The Mail Pay on the Burlington Railroad.

by Anonymous.

The present system under which the Government employs railroads to carry the mails was established in 1873, thirty-seven years ago. Under this system, the Post Office Department designates between what named towns upon each railroad in the country a so-called "mail route" shall be established. Congress prescribes a scale of rates for payment per mile of such mail route per year, based upon the average weight of mails transported over the route daily, "with due frequency and speed," and under "regulations" promulgated from time to time by the Post Office Department. To this is added a certain allowance for the haulage and use of post office cars built and run exclusively for the mails, based upon their length. The annual rate of expenditure to all railroads for mail service on all routes in operation June 30, 1909, was $44,885,395.29 for weight of mail, and for post office cars $4,721,044.87, the "car pay," so-called, being nine and five-tenths per cent of the total pay. The payment by weight is, therefore, the real basis of the compensation to railroads. The rate itself, however, varies upon different mail routes to a degree that is neither scientific nor entirely reasonable. The rate per ton or per hundred pounds upon a route carrying a small weight is twenty times greater than is paid over a route carrying the heaviest weight. The Government thus appropriates to its own advantage an extreme application of the wholesale principle and demands a low rate for large shipments, which principle it denounces as unjust discrimination if practiced in favor of private shippers by wholesale. The effect of the application of this principle has been to greatly reduce the average mail rate year by year as the business increases. This constant rate reduction was described by Hon. Wm. H. Moody (now Mr. Justice Moody of the United States Supreme Court) in his separate report as a member of the Wolcott Commission in the following language:

"The existing law prescribing railway mail pay automatically lowers the rate on any given route as the volume of traffic increases. Mr. Adams shows that by the normal effect of this law the rate per ton mile is $1.17, when the average daily weight of mail is 200 pounds, and, decreasing with the increase of volume, it becomes 6.073 cents when the average daily weight is 300,000 pounds."

NOTE.--Since 1907 the railroads have been paid at much reduced rates.

On the heavy routes the pay is now 5.54 cents per ton per mile.

Post Office Department officials have announced, as their conclusion from the results of the special weighing in 1907, that the average length of haul of all mail is 620 miles.

The bulk of the mail is now carried on the heavy routes at 5.54 cents per ton per mile, or $34.34 per ton for the average haul, that is, for one and seven-tenths cents per pound.

The railroads, therefore, receive less than one and three-fourths cents per pound for carrying the greater part of the mails.

But the rate reduction for wholesale quant.i.ties has not had the effect of reducing the actual remuneration of the railroads for carrying the mails to nearly so great an extent as the increasing requirements for excessive s.p.a.ce for distributing mails en route. This feature was likewise discussed by Judge Moody in his report in the following language:

"The rule of transportation invoked is based upon the a.s.sumption that the increase of traffic permits the introduction of increased economy, notably, the economy which results in so loading cars that the ratio of dead weight to paying freight is decreased. Yet this economy is precisely what our method of transporting mail denies to the railroads. Instead of permitting the mail cars, whether apartment or full postal cars, to be loaded to their full capacity, the Government demands that the cars shall be lightly loaded so that there may be ample s.p.a.ce for the sorting and distribution of mail en route. In other words, instead of a freight car, a traveling post office."

An ill.u.s.tration of the extent to which the reductions have been carried, as shown upon one railroad system, is set forth in the letter of January 21, 1909, addressed to the Committee on Post Offices and Post Roads of the House of Representatives by Mr. Ralph Peters, President of the Long Island Railroad, who states that the actual cost to his company of carrying the United States mail for the year was $122,169, while the total compensation for that service paid by the Government was $41,196. Mr. Peters says:

"The Long Island Company received from the Government for mail service performed in expensive pa.s.senger trains one-half the rate received by it per car mile for average cla.s.s freight in slow-moving freight trains."

The Long Island Company notified the Government that it would decline to carry the mails by the present expensive methods, unless Congress makes some provision for a more adequate compensation. A notification of similar import has been given by The New York, New Haven & Hartford Railroad Company, the princ.i.p.al carrier in New England. Their position in this matter will undoubtedly be taken by other roads, because the same condition of inadequate compensation prevails upon hundreds of small railroads and mail routes, especially in the Southern and Western States.

Notwithstanding these facts, a powerful interest, which commands the public ear and derives great profit from the one-cent-per-pound rate of postage, has, in order to divert public attention from itself, for years industriously and systematically circulated false statistics and false statements among the people regarding the railroad mail pay, and is now circulating them.

The extent to which the public is being deceived regarding the railroad mail pay is disclosed daily. In a recent hearing before the Senate Committee on Post offices and Post-Roads, Senator Carter of Montana said:

"We are all getting letters on this subject. I received the other day a letter from a very intelligent lady in Montana claiming that the Government is paying to the Northern Pacific Railway on that branch line for carrying the mail $97,000 per year. On inquiring at the Post Office Department, I find that the total compensation of the Northern Pacific Company for mail service on that line is $3,070 per year."

This state of things was a sufficient reason for the Post Office Department to inst.i.tute the present series of inquiries tending to show the s.p.a.ce in pa.s.senger trains upon the railroads demanded and used by the Government for the mails in comparison with the s.p.a.ce devoted to express and pa.s.senger service, and the relative rates of compensation in each cla.s.s of service and the extent to which the roads are receiving for carrying the mails the cost to them of performing the service. In order to give these facts fair consideration, it is not necessary to admit that "s.p.a.ce" is, or is not, a better and more workable basis for determining what is reasonable mail pay than "weight," nor to admit that the companies are only ent.i.tled to be paid by the Government for the service rendered to it the bare cost of rendering that service, that is, to receive back the train operating cost. Questions of speed and facilities furnished, and the preference character of the traffic and the exceptional value of the service, and other elements, must be considered as well as s.p.a.ce and cost, but that is no reason why the relative proportion of s.p.a.ce used and the relation of compensation to cost should not be ascertained and given due weight, in the consideration of the important question of what is adequate mail pay to the railroads.

The following pages are based upon answers to the interrogatories of the Post Office Department and contain a statement of the mail service performed by the Chicago, Burlington and Quincy Railroad Company, a system extending westward from Chicago into eleven different States and embracing approximately ten thousand miles of main and branch lines.

The two princ.i.p.al tables of interrogatories were sent out under date of September 28, 1909, by the Post Office Department as the basis for this investigation.

These tables indicate the minute and thorough manner which the Department employed in making this inquiry.

Some questions having arisen regarding the meaning and scope of the word "authorized" in connection with the returns of s.p.a.ce occupied and used for the mails in Post Office cars and apartment cars, and in certain other features, the Department, under date October 23, 1909, issued an important supplementary letter of instructions.

Pursuant to these interrogatories, instructions and requests the Burlington Company has filed with the Department the exact and detailed statements, train by train and car by car, of the mail service upon each of the one hundred and two mail routes on its system, large and small, for the month of November, 1909, which were thus called for. These answers state the facts and state them in the manner prescribed wherever possible. Every inch of s.p.a.ce on pa.s.senger trains and cars which in these tables is shown to be occupied or used for mail or express or for pa.s.sengers is set down from actual measurements made, car by car, and not upon any "estimate" or "consist" basis.

In the appendix will be found four tables prepared under the direction and supervision of Mr. DeWitt which contain the results of this investigation into the mail service upon the Burlington, as disclosed in these statements.

Exhibit A is a statement of the car facilities or s.p.a.ce used in every car in service on the road during the month of November for mail, and for express or occupied by pa.s.sengers based upon replies to questions prescribed in Form 2601.

Exhibit B is a statement of the station facilities, furnished for the mail, prepared on Form 2602.

Exhibit C is a statement of Revenues and Expenses and of train and car mileage, prepared on Form 2603.

Exhibit D is a statement of the number, and cost, and present value of Post Office cars and Apartment cars, prepared on Form 2605.

THE INTEGRITY OF THE RETURNS.

In November, 1909, all the service rendered in all pa.s.senger trains and cars of the Burlington system, reduced to a common basis of car foot miles (that is, each foot of linear s.p.a.ce that was carried one mile), amounted to 529,936,590 car foot miles, divided as follows:

In Pa.s.senger Service. Mails. Express.

428,164,920 62,246,130 39,525,540 (80.8%) (11.75%) (7.45%)

The original circular of the Post Office Department contained certain "notes," to the effect that in reporting the length of postal cars and apartment cars, and the s.p.a.ce therein used for mails, the railroad companies should only report the length or s.p.a.ce "authorized" by the officials of the Department; also that in reporting s.p.a.ce used in cars for what is known as the "Closed Pouch Service," the railroads should make an arbitrary allowance of six linear inches across the car for the first 200 pounds or less of average daily weight of pouch mail and three linear inches for each additional 100 pounds.

These directions were modified by the subsequent circular letter of the Department, dated October 23, 1909.

This letter, among other things, directs the company to take credit for "surplus" s.p.a.ce in post office cars and apartment cars, if actually used for the storage of mails.

The practical difficulties attending the measurement and proper allotment of the s.p.a.ce used for the mails in postal and other cars run on a pa.s.senger train will be better understood when it is known that such s.p.a.ce is or may be described in at least eight different ways, and is actually used on the Burlington road as follows, namely:

1. s.p.a.ce in post office cars specially "authorized" (43.03%).

2. s.p.a.ce in apartment cars specifically "ordered" (20.69%).

3. s.p.a.ce ordered in post office cars operated in lieu of apartment cars (4.3%).

4. Additional s.p.a.ce actually used for storage of mails when the railroad company operates larger post office or apartment cars than the authorization calls for (1.5%).

5. s.p.a.ce in storage cars actually used for mails (12.87%).

6. s.p.a.ce in baggage cars used for closed pouch mails (4.06%).

7. The return deadhead movement of s.p.a.ce ordered and required in one direction only (8.35%).

(Ninety-five per cent of all the "s.p.a.ce" shown in these returns for the Burlington, as used for the mails, comes within the foregoing seven cla.s.ses, as properly authorized s.p.a.ce about which no question can arise.)

8. "Surplus" s.p.a.ce; that is, s.p.a.ce furnished to the Government in post office and apartment cars in excess of actual requirements (5.2%).

This five per cent is the only portion of the s.p.a.ce claimed as used for mails regarding which any question can be raised, affecting the integrity of these returns.

What is the correct view as to this five per cent?

It is manifestly against the interest of the railroad company to furnish s.p.a.ce for mails that is not required, and it will never furnish such s.p.a.ce if it can be avoided. But the "requirements" of the Post Office Department are not fixed and certain quant.i.ties, by any means. It is entirely impracticable for any railroad company to keep on hand at all times a supply of cars of all lengths in order to meet exactly the requirements of the Department officials.

These statistics have been called for by the Post Office Department to enable it to make accurate comparisons between the s.p.a.ce used and the facilities furnished on pa.s.senger trains for the three cla.s.ses of service performed, that is, for express companies, for the Government in mail carriage, and for pa.s.sengers. The point of the whole inquiry is this: