In the business organization of the post office the transportation of mals is under the control of the Send Assistant Postmaster-General. Within his office there is a Division of Kaliway Adjustment under the supervision of a Superintendent. It is here that allowanes to railways are adjusted, that orders and instructions for the weighing of mails are issued, that the returns of such weighing are received and the basis of pay computed from them. There is also a Division of Rallway Mail Service, the General Superintendent of which has charge of the appointment of mail weighers and the conduct of mail weighings, the g-neral conduct of the mail service in post office cars, and the

1 Annual Report of Postmaster-General, 1909, pp. 60-61.

investigation of the necessity for establishing the post office car service on new railways, and increasing the car space on existing routes. The entire service is under the supervision of the Postmaster-General.

REFERENCES

Consult references at the end of the following chapter.

CHAPTER XLVI

RAILWAY MAIL PAY AND THE POST OFFICE DEFICIT

Postal revenues, expenditures, and deficit. 1880-1909–D-ficit not due to payments made to railroads Sources of the deficitTable of post office expenditures-Recommendations of the Postmaster General -References for Chapters XLIV-XLVI.

Is his annual report for 1909 the Postmaster-General speaks in the following terms of the deficit of the post office: "In its early days the postal service was self-supporting. For thirty years, from 1789 to 1819, it failed only once to yield an annual profit, but in recent years, almost without exception, there has been a deficit. So long as the deficit amounted to only a few million dollars and did not increase in proportion to the growth of the service, it attracted little attention; but when, in the last few years, it leaped to upward of $10,000,000, and finally in 1909 exceeded $17,000,000, ordinary business prudence suggested that the causes be definitely located.”1

The postal revenues, expenditures, and deficit since 1880 are shown on the opposite page.

The growing deficit has caused many to favor a reduction in the payments made to the railways. In fairness to the railroads, however, it is manifest that neither is the increasing deficit due to railway mail pay, nor is this pay

1 Annual Report of 1909, p. 6.

in itself too high. As was previously shown, total expenditures have, since 1900, increased more than three times as rapidly as expenditures for rail transportation, and since 1907 there has been practically no increase in railway mail pay. From 1878 to 1907 the sums paid to the railroads increased less than the volume of mail carried, because the rate of payment declines as the volume increases. Since 1907 this relation between volume and payments has become more pronounced, because the actual rates have in various ways been somewhat reduced. Since 1900 postal revenue has increased by 98 per cent, while railway mail pay has advanced by 33.6 per cent. From 1907 to 1909 the former advanced by $19,977,000 and the latter by $111,300.

In 1898 and 1899 a Joint Commission of Congress, appointed to investigate the postal service, concluded that, "taking in view all facts as disclosed by the testimony filed herewith, we are of the 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." As regards the general rates, it concluded that "the prices now paid to the railway companies for the transportation of the mails

are not excessive," and recommended "that no reduction thereof be made at this time."

Conditions since the above statement was made have not so changed as to warrant any widespread reduction. From 1898 to 1907 wages have increased 28 per cent, the price of commodities 38 per cent, and train-mile costs 54 per cent. During the same period it is notable that the earnings of the railways from the mails increased1 46 per cent, as compared with a gain of 121 per cent in express goods, 111 per cent in passengers, and 114 per cent freight revenue. Earnings per passenger train mile from passengers advanced 31 per cent and from express 38 per cent, while in the case of mails it declined 10 per cent. Mail pay in terms of cents per ton miles declined from 12.57 in 1898 to 10.66 in 1907 and 9.94 in 1908, while freight earnings per ton mile and passenger receipts per passenger-mile remained practically stationary.

The rates paid for carrying the mails are somewhat higher than the rates charged on express matter. The difference, however, no more than compensates for the greater expenses connected with the mail service and the higher classification of the articles carried. If the post office entered into contracts such as exist between railways and express companies, it would pay from forty to sixty per cent of its gross revenue to the railways, and railway mail pay would annually aggregate over $100,000,000 instead of $49,869,000.

In order to determine the causes of the increasing post office deficit it is necessary to examine expenditures other

1 J. Kruttschnitt, "Railway Mail Pay," complied from the annual "Statistics of Railways of the United States," issued by the Interstate Commerce Commission. Railroad Age Gazette, vol. xlvi, p. 794 (April 9, 1909).