Nathaniel Hillyer. Egleston.

The North American review (Volume 139) online

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52 THE NORTH AMERICAN REVIEW.

deal of favor. It is highly probable that if the proposal were
submitted to a popular vote it would be adopted by an immense
majority. Most people do not stop to consider either the details
or the consequences of such a change. They know that the
Government is mighty, and they believe that it is omnipotent;
as it is said of the English Parliament, it can do anything but
make a man a woman. They are very generally prejudiced
against the great corporation that controls the telegraphs of the
country with how much reason we need not now consider
and they believe that the Government would do the business
cheaper and better than it is now done. If they were asked for
reasons for this belief, they would say : The Government has
succeeded very well with the Post-office, and it would therefore
succeed with the telegraph if it were to undertake it.

There are two assumptions involved in this reasoning : one,
that the Government is successful in the management of the
Post-office ; the other, that the business of sending telegrams is
so much like that of sending the mails that the Government can
do the former as well as the latter. Neither of these propositions
is so self-evident as to be admitted without argument. The
Star-route trials showed that a great deal of corruption may
exist in the Post-office for a long time before it is discovered ;
and a very little reflection will suggest many differences between
the transmission of letters and telegrams. The only way to form
a rational judgment upon such questions is to consider precisely
what work is to be done in each case, and how the Government
does it or would be likely to do it. The statistics to be examined
are not very well arranged for the purpose, but enough may be
extracted and condensed from them to answer our purpose.

The Post-office department undertakes the work of collecting
and receiving packets, not only of written or printed paper, but
also of merchandise, assorting them, transporting them from one
office to another, re-assorting and delivering them. This involves
the furnishing of necessary conveniences in the shape of buildings
and materials, the manufacture and sale of stamps and envelopes,
and the making of contracts for the transportation of the mails,
for this part of the business is done entirely by private persons.
It also involves the employment and payment of a vast number
of officers, in which of course political exigencies have to be
consulted. The money-order office being really a banking
business, although having office rent and use of the mails at the



GOVERNMENT TELEGRAPHY. 53

expense of the department, needs no special discussion. In order
to learn the financial standing of the Post-office, we should
naturally turn first to its balance-sheet. As the new rate of
letter postage has just been established, we shall be obliged to
use the returns for the year 1882. It will be at least a year
before the effects of the reduction of postage can be known.
This balance-sheet shows an expenditure of $40,482,021, and a
revenue of $41,876,410, leaving a balance of $1,394,388 the first
favorable balance, by the way, for thirty-one years. This is
slightly increased by credits for liabilities of previous years, but
is nearly wiped out by the charges for transportation over the
subsidized railroads. These charges are not paid in cash, but
are credited to these railroads upon the books of the treasury.
Of course they represent so much money paid by the people to
private persons, and, when properly entered, reduce the balance
in favor of the Post-office to $330,050.

Another peculiarity of this balance-sheet, as well as of those
of most government offices, is the absence of any capital account.
True, the amount of capital required by the Post-office is small
this being, as we shall see, one of the chief reasons why the
G-overnment can make so good a showing as it does but it is
still a considerable sum. An example will show the importance
of this omission. The Brooklyn Post-office is now charged
$7,300 yearly for rent. An appropriation of $800,000 has been
made for a public building in that city, which remains unex
pended only because it is not thought large enough to begin
with. But if the building should cost no more, and the Post-
office should use one-half of it, then, making the usual allowance
for interest, taxes, etc., the Brooklyn office would pay a rent of
$40,000 yearly instead of $7,300. On the most moderate calcula
tion the yearly cost of this building could hardly be less than
$30,000. But as soon as this charge has been incurred, the books
of the department will show that its expenses have been reduced.
There will then be no charge for rent. Really the expenditure
will have increased by $23,000, while the books will show a de
crease of $7,300.

The yearly value of the premises occupied by the Post-office
in New- York City can hardly be less than $300,000, but neither
this nor any other Post-office in a building owned by the Govern
ment seems to be charged for its accommodations. There are
appropriations now awaiting the action of Congress that will



54 THE NORTH AMERICAN EEVIEW.

increase the actual rent of certain offices possibly ten-fold. The
more there is of this extravagant expenditure the greater will be
the apparent economy with which the department is conducted.
No one knows what the people have paid for these public build
ings, but it is certainly moderate to say that the rent properly
chargeable to the department is over $2,000,000. To omit this
is like a railroad's omitting from its books the cost of its road
bed. We conclude, therefore, that the Post-office really had a
deficit of about this amount in 1882.

A deficit so small as this, however, is not a very serious
matter to a great nation. Provided the service is otherwise
satisfactory, it is not very important that it should be com
pletely self-supporting. It is, of course, more just that those
who use the Post-office should pay for it ; ' but its benefits are so
universally distributed that hardly any one is taxed who is not
benefited. But if we examine the management of the department
we shall find grave reasons for holding it very far from satis
factory. To exhibit these reasons clearly, we must look into the
expenditures of the department, and also into the method by
which its revenue is raised. Our space will not allow us to
investigate the dealings of the Government in stationery, patent
mail-locks, etc., with which it is supplied by contract. It is not
very probable that the Government derives a profit from these
transactions ; the contractors are supposed to do that j but, as
these expenses amount to little more than $2,000,000, we shall
disregard them, and confine our attention to the two items of
transportation and salaries, which together constitute more than
nine-tenths of the total disbursements.

As to the system of adjusting salaries in the Post-office, the
Postmaster-general declares that necessity herself could invent
nothing more cumbrous or complex. The allowances for clerk-
hire, rent, etc., are entirely arbitrary, being made by a fourth-
class clerk governed by the amount of influence that the appli
cants can bring to bear on him. About $5,000,000 are thus
distributed, and in a list of eighteen of the principal post-offices,
excluding New York, the expenditure for clerk hire varies from
9 to 26.2 per cent, of the gross revenues.

" If the office at Boston could be administered by the expenditure of the
same percentage of gross revenues for clerk hire which is spent at Phila
delphia, it would effect a saving of $45,256.82 at that office. If both offices
could be administered for the average expenditure made at the whole



GOVERNMENT TELEGRAPHY. 55

eighteen, the saving would be nearly $73,500. If the whole eighteen
offices could be administered by the expenditure of nine per cent, of the gross
revenue for clerks, which is the cost at Lowell, the saving would be very
great." Report of Postmaster-general.

The saving referred to would be more than $400,000, out of
a total expenditure for clerk-hire of about $900,000 ; which fact,
with Mr. Howe's other suggestions, makes the wisdom of com
mitting the telegraph to a department that perpetuates such
abuses in its management at least questionable. But, disregard
ing this objection, let us examine the principles upon which the
expenditure for transporting the mails, nearly four-sevenths of
the whole, is conducted.

By far the largest item under this head, some $13,000,000, is
that of payments to railroads. The principle upon which these
payments are made is different from that adopted in the dealings
of the railroads with private persons. In such dealings it is
usual to make lower rates for long distances, but to the Govern
ment the rate is uniformly so much a mile without regard to
the length of route. A road carrying an average weight of two
hundred pounds, or any less amount, daily over its whole length
is paid at the rate of about $43.00 a mile per annum. The com
pensation is gradually raised, until, for an average daily weight
of five thousand pounds, it is about $170.00 a mile, and about
$21.00 a mile additional is allowed for every additional ton.
There is also a further payment to those roads that provide postal
cars, at a rate varying from $25.00 to $50.00 per mile per annum,
according to the size of the car. The results attained by these
provisions will be best exhibited by comparing them with other
transportation charges.

Omitting Sundays from the calculation, a rate of $43.00 a
mile per annum gives a daily rate of between thirteen and
fourteen cents a mile. We cannot tell from the reports furnished
to the public what proportion of the whole number of routes is
of this class, but it seems to be nearly one half, and is probably
not less than forty per cent. "We think it quite safe to say that
on one-tenth of the railroad routes the average weight of the
mails is less than one hundred pounds, and that upon one-half
of the whole number it is less than that of an ordinary passen
ger with his baggage. The mails, however, receive only the
care that baggage receives, being carried on these routes in the
baggage cars. They can occasion no more expense to the rail-



56 THE NORTH AMERICAN REVIEW.

roads than the trunks of their passengers, while passengers
themselves are the most expensive of all freight to handle. The
cars and station accommodations are a very heavy charge, and
the ticket agencies, advertising bills, and damages for personal
injuries altogether make the passenger business a very costly
one. But upon few roads is the rate for a passenger as high as
five cents a mile. In many of the States it is limited to three
cents a mile. These rates, too, are the local rates for single
fares, and where a passenger is carried as regularly as the mail,
he is charged only from two cents to a half a cent a mile. Upon
the whole we feel justified in concluding that in many cases for
the transportation of an amount of mail matter equal in weight
to an average passenger and his baggage, the Government is
charged at least fifteen times as much as would be charged for
the passenger. It would be a moderate estimate, however, to
put the cost to the railroad of carrying the passenger at three or*
four times that of carrying the mail. If this calculation is cor
rect, the railroads charge the Post-office about fifty times what
they charge passengers for an equivalent service. But, as these
estimates are based upon the commutation rates, we ought, per
haps, to modify them, as commuters are not allowed to carry
baggage without an extra payment of a varying fraction of a
cent a mile. We shall confine ourselves therefore to the state
ment, which we believe may be depended on, that upon half the
railroad routes of the country the Government pays for the
carriage of the mail in the baggage car at a rate from three to
five times as high as that which a passenger at full local rates
pays for himself and his baggage.

Even upon the great mail-routes, where the rate paid by the
department is relatively less, it still seems to be excessive. So
far as we can judge from the reports, the Pennsylvania Road
owns only twelve full-size cars, and three forty-foot cars upon
the routes between New York and Pittsburg. The use of these
cars between New York and Pittsburg costs the Government
over $110,000, and more than three times this sum is paid for
carrying the mails in them. This road also receives some
$30,000 for special facilities. If we divide its gross receipts
from passengers by the number of passenger and baggage cars
employed, the annual earnings per car are found to be between
$13,000 and $14,000. But if we divide the receipts for mails on
the main line between New York and Pittsburg by the number



GOVERNMENT TELEGRAPHY. 57

of post-office cars, the annual earnings of each car are $40,000.
No allowance is made for the enormously greater expense of the
passenger business.

It can hardly be contended, from the foregoing statement,
that the Post-office department conducts its expenditures with so
great financial ability as to justify any popular enthusiasm over
the proposal to commit the telegraph to its charge. Its methods
of raising revenue, however, are of a still more discouraging
character. Practically, its entire income is produced by the sale
of postage stamps. There are, in general, four rates of postage ;
one upon all matter inclosed in sealed wrappers, and upon all
matter, whether written or printed, containing anything of the
nature of personal correspondence, which we shall speak of here
after as letter-postage, and reckon at the rate prevailing in 1882 :
one upon periodical publications, or newspaper postage ; one
upon other printed matter, or book postage ; and one upon mer
chandise. These rates are as follows :

Letter-postage, 3 cents a half ounce, or 96 cents a pound.
Newspapers (with certain exceptions), 2 "
Books, 1 cent for 2 ounces, or 8 "

Merchandise, 1 cent for 1 ounce, or 16 "

The extraordinary difference between letter and newspaper
postage can be justified by only two arguments : the first, that
the transmission of letters and sealed packets is far more ex
pensive than that of papers and unsealed packets ; the second,
that it is just and desirable to encourage the distribution of the
latter class of matter at the expense of the former.

As to the first of these arguments, we can determine, with a
tolerable degree of accuracy, how much more it costs to carry
letters than other matter. So far as the mere transportation is con
cerned it costs no more, for the pay is regulated by the weight of
the mails and the distance they are carried, irrespective of their
contents. As to cost of materials, advertising, and general ex
penses, they are properly chargeable to the whole business with
out discrimination as to its nature. The same is true of the sal
aries of postmasters ; for in third and fourth-class offices the
business is so small that in most cases the time of the officer is
only partly occupied, while in offices of the second and first-class
the business of handling the mails is done by clerks paid by the
department, the duties of the postmaster being chiefly super-



58 THE NOETH AMERICAN EEVIEW.

visory in character. It is only in the -expense of clerks employed
in assorting the mails and of carriers employed in distributing
them that any difference between letters and papers exists.

In the case of carriers, it is undoubtedly true that the number
of packets tq be handled is of more importance than their weight.
A carrier needs more time to distribute fifty pounds of letters
than the same weight of papers. He will have to make more
calls, and the labor of assorting the letters for delivery will be
considerably greater. The number of calls, however, does not
increase in at all the same proportion as the number of letters.
When letters increase in number it is only partly because people
receive them who did not before ; it is chiefly because the same
people get more letters. As it is about as easy for a carrier to
deliver ten letters at a house as one, we may conclude that it is
only in the matter of assorting that letters are really the more
expensive mail. When the carrier is employed in collecting, it
is obviously immaterial whether he carries letters or papers.
But, as the time required to cover the route is a far more con
trolling consideration than either the number or the weight of
packages, it hardly seems worth while to make any discrim
ination between them. That this is so, may be conclusively
inferred from the reports of the department. The average num
ber of pieces handled daily by each carrier is a little over one
thousand, of which four hundred are collected, and about six
hundred delivered. As we have seen, the cost of collecting is
unaffected by the nature of the mail even the weight seems
by this showing immaterial and to assort six hundred pieces
of matter is certainly a moderate labor. So far as this item is
concerned we may conclude that there is no substantial evidence
that newspapers are cheaper mail than letters.

By comparing the weight of the second-class mail with the
results of an actual count of the entire number of pieces made
in 1880, it appears that the average weight of a periodical is
about an ounce and a quarter. The average weight of a letter
is between a half and a quarter of an ounce. The labor of
assorting the same weight of letters would therefore seem to be
about four times as great as that of assorting papers. But
owing to the fact that large quantities of papers are forwarded
in bulk to news-agents, it will be more nearly correct to call the
ratio five to one. The total cost of all clerks, whether employed
in assorting letters or otherwise, is about $8,000,000. If we



GOVERNMENT TELEGEAPHY. 59

allow $2,000,000 for time spent in other duties, we have $6,000,000
as the total cost of assorting the mails.

It appears from the count just referred to that the number
of letters is to the number of periodicals about as 8J to 7j.
Offsetting postal cards against books, etc., we may consider
the number of letters as approximately equal to the number of
papers. We should then have $1,000,000 as the expense of
assorting papers, and $5,000,000 as that of assorting letters.
For a number of reasons which there is not space for enumer
ating, this probably gives too high a ratio of cost for letters.
But, assuming it to be correct, we then find that the transmission
of a given weight of letters costs only about one-fifth more than
the same weight of papers, and this seems to be all the excess of
postage properly chargeable to letters. As a matter of fact,
letters are enormously overcharged. Judging from the count of
1880, the number of letters now sent through the mails every
year is about a thousand million, and this corresponds pretty
closely with the sale of two and three-cent stamps. Dividing
the total weight of second-class matter by the average weight of
a periodical, it appears that the number of pieces is also about
one thousand million. Out of every nine letters, one will be
sent for two cents, and eight at three cents, and the total postage
amounts to $29,000,000. The total postage upon second-class
matter is $1,565,000. That is to say, the Post-office transports
80,000,000 pounds of newspapers (allowing only 2,000,000
pounds for those sent free) for $1,565,000 ; and it charges for
about 20,000,000 pounds of letters the sum of $29,000,000. The
present Congress has listened to arguments by the representa
tives of the newspapers in favor of lowering their rate one-half.
If the letters were sent at the same rate as the papers, the ex
pense to the senders would be about $400,000 ! If the papers
were sent at the same rate as the letters the expense to the
senders would be about $80,000,000!

Probably it has occurred to but few dwellers in cities to wonder
that those pleasant adjuncts of the breakfast table, the daily
paper and the morning mail, are supplied through different
agencies. We are apt to take what we are used to as part of the
established order of nature. If any one has the curiosity to inquire
into this matter, however, he can very easily ascertain two facts :
one, that the Post-office practically excludes the daily papers
from its privileges; the other, that there is no good reason



60 THE NOETH AMEEICAN EEVIEW.

why it should do so. The first fact is very easily established.
Newsmen are able to distribute papers for half a cent or even
less a copy ? while the Post-office charges a cent for the same
service, thus driving the business into private hands. As to the
second fact, the proof is equally short. The Post-office states
that the average cost of handling a piece of matter by carrier is
about one-quarter of a cent. The. Post-office does not state, but
we are able to calculate from its returns, that the expense in the
larger cities is considerably less than this. It is also in itself
reasonable to conclude that the Government would have an ad
vantage in doing this business, for it has its offices and other
distributing arrangements already in operation, and almost the
only increased expense to which it would be subjected would be
the employment during a part of the day of an increased force of
carriers.

Newspaper postage not being lower because the expense of car
rying newspapers is lower, it must be so upon the theory that
their distribution should be encouraged by a tax upon letters.
Our space permits but little comment on this theory. Either let
ters and papers are received by the same class of persons, in
which case there is no reason why fair rates should not be charged
for both, or they are received by different classes, in which case
there is no obvious reason why one class should pay for the
reading-matter of another. The truth is, the Government subsi
dizes the press without discrimination as to its contents. The
Police Gazette and the Church Journal are equally encouraged.
The chief benefit goes to advertisers who have succeeded in
making the letter- writing public pay their postage for them,
and to the publishers of cheap stories, who, as the covers of
their books show, have somewhat stretched the meaning of the
term periodical. But whatever may be the theory upon which
these rates are established, it can afford no explanation of the
rates upon fourth-class matter, or merchandise in general. It
is undoubtedly convenient for gentlemen residing in Dakota
to have their boots sent to them by mail from Massachusetts,
as is sometimes done, but it is difficult to understand why
letter- writing should be taxed to maintain this accommodation.
It would be intelligible if the Government were to charge per
sons who wish to send their boots through the mail a somewhat
higher rate than it charges for letters, but it is beyond compre
hension why it should charge them only one-sixth as much.



GOVERNMENT TELEGRAPHY. 61

It is a remarkable fact that many, perhaps most, of those
who are desirous to have the Government assume the charge
of the telegraph, do so upon the ground that the charges of pri
vate corporations are inequitable. We are not concerned to
defend the system of charges adopted by these corporations,
whether for freight or messages, but it is certainly not more
inequitable than the policy pursued by Government. The trans
portation companies charge " what the business will bear," but
they are exposed to competition and have at least no legal
monopoly. The United States Government, however, not only
charges an excessive rate upon a certain class of packets, in
order to carry others at a loss, but it prohibits, under heavy
penalties, the transportation of this obnoxious class, the entire
personal and business correspondence of its people, except in its
own mails. Having thus secured an absolute monopoly, at ex
cessive rates, it refuses compensation to all who may suffer by
the negligence or misconduct of its servants. The monopoly
may be justified, but only if conducted upon equitable principles.

In the management of the Post-office, as of any other busi
ness, a Government labors under certain disadvantages. The
officers whom it employs can have no pecuniary interest in the
economical management of its affairs. On the contrary, a great
many persons/ as well as its officers, are pecuniarily interested
in its extravagance. In order to protect itself against dangers
from this source, it is absolutely necessary that the duties of its



Online LibraryNathaniel Hillyer. EglestonThe North American review (Volume 139) → online text (page 6 of 60)