Mr. YATES. Would the elimination of Saturday service result in savings of $32 million?

Mr. GRONOUSKI. About $32 million this year and about $60 million thereafter.

I want it on the record I am opposed to elimination of Saturday delivery. I think it is a very important service to the American public and I would be very reluctant to see it go.

Mr. YATES. Have you heard the complaint as to this possibilitiy expressed by the local community? Is that why you are so unalterably opposed to it?

Mr. GRONOUSKI. It is because of my philosophy of what the postal service is all about.

TWO-TRIP DELIVERY SERVICE

Mr. YATES. Would you also favor a return to a two-delivery-a-day service?

Mr. GRONOUSKI. No, I don't, because the whole structuring of the dispatch and transportation of the Post Office Department is such that about 85 percent of all the mail for the day can be handled on one delivery and it would be an excessive amount of money for that extra 15 percent.

ELIMINATION OF SATURDAY DELIVERY

Mr. YATES. What would happen if you eliminated Saturday deliveries?

Mr. GRONOUSKI. There would be nobody going out that day for delivery. In other words, between Friday and Monday there would be no mail deliveries whereas most of the mail every day is delivered on a 6-day basis.

Mr. BELEN. We have had one experience. When we are looking just for dollars, we saved about $8 million I think it was by eliminating the Saturday delivery of parcels. We have had one real experience about the screaming that came from that.

Here we spend $600 million in the parcel post program but to pick up $8 million we needed, we cut one-sixteenth of the service. This is the same thing we spend billions on in handling first-class mail, but to pick up $32 million we are cutting off one-sixteenth of the service. Mr. GRONOUSKI. Actually last year we took two actions, one to reduce 1 of the 6 days of parcel delivery and the other to cut back some of the window service, If you want to get public reaction to anything, I have got editorials and clippings and protests a mile high from all over the country, every corner of the country, on this very minor change.

It really didn't have a great impact on service.

Mr. YATES. I asked you what other alternatives there were and I think you are now prepared to answer that question.

Mr. GRONOUSKI. Yes. It just happens to come out $32 million in the case of the elimination of the residential delivery on Saturdays. Actually it would be an annual savings of $62 million, but if we put it into effect for the rest of this fiscal year, it would be $32 million.

As an alternative to that, you have to do a whole hodgepodge of things. To eliminate Saturday delivery in business areas, we would save $2.3 million.

To eliminate Saturday rural delivery would save about $14 million on rural routes.

Mr. YATES. Is that figure included in your $32 million?

Mr. GRONOUSKI. No, it is just residential urban areas. That is the $32 million. Urban business areas would be another $2.3 million. Rural would be another $14 million. That wouldn't change the pay of the rural carrier, by the way; it changes allowances. Car allowances, and what have you, because he is paid on the miles of route rather than hours of work.

OTHER ALTERNATE ACTIONS TO CUT COST

To forgo extension of city delivery as our cities grow would save $5 million, but there is no logical reason not to extend city delivery as your city grows.

Mr. YATES. I think that is a silly alternative.

Mr. GRONOUSKI. I think they are all silly.

Mr. YATES. Well, some are sillier than others.

Mr. GRONOUSKI. Forgoing rural extension of service, a half million dollars. Reducing uniform allowances from the present to $75-$100 to $75, that would be $2 million.

Mr. CONTE. Is that a year?

Mr. GRONOUSKI. The total per year would be $4.3 million, but this figure is for the rest of this fiscal year. You would save about half of that.

To go on, close all window services on Saturday at first- and secondclass offices, $3 million.

Eliminate special delivery service, $8 million.

Mr. YATES. Is this the total of other alternatives?

Mr. GRONOUSKI. These are the other alternatives. These are the ones the staff got together for me when I said we had to have alternatives.

TRANSFER FROM TRANSPORTATION APPROPRIATION

Mr. YATES. One of the alternatives was the transfer from the transportation services of $5 million.

Mr. GRONOUSKI. We did that.

Mr. YATES. Is there a possibility you may do more than that from that appropriation?

Mr. GRONOUSKI. No. Of course, we are now limited to 2.5 percent now as against 5 percent in the past.

Secondly, and more importantly, we just don't have the money to transfer. Our budget this year has been very tight in all its aspects.

AIR RATES

Mr. YATES. What about a reevaluation of your air rates? Is that possible? Perhaps you are paying too much.

Mr. GRONOUSKI. We have already had that. That is the $5 million. The CAB has just reduced our air rates.

Mr. BELEN. On our initiative.

DEFICIT SPENDING

Mr. YATES. You say that you are spending at the present time faster than your appropriations would permit?

Mr. GRONOUSKI. We are right now technically in a deficiency.

Mr. YATES. Why are you doing this? Is it because of the faultiness of your estimates before this committee?

Mr. GRONOUSKI. Well, two things. We are doing this for two rea

sons:

(1) Our mail volume is higher than anticipated; and

(2) Because of a $29 million cut in the operations budget before this committee, we have had to try to attain a level of productivity that we just cannot attain.

EFFECT OF RATE INCREASES

Mr. YATES. Have you found there has been any diminution of business in the post office as a result of the increase in postal rates?

Mr. GRONOUSKI. We are in very much of a growing business. Every class of mail is growing except parcel post.

Mr. YATES. The fact that the rates have increased has not caused people not to use the mails?

Mr. GRONOUSKI. The claim was made in 1962 in the last rate increase, for instance, that third-class mail would decline. Actually it has increased very substantially.

Mr. YATES. In spite of the increase in rates?

Mr. NICHOLSON. It is running between 5 and 6 percent increase, which makes it a very rapidly growing class of mail.

COMPARATIVE PRODUCTIVITY RATES

Mr. YATES. How does your productivity rate compare with that of other countries, with England, for example?

Mr. NICHOLSON. It is difficult to make comparisons country by country because the service they provide is different country by country. Mr. YATES. Have you attempted to do so?

Mr. NICHOLSON. Yes, we have, and there are a number of very learned articles on the subject. One that I recall was published a little less than a year ago. It indicated that in England the average pay of postal employees was one-third of the U.S. pay for postal employees and the U.S. business was six times the mail volume of the United Kingdom. That combination, 3 times the pay rates and 6 times the amount of business in the United States should have indicated the U.S. budget would be 18 times the budget of the United Kingdom post office operation-and for personnel alone would be 16 times the United Kingdom budget. Instead, our budget is only about 8 times the British equivalent.

The author of this article indicated that either of two things is trueor a combination of both :

(1) The U.S. post office is fantastically more productive than the British post office; or

(2) The British post office is performing services that apparently aren't necessary or worth their cost.

Mr. YATES. You were not the author of that article?

Mr. NICHOLSON. No, sir; I was not. The author is a former official of the British post office.

DETAIL OF MAIL VOLUME INCREASE

Mr. YATES. You say your analysis of actual mail volume in 1966 shows an increase of 5.6 percent in the first accounting period instead of the 3 percent. In what classes of mail

Mr. GRONOUSKI. 4.9 in the second

Mr. YATES. In what classes have the increases occurred and to what extent?

Mr. GRONOUSKI. At this point we haven't that kind of a breakdown. We just have the overall.

Mr. YATES. You don't know about this for the first accounting period?

Mr. NICHOLSON. We do have it, but I don't have it with me, I am sorry to say.

Mr. YATES. Do you have any idea where it occurred, as to whether it is in first class, second, or third?

Mr. GRONOUSKI. We will have Mr. Nicholson submit what he has on that.

(The information requested follows:)

Percentage of increases in mail reported for period 1 (June 19–July 16) and period 2

Mr. CONTE. You will submit for the record the bulletin showing the order on hours of employees?

Mr. GRONOUSKI. Yes.

(The information requested follows:)

[From the Postal Bulletin, July 29, 1965]

ALL FIRST AND SECOND-CLASS POST OFFICES

HOURS OF EMPLOYMENT

The following limitations for regular, substitute, and summer temporary employees shall be effective immediately:

Regular employees: Overtime for regular employees must be restricted to absolute minimum needed to meet emergencies and to maintain uninterrupted service. Substitute employees: All substitute employees must be limited to a maximum of 56 work hours per week (112 hours per pay period). No exceptions will be granted to this restriction. Generally, no substitute employee shall be required to work more than 48 hours per week (96 hours per pay period). The number required to work more than 48 hours per week must be kept to the absolute minimum and in no case shall the hours be in excess of 56 hours per week.

Summer temporaries: All employees hired under the provisions set forth in the Postal Bulletin dated April 29, 1965, are designated as summer temporary employees. Under no circumstances shall they be employed to the detriment of career substitute employees. The provisions of article XV-C-b of the National Agreement (POD Publication 53) must be observed with respect to summer temporary employees as well as temporary employees.

The above conditions are to be strictly observed by postmasters.-Bureau of Operations, July 29, 1965.

SUMMER EMPLOYMENT

Mr. CONTE. The chairman was asking about the 7,490 summer employees. Now that summer is all but gone, what happens to these 7,490 positions?

Mr. GRONOUSKI. I think 96 or 97 percent are going to go back to school.

Mr. CONTE. They have been on for about 3 months?

Mr. GRONOUSKI. They have been on about 9 or 10 weeks.

Mr. CONTE. What happens to these positions now? These are all included in your 14,100 positions.

Mr. MCMILLAN. Just as quickly as we can, they will be filled by career employees. Just as quickly as we can get them. As I mentioned a moment ago, we must have this done prior to the Christmas rush.

EMPLOYEES FOR RELIEF OF OVERTIME

Mr. CONTE. I believe you had asked for 15,000. This committee cut you down to 8,896. The main reason we had cut it down was that we felt you couldn't digest all of this all of a sudden and this has proven we were right. You have actually put on only 1,200 new employees in the first accounting period.

Mr. GRONOUSKI. The first accounting period came practically on the heels of the approval of our budget. It was practically there.

Mr. MCMILLAN. The fact is that the first accounting period was virtually over before the regions got their allocations from us and certainly the individual post offices hadn't been allocated the increases. Mr. GRONOUSKI. I can assure you if we had gotten the 15,000 they would have been on this year.

Mr. CONTE. There are always problems. You can't just take these people off the street. There is the civil service examination and screening. A large number will be disqualified for many reasons. Mr. GRONOUSKI. We had figured very carefully on what we could do when we asked for 15,000 and we were very confident we would have put them on.

SUMMER EMPLOYMENT POLICY

Mr. CONTE. I know you won't be here next year; but I would like to ask someone this question: Mr. McMillan, are you going to continue this summer employment program? Perhaps Mr. McMillan will give

me the answer.

Mr. MCMILLAN. I think I will defer to the Postmaster General or Mr. Belen on that.

Mr. GRONOUSKI. I might say it has proved very effective. They have been very efficient employees.