Mr. GARY. In other departments such operators are classified as CAF's 1 and 2?

Mr. STINE. That is right.

Mr. GARY. And paid around $2,000 to $2,500?

Mr. STINE. $2,500, $2,600, $2,700, $2,800.

Mr. GARY. And you classify them as regular clerks and their compensation runs around $3,000 to $3,700?

Mr. STINE. That is right.

Mr. FERNANDEZ. Does the curtailment order that was put into effect by the Postmaster General affect any of those high-priced punch-card operators?

Mr. STINE. No, sir.

TRANSPORTATION OF MAILS, 1951

WITNESSES

A. B. STROM, ADMINISTRATIVE ASSISTANT TO THE POSTMASTER GENERAL

A. C. HAHN, ACTING ASSISTANT POSTMASTER GENERAL, BUREAU OF TRANSPORTATION

D. A. O'BRIEN, DEPUTY ASSISTANT POSTMASTER GENERAL, BUREAU OF TRANSPORTATION

Mr. GARY. The next item is a request for $38,679,000 for the transportation of mails. In this connection we will insert page 8 of the justifications.

Transportation of mails, 1951

General Appropriation Act, 1951, H. R. 7786 – .

Estimated obligations--

Estimated supplemental appropriation

Mr. GARY. It appears that the general appropriation act carries $400,000,000 for this item; that the estimated obligations are $438,679,000, which would leave a deficit of $38,679,000. Who will justify this item, Mr. Strom?

Mr. STROM. Mr. Chairman, I would like to make a brief summary of what this is for. Of the $38,679,000, $432,000 is for the subactivity "Transportation by powerboat"; $11,726,000 for "Transportation by railroad," and $8,865,000 for "Domestic air mail."

Then there is $1,193,000 for "Foreign surface transportation," and $16,643,000 for "Foreign air mail," making a total of $38,679,000. As to the purposes, it is divided this way: $1,193,000 is due to the discontinuance of ECA shipments, the cost of which must now be taken over by the Post Office Department; $25,328,000 is for increased rates which the Civil Aeronautics Board authorized; and $12,158,000 for transportation incident to the increase in mail volume.

Mr. Hahn and Mr. O'Brien will give further justification of these items.

POWERBOAT SERVICE

Mr. HAHN. The first item is for powerboat service. The allotment of the pending appropriation to this item was $2,364,600. Our revised estimate is $2,796,600, making an increase of $432,000. The reason for this increase is increased mail volume. The estimate is based on our experience in the fiscal year 1950. The principal items of increase are the pound rate service to Hawaii and Alaska. Mr. GARY. Who fixes those rates?

Mr. HAHN. Those rates are established by contract; the lowest bid received under advertisement.

Mr. GARY. You have a contract at the present time?

Mr. HAHN. Yes, sir; we do.

Mr. GARY. When does it expire?

Mr. HAHN. At the end of the fiscal year 1951.

Mr. GARY. In that item there is no increase in mail; your contract provides that you pay according to the quantity of mail?

Mr. HAHN. That is correct. We pay by the pound. This estimate does provide for an increase in mail volume over the amount that our present appropriation or the allotment of the pending appropriation would pay for.

Mr. GARY. Why do you estimate more mail your first request was submitted?

now than you did when

Mr. HAHN. It is based on our 1950 actual experience projected into the fiscal year 1951, taking into consideration the Department's overall estimated mail volume increase for 1951.

DOCK STRIKE IN 1950

Mr. GARY. Is there any particular reason for a larger increase than you had estimated previously?

Mr. HAHN. In the beginning of the fiscal year 1950 there was a ship tie-up out in Hawaii, the dock strike. During that strike we had a very great increase in mail going to Hawaii. We estimated that that would fall off or drop back to normal when the strike was settled. However, as is the case many, many times in strikes, items came into

the mails that have not gone back, so that our mail volume to Hawaii has actually held up at a very high level.

Mr. GARY. Is most of that increase due to parcel post?

Mr. HAHN. Almost wholly parcel post; yes, sir.

Mr. GARY. They are sending more packages out there by parcel post than they did previously?

Mr. HAHN. That is correct, sir.

In the case of Alaska we have an increase which is related largely to the general increase in population and in activity in the Territory of Alaska.

RAILROAD TRANSPORTATION

The next item is "Railroad transportation." The allotment of the pending appropriation for this item is $225,635,400. Based upon our experience in 1950 and the estimated increase in mail volume for 1951, we estimate that we will require an additional amount of $11,726,000 for this item. That is at rates that are currently in effect, so that this is strictly a mail-volume increase.

Mr. GARY. Again, what accounts for the increase over your previous estimates?

Mr. HAHN. It is our experience that we gained during the fiscal year 1950, which has proved higher than we thought it would be at the time we made these estimates.

Mr. GARY. Is that largely parcel post?

Mr. HAHN. Very largely parcel post; yes, sir.

Mr. GARY. In other words, we are carrying parcel post so much cheaper than the express companies do that we have taken over practically all of that business now?

Mr. HAHN. That is correct; yes, sir.

Mr. GARY. And losing money on every package that we carry? Mr. HAHN. That is true.

APPORTIONMENT OF APPROPRIATION

Mr. CANFIELD. Mr. Hahn, we are rounding out the fourth week of the new fiscal year and we have before us this rather substantial request. Why is it necessary that you have these moneys now?

Mr. HAHN. We have to have them because we would not be able to authorize the railroads to transport the mails unless we had the appropriation to pay for it. We are now handling mail at the rates that we estimated for.

Mr. STROM. Mr. Congressman, it is a question of being able to apportion the appropriation without apportioning on a deficiency basis. That is the only reason we are requesting these transportation items. We are holding off requests on all other items, such as personnel items, but there is no way of avoiding these transportation items. The mail is tendered to us and we must haul it, and funds should be apportioned on a nondeficiency basis. With reference to personnel, we are going to try to hold the expenditures to what has been allowed in the appropriation. Whether we can do it or not, I do not know, but we will try.

DOMESTIC AIR MAIL

Mr. HAHN. The next item is "Domestic air-mail transportation." We estimate an additional requirement of $8,685,000 for domestic air-mail transportation. This estimate is based upon information which we have obtained from the Civil Aeronautics Board as to the amount the Post Office Department will be required to pay to certificated airlines for the transportation of mail during the current fiscal year.

Of this total amount, $72,713,699, the sum of $72,500,000 is for payment to certificated airlines, the remaining sum of $213,699 is for payment of contract carriers in Alaska. The CAB estimate is that we will be required to pay $72,500,000 to the domestic carriers in 1951. Actual rates now in effect would require payment of approximately $70,000,000, so that $2,500,000 of this amount requested is based on the CAB estimate.

I did want to stress that, of this amount, we need $70,000,000 now at rates already in effect. Then the $2,500,000-that the Board says they will set rates that will require that much additional.

Mr. GARY. There is just no way of getting the Board to catch up in these rates and give us rates that we will know where we stand? Mr. HAHN. I do not believe there is a possibility of it under our present law, Mr. Chairman.

HELICOPTER SERVICE

Mr. GARY. How many new helicopter enterprises have you set up under this?

Mr. HAHN: Two. The one at Los Angeles and one at Chicago. There have been no new ones since we appeared before this committee. Mr. GARY. Why don't you discontinue these?

Mr. HAHN. They are certificated by the Civil Aeronautics Board. Mr. GARY. And you have no right to discontinue?

Mr. HAHN. We must tender mail to them.

Mr. GARY. Have you any additional applications pending?

Mr. HAHN. There is an application for the service at New York, but the Post Office Department is vigorously opposed to that.

Mr. GARY. Is there any way we can assist in the opposition to it? Mr. HAHN. I think the hearings on that have all been held before the Board.

Mr. GARY. It is inconceivable to me that any board of the Government would have the right to say that another department of the Government has to use a form of transportation that is wasteful, extravagant, and wholly unnecessary. I still do not understand it. I think we ought to try to do something about it. I understand you are not responsible for it.

Mr. FERNANDEZ. What is required is an amendment to the law. Mr. GARY. That is what is required. It is my purpose to do what I can to remedy the situation.

Mr. CANFIELD. Let me ask Mr. Hahn, Has there been any instance where the Post Office Department itself initiated helicopter service? I am sure there was one in the far West.

69887-50-pt. 1-26

Mr. HAHN. The Post Office Department supported the establishment of the first helicopter service in the Los Angeles area. That was based on the recognition of the helicopter as a transportation medium that needed development. There is no other way of supporting that means of development by the Government than the Post Office Department to support that one.

Mr. CANFIELD. "Support" is the proper word; not "initiate"? Mr. O'BRIEN. That was initiated by the applicant when he applied for a certificate, and it was only when the Post Office looked into it that we supported it.

Mr. FERNANDEZ. The Board issues the certificate and decides whether it should go on or not, and that is upon the application of the carrier, not the Post Office.

Mr. HAHN. That is correct.

Mr. FERNANDEZ. So we can conceive of a case where an application is made for a certificate where the Post Office would oppose it; but the Board would establish it. That's true?

Mr. HAHN. Yes.

Mr. FERNANDEZ. That's right.

Mr. HAHN. In the case of the Chicago certification, the Post Office pointed out to the Board that we could gain the same service at a far cheaper rate by using surface transportation.

Mr. GARY. We have that evidence from a previous hearing.

SURFACE TRANSPORTATION, FOREIGN MAILS

Mr. HAHN. The next item is for surface transportation of foreign mails, $1,193,000. The reason for that is that the ECA payment for ocean transportation of United States gift parcels to four European countries was discontinued, effective June 30th, and the Post Office Department is now required to pay that ocean transportation on the gift parcels going to Germany, Great Britain, Northern Ireland, Netherlands, and France. We estimate that as a result of the discontinuance of the payment of these ocean transportation charges, which resulted also in an increase of the postage rate from 6 cents back to 14 cents a pound, that there will be approximately 65-percent reduction in the volume this year as compared with last year, so that the 35 percent of the volume they paid for last year will cost this additional $1,193,000.

Mr. GARY. Why did they discontinue paying for the gift parcels? Mr. HAHN. I am not sure that I know the answer to that. The Post Office Department was not consulted. I have talked to some people about it and they have simply indicated that they considered these countries had progressed far enough in their rehabilitation programs that it was no longer necessary to support these individual gift parcel shipments with Government funds.

Mr. GARY. And as it is now, the Post Office pays for carrying them over there?

Mr. HAHN. We do, sir.

Mr. GARY. But they will collect the postage from the senders of the parcels?

Mr. HAHN. We collect the postage.