Richmond times-dispatch. [volume] (Richmond, Va.) 1914-current, 1919-06-04
Government subsidies Itself

DOSTMASTER-GENERAL BURLESON, in
i his published defense of his action in lay
ing an additional burden Of 20 per cent on
the user Of the telegraph services Of the
country, says that much Of the additional
revenue which will be derived will go to
meet a deficit in earnings caused by the low
rate on government messages. He says that
this rate is SO low that the Postal and
Western Union Companies carry it for about
one-half Of the actual operating cost.
In other words, the Federal government
insists on below-cost rate for the amount Of
business which it contributes to the telegra phi
services, and the general public must put up
20 per cent more on its messages in order
that governmental departments may enjoy
this subsidy This is truly an astonishing
revelation. Why the government should
have the benefit Of telegraph service at half
what it costs to give that service is one Of
those official absurdities which occasionally
come to light.
This might not have been SO important
matter when the government business, prior
to the war, was about 10 per cent of the
total handled by the companies, but for the
past two years this business has been more
than 40 per cent CT the total. That means
that 40 per cent Of the gross service rem
dered by the two companies was carried at
loss Of so per cent on operation alone No
overhead is included in the calculation, and
the result is a manifest deficit in earnings
which must be made up from the rate which
the public is now compelled to pay.
The only known parallel to this sort Of
thing is found in the handling OF the mails.
very large per cent Of the mail matter of
the country is sent under government frank.
Not cent is paid upon it. a horse and
buggy might be shipped under a congress
slonal frank-even house and lot If this
were physically possible--and the loss OF
revenue from the use and abuse Of the frank
Ing privilege has kept the country on 2-cent
postage basis for the past twenty years. 1t
mas done more than that. 1t has made it
necessary for the Post-Ofice Department, by
authority or Congress, Of course, to place
periodical mail on an almost ruinous basis.
Can anybody, in his right senses, allege
any good reason why the Federal government
gives itself a telegraph subsidy? 1t might
be argued that the government has some right
to grant itself a mail subsidy inasmuch as
1t has monopoly Of the mail service Of the
country. but the telegraph companies are
privately owned institutions They are only
temporarily under the control Of the govern
ment, and yet for fifty years they have been
called on TO give preferential rates to the
government at the expense OF the general
public.
The PostmasterGeneral is now supreme
boss of the telegraph services. He has 1t in
his power to make any reform he chooses
In the operation OF these services. II he has
any courage AT all he will serve notice with
out delay on every other department Of the
government that no more half-price service
Will be rendered He will insist that the gov
ornment pay al least the cost OF handling its
messages, even II he does not allow the com
panies small profit.