Evening star., 1949-05-09
Railroad Mail Rates
Called Subsidy for
Federal Government
Ssnots Authorizes Probe
To Attempt EquitobIe
Solution of Problem
By DaUd Laurence

Commerce Commission for an in
crease In mail pay. This has led
to overall study OF the whole
question of transportation policy
with respect to the mails.
Now the Senate has just
adopted q resolution authorizing
an inquiry designed to find out
how an equitable solution of the
problem can be found. with parti-
cular reference to the fact that
there are three different rates
paid by the Government for car
rying mail.
For the Government subsidies
the airlines and pays out more
than 80 per cent Of the revenue
from airmail stamps to pay the
airline companies. The Post ONCE
Department. however, collects
s66S. .000. 900 a year from the pub
lie for first-class stamps and pays
the railroads about $26. 900 900.
30 that q very small fraction Of
the three-cent stamp goes to the
railroads-that is, only 4 per cent
Of three cents-while the airlines
get nearly all Of the present six
cent airnail stamp revenue.
Expenses Increase.
Not since the 1920's has there
been q real study made Of the
problem. Meanwhile. operating
expenses have gone UP so that 1t
costs the railroads, for instance,
twice as much as it did then to
carry mail. But they have not
been able to get from the Gov
ernment proper charge for serv-
ice rendered. The laws of the
land say the railroads should get
o fair return" but, owing to the
involved system Of making rates,
the railroads find themselves sty-
mied. When they ask for an in
crease, the Interstate Commerce
Commission naturally takes testi-
mony from the Post ONCE De-
partment. and there have been
substantial delays because the
subject is one of great complexity.
Likewise, the Post Office Depart
ment is faced with a deficit, any,
way. SO it hesitates to agree to any
increases that augment its ex-
penses.
The railroads, on the other
hand. see their competitors-the
airlines-being heavily subsidized.
While they do not question the
wisdom of keeping the airlines
going. they do wonder why the
railroad should be required to
render service without even meet
ing actual costs. One railroad
executive puts it this way:
"The Government is subsidiz-
ing some activity through all the
processes of the American econ
omy. In transportation the barge
lines are subsidized, and we pay
taxes to make that up. It Is true
Of the highways; 1t is true Of the
airways: 1t is true with all the
various authorities. But the ques-
ton Is why, when all our COM
petitors are subsidized, we should
subsidize the Government and
that is what we are doing when
we haul mail at less than cost.
For our present mail rates, even
including the rs per cent interim
increase. and considering the 40
hour week to 60 into effect on the
railroads. are just about half our
costs"
Competition is Issue.
The question of price and COM
petition enters into the picture,
too. Thus. the railroads aren't
making any money out of han
ding express or out of handling
mails. The more they try to raise
their express rates to bring them
up to 0 profit point. the more busi-
ness they push over into parcel
post. The same thing happens
with less-than-carload freight.
What 1t amounts to In the end is
that the railroads subsidize the
Government so that 1t can handle
parcel post at less than 1t costs
the railroads to haul the same
articles. This means the railroads
are helping the Government to
compete with themselves on both
parcel freight and express.
Senator LANCER of North Da-
kota, who sponsored the resolution
which the Senate has adopted,
points out that parcel post rates
are different on the airlines and
the railroads and ships. He thinks
the rates should be co-ordinated.
The Post Ofiice Department
pointed out to the Senate that
the inquiry proposed is interesting
but that IL Is In the midst of q
study Of its own.
Meanwhile. the railroads. baked
In their attempt to get some ac-
tion, O few weeks ago filed q re-
quest with the Interstate Com
merce Commission seeking IS
per cent further increase because
the roads learned that the Post
Office Department wouldn't be
ready TO present evidence before
the commission from Its own
study until sometime in the mid
die OF 1850.
The railroads, unlike private
business. cannot Of their own ini-
tiative increase their prices to
meet operating costs. They have
to wait on Government agencies
and that ID usually O long, long
wait.
tRsprodustien Rishts Rsssrvsd)
ADvERTISEMENT.