Appropriation Bill, 1933

SUPPLEMENTAL HEARINGS

BEFORE THE

SUBCOMMITTEE OF THE

COMMITTEE ON APPROPRIATIONS
UNITED STATES SENATE

SEVENTY-SECOND CONGRESS

FIRST SESSION

ON

H. R. 9699

A BILL MAKING APPROPRIATIONS FOR THE TREASURY
AND POST OFFICE DEPARTMENTS FOR THE
FISCAL YEAR ENDING JUNE 30, 1933

EX OFFICIO MEMBERS FROM COMMITTEE ON POST OFFICES AND POST ROADS

KENNEDY F. REA, Clerk

TREASURY AND POST OFFICE DEPARTMENTS APPRO

PRIATION BILL, 1933

FRIDAY, APRIL 21, 1932

UNITED STATES SENATE,

SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS,

Washington, D. C.. The subcommittee met, pursuant to call, at 2.30 o'clock p. m., in the committee room, Capitol, Hon. Tasker L. Oddie presiding. Present: Senators Oddie (chairman), Smoot, Steiwer, Dickinson, Glass, McKellar, Broussard, and Moses.

POST OFFICE DEPARTMENT

STATEMENT OF HON. WALTER F. BROWN, POSTMASTER GENERAL

Senator ODDIE. Mr. Postmaster General, the Senate, as you know, has sent the Treasury-Post Office appropriation bill back to the committee with instructions to make a 10 per cent cut below the House figures.

Before the committee writes up the bill, we think it will be helpful. to have a statement from you as to any possible manner, that may occur to you, in which the cut can be made without damaging the service, and any suggestions that you can make.

This is a difficult problem. We all understand that. I personally do not favor the 10 per cent cut, but the Senate voted it, and now we have this problem to face.

GENERAL STATEMENT

Postmaster General BROWN. With your permission, Mr. Chairman, I will make a formal statement which I have prepared, and supplement it with some detailed information which may be of value.. I will be pleased, then, to answer any questions that it is possible for

me to answer.

I appreciate this opportunity of appearing before the committee, on behalf of the postal patrons of our country, and on behalf of the 300,000 postal workers, whom I have the honor to represent.

It goes without saying that the Post Office Department desires to cooperate whole-heartedly in any effort to reduce postal expenditures. Substantial reductions in this time of emergency should be, and can be made, but, as the President has repeatedly pointed out, this can not be accomplished without discharging from 30,000 to 40,000 postal employees and drastically curtailing the Postal Service unless Congress, as provided by his plan. will meet the necessity of suspending or amend706205

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ing the laws which impose unnecessary expenditures on the postal service. If the President's plan is adopted the savings desired can be realized except where the Government is under contractual obligation to make definite expenditures.

In considering this problem, certain fundamental principles must be borne in mind. The postal establishment is unique among the Federal departments in that it is a Government-operated public utility the function of which is the collection, transportion, and delivery of personal communications, money, printed matter, and merchandise for the individual citizens of the United States. Like any other public utility, the department should perform for its patrons whatever service they require and are willing to pay for. It should not exact from them more than the cost of its operations, conducted in accordance with sound business practices, and it should not impose a burden upon the General Treasury by charging less than the cost of its operations. If the necessities of the Treasury so require, the Government may, with propriety, levy an excise tax on postal operations, just as upon the business of any other public utility. But the revenue derived therefrom should not be covered into the general Treasury at the expense of the service to postal patrons who buy the service and pay the tax. I can think of no justification for increasing postage rates and at the same time curtailing service to the public.

And let me say, with the candor which the present grave situation demands, that if anyone entertains the view that the present Postal Service can be maintained by withholding adequate appropriations at the present time and by voting deficiency appropriations at some more propitious time after November, he is wholly mistaken. We are obliged by law to limit expenditures week by week and month by month to the ratable share of the gross sum appropriated for each respective item. It follows that if the Post Office Department appropriations for 1933 are arbitrarily cut 10 per cent without amending or suspending the laws relating to the compensation of public employees, their hours of work, furloughs, allowances, and promotions, we must abandon or reduce many services now performed for postal patrons and run the risk of seriously impairing the efficiency of the services which may remain.

ANALYSIS OF APPROPRIATION

A brief analysis of the items carried in the House bill will, in my judgment, make it clear that the arbitrary reduction proposed by the Senate is altogether ill advised unless it is accompanied by the suspension or amendment of the laws to which reference has been made. Of the $805,000,000 in the bill as it passed the House, approximately $105,000,000 is for the compensation of railroads for carrying the mails. The rates of compensation for this service are fixed by the Interstate Commerce Commission. The amount payable depends upon the volume of mail handled and is not subject to departmental action. On the basis of the anticipated business for the fiscal year 1933, no substantial reduction can be made in this sum of $105,000,000 unless service is abandoned on many trains and storage cars substituted for post-office cars, thus greatly slowing up the service.

About $90,000,000 is to cover obligations to other carriers of mails, including shipping companies, air transport companies, mail messengers, screen-wagon operators, and star-route carriers. Because this service is largely covered by long-term contracts, assuming that the Government intends to carry out its obligations, this item is susceptible of only a small reduction. The sum of $23,000,000 is for rental, heating, and lighting of post-office quarters. The department's obligations in this particular are also covered in large part by long-term contracts. Approximately $17,000,000 is for supplies, equipment, travel, and miscellaneous operating expenses, barely sufficient to cover the department's minimum needs if the postal service is to be continued.

These four items aggregate $235,000,000. The remainder of the amount carried in the House bill for the Postal Service, approximately $570,000,000, is for salaries and wages of the officers and employees of the Department in the District of Columbia, and the salaries, wages, and allowances of postmasters, supervisors, clerks, carriers, messengers, laborers, watchmen, and other employees in the field. Thus it is manifest that more than three-quarters of the $80,000,000, which the Senate proposes to cut from the bill, must be applied against the appropriation of $570,000,000 for salaries and wages.

30,000 TO 40,000 EMPLOYEES TO BE DISMISSED

The necessary reduction in this item will compel us to drop from the rolls between thirty and forty thousand postal workers of all classes, including departmental employees, assistant post masters, clerks, city and village carriers, rural carriers, and railway-postal clerks. Obviously, there will not be available a sufficient force to maintain the present postal facilities. It will be necessary to consolidate about 8,000 rural routes and place about 9,000 others on a basis of triweekly instead of daily service. Delivery service must be discontinued in every small town. In the cities it will be necessary to reduce residential deliveries to one a day and business deliveries to not more than two a day. The hours of window service at post offices must be reduced, and, wherever the terms of leases permit, post-office stations and branches must be closed. I need not state what the effect of all these changes would be upon the Postal Service, which has been developed to a high standard of efficiency over a period of 150 years.

I shall be pleased at all times to make available to your committee any information which the department has and to inform you with respect to the effect on the service of any specific cuts which you may contemplate. But, unless the Congress will incorporate in the appropriation bill the features applying to the Postal Service contained in the President's economy program transmitted to the House Committee on Economy, I can make no other recommendations with respect to postal appropriations that those which I made to your committee at the hearings on the House bill some weeks ago. The responsibility for demoralizing the Postal Service and doing an irreparable injury to thousands of faithful postal employees must rest upon some one other than me.