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It would be appreciated if you would insert the following summary statement of how our individual business is concerned.

Transo Envelope Co. has three plants in Jersey City, Chicago, and Glendale. In its total employment, more than 3,000 people as employees and their families are dependent for their living upon this company.

In all the years of our existence, there has never been an employment layoff or strike. The employees are represented by an AFL union.

Between 45 and 55 percent of the total products produced (which is a capacity of 9 million envelopes per day) are directly dependent upon direct mail.

Our market studies show a direct relationship between the usage of our envelopes and the cost of direct mail postage.

In summary, as the direct mail postage rate has increased in the recent past, there has been a shrinking between 12 and 15 percent in the number of envelope units sold by us to particular direct mail customers.

It is our opinion that any further increase will continue to "price out of the market" this valuable area of American business. The majority of the direct mail customers are "small business." Sincerely yours,

ROBERT B. SHAPIRO. OFFICE APPLIANCE MAGAZINE,

Chicago Ill., May 20, 1960. Hon. ELMER HOFFMAN, House of Representatives, Washington, D.C.

Dear ELMER: The Postmaster General is currently attempting to raise the rates of first, second, and third-class mail, as you are well aware. Supporting his proposals is a report prepared by McKinsey & Co. which we understand indicates that there will be very little effect on businesses using second and thirdclass mail if the proposed rate changes were put into effect.

I suspect that such conclusions, if valid, stem from studies of the large circulation general magazines. Certainly they would not be derived from a study of the financial condition of firms like ourselves publishing several smaller trade magazines. Since there are approximately 3,000 business and technical publications in the United States, there are far more firms and individuals affected than in the case of the comparatively few large general magazines. Our company has exceeded a net profit figure of $50,000 only once in 56 years. It is doubtful that we will reach this figure during 1960. In fact we are facing the biggest cost squeeze ever, because we have arrived at a point where further rate increases to either subscriber or advertiser are virtually impossible to make without resultant loss in volume. As near as we can ascertain, the proposed increases would increase our cost $10,000 to $12,000 a year. This is in relation to second and third-class mail only. An increase in first-class mail would add a few thousand more to this figure.

I bring these facts before you, Elmer, because our understanding of the report is that effect of such increases on the financial condition of publishers has been largely omitted. As you can see from the above figures, it would lop off from 20 to 25 percent of our net profit figure. This has a further effect, of course, on the amount of tax which we will pay, to say nothing of the long-term effect on our financial condition.

If support is to be given to the proposals of the Department, it seems to us that the full effects of the move on the publishing industry, particularly small publishers, should be given. We are seriously concerned with the postal rate situation, having had to absorb six increases during the past decade. We can no longer pass them on to our customers and feel that the Post Office Department is negligent in not bringing these facts before the committee considering their proposals.

Anything you can do to present these facts to the right parties would be appreciated. There are a number of other publishers in the Chicago area whose financial situation is virtually identical with ours. I know that they are just as concerned as we are. Thanks very much for your consideration of this problem, Elmer. Sincerely,

CHUCK GILBERT.

WORLD PUBLISHING Co., THE WORLD-HERALD,

Omaha, Nebr., May 16, 1960. Hon. LAWRENCE BROCK, Representative from Nebraska, Washington, D.O.

DEAR MR. BROCK: We have been following news reports of the proposal for still another increase in second class postal rates. I felt that you might be interested in a very brief summary of the World-Herald's position in this matter.

As you know, Congress in 1958 enacted legislation to increase second class postal rates over a 3-year period. The last of these three annual increases is to take effect January 1, 1961.

These three increases are in addition to à previous round of three annual increases, which boosted second class postal rates 30 percent between 1952 and 1954.

The 1959–61 series of three increases, pyramided on top of the previous three increases in 1952–54, pushes second class rates to these levels :

On advertising matter, 100 percent above the pre-1952 rates.
On reading matter, 6643 percent above the pre-1952 rates.

In short, by next January 1, users of second class mail will have undergone a total of six rate increases in 9 years--increases which have raised their second class postage costs between 6643 and 100 percent.

It does not seem reasonable to impose still another round of rate increases, which would be enacted even before the last increases have become fully effective. But more importantly, we believe that the whole basic concept on which the Post Office Department bases its cost of handling second class postage matter is unrealistic and basically unreasonable to the users of second class postage. Yours sincerely,

BEN H. CROWDERY,

Vice President. GENEVA PENNYSAVER,

Geneva, N.Y., May 24, 1960. Hon. TOM MURRAY, Chairman, Committee on Post Office and Civil Service, House Office Building,

Washington, D.C. DEAR MR. MURRAY: I urgently request that you consider our position and make your recommendation that third-class mailing rates for shopping guides not be raised, and that this statement become part of the record, based on the following:

1. Shopping guides are owned by small businessmen who earn their living by publishing local weekly advertising for the community in which they live. This advertising is in lieu of or a supplement to local newspaper advertising, depending upon the individual situation, and serves thousands of independent merchants and businessmen throughout the United States. This is a vital role, as you well know the importance of small business in our economy.

2. There are 90 shopping guides published in New York State and over 300 throughout the United States. In the event of a postal increase, the small merchants who purchase shopping guide advertising are required to pay for the increase, as the publisher cannot absorb the higher costs.

3. Shopping guide publishers pay many times the postage paid by newspaper publishers, although our publications are lighter and much easier to deliver due to their small page size.

4. Shopping guide publishers cannot hire cheap carrier boy labor to deliver their publications as we do not enjoy the same minimum age labor laws benefits that newspapers do.

5. As you can see, a person who publishes a shopping guide must pay a premium for postage or labor, as a result of Government subsidization of second-class publications.

6. If the Post Office continually wishes to raise third-class postal rates and become a self-supporting business, then I think it is time they used business methods and granted shopping guide publishers a category commensurate with their position. We are a 52 week per year customer who sort and bundle our publication exactly as they are carried by the Post Office employees on their mail routes. The only labor involved is weighing and actual delivering our papers--we have eliminated all costly sorting and, what is more important, our publications do not require transportation from one post office to another or through terminals in most cases. Shopping guides now pay 2 cents minimum postage on each piece mailed and, in most cases, the publication does not travel

outside the area served by the post office in which the mailing permit was issued. We own 4 mailing permits ourselves and only publish 14,000 copies per week.

7. In view of the service shopping guides perform, the constant competition from Government's subsidized second-class publications, and the small costs involved in delivering our type publication, I urge you to establish a lower rate for third-class publications which are delivered within the area served by the post office from which they are mailed or by zones which could be easily established. As it now stands, we are penalized because third-class mail from large direct mail firms has to be sorted by hand, and then transported for great distances for delivery. I ask that we be relieved from that expensive classification, which is what any good businessman would do for his better customer under similar circumstances.

8. If large direct mail firms wish to sort and transport their mail, plus buy local mailing permits, you could then offer them the same privileges. Respectfully yours,

WAYNE E. LOVE, Publisher.

YIELD HOUSE,

North Conway, N.H., May 24, 1960. Mr. Tom MURRAY, Chairman, Post Office and Civil Service Committee, House of Representatives, Washington, D.C.

DEAR CHAIRMAN MURRAY: Thank you for your letter requesting a statement relative to the proposed increase in third-class mail rates and how it will affect our business.

We manufacture a quality line of fine furniture and retail it almost exclusively by mail through our catalogs, one of which I enclose. We mail between 300,000 and 500,000 catalogs a year and depend for our sales almost exclusively on these catalogs.

The conversion rate or actual order rate on catalogs such as ours and others similar is relatively low. An increase in third-class mailing rates would so impair our mailings tha we would probably be forced to cut down on the size of our operation and business.

Further increases in parcel post rates would limit the weight of the articles we mail and would force us to either cheapen our product by lowering the weight or again cut back on the size of our business.

We are the only manufacturing industry in this small town-population around 2,000. We employ approximately 75 people on a 12-month basis, and have been in business for 14 years.

The very foundation of our whole enterprise is mailing rates. We like the mail-order business and are most proud of our achievement record in this business. I most sincerely hope your committee will do what it can to maintain the present third-class mailing rates and parcel post rates that we may continue in business. Cordially,

WILLIAM G. LEVY,

BOARD OF EDUCATION,
CURRICULUM MATERIALS CENTER,

Norwalk, Conn., May 23, 1960.
Hon. DONALD J. IRWIN,
House Office Building,
Washington, D.C.

Dear Don : The ceremonies held at the Brien McMahon and Cranbury Schools were most impressive. We were delighted to see you there. This effort upon the part of Norwalkers demonstrates their willingness to spend money for education.

The Federal Government has been helping the local schools in many ways. For example, providing low cost postal rates for expensive instructional aids, such as teaching films, library books, and science materials. The low postal rates have enabled schools to rent or to borrow instructional materials which would other. wise be too expensive to purchase outright. Our science programs in the areas of biology and chemistry depend a great deal on rented films to illustrate the complex phenomena required of these subjects.

At present the Post Office and Civil Service Committee is considering an increase in the postal rates under H.R. 11140. It is essential that the committee

eliminate from this bill the proposed fourth-class rate increases for educational and library materials.

We depend upon State film libraries such as the library at the University of Connecticut for a large proporttion of our instructional aids. A sharp increase in the postal rates will force us to spend more of our budgeted money and reduce the effectiveness of our instructional program. Sincerely yours,

ARTHUR W. LALIME, Director.

THE NEWS-SENTINEL,

Fort Wayne, Ind., May 18, 1960. Hon. J. EDWARD ROUSH, New House Office Building, Washington, D.C.

DEAR MR. Roush: I am happy to reply to your request for our ideas relative to the pending postal rate increase bill now before Congress.

U.S. daily newspapers are being accused of being subsidized by the Post Office through present second-class postal rates, but no one thus far has proved the accusation. We do not favor a second-class postal subsidy and do not believe we have one now. We are willing to pay 100 percent of the cost of handling daily newspapers in second-class mail but not costs that belong elsewhere.

We believe we are being accused of a subsidy because of the free-in-county privilege, which we are agreeable to having abolished, because the Post Office Department will not separate from the costs of handling daily newspapers the costs of handling weekly and monthly magazines and because we must bear most of the cost of distributing religious and charitable publications.

We, like other daily newspapers of America, are concerned over the lack of progress in Washington toward sound management of the Post Office Department and angered by the repeated charges that we are being subsidized through present second-class mail rates.

The Congress clearly marked the way to the objective in its Postal Policy Act of 1958 which declares that each class of mail bear its own cost and that the expense of "public services" rendered by the Post Office be defrayed by specific appropriation. Instead of complying, the Department proposes additional increases on some classes of mail, far above the cost of handling same, in order to offset alleged losses in serving other users, and again it fails to compute on a sound basis the cost of its "public service” activities.

U.S. dailies individually and through their various newspaper organizations have often stated that they approved the Postal Policy Act of 1958 and that they want no subsidy from the Post Office and believe they receive none. In spite of these often-repeated declarations, newspapers are constantly charged with being subsidized.

If the Post Office Department complied with the Postal Policy Act of 1958, it could determine accurately the cost of the services rendered each class of commercial users of the mail, including second-class, and the Congress could enact changes in postal rates wherever necessary to charge all users of the mail their full costs of the services rendered. This is so because the Postal Policy Act prescribes which of the many activities of the Post Office Department are not to be charged to users of the mails. These are costs completely unrelated to the service rendered any mail user. Examples of public service and public welfare activities of the Post Office Department are free and preferred rate mail, such as free mail for the blind and reduced rate mailings for nonprofit organizations; nonpostal services rendered to other Government agencies, such as sale of documentary stamps and U.S. savings bonds; excess rates paid to foreign air carriers ; loss on special services such as c.0.d. mail, special delivery, etc.; and the losses attributable to star route service for third- and fourth-class post offices.

Post Office Department figures continue to confirm many newspaper surveys that daily newspaper use of second-class mail is declining steadily because inadequate service combined with steadily mounting postal costs forces daily newspapers to seek more efficient and less expensive distribution methods. Smaller newspapers are hardest hit by higher second-class rates because few, if any, substitute methods are available to them.

The latest post office cost ascertainment report for the fiscal year 1959 showed a decrease in the number of pieces and in total weight of daily newspapers in second-class mail but arbitrary allocations by the Department itself attributed an increasing "deficit" to daily newspapers as part of second-class mail.

We would like to point out that regardless of the passage of any bill in 1960, another increase in second-class postal rates will go into effect January 1, 1961. This will be the third of a series of three annual second-class rate increases of 10 percent on the reading content of the newspaper and 20 percent on the advertising content. In addition to these, there have been other increases since 1952. To be more specific, second-class postage costs on both Fort Wayne newspapers will have increased 74 percent in the year 1961 as compared with 1952. If the proposed postal rate increases now pending before Congress are enacted, the added increase will boost our second-class postage bill in 1961 to a staggering 143 percent over 1952. Our overall second-class postage bill in 1961 would be over $85,000, as compared with $35,000 in 1952.

Should the proposed increase be enacted, the postage cost alone for one subscriber per year in postal zones 1 and 2 would be $6.71. Add to this the cost of paper and ink and you will see that a mail subscription rate will have to be charged that will practically put an end to mail circulation as we now know it.

On top of paying all these added postage costs, it is necessary for us to deliver by truck a sizable percentage of our own mail-delivered newspapers directly to the post office of delivery in order to get the same-day delivery of our newspapers. We get no rebate from the Post Office Department for handling these papers ourselves.

We urge the Postmaster General to institute an accounting procedure which will ascertain the true cost of handling daily newspapers--and after that cost has been determined, to pass it along to the daily newspapers using second-class mail. We are willing and want to pay our own way.

We agree with you that U.S. postal service is an essential public service, which concept was given full confirmation by the 83d Congress, rather than a public utility as the present Postmaster General seems to view it. If the Post Office Department is to be considered fundamentally as a public service, then it must be recognized that it will not be completely self-supporting. However, we agree heartily with your thinking that revenues should be as near as possible to postal costs and expenses but that increasing rates for more revenues is not the only solution. You are so right when you suggest that another answer is the reduction of costs and expenses through more efficient management. We are convinced that there is plenty of waste and inefficiency in the operation of the Post Office Department and that we are being asked to pay a premium for it. Sincerely,

HELENE R. FOELLINGER, President.

ugton,

THE KOKOMO TRIBUNE,

Kokomo, Ind., May 20, 1960. Hon. J. EDWARD ROUSH, House Office Building, Washington, D.C.

DEAR CONGRESSMAN Roush: Your letter of May 13 concerning H.R. 11140 and directed to Dow Richardson, editor of the Kokomo Ti has been referred to the undersigned, the publisher of the Tribune, for answer.

The Kokomo Tribune has always taken the position on second-class matter that we desire to pay our properly allocated cost of handling our newspaper in the mail. For a great many years we have been in disagreement with the Post Office Department cost ascertainment sheets in which they state the results of their cost study which show a certain loss to second-class mail. We believe second-class mail should be separated between newspapers and magazines. We do not believe that a postal increase should be aimed at eliminating all secondclass mail deficits until certain practices of the U.S. Government are reexamined and altered. We do not feel that any newspaper or magazine which sells advertising for a profit should be permitted to enjoy a rate less than any other newspaper or magazine. This criticism is directed toward such operations as the Christian Science Monitor and the Catholic Sunday Visitor, both of which sell advertising.

We feel that the newspapers costs should be reexamined insofar as the Department is concerned and that the newspaper industry as a whole should pay the costs of handling their product.

Incidentally, many newspapers have queried their local postmaster to see if he could reduce his manpower or route mileage if he handled no newspapers at all. In every case where an answer was forthcoming, it appeared that there could be no reduction. In the case of the Kokomo Tribune, and most newspapers,

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