STATEMENT OF HON. MILTON A. ROMJUE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MISSOURI Mr. ROMJUE. Mr. Chairman and gentlemen of the committee, I did not want to trespass on your time, and when you think my time is up I hope you will let me know. As quickly as I can, I want to get to the point involved in this legislation. If this bill is enacted into law, it simply takes the Government out of the business of printing corner cards on these stamped envelopes. The stamped envelope will continue to be furnished as it is now; but in the corner there will be a skeleton card, with "After five days return to" and then blank. In other words, it eliminates the Government in the printing business, where the firm names are now printed. Now, I want to call the committee's attention to this point: Something has been said about the profit that the Government makes and the cheapness at which the party buying the envelope gets the printing done. In the first place, the Government is not entitled to have any profit out of this whatever. If the facts are true that the Post Office Department claims-or those who are opposed to the legislation-then the Government is violating the statute as it is plainly written at the present time. I will read you what the law says: The Postmaster General shall provide suitable letter and newspaper envelopes, with such watermarks or other guards against counterfeit as he may deem expedient, and with postage stamps with such device and of such suitable denominations as he may direct, impressed thereon; and such envelopes shall be known as "stamped envelopes," and shall be sold, as nearly as may be, at the cost of procuring them, with the addition of the value of the postage stamps impressed thereon. Mr. O'CONNOR. Well, does he have any authority to do this printing? There is nothing in that provision which you read about that. Mr. ROмJUE. The Government does not do the printing. Mr. O'CONNOR. But the Postmaster General acts as agent for the printing. He has even authority to do that? Mr. MARTIN. The manufacturer prints it. Mr. ROмJUE. The manufacturer prints it. What happens is this: The postmaster goes out among the business men of the community and gets orders from them for these corner cards on envelopes, stating their names as well as their business, getting a commission on the orders. They send that in to the Post Office Department; and the Post Office Department then, at the expense of the general taxpayers of the country, collects this business and turns it over to the one company which has the contract to do the printing. Mr. O'CONNOR. When you say they get a commission, does the postmaster get a commission? Mr. ROMJUE. He gets paid for the collections he makes. Mr. O'CONNOR. Personally? Mr. ROMJUE. Personally. And the Post Office Department puts the Government printing through this one printing company in com petition with the local business. And the principle involved in this, of course, is clear, and certainly at this time the Government ought not to be engaged in competition with private enterprises, except in very great emergency. Mr. O'CONNOR. How are they as campaign contributors-this International Envelope Co. that has the contract? [Laughter.] Mr. ROMJUE. How are they as what? Mr. O'CONNOR. Campaign contributors? Mr. ROмJUE. The gentleman probably knows more about that than I do and we will discuss that when the campaign comes on. Now, they say that this concern can print more cheaply than you will get the printing done otherwise. Doubtless that is true. If the Government should gather together all the contracts for making shoes or clothing and turn them over to one firm, of course they could make it more cheaply. If this bill becomes a law, it does not put this printing company out of business. If these people at the Post Office Department want to get the printing done, they can send it to the same firm and get it done. And if the local concerns can do it as cheaply as it is being done now, then we know that the Government is levying a tribute on the people of the country and that the taxes laid on all the people of the country are being used for a few. Now, how many of the public use this service? Less than onehalf of 1 per cent of the people of this country use this service; and is it right to tax the other 991/2 per cent of the people of this country in order that one-half of 1 per cent of the people may get something done a little more cheaply for themselves? And particularly at this time we should consider that, when millions of men are unemployed throughout this country. And we should distribute this work all over the country. It is not only a question of the local newspaper printing offices, but we have a lot of job printers throughout the country; and this business would naturally go to them; and I feel that they have a right to it. Mr. MARTIN. Did I understand you to say that your bill would not affect the printing of the skeleton card? Mr. ROMJUE. No; it would not affect the printing of the skeleton card; that would still be printed just as at present. Mr. MARTIN. Who does that work now? Mr. ROMJUE. That is printed by the same concern. Now, that printing comes directly in competition with your local business man. Now, let me talk to you a moment about the deadletter office. Any man who has caution enough to go and have his firm name printed on the corner of his envelope is usually a good enough business man to have that done anyhow, whether done by the Government or by local printers. The CHAIRMAN. Mr. Romjue, the time of you gentlemen on this bill has nearly expired; and we want to hear all of you on the subject that we can. Mr. ROMJUE. Well, I want to be fair to the other members and give them an opportunity to address the committee. I thank you. STATEMENT OF HON. BYRON B. HARLAN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OHIO Mr. HARLAN. Mr. Chairman and gentlemen, I was asked by Mr. Lamneck, who filed a minority report on this bill, to state to the committee that he was unavoidably called out of the city and could not be here to-day. In the short time that I have had to consider this, I thought probably preparing a balance sheet of this would bring the items to the minds of the members of the committee more quickly than any other way. Now, the Government has been doing this business for 65 years. It was doing it before some of us were born. And you can not have anything printed except your name and address, so that the Government will know where to return these envelopes if they are lost in the mails. Every Postmaster General for 65 years, whenever this question has come up, has been in favor of the continuance of this business. Not because of the profit; although Postmaster General Brown says the Government is making every effort to try to bring the costs down as low as they can, the Post Office Department makes a profit of $2,000,000 each year of handling this business Mr. MARTIN (interposing). That is, out of a $3,500,000 proposition? Mr. HARLAN. The $3,500,000 is just the cost of printing the names on these envelopes. You see, here is the proposition you are up against: You see the printing houses, the job printers, are not the ones attacking this thing. It is the envelope people who are back of it; and if you take the printing of the name in the corner card of the envelope all people will stop using the envelopes, because already everybody who wants an envelope without his name on it gets it. There are 1,078,000,000 of those envelopes sold, and there are 1,640,000,000 of these envelopes with the return corner card; so that those people who get those with their names printed on them get those envelopes because they want them with the return card giving the name; if thy did not want that, they would get the other kind. So that out of those 1,640,000,000 of envelopes with the return card with the name printed the Post Office Department makes a profit of $2,000,000. Now, if we assume that the same percentage of people who use these return name cards have their letters go to the dead letter office as happens with other letters-and there is no reason why we should adopt any other assumption-but suppose you discontinue printing the return name on the envelopes, there would be a certain percentage of those letters that would go to the dead-letter office, because a great many letters come from ranches, lumber camps, and other places in the backwoods, where there are no printing offices. But their place is a post office; and a man who has 500 envelopes to have printed can go down to the post office and have them printed, although there may not be a printing office in the town. And I say that if you discontinue this, there will be a higher percentage of those men whose letters will go into the dead-letter office. Last year there was something like $94,000 in lost money, and $300,000 in stamps and checks and things of that kind, that got into the dead-letter office. Now, it costs the dead-letter office $880,000 a year to open and read those letters and get them back to where they belong. If the same percentage of these envelopes should get into the dead-letter office that now get in of other kinds, it would add an expense of $22,000 to the dead-letter office. It costs 7 cents a thousand to print stamps. Now, when the Government puts out gummed stamps, the Government pays that cost. If the stamps are printed on the envelope, the man who buys the envelope pays the cost, because it is all included in the cost of the envelope. And if these 1,640,000,000 stamps are to be printed, we would add that expense to the Bureau of Engraving and Printing. Then, in addition to that, the present system saves time in small post offices; that is the reason the small postmasters have been so energetic in favor of it. The local postmaster generally runs a grocery store, with one clerk. When his customers can come in and buy 500 stamped envelopes in a lot, he does not have to take the time of himself and his clerk away from his own business in order to sell a few stamps at a time to his customers; and therefore the expenses of that post office are reduced. There also results increased efficiency. The Government in using this method specifies the tensile strength of the envelope; it specifies the quality of the glue that is to be used; and there is a supervision which the Government exercises which would not be exercised otherwise. There is another item to be considered on this matter: If you buy 500 of these envelopes, it costs you 12 cents to have them printed; if you buy 1,000, it costs you 24 cents. If you buy 500,000, it costs you at the same rate. But the fact of the matter is that practically all of the users of these envelopes are users in less than 2,000 lots; 37 per cent of them are used in 500 and 1,000 lots-just small users throughout the country, ministers, doctors, and people of that kind, who are not advertising-lodges, granges, and people of that kind are the kind of people that use this service; it is not the big man. The big manufacturer is now using the metering envelopes; he runs his envelopes through a stamp metering machine, and he does not use this service. And it is these people who would have no protection in the quality of the envelopes they buy that would be injured by giving up this service. And frankly, gentlemen, I believe that is the purpose of the envelope people in breaking this thing up. They can not compete-or certainly they have not been able to compete with these Government envelopes. They can not supply envelopes of the quality that the Government requires at the price that the Government pays. So they are planning to put a cheaper envelope out among the people. Now, it has been estimated that at all times there is invested in these envelopes $9,500,000; that is, a man will buy envelopes for six months or a year ahead of time; and he buys those stamped envelopes. The Government has that money; he has the stamps. But the services are not rendered. The Government gets a profit on that. So that, with interest at 4 per cent, it means the Government is getting an annual interest there of $380,000. Now, I do not know whether the Postmaster General included that in his $2,000,000 or not; that is not clear in his letter; but I put that down there anyhow. Now this [indicating paper in Mr. Harlan's hands] is the amount of money that the people who now use these envelopes would have to pay $3,706,400 is what they would have to pay in additional charges these missionary societies, lumberjacks, and farmers would have to pay to have the same printing done, the same identical service rendered that they are now getting from the Government. Now, why can the Government do this at the price at which it is doing it now? It gets it done cheaply by having it done at the time the stamped envelope is printed. It gets it done for two and one-half cents a thousand and sells it to the public at 24 cents a thousand. Now, that 24 cents a thousand covers all the cost of handling, and also covers a good deal of that $2,000,000 that the Government points out. Now, if you discontinue that, while it is true that you may be making some work for some people, you are simply picking the pockets of one class of people for a service that is of no value to them, and putting the money in the pockets of another class. The CHAIRMAN. Mr. Romjue wants to ask you a question. Mr. ROмJUE. If the statute says that the recipient of these envelopes shall not be charged more for them than the actual cost of procuring them, how can it be said that the Government is making this profit? Mr. HARLAN. That is something that has been going on for 65 years, ever since the statute has been in existence; and I do not know that is done, but I know that they figure it down and the Government has made this profit. And the Postmaster General has always been in favor of it. Now, in addition to that, gentlemen, it would throw out of employment 600 people; and I have averaged their salary at $1,500 a year, because that is substantially what the Government employees get. That would mean $900,000. Now, what do you get on the other side of the picture? Mr. MCMILLAN. I would like to ask Mr. Harlan a question or two, if the time will permit. Mr. BANKHEAD. Let me make this suggestion: This is a very serious question, and we are getting correspondence on this subject on both sides of this matter; and so far as I am concerned, I would like to have a little more information on both sides of this question before we are called on to act on it. I do not feel that it is fair to the author of the bill, or to the opponents of the bill, that we should act on it with such a sketchy opportunity they have had to present the merits of this matter. Mr. MEAD. I think there are several other members who would want to address the committee. I have the letter of the Post Office Department here that some member of this committee asked for, which I will leave with the committee. Mr. MEAD. I want to say, in justice to my colleague Mr. Buckbee, that a statement has been made here about his personal interest in the bill. I want to say that in 1925 and 1927 our committee raised the parcel-post rates; and Mr. Buckbee as a member of that committee, whenever the question came up, gave valuable service and never objected to an increase, whether it affected his business or not. And the fact that our committee, on two occasions, did vote to in |