Dimes, Deficits

From Freedom, Me., from Ty Ty, Ga., from Roosevelt, Minn., from Coolidge, Kan.--from some 35,000 Rural Free Delivery routes throughout the land have gone a dime each from country mailmen. Each 10-c- contribution rolled into Washington to make up a total of $3,500. With this fund a shiny seven-passenger automobile was purchased by the Rural Letter Carriers' Association (membership: 43,700) and rolled to the Post Office Department where it was presented as a farewell gift to Harry H. Billany as he retired as Fourth Assistant Postmaster General, "chief" of the country mailmen. Ned H. Goodell, the association's president, presented the car, told Mr. Billany: "You have humanized the service." Last week the Post Office Department found itself in a bad financial predicament. It was haunted as never before by the old problem of deficits, of the U. S. mails costing more to handle than they earn. Last year, it was announced, the postal service had run 137 million dollars into the red, which President Hoover considered a lamentable showing for the only "business" arm of a Government which its officials, in moments of pride, like to call "the biggest business organization in the world." Promptly President Hoover summoned to the White House Postmaster General Walter Brown and his four assistant postmasters general, told them something had to be done to reduce these ever-increasing shortages, to put the postal service on a "pay-as-you-go" basis. What concerned the President chiefly was the sudden leap in this year's deficit and the prospect of similar shortages to come. The Post Office Department has not been on a paying basis since Frank H. Hitchcock was Postmaster General (1909-13). In 1924 the deficit was 13 millions; in 1928, 32 millions. Fiscal 1929's "operating" deficit was 95 millions, to which had to be added 42 millions for back pay to railroads for mail transportation. Unless something was done and done promptly, President Hoover foresaw where the postal deficit would be 85 millions per year for the next five years, plus 35 millions per year for new construction--a net loss of 600 millions in five years which U. S. taxpayers would have to meet. The annual cost of handling the U. S. mails is about 800 millions. Postal deficits are due to the fact that not all postal rates cover equitably the cost of the service rendered. The Post Office makes money on handling first-class letter mail, on postal savings, on its registry service. It loses on second-class matter (newspapers, magazines), fourth-class (parcels post), rural free delivery, air and marine mail. The only loss which President Hoover considers justifiable is on air mail which he feels is still in an experimental stage and worth the extra expenditure to advance commercial aviation.

Second-class mail costs the U. S. about $90,000,000 per year more than publishers pay, no appreciable part of which can be charged against the free distribution of small weeklies in the county of publication. The losses on marine mail are due in a measure to the Jones-White Shipping Act which granted "subventions" to U. S. ships carrying U. S. mails on long-term contracts. Other factors which have increased the deficit have been recent legislation granting increased pay for night postal work, increased allowances to fourth-class postmasters, rate reductions on certain mail classes. The increasing use of the Congressional frank has added materially to the Post Office Department's deficits.

At his conference with Postmaster General Brown, President Hoover called for a quick and thorough study of postal costs by mail classes. At the Post Office Department, many an official was sure that the only remedy lay in increasing postal rates, especially on second and fourth class matter, a proposal which they knew would arouse the bitterest antagonism in Congress, which alone can sanction it.