month, or $205 per day. + +The total earnings of the passenger trains on this road are $1,195,000 +a year, and the mails required 10.43 per cent of the passenger train +facilities; on this basis they ought to pay $125,000 a year. + +These post office cars are hauled 534,000 miles every year. The +Postmaster-General estimates that the actual cost to the railroads of +operating a sixty-foot postal car is 18 cents per mile. At this rate +the Burlington Company should be paid $96,000 a year for the service +of the postal cars only. + +It is, in fact, paid for all the mail service on this road $73,872 +annually. + + +V. + +Route 135,010. Galesburg to Quincy (Ills.). 99.93 Miles. Average Daily +Weight, 19,727 pounds. + + _Per cent _Per cent _Should Earn _Did + Space_ Earnings_ on Space_ Earn._ + Passenger 69.45 79.44 $28,864 $33,015 + Mail 19.70 8.45 8,187 3,511 + Express 10.85 12.11 4,509 5,034 + ------- + $41,560 + +Mail earnings from all sources $3,511 per month, or $117 per day. + +The service is performed in three 60-foot postal cars, two 16-foot +apartments and one 27-foot apartment, each way daily; also one 44-foot +postal car and one full storage car, daily except Sunday, in addition +to some space furnished for closed pouches in ordinary baggage cars. + +The car space provided for the mails on this route is equivalent to +ten full sixty-foot cars daily, over the whole length of the route, or +365,000 car miles a year. At 18 cents per mile the pay would be +$65,700, whereas the actual pay is only $42,132. If the Government +paid for the service in proportion to the facilities it demands and +receives, it would pay $98,244. + + +VI. + +Route 135,007. Chicago to Burlington (205 Miles). Average Daily +Weight, 192,540 pounds. + + _Per cent _Per cent _Should Earn _Did + Space_ Earnings_ on Space_ Earn._ + Passenger 73.14 74.72 $210,134 $214,671 + Mail 17.19 13.74 49,387 39,462 + Express 9.67 11.54 27,782 33,170 + -------- + $287,303 + +On the basis of space used and facilities provided for the mails, the +Burlington road is underpaid $119,000 a year on this route. + +Two-thirds of the weight of mail is carried in special trains run at +great speed and unusual expense, for which no extra allowance is made. +The extension of the route to Omaha is across Iowa, where it is "Land +Grant," and subject to land grant deductions. + +The Government made a "gift" to the company in 1856 of lands amounting +to 358,000 acres and then valued at $1.25 per acre, or $447,500. + +The mail pay deductions to June 1, 1910, on account of this Iowa land +grant aggregate $1,650,000, and still continue at the rate of $62,000 +a year. + +Neither in the foregoing six statements of results upon separate mail +routes, nor in the general statement of results upon the Burlington +Road has any allowance been made for the expense to the company of +what is called the "Mail Messenger Service." + +At all points where the post office is not over one-fourth of a mile +from the railroad station the railroad company must have all the mails +carried to and from the post office. + +What an important item of expense this amounts to appears in the +following extract from the Report of the Wolcott Commission, which +states: + + "Out of 27,000 stations supplied by messenger service 7,000 are + paid for by the Department at a cost of between $1,000,000 and + $1,100,000 per annum, leaving the other 20,000 stations to be + supplied by and at the expense of the railroads." + +Investigation has shown that on mail routes, where the average mail +pay of the railroad company is $900 a year, the average cost of this +mail messenger service is $400, calculating only $100 as the expense +for each station where they are required to perform the service. +There are instances where the company pays in cash each year, for +delivering the mails between station and post office, considerably +more than the Government pays for the entire mail service over its +line of road. There is no such feature in the express service. + + +WHY DO RAILROADS CARRY THE MAILS WITHOUT PROFIT? + +The question is sometimes asked why the railroads continue to carry +the mails if there is no profit in the business. Carrying the mails is +not the only traffic which railroads take upon terms that would +bankrupt them if applied to all their business. + +There is no profit in running passenger trains on most railroads; that +is, the receipts from all the traffic carried on passenger trains are +not sufficient to pay a train mileage or car mileage share of +operating expenses and taxes and charges for the use of capital. But a +large part of this cost of conducting the business of a railroad, such +as taxes, interest, maintenance of roadway, general office expenses, +and many others, would continue substantially the same if the +passenger trains were discontinued. Having the railroad, and its +taxes, and interest, and maintenance expenses to meet, anyhow, no +railroad can afford to refuse any income from passenger trains that +amounts to more than their train operating cost. On the same principle +they accept low rates per mile as a share of through passenger fares +which, if applied to all passenger fares, would show a loss. The road +is there, the trains are running, and the cars only partially loaded; +the addition of through passengers may not materially increase the +expense, and the road is better off to accept the business at less +than the average cost, rather than to reject it. But whatever the +passenger trains lose must be made up by the freight trains if the +road is to continue in business. + +The constant aim of the managers of the railroad is to secure from +each class of traffic not only the operating cost peculiar to that +traffic, but a proportion of the general cost; but business is not +necessarily rejected on which it is impossible to secure such +proportion. + +Many of the reasons which impel them to run passenger trains without +profit apply to their acceptance of the Government mails. They +facilitate the freight business; it is better to carry them at a loss +than not to carry them at all. + +But is that any reason why the Government should not pay fair value +for what it receives? Is it good policy for the Government to force +upon the companies the alternative of carrying the mails at a loss or +refusing to carry them at all? + +What are the mails? + +They are the letters and packets that are conveyed from one post +office to another under public authority. + +Who conveys them? The railroads convey nine-tenths of them. + +The railroads are the mail service of this country. The Post Office +Department states that it receives from the people who use the mails +eighty-four dollars on every one hundred pounds of letters and post +cards. Who makes that money for them? The railroads. The railroads +convey those letters and cards from post office to post office--not +the Government. + +For a service like that the Government can afford to pay. + +What does it pay? + +On the great bulk of the business the railroad companies which do the +work and earn the money receive less than two dollars a hundred. On +every pound of first-class mail the Government collects eighty-four +dollars a hundred. + +The fact that the Congress, for purposes of general education or other +reasons, thinks it is good public policy to carry the magazines and +other second-class matter at one dollar a hundred is something about +which the railroads have nothing to do and nothing to say. + +The mail pay of the railroads has been reduced in the past four years +more than eight million dollars a year. Part of this was done by act +of Congress, but the greater part came from the arbitrary and illegal +Cortelyou order. + +These reductions were made without any hearing being granted to the +railroads. Hearings were refused by the Committee which reduced the +pay three and a half millions, and no pretense of a hearing was made +by Secretary Cortelyou when his autocratic order was issued reducing +the mail pay approximately five million dollars a year. This order was +an arbitrary and unwarranted and illegal exercise of executive power. + +The last hearing allowed to the railroad companies on this subject was +by the Wolcott Commission, 1897 to 1900, composed of eminent Senators +and Representatives. They reported, after two years' investigation, +that the mail pay was reasonable and should not be reduced. Upon the +question whether railroads should be asked to carry the mails at a +loss their report expressed the following views: + + "It seems to the Commission that not only justice and good + conscience, but also the efficiency of the postal service and + the best interests of the country demand that the railway-mail + pay shall be so clearly fair and reasonable that while, on the + one hand, the Government shall receive a full _quid pro quo_ for + its expenditures and the public treasury be not subjected to an + improper drain upon its funds, yet, on the other hand, the + Railway Mail Service shall bear its due proportion of the + expenses incurred by the railroads in the maintenance of their + organization and business as well as in the operations of their + mail trains. + + "The transaction between the Government and the railroads should + be, and in the opinion of the Commission is, a relation of + contract; but it is a contract between the sovereign and a + subject as to which the latter has practically no choice but to + accept the terms formulated and demanded by the former; and, + therefore, it is incumbent upon the sovereign to see that it + takes no undue advantage of the subject, nor imposes upon it an + unrighteous burden, nor 'drives a hard bargain' with it. The + Commission, therefore, believes that the determination whether + the present railway mail pay is excessive or not should be + reached, as near as may be, upon a business basis, and in + accordance with the principles and considerations which control + ordinary business transactions between private individuals." + + +THE POSTAL CAR PAY. + +The wide credence which has been given to the statement that the +Government is paying to the railroads an annual rent for postal cars +equal to the cost of building them is remarkable. + +The Government does not pay a rental for any car. The idea is an +erroneous one, and is based upon ignorance regarding the payment of +what is called "Post Office Car Pay." + +Originally, the mail business on railroads was the transportation of +mail bags, and was essentially a freight traffic. But its character +has entirely changed. + +The business now consists almost wholly in providing moving post +offices, expensive to build and expensive to operate, in which the +average weight for which pay is received is about two tons in full +postal cars and six hundred pounds in apartment cars. + +The Post Office Department weighed all the mails carried in all postal +cars and apartment cars in the country during October, 1907, and the +average weight of mail on the Burlington road loaded in a forty-foot +postal car was found to be less than 2,000 pounds; in fifty-foot cars +it was 2,500 pounds; and in sixty-foot cars it averaged less than +4,500 pounds; in apartment cars it was 607 pounds. + +The average load carried in an ordinary freight car on the Burlington +road is from 36,000 to 40,000 pounds. Railroads, as a rule, haul a ton +of paying or productive freight for every ton of dead or unproductive +load. In the Government mail business they carry nineteen tons of dead +weight for each ton of paying weight. + +These cars are fitted up as post offices and are used for distribution +en route in order to expedite and facilitate the prompt transmission +and delivery of mails. They largely take the place of very expensive +distribution offices in cities. + +The railroads provide cars for freight traffic, but refused to build, +and maintain, and haul these moving post offices with their clerks and +paraphernalia, without pay. That is the post office car pay of which +so much is said. + +The truth regarding this feature of the subject is clearly stated in +the following recent letter from the Postmaster-General: + + +(_Congressional Record_, March 5, 1910, 61st Congress, Second Session, +Vol. 45, No. 61, Page 2852.) + + LETTER OF THE POSTMASTER-GENERAL RELATIVE TO THE COST OF + FURNISHING AND OPERATING RAILWAY POST OFFICE CARS. + + "OFFICE OF THE POSTMASTER-GENERAL, + WASHINGTON, D.C., March 2, 1910. + + "Hon. JOHN W. WEEKS, + _Chairman Committee on Post Offices and + Post Roads, House of Representatives_. + + "MY DEAR SIR: In response to your inquiry made of the Second + Assistant Postmaster-General in regard to the cost of + maintaining and operating railway post office cars and its + relation to the compensation received by railroad companies for + the same and your reference to the speech delivered by Senator + Vilas on the subject in the United States Senate, February 13, + 1895, I have the honor to advise you as follows: + + "The Department has not at this time sufficient information upon + this point to give from its own records a reliable estimate. As + you are aware, we have recently asked railroad companies to + submit answers to inquiries with reference to the cost of + operating the mail service, and it is believed that when these + shall have been received we will be in a position to furnish + such information. Inasmuch, however, as it may be of importance + to you to have estimates made from time to time by others and + such incomplete information as we have at present, I submit the + following: + + "The cost of operating a railway post office car has been + variously estimated (but not officially by the Department) as + from 15 to 30 cents a car mile. The average run per day of such + a car is about 300 miles. Estimating the cost at 18 cents a car + mile, the total cost of operating such car for one year would + be $19,710. + + "The specific items which constitute this total cost are not + definitely known to the Department. However, as to the cost of + lighting, cleaning, repairs, etc., the General Superintendent of + Railway Mail Service furnished the following estimates before + the Commission to investigate the postal service in 1899, viz.: + Lighting, $276; heating, $365; cleaning, water, ice, oil, etc., + $365; repairs, $350; proportion of original cost of car + (estimating the life of a car at fifteen years and the original + cost at $6,000), $400; total, $1,756. Recent inquiry gives the + following as the approximate cost of maintaining a car at the + present time: Lighting (electric), $444; heating, $150; + cleaning, $360; repairs, $300; oil and brasses, $120; interest + on cost of car (at $7,500), $300; annual deterioration + (estimating the life of a car at twenty years), $375; total, + $2,049. These figures give the cost of a car built according to + the Department's standard specifications. The cost of modern + steel cars being built by some of the railroad companies is from + $14,000 to $15,000. + + "The compensation received by a railroad company for operating a + car and carrying the mails in it would be approximately as + follows: + + "The pay for a 60-foot car at $40 a track mile per annum, for a + track mileage of 150 miles, would be $6,000. The average load of + a 60-foot car, according to statistics obtained recently, is + 2.83 tons. The rate per ton of an average daily weight of 50,000 + pounds carried over the route is $25.06. At this rate the + company would receive $10,637.97 per annum for the average load + of mail hauled in the car. This sum added to the specific rate + for the railway post office car ($6,000), makes the total pay + for the car and its average load $16,637.97 per annum. + + "Senator Vilas' argument was based upon the theory that the + rates fixed for railroad transportation alone, based on the + weights of the mails carried, are adequate compensation for all + services rendered, including the operation of railway post + office cars, and that, therefore, the railroad companies would + be required to operate postal cars owned by the Post Office + Department for the compensation allowed by law for the weight of + mails alone, including apartment-car space and facilities. Such + theory is not justified by the facts, as will appear from the + following: + + "A careful perusal of the debates in both Houses of Congress + which led to the enactment of the present law fixing the rate of + pay for railroad transportation of the mails and for railway + post office cars clearly indicates that the additional + compensation for railway post office cars was intended to cover + the additional expense imposed upon the railroad companies for + building, maintaining, and hauling such cars. The companies at + that time insisted that these cars, which were practically + traveling post offices, did not carry a remunerative load, and + that therefore the amount of pay, based on weight, did not + compensate them for their operation. This led to the specific + appropriation for railway post office cars. In this connection + it should be borne in mind that the purpose of the railway post + office car is to furnish ample space and facilities for the + handling and distribution of mails en route. Therefore, the + space required is much greater than would be required for merely + hauling the same weight of mails. + + "In regard to any proposal for Government ownership of postal + cars, other facts as well as the above should be given + consideration. Such cars must be overhauled, cleaned, and + inspected daily. It would be necessary to either arrange with + the railway companies for this service or for the Department to + employ its own inspectors, repair men, and car cleaners at a + large number of places throughout the country, which would + probably be more expensive than the cost to the railway + companies in that respect at present. It would hardly be + feasible to establish a Government repair shop. Therefore, the + Department would be compelled to use the shops of the several + railway companies throughout the country. Without the closest + supervision and attention of the Government's inspectors it + could scarcely be expected that our cars would receive the same + consideration in railroad shops as those owned by the railway + companies. These shops are frequently congested, and it is + probable that the railroad work would be given the preference. + + "Yours very truly, + "FRANK H. HITCHCOCK, + "_Postmaster-General_." + +The Wolcott Commission carefully investigated the whole subject of +Postal Car Pay and their conclusions regarding this form of +compensation and its reasonableness are set forth in their report in +the following language: + + "Until a comparatively short time prior to 1873 the distribution + of the mails in transitu was unknown. Prior to the late sixties + the railroads simply transported the mails, which were delivered + at the post offices and there distributed. Accordingly, 'weight' + as the basis of compensation was at the time of its adoption and + long thereafter entirely adequate. + + "For a few years, however, prior to 1873 the distribution of the + mails in transitu had been practiced to a sufficient extent to + satisfy the Post Office Department and Congress that it was a + desirable innovation and a branch of the postal service that + should be very much enlarged. But it was recognized that if the + railroads were not only to transport the mail itself, but also + to supply, equip, and haul post offices for the distribution of + the mails, the compensation upon weight basis that had obtained + up to that time was not entirely adequate and just, and + therefore the law of 1873, as already indicated, contained a + provision allowing additional compensation for railway post + office cars. At first these cars were mostly not exceeding 40 or + 45 feet in length and of light construction, similar to baggage + and express cars. + + "From the policy of the Department, however, of constantly + demanding better and better facilities from the railroads and + the introduction of every improvement that could be discovered, + it has come to pass that, today, the railroad post office cars, + with the exception of a few obsolete ones that are being + discontinued as rapidly as practicable, are elaborate + structures, weighing between 90,000 and 100,000 pounds; built as + strongly and fitted up, so far as suitable to the purpose for + which it is intended, as expensively as the best Pullman and + parlor cars; costing from $5,200 to $6,500; maintained at a cost + of $2,000 per year; traveling on an average of 100,000 miles per + annum; provided with the very best appliances for light, heat, + water, and other comforts and conveniences; placed in position + for the use of the postal authorities from two and a half to + seven hours before the departure of the train upon which they + are to be hauled, and owing to the small space allowed in them + for the actual transportation of the mails, accompanied on the + denser lines by storage cars for which no additional + compensation is paid by the Government and on the less dense + lines the larger bulk of mails is carried in the baggage cars + without additional compensation for the car. + + "These cars are constructed and fitted up by the railroads in + accordance with plans and specifications furnished by the + Department, and the amount of mail transported therein is + determined exclusively by the postal authorities. From these two + facts it results that the railroad must haul 100,000 pounds of + car when the weight of the mail actually carried therein is only + from 3,500 to 5,000 pounds--often very much less, and + occasionally somewhat more. + + "Taking in view all these facts, as disclosed by the testimony + filed herewith, we are of opinion that the 'prices paid * * * as + compensation for the postal-car service' are not excessive, and + recommend that no reduction be made therein so long as the + methods, conditions, and requirements of the postal service + continue the same as at present." + + +MAIL RATES AND EXPRESS RATES. + +No feature of this question has been more persistently misrepresented +than the relative value to the railroads of the mail business and the +express business. + +As elsewhere shown, the express business is 52 per cent more valuable +to the Burlington road than the Government mails on the mere basis of +space used and facilities furnished in passenger trains. There are +many other considerations which increase this disparity of value in +favor of the express, but reference to them is omitted in order to +direct public attention to the following statements of the +Postmaster-General in his recent letter upon the subject: + + +(_Congressional Record_, March 4, 1910, 61st Congress, Second Session, +Vol. 45, No. 60, Page 2802.) + + LETTER OF THE POSTMASTER-GENERAL RELATIVE TO THE SERVICE + RENDERED BY THE RAILROAD COMPANIES IN CONNECTION WITH THE MAILS + AND WITH EXPRESS. + + "OFFICE OF THE POSTMASTER-GENERAL, + "WASHINGTON, D.C., January 31, 1910. + + "Hon. JOHN W. WEEKS, + _Chairman Committee on Post Offices and + Post Roads, House of Representatives_. + + "MY DEAR SIR: In response to your inquiry as to the difference + between the service rendered the Post Office Department by + railroad companies in the carriage and handling of the mails, and + that rendered express companies, I would state that from such + information as we have been able to obtain in regard to the + service rendered to express companies, the difference is + substantially as follows: + + "The Post Office Department requires the railroad company to + take the mail from the post office wherever the office is within + 80 rods of the depot, and the company has an agent, and in many + cases to perform the terminal service regardless of the distance + between the post office and the station. Wherever the terminal + service is taken up by the Department, by means of regulation or + screen-wagon service, the contractor delivers the mail at a + specified place at the depot, and from that point the railroad + employees transport it to the cars, and if the amount is so + great that it would impose a hardship upon the postal employees + to load and store this mail, the railroad company is called upon + to furnish porters to do the work. Where the mail messenger or + contractor can drive direct to the cars, he does so. The express + companies haul all of their matter to the railroad stations and + put it in the cars, using their own employees and their own + trucks. + + "The cars furnished the Post Office Department and those + furnished the express companies differ very materially. The + former are built according to specifications furnished by the + Department, and are fully equipped with letter cases, paper + racks, drawers, and lockers for registered mail and supplies, + and all of the equipment necessary for the distribution of mail + en route. The cars furnished the express companies have very + little, if any, interior furnishings, and are more like the cars + used for the transportation of baggage. In both cases the cars + used are owned by the railroad company. + + "The number of employees transported for the Post Office + Department is very much greater than for the express companies. + There are frequently five or six clerks in the postal cars, and + on fast mail trains, where there are two or three working cars + to a train, the number runs up as high as 23. The express seldom + requires more than two men in a car. + + "The Post Office Department claims as much space at depots + without specific payment therefor as may be required for the + storing and handling of mail in transit. The express companies + are required to pay the railroad companies for all space used at + depots. + + "On smaller lines a separate apartment must be furnished for the + mails other than baggage mails. The express matter is usually + placed in the baggage car. + + "Upon arrival at terminals the railroad company may be required + to unload a mail car, if the quantity is such as to impose a + hardship upon the clerks, and to see that it is loaded into the + contractor's wagons; or, if the terminal service devolves upon + the railroad company, that it is delivered into the post office. + The express company unloads and handles its own matter. + + "The railroad and express companies frequently use a joint + employee to handle baggage and express, thereby economizing in + cost of help. That can very seldom be done in connection with + the postal service. + + "The railroad company has charge of all baggage mails in transit + and receives them into and delivers them from the cars. It also + handles other mails when necessary to transfer them between cars + or trains. It is held responsible for reasonable care in their + transportation. Deductions are made for failures to perform + service according to contract, and fines are imposed for + delinquencies. The company is required to keep a record of all + pouch mails carried on trains in charge of their employees and + handled at stations where more than one regular exchange pouch + is involved and no mail transfer clerk is located, and to + prepare and forward shortage slips when a pouch is due and not + received. They are required to make monthly affidavits as to + performance of service. It is understood that the company never + assumes control of express matter. The Department is not + informed as to the terms of contracts between railroad and + express companies, and therefore can not state what + responsibility is imposed as to transportation. + + "Mail cranes for the exchange of mail at points where trains do + not stop are erected and kept in repair by and at the expense of + the railroad company, whose employees must hang the mail bag on + the crane and adjust it for catching at points where the + company provides side service. The mail catchers are also + furnished by them. No service of this character is rendered + express companies. + + "A railroad company is required by law to carry the mails upon + any train that may be run, when so ordered by the + Postmaster-General, without extra charge therefor, and as a + result the mails are carried on the fastest trains and with + great frequency. Express matter is not as a rule carried on the + fast limited passenger trains, nor with the frequency with which + mails are carried. + + "In this connection your attention is invited to pages 84 to 94, + 516, 517, 860 to 863, part 1, and pages 687 to 696, part 2, of + the testimony before the Congressional Commission which + investigated the postal service in 1900--Wolcott-Loud + Commission. + + "Yours very truly, + "F. H. HITCHCOCK, + "_Postmaster-General_." + +The Government does not own any railroad, but, under the present +system, the Post Office Department dictates to the railroad companies +upon what passenger trains and in what kind of cars the mails shall be +carried. It insists on such space and facilities as it deems necessary +for the mails being furnished on the fastest and most expensive trains +and demands that these trains keep their fast schedules; this means +that all other trains on the road are side-tracked and delayed +whenever that is necessary in order to expedite the mails. + +There are no such features in the express business. + +Demanding a preference traffic, the Government ought to be willing to +pay for it more than express rates. In fact, it pays much less than +express rates. + +The ablest and most competent witness who appeared before the Wolcott +Commission on this subject was Henry S. Julier, Vice-President and +General Manager of the American Express Company, who said: "Without +question, the Government has the cheaper service by far." + +Mr. Julier further stated that seven pounds is the average weight of +packages sent by express, and the seven pound package is the typical +express package, and therefore the earnings from carrying such +packages are the true index of the rates actually received. Some +railroads receive as their compensation fifty per cent of the express +company's earnings; the C. B. & Q. receives fifty-seven and a half per +cent. + +Mr. Julier was asked by the Commission to file statements showing from +the rates in force exactly the revenue received per hundred-weight by +the railroad company from the express in comparison with the mail +rates. He filed the following: + +_Table Showing Rates Received by Railways Per Hundred-weight for Mails +and Rates Received for Express Between Points Named._ + + EXPRESS. + 50 per cent of + MAIL. express companies' + Rate per 100 earnings on fourteen + pounds allowed 7-pound packages + railroad companies weighing in the + under last aggregate 100 + weighing, pounds, yields the + including the pay railroad companies + for post office the rate per 100 + Distance. cars. pounds noted below. + + New York to + Buffalo 440 $1.58 $2.80 + Chicago 980 3.57 4.55 + Omaha 1,480 5.38 5.95 + Indianapolis 906 3.27 4.55 + Columbus 761 2.49 3.85 + East St. Louis 1,171 4.38 4.90 + Portland, Me. 347 1.33 2.80 + Chicago to + Milwaukee 85 .34 2.10 + Minneapolis 421 1.83 3.85 + New Orleans 922 5.27 5.95 + Detroit 284 1.34 2.80 + Cincinnati 306 1.20 3.15 + Cincinnati to + St. Louis 374 1.61 3.15 + Chicago 306 1.20 3.15 + Cleveland 263 1.26 2.80 + + Since the filing of these statistics, the rates paid to + railroads for carrying the mails have been reduced almost a + fifth. + + The statements of the Postmaster-General and the statistics + confirm the evidence of these returns that the express business + is much more valuable to railroad companies than the Government + mail business. + + W.W. BALDWIN, + _Vice-President_. + + JOHN DEWITT, + _General Mail Agent_. + + MAY, 1910. + + + + +APPENDIX. + + +_Exhibit A._ + +[Form 2601.] + +There are on file in the Post Office Department one hundred and two +separate statements showing, for the month of November as to each mail +route on the Burlington system, the space occupied and used for mail +and for express and for passengers. + +In order to make a comparison it was, of course, necessary to reduce +each item of space used in each car to a common basis of feet, and the +following table shows what are the actual facilities furnished in +passenger trains for the three classes of traffic reduced to linear +car-foot space: + + +_Car Foot Mileage._ + + _Mail._ _Passengers._ _Express._ + 62,246,130 428,164,920 39,525,540 + (11.75%) (80.8%) (7.45%) + + +_Exhibit B._ + +[Form 2602.] + +_Station Facilities Furnished for the Mails and Express and the Value +of Other Items of Service Rendered._ + +_Mail Expense._ + + Monthly Cost of Handling Mail at Stations, + labor, etc. $14,241.67 + Monthly rental value of mail rooms in stations 1,008.61 + Monthly rental value of tracks occupied by mail cars + for advance distribution 157.69 + Cost of lighting and heating mail cars for advance + distribution 114.25 + Value of 309,827 miles of free transportation to post + office employees, not including postal clerks in + charge of mail 6,196.54 + Switching mail cars for advance distribution 2,795.80 + ---------- + Total for November $24,514.56 + +The foregoing does not include the rental value of space furnished by +the railroad company to the Government for handling mails and mail +trucks on station platforms, and for storing the mails on platforms at +large terminals. This is a large item, but statistics of such space +used were not called for. At Chicago Station platform space to the +amount of over 6,500 square feet is devoted exclusively to mails +handled by the Burlington and Pennsylvania. + +In addition to the foregoing, the Burlington Company transported on +its trains during November postal clerks in charge of mail for the +Government a distance of 3,109,747 miles in the aggregate. + +If the Government had paid their fare at two cents per mile the amount +paid would have been $62,174.94. + +These items of station facilities and other service rendered to the +Government for the mails amounted to $86,689 for November, or at the +rate of more than one million dollars annually. + +_Express Expense._ + + Rental value of space in station buildings used for + express, for which no rent is paid $488.68 + Rental value of tracks used for advance loading + of express 191.11 + Value of 42,298 miles of free transportation to + Express Company officials and employees at two + cents per mile. 885.96 + --------- + $1,565.75 + +In addition to the foregoing, the agents and employees of the railroad +company in the month of November rendered service at stations in +handling express and in other ways for the Express Company to the +amount of $10,274, but the Express Company paid to the same persons +$14,538 in commissions. + +The Express Company also shared in the salaries paid to certain +baggage men and other joint train employees in November to the amount +of $7,480, in addition to the payment of commissions, as aforesaid. + +All the items of expense to the railroad company on account of the +express in the way of space furnished and free transportation to +employees, and services of station agents, amount to $11,840, while +the cash payments by the Express Company to the railroad Company +indirectly, through payments in commissions to station agents and the +salaries of baggage men amounts to $22,018, a pecuniary gain or income +from express of $10,178 per month, or at the rate of $124,136 +annually, compared with a large outgo annually on account of the mails +as shown in the foregoing items. + + +_Exhibit C._ + +[Form 2603.] + +_Revenues and Expenses and Train and Car Mileage._ + +_Revenues._ + + Receipts in November from all passenger traffic + (not including Mail and Express) $1,859,839 + Receipts from Express 187,825 + Receipts from Mails 194,435 + ---------- + Total $2,242,099 + +_Expenses._ + + Total Operating Expenses of the road for November $5,452,830 + Passenger Operating Expenses, and one-twelfth + of the taxes and one-twelfth of the interest + on the funded debt $2,365,521 + +The passenger operating expenses are distributed as follows: + +_Assignable Expenses._ + + Transportation Expense $454,208 + Fuel passenger engines $132,709 + Salaries passenger engineers 100,511 + Salaries passenger trainmen 87,557 + Train supplies, etc. 55,664 + Injuries to persons 19,904 + Station employees 17,160 + Joint yards and terminals 15,610 + Miscellaneous 25,093 + -------- + Maintenance of Equipment $107,626 + Repairs, passenger cars $67,650 + Depreciation, passenger cars 39,639 + Miscellaneous 337 + -------- + Traffic Expense $48,971 + Advertising $17,249 + Outside agencies 16,673 + Superintendence 10,272 + Miscellaneous 4,777 + -------- + Maintenance of Way, etc. $12,970 + Buildings and grounds $7,053 + Joint tracks, etc. 4,440 + Miscellaneous 1,477 + -------- + General Expense $13,580 + Salaries, clerks, etc $8,994 + Insurance 2,478 + Legal expense 1,153 + Miscellaneous 955 + -------- -------- + Total $637,355 + +_Proportion of Non-Assignable Expenses._ + + Operating Expenses $1,278,016 + Taxes and Interest 450,150 + ---------- + $1,728,166 + ------------- + Total $2,365,521 + +Exhibit A shows that the entire space in all cars run on passenger +trains on the Burlington in November was divided as follows: + + Passengers occupied 80.8 % of the space. + Mail 11.75% of the space. + Express 7.45% of the space. + +If each of these three classes of traffic had contributed earnings and +paid expenses in proportion to the space occupied by it, the result in +comparative profit or loss to the company would have been as follows: + +_Comparative Profit and Loss._ + + _Earnings._ _Expenses._ _Profit._ _Loss._ + Passengers $1,859,839 $1,911,341 $51,502 + Mail 194,435 277,949 83,514 + Express 187,825 176,231 $11,594 + ---------- ---------- + $2,242,099 $2,365,521 + +If the Government had paid to the Burlington Company for carrying the +mails 11.75% of the actual cost of doing the work, and a proportion of +the taxes and interest on the funded debt, it would, for November, +have paid $83,514 more than was paid, indicating that for the year the +Government is paying $1,002,168 less than the actual fair cost of the +service it is receiving. + + +_Exhibit D._ + +[Form 2605.] + +_Statement of Mail Cars and Apartment Cars._ + +_Postal Cars._ + + _Original _Present + _Number Average Average + _Kind of Car_ Owned_ Cost_ Value_ + 60 feet or more in length 49 $5,176.00 $4,669.84 + 50 to 59 feet in length 10 4,116.00 2,595.70 + Less than 50 feet in length 17 2,555.00 2,094.41 + -- --------- --------- + Total 76 $4,451.00 $3,820.84 + +_Apartment Cars._ + + _Original _Present + _Number Average Average + _Kind of Car_ Owned_ Cost_ Value_ + Cars with mail apartments 30 feet + or more in length 27 $3,888.00 $2,112.78 + Cars with mail apartments 25 to + 29 feet in length 21 3,660.00 2,004.95 + Cars with mail apartments 20 to + 24 feet in length 22 3,292.00 1,810.50 + Cars with mail apartments less + than 20 feet in length 31 3,106.00 1,729.35 + --- --------- --------- + Total 104 $3,460.00 $1,901.71 + + * * * * * + + + + + +End of the Project Gutenberg EBook of The Mail Pay on the Burlington Railroad, by +Anonymous + +*** END OF THIS PROJECT GUTENBERG EBOOK MAIL PAY *** + +***** This file should be named 36464.txt or 36464.zip ***** +This and all associated files of various formats will be found in: + http://www.gutenberg.org/3/6/4/6/36464/ + +Produced by 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