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    THE EXPRESS COMPANIES
    OF THE UNITED STATES

    A Study of a Public Utility

    By
    BERT BENEDICT

    Price 10 Cents

    Published by
    THE INTERCOLLEGIATE SOCIALIST SOCIETY
    70 Fifth Avenue, New York City
    1919




_FOREWORD_


The Intercollegiate Socialist Society takes pleasure in presenting to
the public this careful monograph of Mr. Bertram Benedict on the
important subject of "The Express Companies of the United States." The
pamphlet is particularly timely in these days when the nation is
endeavoring to formulate its policy regarding the future control of the
express business.

It is, moreover, the first concise and scholarly analysis of the express
service in America that has appeared in recent years and is a distinct
contribution to the literature on the subject. The author herein
presents a vivid, bird's-eye view of the development of the express
companies from the days of the stage-driver up to the present time. He
portrays the rapid consolidation of express systems, their integration
with the great railroads, their remarkable enlargement of activities,
the growing competition of the parcel post with the private express
systems and the increasing governmental regulation over this utility.

This survey is followed by an analysis of the present status of the
express companies, and a discussion of express profits. The relative
service rendered by express and parcel-post is then dealt with, and the
reader is treated to an illuminating discussion of the probable savings
accruing from government ownership and management of the express
industry, particularly as a result of consolidation of equipment,
agencies, offices, etc.

In conclusion, Mr. Benedict deals with various methods whereby the
government may take over the express companies, tells of the present
status of the companies as a result of the war, and gives us a glimpse
into future developments. The author reaches the conclusion that the
express service should be a public agency and that it should be closely
connected with the post office department rather than with the railroad
administration. The pamphlet as well explains the manner in which
European countries have handled this problem and presents a complete
bibliography on the general topic. The author throughout gives a wealth
of accurate information concerning the express system in all of its
manifold relationships.

The pamphlet is one of a series planned by the Intercollegiate Socialist
Society on various phases of public ownership and democratic management.

                                           HARRY W. LAIDLER.




_INTRODUCTION_[A]

_THE CHARACTER OF EXPRESS SERVICE_


The express companies of the United States are unique organisms, and
have no counterparts in any country outside of North America. In Europe,
their services are performed by the parcel-posts or by the railroads
themselves, often in conjunction with collecting and delivering
companies.

The express company in the United States collects from the shipper the
matter to be sent by express and delivers it to the consignee. The
charge for expressage may be either paid by shipper or collected from
the consignee. The transportation between different points is generally
furnished by the railroads, although steamship and stage lines are also
used to a slight extent; and the charge for this transportation, as well
as the charges for collection and delivery, are included within the one
fee levied by the express company. This one fee also automatically
includes insurance up to fifty dollars, there being additional fees for
additional insurance, to the amount of which there is practically no
limit. The goods shipped are sent in express cars attached to passenger
trains or on special express trains maintaining the speed of passenger
trains. Because of the speedy transportation thus afforded, merchandise
large enough to be sent as freight, such as machinery and live stock, is
often forwarded by express; but by far the greater part of express
traffic in normal times is composed of articles weighing less than one
hundred pounds. The larger companies conduct their activities in foreign
lands as well as in the United States; and in addition perform a number
of subsidiary activities not connected directly with the transportation
of merchandise.

[Footnote A: The author wishes to acknowledge his indebtedness to the
studies of Mr. Davied J. Lewis, the one man in official public life in
the United States during the last decade adequately to realize the need
for investigation and agitation in the field of a Government express
service.

                                           B. B.
    January 25, 1919.]




_ORIGIN AND DEVELOPMENT_


The development of the express business in the United States serves
perhaps as admirably as the development of any other single public
utility to hold up the mirror to the economic ideology which prevailed
among the American people up to August 1, 1914.

The origin of the express business in this country is usually assigned
to 1839, but the Davenport and Mason Company claims to trace its
beginnings back to 1836. In July of that year, a railroad was opened
between Boston and Taunton, Massachusetts, a distance of 36 miles; and
with its opening Charles Davenport and N. S. Mason delivered valuables
and small packages to customers at those two towns. Even before this
time, however, the picturesque and half-legendary stage-driver had often
called for, transported and delivered articles entrusted to him for
persons living along or near his route. Similar service had been
frequently rendered also by steamboat captains and even by the
conductors on the first railroads, often, if not usually, as an
unremunerated personal favor. A. L. Stimson, one of the early expressmen
and the author of the most comprehensive history of the express business
in the United States, states that the need for some form of
transportation by express was so intense before 1840 that a person could
hardly make a trip between two cities without being deluged with
requests to deliver parcels, and that these requests would come not only
from friends and acquaintances, but even from total strangers.


THE VENTURES OF HARNDEN, ADAMS, WELLS AND FARGO

The first reliable and extensive express service, however, does date
from 1839. In that year, William F. Harnden grasped the need for, and
chance of profit in, the delivery of valuable parcels between Boston and
New York and to that end made a contract for his personal transportation
on the Boston and Providence Railroad--the first express contract in the
United States. Harnden made four trips weekly, by rail to Providence and
thence to New York by boat; and carried the expressed articles in a hand
satchel. But within several months the business outgrew that humble
forerunner of the modern express car, and he was compelled to hire
additional express messengers, to set up offices, and to arrange for
special space on trains.

So successful was Harnden's venture and so serviceable that he soon
found himself confronted by many imitators and competitors. In 1840,
Alvin Adams entered the New England-New York field, thus becoming the
founder of the present Adams Express Company; and later in the same year
Harnden extended his business to Philadelphia. In the following year,
Henry Wells and a partner established an express service between Albany
and Buffalo. By 1845 express companies had sprung up on every hand. In
the latter year Wells and William G. Fargo developed a company to cover
territory, much of it railroadless, west of Buffalo; and very soon this
service reached Chicago. Early in the fifties Wells and Fargo were
delivering in California by the stage coach and pony express of song and
story and motion picture, although it was not until 1869 that the first
transcontinental railroad was completed. (The pre-occupation of the
present Wells-Fargo Express Company with the western field is thus not
fortuitous.) And by the early fifties also Adams and Company was
beginning to tap the South.


EXPRESS COMBINATIONS

In 1850, Wells and Company, Livingston and Company, and Butterfield,
Wasson and Company so far violated the contemporaneously sacrosanct
belief in the greater efficiency of the competitive system and the
contemporaneously pseudo-religious authority of the whole principle of
competition as to combine into one large corporation, the American
Express Company. Later, Wells, Fargo and Company organized as a joint
stock company with a capital of $300,000. The year 1854 saw the
consolidation of Adams and Company, Harnden and Company, Thompson and
Company, and Kingsley and Company into the Adams Express Company, and in
the same year the United States Express Company was organized. The
origin of the Southern Express Company dates from 1886--it is controlled
by and is recognized as a part of the Adams Express Company. These four
express companies continued through the nineteenth century and into the
twentieth as the four great branches of the express service system of
the United States. It is true that there existed by their side a number
of other companies, but the latter were subsidiary, local and
comparatively unimportant. The fields of activities of these four great
national systems were as follows: _Adams-Southern_--the East, middle
West, and several western routes, and the South; _American_--the East,
middle West and trans-Mississippi; _United States_--the East outside of
New England and the middle West, with several western routes; and
_Wells-Fargo_--the far West and the Southwest, with several eastern
routes. But there have long been complete understanding and gentlemen's
agreements among the separate companies; and for practical purposes they
formed, not four units of competition for the express business of the
country, but four branches of one organization. Several Canadian
companies also do business in the United States.


LACK OF REGULATION

During the sixty years from the inception of these private express
companies in the United States to the dawn of the twentieth century, the
rendering of this express service, of vital significance to the economic
needs of the United States and of vital potential significance to the
social needs of the people of the United States, was relegated without
whimper to unchecked private agencies. Although the last thirty years of
the nineteenth century saw the development of the United States into a
complex and extensively specialized industrial mechanism--with a growing
dependence of each geographical division of the country upon every other
geographical division and of each economic unit upon every other
economic unit--the country seems never to have suspected that it might
well claim authority over so important a link in its industrial
integration as the transportation and delivery of all merchandise too
small or too valuable to be transferred and delivered as freight. There
sprang into being during this period only some futile and spasmodic
attempts at state regulation. By 1871, Germany had developed its
remarkable Government express service, which later was classified into
passenger and fast freight divisions, with corresponding variation in
costs. In Great Britain, agitation for developing the express business
as a part of the postal system had resulted in the establishment of a
Government parcel-post as early as 1883. By 1892, the French Government
was conducting an express business, selling the transportation of
parcels both large and small to the French people without yielding
profit to any owners of stocks and bonds, but imposing charges just high
enough to meet the cost of the system; and developed, like our own rural
free delivery, with an eye primarily to the service of the people, not
to the profit-and-loss balance-sheet. But who were these countries that
the United States could learn anything from them? The United States was
the land of opportunity, and if gentlemen of affairs had been skilful
enough to corral under their control the express business of the land,
we most emphatically refused to thwart their opportunity for making the
most of their foresight. We suggested jail for the agitator who
insisted that the country owed the poor man a living, but the keystone
of our economic creed was a faith that we owed the rich man a living. We
weren't interested in what was serviceable as such to the people as a
whole--we believed in the divine right of private enterprise of the
economically capable. Were the express companies enforcing exorbitant
rates? _Private enterprise._ Did they discriminate against certain
shippers? _Private enterprise._ Did express profits represent a small
amount of traffic at a high profit instead of a large amount of traffic
at a low profit? _The freedom of private enterprise._ Was the cost of
expressing a package unduly high because of the costliness of frequently
transferring it into the hands of five separate companies? _Private
enterprise._ Could the Government do the business more satisfactorily,
more cheaply and more extensively, and thus reduce the cost of many
commodities to their consumers? _The holiness of and the necessity for
the untramelled right of private enterprise._

Accordingly, it was not until 1890 that even any accurate and reliable
figures of the quantity and quality of the express service of the
country were available for purposes of mere study and investigation.
Within the census of that year, the express companies happened to be
included--a survey being made of their operations for the fiscal year
ending June 30, 1890; and thus for the first time and after fifty years
the American people were able to get some information on the operations
of the private agencies to whom the express service of the land had been
entrusted. It is true that the act of Congress authorizing the census of
1880 had contained a provision for the collection of statistics of the
express companies, and that a schedule of inquiry directed toward that
end had been formulated and distributed. Only two of the eighteen
companies in existence, however, replied to it. The others maintained
that the census law had no authority over their vested interests, and
declined to make a report. The Census Office in 1880 actually reacted to
this attitude by courteously abandoning its legally-authorized
investigation, and contenting itself with publishing merely some
information on the contracts between the express companies and the
railroads. And, although the 1890 Census went so far as to publish the
expenditures of the express companies, it very naively declined to
report upon their receipts.


AUXILIARY FUNCTIONS OF EXPRESS COMPANIES

By 1890, moreover, the express companies had developed and at the
present time are performing certain functions which are secondary to or
even independent of the express business proper. These functions for
the greater part parallel at the present time similar functions
performed by the national government or by other agencies. These adjunct
and independent functions are:

1--The issue of money orders, letters of credit, travelers' checks,
etc., payable through express company agents and correspondents over
well-nigh the entire civilized world.

2--The purchase for customers of goods in any locality in which an
express office is located.

3--The sale for their customers of goods in any locality in which an
express is located.

4--Miscellaneous services, such as filing legal documents, redeeming
pawned articles, selling exchange, entering and clearing articles of
import and export at customs houses, paying bills, and, in short,
attending to any business which can be readily performed by an agent for
a customer.


THE 1890 CENSUS

Remembering, then, these secondary as well as the primary aspects of the
express business, the students of the 1890 Census on Express Companies
would have learned the following facts:

      Number of companies                                18
      Total mileage operated                        174,535
    Total on Railroads                              160,122
    Total on Water Lines                             10,822
    Total on Stage Lines                              3,055
      Value of Equipment and Fixtures            $5,074,045
      Expenditures                              $45,783,123
      Receipts                                 Not reported
      Number of employees                            45,718
      Number of Money Orders Issued               4,598,567
      Number of packages carried by Express     115,377,112
      Paid to Railroads, Steamboats, and
        Stage Lines for transportation          $19,561,182

Of the total mileage operated, as shown below, 92.7% was operated by the
five leading companies listed above and the Pacific Express Company. The
latter, organized in 1879, was owned and directed by the Gould group of
railroads (the Union Pacific, Missouri Pacific and Wabash Lines); its
business was taken over in 1911 by the Wells-Fargo Company.

    Total mileage operated                          174,535
        Adams Express Company                        24,919
        American Express Company                     43,126
        Pacific Express Company                      21,332
        Southern Express Company                     21,714
        United States Express Company                21,479
        Wells-Fargo Express Company                  29,098

These six companies also carried 92% of the parcels carried by express,
as follows:

    Total number of packages                    115,377,112
        Adams Express Company                    26,456,382
        American Express Company                 23,871,251
        Pacific Express Company                   7,552,622
        Southern Express Company                  7,552,622
        United States Express Company            17,039,844
        Wells-Fargo Express Company              22,658,384

The unquestioning devotion of the American public of 1890 to the
principles of private enterprise is attested by the fact that there was
no further census, and hence no further reliable information about the
express companies, until 1907. It is true that the express companies
were included in a Census Report on Transportation in 1894, but this
survey could hardly be considered comprehensive.


THE EXPRESS COMPANIES AND THE RAILROADS

Until the twentieth century, then, the express companies remained
unchallenged and even uninvestigated in their control of the service of
transporting packages and parcels weighing more than four pounds.
(Packages and parcels up to four pounds in weight could be sent by
mail.) In ownership and control as well as in the nature of their
activities, they were linked with the great railroad systems; and there
was in addition an extensive amount of interownership between the
various express companies. When the 1907 (the second) Census report on
express companies was published, it was found that of the $68,853,200
capitalization of the seventeen important express companies,
$20,668,000, or 30%, was in the hands of the railroads as such. [The
express companies as such had reciprocated by buying and holding the
stock of railroad companies to the amount of $22,218,950 and railroad
bonds to the amount of $12,324,000.] Moreover, of the $68,853,200
capitalization of the express companies, $11,618,125, or 17%, was held
among the various express companies as such. How much of the remaining
53% of the capitalization of the express companies was held by
individuals interested in the railroad holdings and control cannot be
told, but may certainly be surmised.

It is therefore not surprising to find that in 1909 of the seven
directors of the Adams Express Company, four were directors of railroad
companies; of the nine directors of the American Express Company, three;
of the seven of the Pacific Express Company, six; of the seven of the
United States Express Company, two; and of the thirteen of the
Wells-Fargo Company, ten. In 1918, more than half of the directors of
the four large express companies were also directors of railroads. The
explanation of the willingness of the railroad companies not to disturb
the express companies in their exclusive exploitation of the express
service field is hence not difficult to find. Even those few of the
directors who were not directors in railway systems were nevertheless
also of that group of controllers of industry which was responsible for
the sinister connection between American politics and American big
business which for so many years had prostituted the promise of American
life. Furthermore, whatever few regulations could be applied generally
to corporations as such had little effect upon the express companies;
for the Wells-Fargo and the Southern were, and up to the present time
are, the only large companies which have the corporation structure. The
other three maintain their early status as limited partnerships of a
fixed number of shares without fixed par value, although the Adams
Express Company, on December 15, 1913, assigned a par value of $100 to
each of its 120,000 shares outstanding, giving it a capitalization of
$12,000,000.

Of no less wisdom than cynicism accordingly was the remark of a
prominent American statesman when propaganda for the establishment of a
parcel-post had finally begun to rear its defiant head: "There are four
reasons why the parcel-post cannot be established in the United States,"
with the explanation, when pressed for details: "The four reasons are:
(1) The Adams Express Company; (2) the Wells-Fargo Express Company; (3)
The American Express Company; and (4) The United States Express
Company."


REGULATION

By the twentieth century, however, the hypnotic spell of the private
enterprise creed over at least the middle and lower economic classes was
beginning to weaken. The American public was developing a sullen and by
no means silent antipathy--in some sections seemingly congenital--to the
great national corporations. The storm had burst first upon the
railroads; and when in 1906 the Hepburn Act gave the Interstate Commerce
Commission definitely increased powers over the railroads, with
commendable logic the express companies were coupled with the railroads
in the scope of the law. All express tariffs had to be filed with the
Commission. No change could be made in a tariff except after thirty
days' notice. A uniform system of accounts could be and soon was ordered
by the Commission. The Commission was given access to all the books and
records of the companies. And, of especial significance, upon complaint
express rates could be fixed by the Commission, subject to review by
Federal courts.

The Mann-Elkins Act of 1910 went even further. Among its other
provisions, the burden of proof on rates was shifted to the express
companies and the Commission was given power to initiate, of its own
volition, express rate rulings which not much later became subject to
review only by the Supreme Court of the United States. Power over the
classification of express traffic was also specifically given to the
Commission. The Commission immediately utilized its new powers to
inaugurate a searching investigation of every aspect of the express
business, with the result that on February 1, 1914, there went into
effect a reduction in rates amounting to an average decrease of about
16%, together with a new system for calculating such rates, the country
being divided for that purpose into five zones. The newly prescribed
rates were stated and arranged after a fashion simple enough to be
readily understood by any tyro. All direct and indirect rebates were
abolished. Articles of food were to go at three-fourths the new rates.
The classification of merchandise was radically simplified. (Already in
1913, a further act of Congress had made discrimination against shippers
a criminal offense punishable by fine or imprisonment.)


PARCEL-POST

But the hardest blow to the express companies had been delivered on
August 24, 1912. On that day, after years of agitation, a bill providing
for a parcel-post in the United States became the law of the land; and
the parcel-post system went into effect on January 1, 1913. Congressman
David J. Lewis conducted a staunch campaign to have a postal express
provision included in the new law, but unsuccessfully; and the weight
limit of the parcels which could be sent through the post office was
fixed at eleven pounds. Nevertheless, the United States Express Company
saw the handwriting on the wall, and in that year decided to wind up its
business, ceasing operations on June 30, 1914.

The detailed history of the development of the parcel-post in the United
States, closely related as are the parcel-post and express problems, is
not pertinent to this study. It is sufficient to point out that more and
more the parcel-post has been broadened so as to include much of what
was the express companies' field. At the present time, the weight limit
is 70 lbs. for a distance up to 300 miles and 50 lbs. for greater
distances. Packages may be sent collect on delivery up to $100, and
they may be insured up to $100. There are separate fees for those two
latter services up to ten cents, which amount covers both a collection
on delivery of $100 and insurance of $100. A receipt is given for the
uninsured pre-paid parcel for a fee of one cent. So that by January 1,
1918, the business of transporting goods too small or too valuable to be
transported as freight was divided between two agencies in competition
with each other--one of them governmental, one of them private.




_THE PRESENT ACTIVITIES OF EXPRESS COMPANIES_


Before considering the problem thus presented to the mind--nor would it
be inexact to add, to the conscience of every keenly-scrutinizing
student of political and industrial phenomena in the United States--a
resumé of the practically contemporaneous activities of the private
express companies will be helpful. In the twelve months preceding
January 1, 1918, the statistics of the eight express companies doing
interstate business in the United States--the Adams, American, Canadian,
Great Northern, Northern, Southern, Wells-Fargo and Western--were as
follows:

    Total Mileage                                   307,400

      Railroad                                      257,408
      Electric Line                                   8,802
      Steamboat                                      39,995
      Stage Line                                      1,195

    Total Mileage                                   307,400

      Adams Express Company                          48,602
      American Express Company                       73,289
      Southern Express Company                       34,918
      Wells-Fargo and Company                       115,521
      All others                                     35,070

    Cost of Land, Buildings and
        Equipment on January 1, 1918            $44,160,773
      Land and Buildings                         20,811,830
      Equipment                                  23,348,943

    Inventory Value of Equipment
    owned on January 1, 1918                    $13,735,058

    Total Express Charges                      $222,860,373
    Other Operating Revenue                       6,594,815
                                               ------------
      Total                                    $229,455,188
    Operating and Other Expenses               $229,639,493
      _Deficit from Operating_                      184,305
    Other Income                                  4,471,292
    Gross Income                                  4,286,987
      Deductions from Gross Income                1,538,481
                                               ------------
    Net Income                                   $2,748,406
    Dividends                                     2,508,044

    Profit and Loss Balance                     $24,294,792
    Total Investment, Including
      Real Property and Equipment              $123,484,515
    Capital Stock                               $59,008,600
    Funded Debt Unmatured                        20,736,500

    Money Orders Issued:
      Number                                     16,035,002
      Amount                                   $145,934,982

    C. O. D. Checks Issued:
      Number                                      8,612,106
      Amount                                   $143,832,226

    Limited and Unlimited Checks Issued:
      Number                                        236,071
      Amount                                   $108,798,279

    Telegraph and Cable Transfers:
      Number                                         88,146
      Amount                                   $136,809,746

    Travelers' Checks Issued:
      Number                                      1,608,037
      Amount                                    $34,923,816

    Letters of Credit Issued:[1]
      Number                                          1,539
      Amount                                     $4,126,154

    Revenue from the above six items and other
    sources, other than Express Charges          $6,594,815

    Maintenance Expenses                         $6,527,766
    Traffic Expenses                                925,033
    Transportation Expenses                     $98,583,724
      (Employees' Wages)                        (55,820,701)
    General Expenses                              7,684,534
      (Salaries and Personal Expenses)           (4,161,299)

     [Footnote 1: Including 569 Postal remittances to the amount of
      $39,435, issued by the Canadian Express Company.]

     NOTE:--Of the above figures the Adams, American, Southern and
     Wells-Fargo Companies accounted for 89% of the mileage and for
     94% of the total operating revenues.

One feature of the above figures stands out pre-eminent. With a capital
stock of $59,000,000 and a funded debt of $21,000,000, the express
companies performed express operations bringing in an annual revenue of
$223,000,000. (Of this latter sum, one-half went to the railroad,
steamship and stage lines for transporting the packages entrusted to
their care by the express companies.) On January 1, 1918, the cost of
the land and buildings owned by the express companies was slightly more
than $20,000,000 and of the equipment slightly more than $23,000,000. It
is therefore immediately evident that the most valuable asset of the
express companies is to be found, not in their tangible property, but in
their contracts with the various railroad companies giving them the
exclusive right to have their packages transported by the railroads on
passenger trains--in a sense, their charters.


PROFITS OF EXPRESS COMPANIES

Previously to the regulation of express rates by the Interstate Commerce
Commission and to the beginning of the parcel-post in this country, the
profits of the express companies were undeniably swollen. By just how
much they were unreasonably large, it is practically impossible to
determine; although the Interstate Commerce Commission did on several
occasions officially assert unduly large profits in the case of the
Wells-Fargo Company.

As described above, three of the five leading companies had issued no
stock at a fixed par value, but had distributed a certain number of
shares of ownership. They had started in business with a limited
equipment (Franklin K. Lane declares that it had not exceeded $1,000,000
in value) and had purchased new equipment mostly from current profits.
Some companies have capitalized their profits. Others have carried them
along from year to year in a profit and loss account. By their contracts
with the railroad companies, they have become practically a part of the
railroad system, and hence whatever equipment and property they
themselves possess have served up to the present time as little basis
for determining their just profits. For instance, as the decision of the
Interstate Commerce Commission's report of 1912 pointed out, some one
company may invest money in certain equipment which another company
hires. They both may make the same percentage of profit on the same
amount of business, but in the first case the profit would loom small in
comparison with the property of the company, whereas in the second case,
it would loom unnaturally large. In other words, a charge on capital in
the first case would be classified as an item of operating expense in
the second.

And yet, despite all these considerations, the fact that from 1909 to
1912 the net profits of the companies were from 17% to 65% of the value
of their properties, coupled with the common sense knowledge that in
those years there was no inward or outward compulsion upon the directors
of the companies to charge one cent less than the traffic would bear,
makes it certain enough for practical purposes that the express
companies' profits were unethically swollen.

Whatever the profits before 1913, however, they have sadly dwindled
since, as the following figures of the Interstate Commerce Commission
will indicate:

    Fiscal        Operating          Operating         Net Operating
     Year         Revenues           Expenses             Revenue

    1909        $132,599,191       $120,305,182       $12,294,009 or  9%
    1910        $146,116,316       $131,608,035       $14,508,281 or 10%
    1911        $152,612,880       $141,025,251       $11,587,629 or  8%
    1912        $160,121,933       $151,831,956        $8,289,977 or  5%
    1913        $168,880,923       $163,088,205        $5,792,718 or  3%
    1914        $158,891,327       $157,128,012        $1,763,255 or  1%
    1915        $148,994,960       $145,037,555        $3,957,415 or  3%
    1916        $179,206,649       $167,063,210       $12,143,439 or  6%

    Calendar
      Year

    1916        $196,137,768       $185,523,071       $10,614,727 or  5%
    1917        $229,455,188       $227,256,116        $2,199,072 or  1%
    1918             ...               ...             $5,579,601 _Deficit_
    (First five months)

     NOTE:--In studying the above figures, it must be remembered
     that approximately one-half of the operating revenues are paid
     to the railroads for transportation, so that for practical
     purposes the ratio of the total operating revenue to the net
     operating revenue with respect to the direct business of the
     express companies--the collection of packages for the railroads
     and the delivery from the railroads--would be approximately
     twice the percentages in the above table.




_GOVERNMENT POSTAL EXPRESS VS. PRIVATE EXPRESS COMPANIES_


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

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

    By Parcel-Post                1,120,000,000
    By Express Companies            280,000,000

But in 1912, if the average express charge was the same as in 1909, and
no reason is known why it should not have been, the number of parcels
carried by the express companies was about 320,000,000. In that same
year the number of parcels carried by the post office, under the
four-pound limit, was 240,000,000. In other words, the effect of the
entrance of the Government into what had been a field of private
enterprise resulted within five years in an increase of more than 450%
in the extent of the service rendered by the Government, whereas the
express company's services to the public in that time actually decreased
12-1/2%, although the extent of the total services rendered by the two
combined agencies increased 250%.

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

    1912                         $1,781,435 _deficit_
    1913                          4,551,984 surplus
    1914                          4,390,796 surplus
    1915                         11,297,861 _deficit_
    1916                          5,853,655 surplus
    1917                          9,887,398 surplus

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


COMPARISON WITH OTHER COUNTRIES

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

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

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

                                _Pounds_        _Pounds_       _Ratio_
                                _Freight_       _Express_      _Express_
                                _Shipped_       _Shipped_     _Shipped to_
    _Country_       _Date_     _Per Capita_    _Per Capita_    _Freight_
    Argentina        1909         10,680          165.4        1 to  64
    Austria          1908         11,260          116.6        1 to  97
    Belgium          1909         16,320          199          1 to  82
    Germany          1909         15,980          140.4        1 to 113
    France           1908          7,480          140.6        1 to  53
    Hungary          1908          5,540           67.8        1 to  84
    United States    1909         16,300           99          1 to 165

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

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

                                                            _Ratio_
                               _Average_    _Average_      _Freight_
                               _Freight_    _Express_      _Charges_
                               _Charge_     _Charge_      _to Express_
    _Country_       _Date_     _Per Ton_    _Per Ton_      _Charges_
    Argentina        1909        $1.95        $6.51        1 to  3.2
    Austria          1908          .74         3.77        1 to  5
    Belgium          1909          .53         4.92        1 to  9.3
    France           1908          .95         6.88        1 to  7.2
    Germany          1908          .76         3.80        1 to  5
    Hungary          1908          .93         3.68        1 to  3.9
    United States    1909         1.90        31.20        1 to 16.4

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

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

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


EXPRESS SERVICE VS. PARCEL-POST

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

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

Under (a):

          _Express Company_                     _Parcel Post_

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

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

    3.  All sizes and weights are         3.  Weight limit--70 lbs. (300
        accepted.                             miles), 50 lbs. (above 300
                                              miles). Size limit--84
                                              inches, length and girth
                                              combined.

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

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

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

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

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

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

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

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

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

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

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

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




_COST OF LIVING_


A moment's reflection is sufficient to show that a Government postal
express would make express facilities available to a far greater number
of persons than are served at present by the express companies. For the
Government postman and the Government post office cover the country as a
whole--the express companies operate only along railroad, electric,
steamboat and stage-lines. Moreover, of these four media, 83.7% of the
mileage is by railroad and only 2.9% by electric line, 13% by steamboat
line, and 4/10 of 1% by stage-line.

All in all, the mileage covered by the express companies totals 307,400.
On the other hand, the mileage covered by the postal system is
1,374,056. Of this amount, 1,112,556 represents the mileage of the rural
routes alone, and the number of persons served by the rural routes in
1917 was more than 27,000,000. Of course, it is certain that not all of
the persons along these more than one and a quarter million miles were
deprived of the benefits of an express service, but it is equally
certain that many of them were, and it is probable that the majority of
them were.

But it is the extension of the express facilities to just that element
of the population living off the railroads and on the rural post routes
in which lie the greatest potential benefits that an express service can
render to the nation. For, speaking by and large, most of this
population is engaged in farming; and, conversely, possibly the majority
of the producers of foodstuffs in the country live off the railroads and
on the rural post routes. Now, it is stated on reliable authority that
of each dollar expended by the consumer for food in New York City, for
instance, the farmer gets only from thirty-five to fifty cents. In other
words, at least 40% of the cost of food is represented by the cost of
getting the products of the farm to the ultimate purchaser. The rôle
thus played in the drama of the high cost of foodstuffs and the high
cost of living generally is apparent. Equally apparent is the rôle which
a simplification of or a reduction in the processes of getting food from
the farm directly to the dinner table could play in lowering the cost of
living.

But such a simplification and reduction are possible only to a
Government postal express. At present the rural free delivery does make
provision for sending farm products directly from the farmer to the
consumer, but its efforts in this direction are still largely embryonic.
For the machinery of the process must be constructed anew and the task
of construction is one of those tasks which cannot be hurried. On the
other hand, the express companies have built up through the years an
extensive and efficient machinery for "farm to table" transactions, but
their services in this direction are hampered by the fact that the
companies are limited on the whole to the territory adjacent to the
railroad lines. The fertilization of the vast farming territory tapped
by the post office by the express company facilities should give birth
not many months after its consummation to the one most potent factor at
present available to lower the retail cost of foodstuffs to an
appreciable extent.

Under such an arrangement, a separate bureau would be established in the
postal system, covering both the parcel-post and the postal express.
This bureau would collect names of farmers--both those voluntarily
resorting to it and those reached in its own canvasses--who would send
their products collect on delivery to consumers. Similarly, lists of
consumers desiring thus to be served would be collected. It would be no
difficult matter for individuals on the two lists to get into touch with
one another, and to deal directly through either the parcel-post or the
postal express. Where they could not by their own arrangements get into
touch with one another, the bureau's task would be to get them into
touch. And where a farmer and a consumer could not even thus be brought
into direct contact, the bureau would act as the agent for
each--maintaining warehouses, if necessary, to which farmers would send
goods to be sold at a stated minimum price and to which consumers would
resort for their purchases. Since these functions are already performed
to a slight extent by the express companies, there should be little
question of the legality of such procedure by the Government. If
necessary, additional legislation might be sought; nor after the
activities of the Government during the Great War would there be much
likelihood of such legislation being declared unconstitutional.




_ECONOMY IN OPERATION_


It has been seen that about 50% of the charges collected by the express
companies for the transportation of packages go to the railroads, 50%
remaining to the express companies. To be exact, in 1917 the sum of
$222,860,373 represented the collection charges by the express
companies, of which $113,535,059, or 51%, went to the railroads, leaving
to the express companies from transportation, $109,325,314. Revenues of
the express companies from operations other than transportation brought
their total revenues up to $115,920,129. Their operating expenses were
$113,721,057. In other words, for every 10% by which Government
operation of the express service might decrease the operating expenses
of the express service, even if the present contracts with the railroads
are assumed by the Government, there should be a saving in the amount of
express rates assessed the public of no less than 5%.

Such savings seem inevitable under a Government postal express. Vast as
is the extent of the parcel-post operations, there is no evidence that
all or even most of its ramifications have yet reached that point of
magnitude where the addition of new business means an increasing instead
of a decreasing cost per unit. Let it be remembered that the parcel-post
carried in 1917 some 1,120,000,000 parcels and the express companies
some 280,000,000; so that, taking into account the secondary features of
the express service not performed at present by the post office, the
inclusion of the express service in the parcel post would increase the
latter's activities not much more than 25%. Certainly, it may be fairly
assumed that any such services in which the law of increasing costs per
unit might hold would be at least counter-balanced by services in which
the law of diminishing costs per unit would hold; so that we may
consider the economies of a Government postal express absolutely instead
of relatively.


CONSOLIDATION OF EQUIPMENT

In the first place, the express companies require for their operations
much the same kind of equipment as is required by the Post Office
Department. Express cars and railway postal cars; horse-drawn express
delivery wagons and horse-drawn post office delivery wagons; motor
express trucks and motor post office trucks; express company horses and
Post Office Department horses--all do similar work, along similar
routes, in similar sections of similar cities at similar times of the
day and under similar conditions. The economies possible by
consolidation are lessened only slightly by the fact that on the main
railroad trunk routes express traffic is often carried by trains
composed entirely of express cars, in which there can obviously be
little saving by consolidation of the express system and the
parcel-post. In passing, it should be noted that the railway mail cars
are furnished by the railroads, and in most cases the trucks and wagons
and automobiles used in transporting mail through a city render that
service by contracts of the Post Office Department with their owners; so
that the savings in consolidation would accrue indirectly by lower
contract rates rather than directly.

Especially in smaller communities and in the thinly settled outskirts of
larger communities can one wagon or one motor truck often render the
service now requiring one express wagon or motor truck and one post
office wagon or motor truck. On less crowded routes and on less crowded
trips, one railroad car can often render the service now requiring an
express car and a railway post office car. And on the crowded routes and
in the thickly-populated cities, if one vehicle of transportation cannot
render the service now requiring two, at least in many cases four such
vehicles can render the service now requiring five. (Note 3.)


CONSOLIDATION OF AGENCIES

In the second place, it has been seen that each of the express companies
of the United States concentrates its activities upon a certain section
of the country. That is to say, on many occasions a package traveling a
long distance may be handled by two or three, or sometimes even four
express companies before it reaches its destination. The wastes and
superfluous costs therein are evident. There is not only the direct cost
of unloading, transferring, and re-loading parcels from one express
company to another--and at many points express offices and yards are the
width of an entire city apart. There is also the cost of the complicated
bookkeeping necessary to determine for what part of the journey of a
package each express company has been responsible and accordingly to
what share of the express charge each is entitled. That this cost is no
mere creature of a brain hell-bent upon Government ownership is proved
by the fact that of a total operating expense of $113,721,057 in 1917,
exactly $32,272,795 or 30% was paid to office employees. As it stands,
this is the largest single item of expense in the express business, nor
does this sum include the salaries of the officers and general
superintendents and minor managers, nor the salaries of their clerks and
subordinates directly engaged in the managing and superintending
aspects of the express business. A consolidation of the express
companies of the country into one agency would end that large proportion
of office work attendant upon the calculation of the pro rata returns to
separate express companies, and upon the issue of separate receipts,
waybills, etc., and would hence result in still further reduction of
express rates.


CONSOLIDATION OF PERSONNEL

But, in the third place, there are also to be considered the expenses
represented by the employees not in the offices--those on the vehicles,
around the stables and garages, and on the trains. Consolidation of the
express service with the postal service would result in a consolidation,
not only of equipment, but also of personnel. If one truck does the work
of two trucks, or four trucks of five, two truck employees can do the
work of four, or eight of ten. Where one railway car does the work of
two, one railway car crew can do the work of two crews. That such saving
would have a not altogether inconsiderable effect upon the operating
expenses and hence upon the rates of the express companies is evident
from the fact that the wages of vehicle, stable, garage and train
employees amounted in 1917 to $23,547,906, or 20% of the operating
expenses of the express companies.


CONSOLIDATION OF OFFICES

In the fourth place, there were in the United States in 1917 some 55,000
post offices. The number of express offices is not definitely known, but
it is probably in the neighborhood of 40,000. The possibilities of
saving by coöperation and consolidation here are again obvious,
particularly when it is remembered that a large section of the
activities of practically every post office is given over to handling
packages mailed under the parcel-post. Especially in many smaller cities
and towns, post offices could handle with little increased cost the
business now requiring separate express offices in those localities.
Where post office facilities are inadequate to handle the demand now
being made upon them, the present express company offices might readily
serve to save the cost of additional construction and facilities in the
future. The amount of rental saved merely by the consolidation of many
different express offices may be indicated by reference to the recent
experience of the Railroad Administration in a parallel situation.
Similarly, there is possible an extensive consolidation and economizing
in stables and garages, office furniture and supplies.


THE POSTAGE STAMP

In the fifth place, there is the saving represented in the very nature
of the postage stamp itself, which can be sold and accepted for payment
of charges only by the Post Office Department. Much of the expense of
the express companies in issuing receipts, making statements, checking
upon money received, etc., could be saved if the express parcels could
proceed under a postage stamp.


MISCELLANEOUS SAVINGS

Finally, there are the hosts of miscellaneous items of operating
expenses in which we must be led to expect saving by all other
experience in consolidating similar agencies performing similar
services. Some of these expenses might even be eliminated entirely under
Government ownership and control. Such are the cost of superintendence
and auditing, insurance, the cost of securing traffic commissions,
advertising and law expenses, to say nothing of the profits paid
stockholders in normal years.

The amount of these savings can only be roughly surmised; but in 1912,
Mr. David J. Lewis estimated that they would amount to at least 40% of
the total operating expenses. In this connection, it may be remarked in
passing that Mr. Lewis's qualifications for throwing light upon the
express service problem include not only theoretical knowledge gained by
years of study of the problem, both here and abroad; but also practical
knowledge of ways and means, as attested by general belief that the
establishment of a parcel-post in the United States was due to his
analyses more than to the efforts of any other one man; and also by the
fact that when the Government in 1918 assumed responsibility for the
management of the telephone and telegraph systems of the land, Mr. Lewis
was made, and at the time of writing is, the general manager in charge
of those systems while under Government control. Certainly, in view of
the economies enumerated above as inherent in Government ownership and
control of the express companies, on the face of it Mr. Lewis's
statement seems extremely reasonable.


THE CONSEQUENT REDUCTION IN RATES

So that, if Mr. Lewis's estimate were accurate, and remembering that the
operating expenses of the express companies in 1917 represented one-half
of the total charges made by the express companies for transportation, a
reduction of 20% in the express rates should accompany the acquisition
of the express companies by the Government, other things being equal.
But other things are not equal. Lower rates mean increased business; and
in an agency which has developed the field at its disposal so
inadequately as have the express companies, each additional unit of
business can be handled at a lower cost and hence at a greater profit
than each previous unit. This consideration was the primary one advanced
by the Interstate Commerce Commission in ordering 16% reduction in the
express rates in 1914. So that, the lower amount of profit per parcel
being counterbalanced by a greater number of parcels, the economy in a
Government postal express should be represented by a lowering of express
rates anywhere from 25% to 35% of the present rates.

But up to this point our calculations have assumed that under a
Government postal express the railroads would continue to obtain their
50% of the charges on each package transported by express. This method
of calculating the return due to the railroad is certainly ingenious in
its simplicity and lack of scientific basis, but it is just as certainly
unfair to the shipper of parcels by express. Let us consider, for
example, two shipments of similar articles under similar conditions--one
from New York City to Yonkers, New York, a distance of some 20 miles;
the other from New York City to San Francisco, a distance of more than
3,000 miles. In each case, the express companies collect the parcel and
deliver it to the railroad in New York City; and collect the parcel from
the railroad and deliver it to the consignee, in the first case in
Yonkers; and in the second case in San Francisco. In both cases, the
services rendered by the express companies are about identical, aside
from the different lengths of time during which space and protection in
express cars must be afforded. But the services rendered by the railroad
companies are far different in the two cases. In the first case, the
parcel is carried for less than an hour; in the second place, for some
days. Obviously, the share of the railroad in the entire service
rendered in transporting the parcels is less in the first case than in
the second, but in each case it gets the same share of the total express
charge--namely, 50%.

Such a system in its very nature must thwart any attempt to make express
rates reflect the value of express service. For, of course, the rates
actually fixed endeavor to do justice to both the express companies and
the railroads in each case considered above. In the first case, the rate
must be high enough so that 50% of it will not be too glaringly little
for the express companies to retain for their _relatively_ more
important and more costly service of collecting a parcel in New York
and delivering it in Yonkers. In the second case, the rate must be high
enough so that 50% of it will not be too glaringly little to turn over
to the railroad for their _relatively_ more important and more costly
service of carrying the parcel across the continent. The railroad
directors and express company directors cannot be expected to have
reached a fair compromise after fighting for their own interests when
the contracts were originally made, for, as has been seen, their
interests are largely identical. It would seem, then, that only the
shipper sending a parcel several hundred miles is charged a fee
commensurate with the value of the service rendered him. It would seem
that shippers sending parcels shorter distances must be charged too much
and that shippers sending parcels longer distances must be charged too
little. A glance at parcel post rates proves the validity of this
surmise, for parcel post rates are lower than express rates for shorter
distances and higher for longer distances. Under the present system of
competition between the parcel post and the express companies, the
nature of the contracts between the express companies and the railroads
compels express rates which unfairly discriminate against the express
companies at the shorter distances and unfairly discriminate against the
parcel-post at the longer distances.

       *       *       *       *       *

However, there is no evidence in all this that the express rates as
actually levied may not strike a just and equitable average between the
rates too low and the rates too high. Let us therefore compare for a
moment the railroad costs of the express traffic with the railroad costs
of the Postal System. It has been seen that in 1917 the express
companies paid the railroads for transporting some 280,000,000 parcels
the sum of $113,535,059. In the fiscal year ending June 30, 1917, the
Post Office Department paid railroads and other transportation lines for
services in transporting _all postal matter_, including almost
1,120,000,000 parcels, the sum of $63,358,997. (The basis for
remuneration to the railroads for transporting postal matter is the size
and the weight of the matter transported.) Of course, it must be
remembered that for the postal service the railroads furnished the cars.
It must be remembered also that the parcels of the express companies
averaged heavier weights and travelled longer average distances than the
parcels of the parcel-post. Nevertheless, the enormous discrepancy
between the two figures cannot be thus entirely explained away. Some of
the discrepancy, and obviously a considerable part of it, can be traced
only to an unjustifiably high return paid the railroads by the express
companies. (Note 4.)

Moreover, the amount thus obtained by the railroads in 1917 from its
express traffic was equivalent to about 3-1/2% of the total railroad
revenues, although it represented 50% of the total express revenue.
Accordingly, even a radical slashing of express rates, with its
resulting beneficial stimulation to the express service of the country,
could hardly disturb the well-being of the railroads to any serious
extent.

Again, the various functions performed by the express companies as
subsidiary to the express business proper are on the whole paralleled by
similar functions of the Government or other agencies. Money orders,
both domestic and international, are issued by the Post Office
Department, and in 1917 were issued to the extent of $854,963,806 as
against $145,934,982 of the express companies. Telegraph and cable
transfers are readily issuable by the telegraph companies themselves.
Similarly, the travelers' cheques issued by the express companies could
without difficulty and with no less convenience be issued by our large
banking institutions performing that service.

       *       *       *       *       *

It is therefore respectfully submitted that any comprehensive
consideration of the express service field in the United States can
point only in one direction--toward the consolidation of the express
service of the United States with the Postal System of the United
States, under the control and management of the Post Office Department.




_METHODS OF ESTABLISHING A GOVERNMENT POSTAL EXPRESS_


Many studies advocating Government ownership and management of public
utilities find it necessary to hitch their program to one definite mode
of procedure. In the case of the express service, however, no such
necessity exists. Several modes of procedure are open, and if one of
them seems preferable, none of them is impossible, inadequate or
inefficient. The most desirable method now available of substituting a
Government postal express for our express companies would seem to be a
legal and constitutional confiscation of their property and rights, with
adequate compensation. The adequacy of the compensation would naturally
entail much discussion--on the one side would stand those insisting that
the Government pay for only the contemporaneous value of the physical
property taken over; and on the other side would stand those insisting
that the contracts with the railroads, good will, and other intangible
assets of the express companies possess true value despite their
intangible nature and should accordingly be purchased. Supporting the
first group would be the policy of the present Government which, as we
shall see, has placed the capital of the express combination temporarily
handling the express business of the country at $30,000,000, or
approximately the value of the actual physical property represented by
that combination. Supporting the second group is the Interstate Commerce
Commission, through its representative, Franklin K. Lane, in its 1912
decision in the matter of the express rates.

A third method presents itself, but its adoption could be considered
only as deplorable, even as reprehensible--namely, purchase of the
express companies at their paper valuation. As we have seen, the
capitalization of the express companies bears no relation to the value
of their property, and chiefly represents, not money invested, but
profits accumulated. As a matter of fact, the Supreme Court of the
United States some years ago decided that capitalized excess profits may
not be used as a basis of computing fair rates of dividends upon capital
as against the state. Possibly Congress might find it wise to settle the
whole problem in any bill providing for Government acquisition by
abiding in the judgment of the Interstate Commerce Commission, leaving
the Government or the express companies, or both, the right to appeal to
the Supreme Court if dissatisfied.

The express service would represent too unimportant and too different an
activity from railroad freight service to be efficiently handled now by
the railroads. And mere regulation, as has been seen, affords no
solution, for the profits and the equipment represent but an
infinitesimal part of the operating expenses.

At this point, the Socialist or the socialist or the person who falls
loosely into the category of "radical" or perhaps even the merely
"liberal" advocate of the public ownership of public utilities will
doubtless exclaim: "But why compensate at all? Isn't it bad enough to
have so long permitted a group of entrepreneurs to grow rich by
exploiting for their own gain a field which all experience outside the
confines of North America proves a field of public endeavor? Why add
insult to injury by actually paying them for rendering unto the people
the things which belong to the people? Why shall not the Government
establish its own express service, as it established the parcel-post,
and leave the express companies, so long unchallenged in their
activities, to meet Government competition as best they may? If they can
meet it, well and good--if they can't, the essentially parasitic nature
of their business is proved beyond cavil."

Very good, gentlemen; and if he may be permitted a personal reference,
the writer of these lines is in perfect accord with you. The rates of
the private express companies under your plan would still be under the
control of the Interstate Commerce Commission, and accordingly these
private agencies would be unable to compete unfairly with the new
Government service by establishing along any of the more popular routes
rates far below the cost of the service, in order to cripple the
Government service along these routes and hence in its entirety.
Moreover, there is every probability that the legislative grant to the
Government of a monopoly of the express service of the United States
would be upheld by the courts, for a good case could be made out for the
essential nature of the express business as a part of the mail business
in which the Government has been granted a monopoly. Indeed, monopoly
was originally granted the Government mail service to prevent the
competition which the Wells-Fargo Company soon after its organization
was conducting in the business of carrying letters.

But, gentlemen, what are the chances that a sufficient number of your
fellow-countrymen can be brought into accord with you--not merely in
their intellectual convictions, but in convictions, intellectual and
emotional, so strong that they can be transmuted into a sufficient
number of votes in the ballot box to make our lawmakers at Washington
give heed--at least in the immediate future? For the problem of the
express companies will come up for adjudication, temporary or
long-enduring, within some months, or at least within a year or two.
Obviously, the present status of the express companies, as described
below, will end soon after the war. And Government ownership of the
express service, as has been indicated, is so infinitely more
advantageous than private ownership, that if Government ownership can be
obtained only by your (and my) method, and if we divide our ranks by
refusing to support any other method short of one vicious in both
principle and practice, the country may return once more to the private
express company method. As has been indicated, the whole problem
concerns scarcely ten or twenty millions of dollars in a business whose
operations amount to more than two hundred millions; and whatever method
be adopted, it can hardly effect a difference of 5% one way or another
in express rates. If the question were one similar to the Government
ownership of railroads, it would indeed be worth delay to obtain a
comprehensively adequate method of taking them over by the Government,
for marked differences in rates would then result. But the differences
in express rates involved in different methods of purchasing the
companies would hardly recompense for the delay involved in the postal
service's mastery of a new technique, in its assimilation of details
which can be mastered only through experience, in tedious litigation, in
political wirepulling and manipulation, and in determination of
constitutionality, all of which features will accompany the
establishment of a new Government postal express independent of the
present express companies.

For, by the time that the dissolution of the American Railway Express
Company (see below) will come up for final decision, new equipment and
the materials for new equipment will still be scarce, very scarce, and
very costly in the United States. It would be unfairly prejudicial to an
infant Government postal express service if it were hampered by scarcity
or high cost of equipment. Indeed, in the long run, in an industrial
situation which for many months after peace will be unsettled as a
result of the war, it might even be more economical to purchase the
express companies outright. And if once the express service is released
to its former owners, the difficulty of prying it loose again will
involve far greater loss than the loss in adopting even the least
justifiable method of consolidating it in the Postal Service.




_THE PRESENT STATUS OF EXPRESS COMPANIES_


As the United States more and more radically altered its industrial
processes to correlate them with the needs impressed upon the national
life by the Great War, the express companies more and more plainly gave
evidence of membership in that group of public utilities which could not
unaided weather the storm. Not so soon as in the case of the railways,
but not any considerable length of time afterwards, Government
intervention became the _sine qua non_ of a continuation of the express
business of the United States on an efficient plane. On May 28, 1918,
the United States Railroad Administration made public an arrangement
with the express companies by which the express service of the country
has since been conducted up to the time of writing. Of that arrangement,
the salient features follow:

1. A new express company, known as the American Railway Express Company,
was organized by the Adams, American, Southern and Wells-Fargo Express
Companies.

2. The new company is capitalized only to the extent of the actual
property and cash represented in its formation and activities--namely,
$30,000,000, and capital stock has been issued for that amount and
further stock will be sold at par.

3. With the American Railway Express Company the Railroad Administration
made a contract for conducting the express business on all carriers
included in the Railroad Administration.

4. Under that contract, the Railroad Administration receives 51-1/4% of
the operating revenues.

5. The 49-3/4% remaining to the express companies must cover the
operating expenses, taxes, profits and a dividend of 5% on the stock of
the American Railway Express Company.

6. In any profits remaining, the first 2% is divided equally between the
Railroad Administration and the American Railway Express Company; of the
next 3%, the former receives two-thirds and the latter one-third; of all
further profits, the former receives three-fourths and the latter
one-fourth.

7. The amount of the express rates charged and control over the
character of service supplied are vested in the Director-General of
Railroads.

Subsequent changes in the arrangement of May 28, 1918, have been as
follows:

8. In July, 1918, the Interstate Commerce Commission approved an
increase of 10% in express rates, all of which was absorbed, however,
according to both the Interstate Commerce Commission and the Director
General of Railroads, in wage increases effective July 1, 1918.

9. On September 13, 1918, the Director General of Railroads requested of
the Interstate Commerce Commission an opinion concerning a contemplated
absolute increase in the express rates on each package, irrespective of
weight and distance travelled. The proposed increase would be equivalent
to possibly 9% on all traffic; but again, according to the Director
General of Railroads, it would cover only increased wages. The
Commission was asked only if the proposed increase would net the sum
needed, and replied on October 22, 1918, in the affirmative. However,
the Commission significantly called attention to the possibility of
increasing express revenues by lowering the percentage on all express
charges received by the railroads.

10. On November 18, 1918, President Wilson issued a proclamation
specifically taking, through Secretary of War Baker, possession,
control, operation and utilization of the American Railway Express
Company, in order to make the Government's control over that agency
indisputably clear. The powers assumed by the Government were delegated
to the Director General of Railroads to be utilized according to the
prior contract made between him and the American Railway Express
Company.

11. On January 1, 1919, an increase of about 9% in express rates went
into effect, making a total increase since the United States entered the
European War of about 19%, this representing the only increase in
express rates since the reduction of 16% ordered in 1912 and effective
in 1914, and representing also a smaller increase in rates than was
found necessary by the railroads in their freight traffic.


ADVANTAGES

The advantages of this arrangement over its predecessor are undeniable.
The consolidation of effort, the reduction in the number of separate
express agencies, the minimizing of accounting, the simplification of
management, the pooling of equipment and facilities,--these
administrative reforms should result in a marked decrease in relative
operating expenses. The transfer of control from a moneyed group--or
rather from three moneyed groups--interested primarily in private
profits to a public official seeking only service to the public, this
similarly is a definite achievement. The limitation of the capital
stock to the actual cash value of the property and the fixing of the
dividends on that stock at a nominal rate, these again are as notable
gains in the realm of the express service as the profit-sharing
arrangement between the Government and the private companies.


WAGE INCREASES

As has been seen, the increases in express rates since the birth of the
American Railway Express have been absorbed in wage increases. Now, in a
statistical study, the phrase "wage increases" will connote a mere item
of expense, but to the wage-worker it will connote happiness. It means
more nourishing food; it means more wholesome dwelling conditions; it
means more schooling for the children; it means more recreation; it
means more medical care and less illness; it means especially less
gnawing fear of what the morrow may hold. The example of the Railroad
Administration indicates the widespread services in lessening want or
even in increasing comforts which Government control brings in its
wake--the raising of all wages to that level below which a decent
standard of living cannot be maintained and the abolition of artificial
and undemocratic special wage privileges of sex or color in favor of
equal pay for equal work. A country which hitches its wagon to a world
made safe for democracy can ill afford in any of its industrial
activities underpaid workers, and least of all in any of its public
utilities. If a Government Postal Express should be compelled to devote
all its savings over the private express system only to wage increases
among the thousands of men and women express employees, instead of being
able to devote some or most of them to lowering the rates, the
inauguration of a Governmental Postal Express would be still more than
justified.


INADEQUACIES

Nevertheless, the advantages of the present system over the old are not
sufficient. A large majority of the 25,000,000 persons served by the
rural postal delivery are still without express service. There is still
little opportunity for the direct transmission of foodstuffs from the
producer to the consumer which at the present time presents the most
hopeful method of attacking the soaring cost of food. There is still
much potential and helpful express business which has not been called
into being, and there is accordingly a considerable lowering in the
rates which has not yet been effected. There is still no possibility of
coordinating postal facilities with express facilities. There is still
no change in the method of remunerating the railroads, and hence in the
unscientific and discriminating methods of fixing rates. In a word, if
this study may be said to have proved anything, it has proved that the
express service belongs to the Post Office Department, not to the
Railroad Administration; indeed, one can hardly avoid the deduction that
the present war-time express system could have been adopted only from
considerations of either temporary political expediency or of transient
personal efficiency; or else of inattention to the true nature of the
problem presented.


THE LARGER ISSUE

But material gains may not be the summum bonum of the express business.
The express service is much more than an important business undertaking,
and it is much more even than a valuable agent in quickening the
industrial activities of the United States--it is, or rather it can be,
one of the most serviceable media for the development of an American
culture as that culture expresses itself in the economic processes of
the nation. The future of the nation's express service is basically a
problem of national morale. In the decades before April 6, 1917, there
was no United States esprit, no United States national life, no United
States unity. There were only separatist esprits; there was only class
life; there was only geographical unity. The war found us an
unintegrated miscellany, and our Government a creature strangely and
even desirably aloof from the thoughts and aspirations of our daily
lives. And now, almost overnight, sacrifice in France and at home has
welded us into one people. Shall we remain one, or shall we revert to
factions, to factions either at loggerheads with one another, or else
indifferent one to the other? Assuredly we shall soon re-degenerate into
warring factions unless our still largely inchoate strivings for
national unity can discover vehicles to carry them forward. A Government
which has become truly a people's Government will long continue in the
United States only as it draws unto itself and maintains both the
material and the immaterial agencies which dive down to the depths of
our national daily existence and bind us together. More powerfully than
any other of these forces, our vast public utilities can, as an integral
part of the Government, retain our Government as the hub of our
universe. And although of all the public utilities the railroads
undoubtedly present the most hopeful source of this re-vitalization of
our national life, yet a Government express service can also help in no
small degree, both in itself and as a sharer in the entire general urge
towards a democratically-socialized state, to preserve and even to
invigorate the national morale.

And the future of the express service concerns not only national morale,
but also individual morale. Aside from a few serviceable and hitherto
usually unappreciated social servants, whether in private or in public
bodies, success in America has lain along the lines of private
enterprise for private gain. For the first time, a widespread summons
for service to the people has been able during the nineteen months of
war to supplant in the hearts of our most capable administrators the
summons to exploitation of the people. For nineteen months they have
subordinated self and enthroned society. Shall we send them back to the
limbo of self-aggrandizement or shall we carve out new paths for the
development of character in our American citizens? For obviously the
decades immediately at hand are to witness also a direct growth of the
control of the workers over their industry, whether it be private or
public industry. Who can hope to measure the gain in individual morale
when a man realizes that his own advancement depends upon the extent to
which he can serve others, not upon the extent to which he can serve
himself; when such a public utility as the express companies is in the
hands of administrators who have turned their attention away from
endeavors to derive as high rates as possible from the public to
endeavors to charge the public as low a rate as possible? If we hope to
keep unnarrowed, and even to broaden, the present fields in which
opportunity is given our fellow-citizens to devote their lives primarily
to their fellows' service rather than primarily to their own gain, any
national activity as socially-necessary and as nationally-significant as
the express companies must inevitably revert in ownership to the nation
to whose needs it ministers, and the men and women within the machinery
of its operation must serve owners who are not a handful of individuals,
but the people, all the people who make up America.




APPENDIX

EXPRESS CONTRACTS


The contracts made by express companies with railroads usually provide
that the railroad must:

1--Furnish facilities for the prompt transportation of express matter,
accompanied by express messengers, on passenger and mail trains; in
baggage and combination cars; or on special trains made up of express
cars only.

2--Turn over to the express company, i. e., give it a monopoly of, all
merchandise offered for transportation on passenger trains, except
personal baggage, dogs, corpses, etc.

3--Refuse any other express company facilities for the transportation of
express matter.

4--Grant the express company, wherever possible, space in railroad
stations, without charge where such grant causes no extra expense to the
railroad.

5--Grant free transportation to officers and employees of the express
company, and for its personal property and supplies.

6--Permit its employees at stations, etc., wherever possible, to be
agents also of the express company.

On its side, the express company must:

1--Pay the railroad an agreed percentage (usually about 50%) of the
charges levied and collected by the express company for its service of
sending matter by express.

2--Throw open its books and tariffs to the scrutiny of the railroad and
furnish the railroad whatever additional documents and records may be
necessary to determine the correctness of the sums assigned the railroad
by the express company.

3--Carry free of charge money and other matter concerned with the
business of the railroad.

4--Be responsible for any damage to the expressed goods.

5--Make its charges at least 150% of the freight charge of the railroads
for similar merchandise. (The present charges average about 300% of the
freight charges.)

6--Furnish, heat, light and man the cars necessary for the
transportation of express matter.




NOTES


NOTE 1--This estimate is based on the following considerations. For the
fiscal year ending June 30, 1911, the official report of the Interstate
Commerce Commission gives the average charge per shipment of the Adams
and the United States Express Companies on August 18, 1909, and December
22, 1909, respectively--namely, $.4962 and $.4999, or an average of
$.4980-1/2 per shipment in 1909. (Many shipments contain more than one
parcel.) By dividing this sum into the known total amount of money
collected by the express companies for the express services, we can
obtain the total number of shipments for that year.

But with the establishment of the parcel post in 1913 the character of
the express business underwent a radical change. The fact that the
parcel-post limits its shipments to parcels under a certain weight and
under a certain size is one factor of the situation tending to transfer
to the parcel-post from the express companies a larger number of smaller
packages than of larger packages, and hence to make the average charge
per package of the express company in 1917 higher than in 1909. A second
factor tending in the same direction is the fact that the parcel-post
limits the amount of insurance which may be placed on a valuable
package, while the express company has no such limit, thereby keeping
with the express company most of the valuable packages on which the high
insurance makes a high rate. A third factor tending similarly is the
fact that for shorter distances the parcel-post rate is lower on the
whole than the express rate, whereas for longer distances the express
rate is lower on the whole than the parcel-post rate; and accordingly
the express companies' average haul was longer and hence at a higher
rate in 1917 than in 1909, although not so much longer as might be
expected, as has been shown above. A fourth factor of similar effect is
the railroad congestion in 1917, causing the expressage of many heavy
shipments which had formerly been dispatched as freight, especially in
the latter part of the year.

The chief factor moving in the opposite direction is that of the
reduction of 16% in express rates effective in 1914; but there is every
evidence that the effect of the first four factors outweighs to a
considerable extent the effect of the last. So that we should not go far
wrong if we assume that the average charge _per parcel_ of the express
companies in 1917 was $.80. This estimate is supported by an
investigation of the Interstate Commerce Commission for April, 1917, in
which the average charge _per shipment_ (often including more than one
parcel) was found to be $.85.

By dividing $.80 into the total transportation revenues of the express
companies in 1917, we get 280,000,000 as the number of parcels carried
by them in that year.

The accuracy of this estimate of the number of express parcels may be
gauged from an investigation of the Interstate Commerce Commission for
the number of parcels carried by express companies during the month of
April, 1917. In that month, some 21,100,000 shipments were carried, from
which a total of some 250,000,000 _shipments_ for the whole year may be
deduced. Remembering, however, that the freight congestion of last
winter increased toward the end of the year the normal acceleration of
the number of shipments dispatched, and remembering also that many
_shipments_ contain more than one _parcel_, there would seem to be
little variation required from our first estimate of 280,000,000 parcels
carried by the express companies in 1917.

NOTE 2--Many, if not most, shippers, especially in the smaller cities
and towns, are able to transport their parcels to the parcel-post
station without additional cost to themselves. The fee collected from
them should therefore not cover also the cost of collecting packages
from other shippers. This statement holds especially for the person who
ships parcels only occasionally, not primarily as a business
transaction, and who has little difficulty in taking or sending them to
the dispatching station. On the other hand, without the pick-up feature
of the express service, vehicles would be necessary to convey larger
packages or a great number of smaller packages from other shippers; so
that this feature of express service is as necessary for certain
shippers as it is unnecessary for others and should hence not be
included in the charges levied on the latter. Again, in theory there
would seem to be little reason why the cost of collecting the express
fee from the consignee on delivery should be distributed among the
express fees on packages which are prepaid. This situation obtains in
the present practice of the express companies, where the one fee
includes all services except those of an especial nature. But in
practice the present parcel-post method of charging a separate fee for
collecting on delivery will have to be radically simplified and
cheapened if a Government postal express is to follow this separate fee
arrangement. For in 1917 less than 1% of the parcels sent by the
parcel-post were dispatched C. O. D. The question is one
of administrative efficiency, and in practice the present
one-fee-for-normal services system of the express companies might prove
more desirable than the theoretically more desirable separate C. O. D.
fee of the present parcel-post.

In other countries, practises in this respect vary. In Austria, Italy,
Rumania and Switzerland, a special fee is charged for collecting on
delivery. Belgium renders this service free for packages upon which the
postage is above ten cents and Denmark, when the weight of the package
is above ten pounds. Germany collects free upon packages above ten
pounds and renders the service at a fee upon packages under that amount.

NOTE 3--The possibility of economy in a postal express as contrasted
with the express companies may be readily understood by a glance at the
following table of the equipment required and utilized in 1917 by the
express companies of the United States:

    Cars                      256
    Horses                 19,986
    Automobiles             2,886
    Wagons                 14,907
    Sleighs and Buggies     3,563
    Trucks                 56,924

In 1917 there were about 1,800 railway postal cars in operation. These
are furnished the Post Office Department by the railroads. As has been
said, other corresponding equipment used by the Post Office Department
is usually owned by private contractors who furnish transportation by
wagon and by automobiles on contract, so that it is impossible to get
accurate figures concerning it. Some idea of the equipment needed,
however, may be gleaned from the postal operations within the cities of
Chicago, Pittsburgh, Philadelphia, Detroit, Washington, St. Louis,
Indianapolis and Nashville. In these cities all the transportation of
mail between the railroad stations and the post offices as well as in
the collection and delivery services is performed by automobiles owned
by the Post Office Department itself. The number of automobiles required
for the service in these cities and operated in them in 1917 was 541.
This method of conveying postal matter within the cities mentioned
represents a departure from the contract system which the
Postmaster-General asserts should be and will be extended. Accordingly,
more and more the economies under this head in consolidating the express
service in the Postal System would accrue to the Post Office Department
directly rather than indirectly.

NOTE 4--The example of the United Kingdom substantiates the last
surmise. For in the United Kingdom the railroads, all privately owned,
are given 55% of the total charges on all _parcel-post parcels_ carried
by them, irrespective of distance. (And there is evidence that this
remuneration is expressly considered too generous in the United
Kingdom.) Now, the parcel-post charges in the United Kingdom are
considerably lower than the express charges in the United States not
only absolutely, but also relatively to the different values of money in
the two countries. But the railroads' service in carrying a parcel-post
package, aside from furnishing mail cars, is no more expensive than
their service of carrying an express package of the same weight. If the
railroads of the United States were to carry parcels at 55% of the
_parcel-post charges_ or at that percentage of the parcel-post charges
in this country which, considering the difference of conditions in the
two countries, would correspond to 55% of the parcel-post charges in the
United States, they obviously would be receiving much less than 50% of
the _total express charges_. Nor should the fact that express packages
on the whole may travel farther and weigh more than parcel-post packages
invalidate the argument, for the present contracts with the railroads
have not been altered to any extent so as to meet any such condition due
to the advent of the parcel-post--in the year before the parcel-post was
established the railroads got 49% of the net express charges and in
1917, 51%. So that the question as to whether the railroads of the
United States obtain on the whole too high a proportion of the express
rates because of unduly high percentage clauses in the express
company-railroad company contracts is, if not thus answered, at least
illumined.




BIBLIOGRAPHY


ADAMS EXPRESS COMPANY, et al--Response in Interstate Commerce
     Commission Docket No. 4198, opposing decrease in express rates
     (1911).

CENSUS BUREAU--

     Census of 1890: Transportation in the United States.

     Census of 1890, Bulletin: Transportation Business in the United
     States (Part II), Transportation by Express Companies (1894).

     Express business in the United States (1907).

CHANDLER, WILLIAM H.--The Express Service and Rates (1914).

CONGRESSIONAL RECORD, 1911 AND 1912--Speeches, bills, etc., concerning
     the parcel-post and express service.

DEPARTMENT OF AGRICULTURE--

     Annual Reports, Secretary of Agriculture, 1917 and 1918.

     Farmers' Bulletins Nos. 594, 688, 703, 922, 930 and others
     relating to marketing by parcel-post.

FIELD, ARTHUR S.--Rates and Practises of Express Companies; and The
     Express Charges Prescribed by the Interstate Commerce Commission,
     American Economic Review, 1913, volume 3, pages 314 and 831.

INTERSTATE COMMERCE COMMISSION--

     Annual Reports, Statistics of Express Companies, 1909-1918.

     Bulletin 13: Interpretations of Accounting Classifications ...
     in accordance with ... the Act to Regulate Commerce (1917).

     Classification of Expenditures for Real Property and Equipment
     of Express Companies (1908).

     Classification of Operating Revenues of Express Companies, etc.
     (1912).

     Dockets No. 4198, 1280, 1911, 1916, 2175, 2176, 2246, 4302. (In
     re Express Rates, Practises, Accounts and Revenues.) 1912.

     Brief on Behalf of Shippers (Fairchild). See also Adams Express
     Company, above.

     Report No. 1498: Hearing and Supplemental Order No. 15 (1915).

     Docket No. 9972 (Proposed Increase in Express Rates). June,
     1918.

     Equity No. 4198 (In re Express Rates, Practises, Accounts and
     Revenues): Released rates (1917).

     Ex parte 64: In re Increase in Express Rates (October, 1918).

     Uniform System of Accounts ... in accordance with ... Act to
     Regulate Commerce (1914).

JOHNSON, E. R., and HUEBNER, G. G.--Railroad Traffic and Rates, Volume
     II (1911).

KIRKMAN, M. M.--The Science of Railways: Baggage, Express and Mail
     Business (1896).

LEWIS, DAVID J.--

     A Bill to Take Over the Express Companies of the United States
     (1911).

     A Brief for a General Parcel Post (1913).

     Postal Express as a Solution of the Parcel Post and High Cost
     of Living Problems (1912).

     Study in Some Proposed Improvements to the Parcel-Post (1915).

POST OFFICE DEPARTMENT--

     Annual Reports, Postmaster General.

     Comparative Statements (Blue Prints) on Operations of
     Parcel-Post.

PRESIDENT OF THE UNITED STATES--A Proclamation (No. 1497) Taking
     Possession and Control of the American Railway Express Company
     (November 16, 1918).

STIMSON, A. L.--

     History of the Express Companies (1858).

     History of the Express Business (1881).

THOMPSON, SLASON--Postal Express vs. Parcel-Post, A Review of
     Congressman David J. Lewis's Bill Proposing that the Government Take
     Over the Express Business (1911).

TUCKER, T. W.--Waifs from the Way-bills of an Old Expressman (1872).

UNITED STATES OFFICIAL BULLETIN, _October 31, 1918_--Statement of
     Contract between the Railroad Administration and the Express Companies
     concerning the American Railway Express Company.

UNITED STATES SENATE COMMITTEE ON POST OFFICE AND POST ROADS--

     Hearings before Sub-Committee on Parcel-Post, November 7,
     1911-January 16, 1912.

     Parcel Post in Foreign Countries (1912).

     Table Showing Data concerning Parcel-Post Systems of ... World
     (1912).

WELLS, HENRY--Sketch of the Rise, Progress and Present Condition of the
Express System (1864).


       *       *       *       *       *

Transcriber's note


Minor punctuation errors have been changed without notice. Printer
errors have been changed and are listed below. All other
inconsistencies are as in the original.

Characters that could not be displayed directly in Latin-1 are
transcribed as follows:

    _ - italics


The following changes have been made to the text:

Page 3: "Davied J." changed to "David J".

Page 16: "first class the profit" changed to "first case the profit".

Page 29: "employes not in" changed to "employees not in".

Page 30: "Governmnt ownership" changed to "Government ownership".