The citizen. [volume] (Berea, Ky.) 1899-1958, 1922-11-09
WHERE UNCLE SAM
MIGHT SAVE MUCH
POSTMASTER GENERAL WORK m
FAVOR OF GOVERNMENT OWN.
eRsHIP OF POST OFFICES.
HE URGES IT ON CONGRESS
Present System Of Leasing Such
Buildings Is Very Costly and Has
Various Other Serious Disadvan-
tspes, He Asserts.
ey JAMES p. HoRNApAY

BY JAMES p. HoRNAoAY
ngtun.-Postmaster General
Work originated and has urged before
congress the government ownership
of post office buildings on the ground
that annually great saving of none!
! will result to the American taxpayers
In a communication to the joint com
mission ON postal service of congress.
| the postmaster general points out that
the government can borrow money on
| practically a per cent basis To
build post offices, whereas when II
leases IL pays a rental sufficient To
permit the lessor to borrow money at
Z per cent and In some cases as
much as 10 per cent. In other W rds,
by this lease policy the government is
indirectly paying per cent and
10 per cent interest on money when
IL is able to borrow at per cent.
The postmaster general in further
explaining the advantage of this plan
said:
"When the government owns pest
office building II is free from taxation,
whereas when il leases an office II Is
Indirectly paying taxes at the rate OF
about per cent on the investment
and many times at very much nigh
or rate. When building required
for postal purposes represents an in
,estment of a large amount of me ney.
II Is readily seen that the tax alone
which the government must pay to
the lessor in the form of rent Is
very considerable sum.
Another way of stating in COM
bined form the two preceding propo-
sitions Is that the ordinary lessor
| usually obtains about 10 per cent
gross on his investment, whereas II
the government owned the property.
building II with per cent money,
il would be costing the government
about one-half as much az II Is OBJ
liged to pay in the form of lease for
the use OF the building.
Could Take the Property.
IF the government adopted the
policy of owning its post office build
ings, IL would be in a position to take
| property by right of eminent domain,
whereas II cannot take leasehold
interest by such right.
in our negotiations for leases with
prospective lessons we are confronted
with the fact that we cannot build,
and therefore we must pay what they
ask. II we could say to bidders, un'
less you bring your rental down to q
certain reasonable figure the govern
ment will put up a building of Its
own, we would then have weapon
| Of negotiation where We now have
meme. But that is only possible when
the government has adopted policy
Of ownership and provided funds to
carry out such policy.
Leased buildings are constantly
being outgrown. confronting the de
partment with the necessity Of either
adding additional space or seeking
an entirely new location. With a
lease policy and without the right OF
condemnation the additional adjacent
| space is often held AZ unconscionable
figures. and we are often compelled
to pay far more than we know TO be
reasonable on account Of the situation
when a government post office OF
postal building is erected by a lessor
In a very large percentage Of cases
II enhances the value of all property
in the vicinity. so that 1t becomes
necessary to renew such lease at
much higher figures, whereas II the
government owned the building II
would receive the benefit of the en-
hancement of values which 1t ha,
created.
An Expensive Proposition.
"The lessor who builds pos
office or postal station for the gov
eminent on contract for lease fol-
10 or 20 years is obliged to figure or
absorbing either the whole or a large
percentage Of the original cost of the
building. and this he does. He 1,
obliged to do this because he knows
he may be compelled al the end of the
lease TO reconvert il into other uses
The result of such a lease policy Il
1
about 10 per cent of the original in
vestment but II pays In addition there
10 certain per cent of all the orlgi
nal investment distributed over n term
Of years, so that at the end of the
lease the government has nothing. but
Is Obliged to start over again. still AT
the mercy Of lessons. with no efficient
weapon TO compel fair prices.
at frequently Is impossible to lease
buildings having satisfactory working
conditions. such as natural light and
ventilation. In erecting government.
owned buildings ideal working con-
dltions would be provided. thereby in
surfing the health and comfort Of EN-
ployees. which should always be given
first consideration. Then. too. such
buildings would be erected In accord.