Postal Deficit

Last week, Postmaster General Harry S. New gave out the data for Post Office receipts in June. The reason they are of any special interest is because, early last spring, after a great fight, Congress passed a bill which increased the salaries of postal employes (to the tune of about'$68,000,000 a year) and increased revenues in a way to furnish an equal amount of additional revenue (TIME, Mar. 9).

Said Mr. New;

"Although the receipts of the 50 selected post offices for the month of June, 1925, show an increase of 14.72% over June, 1924, and those of industrial cities, with 16.45%, show even a better average, it is fair to state that June, 1924, with which the comparison was made, was a very poor month, and showed a loss of 1.17% in receipts of June, 1923. In contemplating the increase, this fact must be taken into consideration, as well as the further fact that, in June, 1925, there was one more business day than in June, 1924.

"Of course, any estimate based on these figures as to how nearly the postal receipts will balance expenditures for the current year is the merest guess. But the figures quoted would indicate a deficit of something like $40,000,000, which is due, of course, to the legislation passed by the last Congress affecting both pay and rates."

If Mr. New's merest guess proves correct, Congress made a grievous miscalculation.

In the year which ended June 30, 1924, the Post Office ran a deficit of $12,000,000. The annual deficit had been decreasing since the War. When Congress passed the pay and rate increase measure last spring, there was a prospect of a $3,000,000 surplus this June. Because of the new law (pay was made retroactive to Jan. 1 and increased rates did not begin until April), the Post Office showed a deficit at the end of the year (June 30). The deficit, not yet calculated, is estimated at $23,000,000.

And Mr. New "merestly guesses" that next June 30 will show a deficit of $40,000,000. If so, it means that the Treasury's estimated surplus of $290,000,000 next June must be reduced to $250,000,000. It means, also, that there will be more squabbles and more tinkering with postal rates and that, if any change is made, the rates will probably be revised upward.