Average time required by rural carriers in offices and on routes 4, 101. €0 The trip reports of the carriers on 2,682 routes were used in computing the general average above stated. Senator HAYDEN. It would be true, however, that figures obtained from large commercial concerns which handle fleets of trucks and automobiles, and which have means and methods of maintaining their equipment, probably would on the average be lower than the maintenance cost of individual cars, would they not, such as the carrier has to care for? I am trying to find out whether the figures you obtained are actually comparable. Mr. BRANCH. You have in mind the fact that if a concern with a number of trucks makes a contract with a garage, based on a large number of cars, it might get a better rate for repairs and main tenance. Senator HAYDEN. Yes. I know, for instance, that fleets of taxicabs in cities have some place to which they go where there are skilled mechanics who look after the cars, keep them properly greased, and so forth. I found that condition to exist in the National Park Service. There is a concessionaire who takes care of a large number of cars, so that the average cost on a car would not be as great as where an individual had to go to a garage. Mr. BRANCH. That is true, but there is another side to that which may be worthy of consideration. The rural carrier, generally speaking, resides in a small town, and, generally speaking, the garage charges in small towns are less than the garage charges in the larger cities. I have no figures on that to submit; I am just stating what has been my experience in having my car worked on in cities and in small towns. Senator HAYDEN. My experience has been exactly the other way, that in a small town the garage charges are more than they are in a city garage. Mr. BRANCH. Another point is the character of car used by the rural carrier. If a rural carrier uses what we know as a small car, such as, we will say, Fords, or Chevrolets, or some car of that type, naturally the upkeep and maintenance on that car would not be as great as on a Buick, or a Studebaker, or some other car. Senator FRAZIER. I do not know where you get those figures. Mr. BRANCH. I do not know what proportion of them use the larger cars. In making out their estimates of costs of maintenance, I do not know whether the carriers are able to or have combined the mileage traveled actually on their routes for purposes of the calculation, or whether they have just taken what it has cost them to keep the car running when they may, and often do, use it in their own private affairs, after they finish their work, in social affairs, and things of that kind. I do not know what they have done about that. I do not know how to talk about their figures. The only thing we had to go on was to get as best we could something which at least bore the earmark of authenticity from firms which had gone into that matter, and had made estimates. Senator HAYDEN. Your figures are about one half of the carriers' estimate? Mr. BRANCH. I think they estimate about 8 cents. Mr. BRANCH. A little over 8 cents. I want to say this, that while we have not looked with favor on running the equipment allowance up, we will not oppose a 5-cent equipment allowance. We will oppose and do oppose a 6-cent equipment allowance. Every penny added to the equipment allowance of the carriers means a cost of $4,000,000 a year to the Post Office Department. The CHAIRMAN. That brings us to the practical question. Suppose this bill were enacted just as it was passed in the House. What saving would there be to the Government, if any? Mr. BRANCH. It is something over a million dollars. I will ask Mr. Donaldson what is the estimate of saving under the bill as it passed the House? Mr. DONALDSON. The saving to the Post Office Department as the bill stands now would be $9,395,000 with reference to basic pay, and then there would be an increase, on account of the 6-cent allowance, of $17,964,000, which would leave us $8,569,000 under our appropriation for 1935. Senator HAYDEN. Those figures are rather surprising, because the committee had been led to understand that what the Department originally proposed, in extending the average route from 24 to 30 miles, and reducing the compensation from $75 to $60, meant a saving of $11,000,000, and that fixing the allowance at 6 cents a mile would take away all but about a million and a half or 2 million of that. So that those figures are quite different from those we have had. The CHAIRMAN. According to the figures we had here a day or two ago, the actual saving to the Government under the bill was $1,600,000. Mr. DONALDSON. Let me give you these figures. Mr. BRANCH. May I interrupt to ask a question? We have prepared a very brief memorandum which covers a number of those points, which we would like to read to you for the record. Mr. Donaldson is quoting from that now, so he might as well read it into the record. The CHAIRMAN. Very well. Mr. DONALDSON. The statement is as follows: MAY 3, 1934. RURAL FREE DELIVERY-H.R. 8919 The amount appropriated for the Rural Free Delivery Service for the fiscal year 1932, was $107,550,000, and the audited expenditures for the same year were $106,327,540. The amount appropriated for this service for the fiscal year 1933 was $106,000,000, and the audited expenditures for the same period were $93,772,120. The appropriation for the fiscal year 1935 is $82,902,500. This estimate was predicated on the theory of the remission on July 1 next of only 5 percent of the pay cut and the continuance of the rates paid this year for equipment maintenance, namely, 1 cent a mile for 8 months and 3 cents a mile for 4 months. Whatever amount may be necessary to pay a 10-percent remission of the pay, is appropriated in the recent Independent Offices Appropriation Act, but no provision is made anywhere for the very considerable increase in cost that would be entailed by the increase in the equipment allowance to 6 cents a mile throughout the year. The cost of the equipment allowance as considered when the amount was appropriated for 1935 would be $6,909,000. Senator HAYDEN. That is based on 1 and 3? Mr. DONALDSON. One and 3. The CHAIRMAN. Based on 6, what would it be? Mr. DONALDSON. The statement continues: Under bill H.R. 8919, which provides for an allowance of 6 cents a mile without deduction, this cost would be $24,873,000, an increase of $17,964,000. This amount would be partially offset by the decrease of $10,755,000 which the original bill imposed in the base pay of the carriers and in other lesser items. However, the bill as passed by the House contains a provision that no carrier already in the Service and who serves a route of 30 miles or less shall have his salary reduced more than $180 per annum. This would involve an immediate increase in cost over what was considered under the original bill of $1,360,000 per annum. In other words, it would reduce the decrease in the base pay of the carriers from $10,755,000 to $9,395,000, and there would be a total shortage in the appropriation for 1935 of $8,569,000. If the bill in its present form should become a law, it would mean that the amount appropriated for this Service for 1935 would be $8,569,000 less than the amount necessary for the conduct of the Service. The original bill as proposed by the Department meant a saving to the Department of $10,755,000, or, as was stated in the hearings, approximately $11,000,000. One million three hundred and sixty thousand dollars of that was lost by the amendment providing that there should not be a decrease in the salaries of the carriers on routes 30 miles in length or less of more than $180, which would reduce the saving to $9,395,000. Then the increase from 4 cents to 6 cents would give an increase of approximately $8,000,000. Senator HAYDEN. That is, every cent means $4,000,000? Mr. DONALDSON. That is right. The CHAIRMAN. So that the bill, if passed just as it is, would mean a saving of $1,395,000? Mr. DONALDSON. That is correct. The CHAIRMAN. Your estimate is $205,000 less than the estimate offered before. Mr. DONALDSON. There would be a saving to the Department over the present plan, if we pay 4 cents equipment allowance; but since we are not paying 4 cents this year, and since the appropriation asked for at the time the Department appeared before the Committee on Appropriations of the House was based on a 1- and 3-cent equipment allowance, it means that our appropriation is $8,569,000 short of what would be required to operate the Service under the pending bill. The CHAIRMAN. You would have to have a deficiency? Mr. DONALDSON. Yes, sir. Senator HAYDEN. Frankly, however, you would not consider it fair to go beyond the reasons which are set out because of this emergency in imposing a 1- and 3-cent equipment allowance, when your own figures show that for other business it costs 4 cents? Mr. DONALDSON. The Department was interested, of course, in returning the 4-cent equipment allowance to the carriers on July 1, or as soon as this bill could be effective. They hoped it could be effective April the first, which would restore the 4-cent equipment allowance. The CHAIRMAN. If you put into effect the 5-cent equipment allowance, and restore it on the 1st of July, the savings for the next year would be how much; $4,000,000, added to the $1,395,000? It would be about $5,395,000, would it not? Mr. DONALDSON. No. If this bill were modified for a 5-cent equipment allowance, the saving under the original plan which the Department submitted The CHAIRMAN. I am talking about what would happen under the bill as it passed the House, with the figure "6" changed to "5." What would that do for the Department? Mr. DONALDSON. That would make a saving for the Department in the total pay under the plan they propose of around a quarter of a million dollars. The CHAIRMAN. I do not think you understand my question. I have figured that if 1 cent means $4,000,000, you just add that $4,000,000 to the $1,395,000, which would make $5,395,000. Is that correct? Mr. DONALDSON. That would be correct; yes, sir. Senator HAYDEN. The comparison I want to make is, not on the basis of emergency action which you have taken of 3 and 1 cents, but on the basis of 4 cents a mile as compared with 5 cents a mile, and then the reduction in the base pay. What does that net? Is the Senator correct in saying that it would cost, for a fiscal year, normally operated, $5,000,000 less than if we passed the bill, less than if nothing were done about it, and you went back to the 4 cents? Mr. DONALDSON. If this bill were modified to make the equipment allowance 5 cents instead of 6 cents, and the provision in the bill which prevented reducing the salaries on routes less than 30 miles in length were taken out, then the saving to the Department over the original bill would be the difference between $10,755,000 and approximately $4,000,000, or it would be a saving of about $6,755,000. Senator FRAZIER. What would be the average mileage under the new bill? Mr. DONALDSON. Thirty miles, standard routes. Senator FRAZIER. The average will be raised a little, will it not, from the old law? Mr. BRANCH. There is a limit. Mr. DONALDSON. The bill would not change the average length of the rural routes. Mr. BRANCH. What the Senator wants to know is the average length of the rural route under this bill. Senator FRAZIER. I thought you were going to change the mileage and have on the average a longer mileage than under the old law. Mr. DONALDSON. No; it does not change the average. The old law considered the standard route 24 miles, and the basic pay was $1,800, which is at the rate of $75 a mile. The new law proposes to make the standard route 30 miles, with the basic pay the same, $1,800, which means $60 a mile. Senator HAYDEN. That is the way the bill is written, and as it passed the House? Mr. DONALDSON. Yes, sir. The CHAIRMAN. It seems to me that there has been some evidence here that on the country routes, over bad roads, the cost per mile is greater than it is on the good routes. Is that true? Mr. DONALDSON. That is true. The CHAIRMAN. Would not increasing the routes to 30 miles work a hardship on the strictly rural routes? I am talking about the country routes, where the roads are not good. Mr. DONALDSON. No; I do not think that part of the bill would work any hardship on the carrier at all. The CHAIRMAN. If it costs a man who carries the mail with a horse and buggy more, should he not have more? Mr. DONALDSON. Nearly all of the bad routes are shorter routes, and have to be so otherwise the carrier cannot get over them in the required length of time. THE CHAIRMAN. Of course, you cannot work out a plan that will do even and exact justice to everybody, but what we would like to have would be a plan that would be just as fair to all carriers as |