The Manitowoc pilot. [volume] (Manitowoc, Wis.) 1859-1932, 1922-11-09
WHERE UNCLE SAM
MIGHT SAVE MUCH
POSTMASTER GENERAL WORK IN
FAVOR OF GOVERNMENT OWN
ERSAIP OF POST OFFICES.
HE URGES IT ON CONGRESS
Present System OF Leasing Such
Buildings Is Very Costly and Has
Various Other Serious DisadVan-
tages, He Asserts.
BY JAMES p. HoRNADAY

BY JAMES P. HoRNADAY
Observation-Disclosures General
Work originated and has urged before
congress the government ownership
of post Office buildings on the ground
that annually great saving of money
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 per cent basis to
build post offices, whereas when 1t
leases it 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 words
by this lease policy the government is
indirectly paying per cent and
10 per cent interest on money when
1t is able to borrow at 4 per cent.
The postmaster general in further
explaining the advantage Of this plan
said:
when the government owns post
office building it is free from taxation,
whereas when it leases an office it is
indirectly paying taxes at the rate OF
about 2 per cent on the investment
and many times at very much high
er rate. When building required
for postal purposes represents an in
yestment of a large amount Of money,
II is readily seen that the tax alone
which the government must pay to
the lessor in the form of rent is a
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 If
the government owned the property,
building it with 4 per cent money,
it would be costing the government
about one-half as much az il 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, it would be in position to take
property by right of eminent domain,
whereas it cannot take a 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. If we could say to bidders, I'M
less you bring your rental down to a
certain reasonable figure the govern
ment will put up a building of its
own we would then have a weapon
of negotiation where we now have
none. But that is only possible when
the government has adopted a policy
of ownership and provided funds to
carry out such a 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 at 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 or
postal building is erected by a lessor
in very large percentage Of cases
1t enhances the value of all property
In the vicinity, so that it becomes
necessary to renew such lease at
much higher figures, whereas If the
government owned the building 1t
would receive the benefit of the en-
hancement Of values which it has
created.
An Expensive Proposition.
"The lessor who builds a post
office or postal station for the gov
eminent on a contract for lease for
10 or 20 years is obliged to figure on
absorbing either the whole or a large
percentage OF the original cost Of the
building, and this he does. He is