covered entirely from the public revenues as is the case in providing for the national defense. What we do say is that there exist elements of public service in the operation of the postal department and that these are as much entitled to public support as are operations of other executive departments that look to Congress annually for appropriations. Our past conclusion that there was an aspect of public service in the postal system still represents our view. At the same time we recognize that this of itself is not sufficient as a guideline pointing to specific action. A few years ago a Citizens' Council set up to study the postal deficit had this to say: "The Council has *** concluded that the Post Office is, has been, and should continue to be, primarily a service to the American public." [Italic added.] We agree; but as just said, this conclusion does not solve the problem. On the other hand, adoption of the conclusion would provide a point of departure. It would represent fundamental policy. If that Council's conclusion was sound, as we think it was, it means that socalled postal deficits will be, as they should be, regarded in a different light from the current one that makes it appear as if the Post Office Department suffers from chronic and perhaps culpable inability to make both ends meet. The Council rendered a useful service in presenting data on the costs of measurable services performed by other executive departments that were fully covered by the Treasury. While the data may be somewhat out of date today they are still of great value as evidence. Among these were the services of the Patent Office. The costs were shown as $11.2 million in 1955. The report stated that the nature of the services were measurable and that minimum charges were indeed made. It said that all costs could be charged against the user if that were congressional policy, which it evidently was not. The benefits went directly to individuals or companies. Yet the charges made were insufficient to cover the costs and the results were a "deficit" just as clearly as the shortfall of the postal service was a deficit. Why should the postal deficit stand in a category by itself? The Council's report also covered the services of the Bureau of Standards. It said that the expenses could all be charged against the users of the services. Yet this was not done. It was a matter of public policy. The report mentioned other similar services by executive departments that could be measured and charged to the users. Among them were the services of the Civil Aeronautics Administration, Federal Communications Commission, and others. It also listed airline subsidies and shipbuilding subsidies. None of these subsidies were referred to as "deficits" of the executive departments that bestowed them. It is our opinion that many elements of postal service have as distinct a public service aspect as any of those listed above, if not more so. In 1951 we said: "The fact is that large deficits have been incurred (by the postal service) and that they have been covered by general tax revenue. No one has claimed that this is unconstitutional. No one has maintained that it is illegal; nor has it been held to be immoral. What then condemns a postal deficit? "It is held to be unbusinesslike. It is regarded as reflecting on the efficiency of the management of the postal service. But it is obvious that the service is not operated as a business. It lacks the profit incentive. It lacks the spur of competition. Postmasters are appointed under the patronage system." The Citizens Council's report in 1957 offered adequate evidence demonstrating that the postal service is not a business and cannot be run as a business unless drastic changes were made, such as elimination of part if not all of rural free delivery, star route delivery, c.o.d. service, money order service, registry, etc. But no one suggests dropping these loss-producing operations. Therefore they must be paid for. The question then arises whether users of other parts of the postal service rather than the general public should make up these losses. The answer seems clear enough that if the services are continued as a matter of public policy, the public as a whole should pay for them. If this principle is accepted, as we think it should be, the way should be open to a determination of what elements of the postal service are to be regarded as public service and therefore entitled to be treated as such. H.R. 11140 does not do this and we therefore urge its rejection by the committee and request that this letter be made a part of the printed record. Sincerely yours, O. R. STRACKBEIN, Legislative Representative. Hon. Toм MURRAY, CLASSROOM PERIODICAL PUBLISHERS' ASSOCIATION, Chairman, Post Office and Civil Service Committee, House of Representatives, Washington, D.C. DEAR MR. CHAIRMAN: This letter is written to explain the position of the Classroom Periodical Publishers' Association on H.R. 11140 now pending before your committee. As you know, 39 U.S.C. 289a provides: "SEC. 289a. Increase in postage rates for second-class mail. "(a) Matter mailed by publisher; advertising as affecting classification; matter issued by religious, etc., organizations. **Provided further, That the rate of postage on newspapers or periodicals maintained by and in the interests of religious, educational, scientific, philanthropic, agricultural, labor, veterans' or fraternal organizations or associations, not organized for profit and none of the net income of which inures to the benefit of any private stockholder or individual, shall be 12 cents per pound or fraction thereof, and the increases provided by this section shall not apply to such rate: And provided further, That existing rates shall continue in effect with respect to any religious, educational or scientific publication designed specifically for use in school classrooms or in religious instruction classes. The publisher of any such newspaper, periodical, or publication before being entitled to such rate shall furnish proof of qualification to the Postmaster General at such times and under such conditions as the Postmaster General may prescribe." The last proviso of the above section pertains to the periodicals published and distributed by the members of the Classroom Periodical Publishers' Association. H.R. 11140, dated March 14, 1960, prepared by the Post Office Department and now before your committee, provides that section 289a be amended and the following language be substituted: "*** Provided further, That on and after the effective date of this section, the rate of postage on newspapers or periodicals maintained by and in the interests of religious, educational, scientific, philanthropic, agricultural, labor, veterans, or fraternal organizations not organized for profit and none of the net income of which inures to the benefit of any private stockholder or individual, and religious, educational, or scientific publication designed specifically for use in school classrooms or in religious instruction classes shall be the rates required to be paid on publications generally except that the rates prescribed in this subsection shall be reduced by 50 per centum. The publisher of any such newspaper, periodical, or publication before being entitled to such rate shall furnish proof of qualification to the Postmaster General at such times and under such conditions as the Postmaster General may prescribe." On May 31, 1960, Mr. Arthur J. Summerfield, the Postmaster General, addressed a letter to you in which he withdrew the Department's proposed increases in postal rates for second- and third-class nonprofit organizations. We applaud and appreciate this action by the Postmaster General but believe the Postmaster General's letter should have included the religious and classroom publications referred to in section 289a. It is my understanding that section 289a makes no distinction relative to the merits of any publication covered in the section. I believe it is the common understanding of those in the Congress and outside it that the end use of the publications mentioned in the section justifies their inclusion in this exceptional category. I do not feel it is necessary to review the good work classroom and Sunday school publications do. All contribute to the welfare of our American youth. The publications are all approved by the responsible officials in both the schools and religious instruction classes using them. High praise is given regularly to the publications and the service they render. Your committee and the Congress have long recognized the excellent job classroom and religious instruction publications are doing both in instructing our children and providing them with decent and clean literature. On behalf of classroom publications I earnestly request that your committee extend the sense of the Postmaster General's letter to include religious, educational, or scientific publications designed specifically for use in school classrooms or religious instruction classes. This would insure like treatment for all publications under 39 U.S.C. 289a. Our publications depend entirely on the Post Office Department for prompt delivery to the schools and churches of America. Our business is geared to the efficiency of the Post Office and the Department has improved its operations to give us the additional, efficient service necessary to handle our steadily growing industry. Over the years (75 years in one instance) we have received day by day prompt, efficient, and courteous treatment at all levels of the Post Office Department, from the local working level to the highest officials of the Post Office Department in Washington. Despite the elimination of scores of trains carrying the mail, our publications are being delivered on schedule and in good condition each week during the school year. The number of complaints received from our subscribers relative to Post Office Department delivery service is so small it can be dismissed as a criticism of the Department. Our experience with the Post Office Department proves beyond doubt that its personnel has increased its efficiency and it is my unqualified opinion that the Post Office is the most efficient department of the Federal Government. Members of our industry are aware of the excellent programs instigated by Postmaster General Summerfield to improve service and to automate the Post Office Department. Evidence of the modernization and mechanization of the Post Office under the leadership of Postmaster General Summerfield are everywhere at hand. Some of the example are: Devices for the separation of mail in office buildings; wheeled carts for carriers; new smaller vehicles; red, white, and blue trucks; new post offices; sorting machinery; revolutionary methods of mail transmittal; extended entry chutes for pickup boxes to avoid leaving a car to mail a letter, etc. We are firm believers in the view that the Post Office Department is a service department to be operated in the public interest. We do, however, believe the Post Office should operate on as small a deficit as is possible after proper charges for public service. Postmaster General Summerfield and his staff have worked diligently to cut the Post Office deficit and to do their share to balance our national budget. They deserve the commendation of every fair-minded and sound-thinking citizen. We, in turn, are doing more and more of the postal work before our mail goes to the carrier to reduce the cost of handling our mail. Returning to our request mentioned above, we hope that you and your committee will give the religious, education, and scientific publications designed specifically for use in school classrooms or religious instruction classes the same consideration received by all other publications under section 39 U.S.C. 289a. Sincerely yours, Hon. DONALD J. IRWIN, House of Representatives, Washington, D.C. THOMAS F. LYNCH, Chairman. NEW CANAAN, CONN., June 1, 1960. DEAR REPRESENTATIVE IRWIN: I live in New Canaan, Conn., and am writing to you in hopes that you will vote against any bills that will increase the minimum rates for third-class bulk mail. I work in a direct mail firm and have seen these third-class bulk mail rates increase 150 percent since 1952. With each successive increase it has become apparent that users of the mails have sought other forms of advertising to stimulate sales of their products due to additional postage rates. This, in our business, has necessitated layoffs in our working force as has been the case industrywide. I know I need not mention to you what unemployment means dollarwise to the Federal Government. Incidentally, in an article published in the Wall Street Journal recently, the direct mail industry was the only industry in the country which showed a decline in sales from 1958 to 1959. I certainly approve and applaud the fact that Mr. Summerfield is attempting to put the Post Office Department on more of a pay-as-you-go basis, but I don't feel that it should be done in such a manner as to cause severe economic repercussion in an important and necessary industry, and which will happen if there are any more accelerated rate increases. Thank you for taking the time to read this letter and I hope you will consider our position in this matter. I will be quite interested in seeing how you cast your vote. Very truly yours, BARNEY DONNELLEY. OLD GREENWICH, CONN., June 2, 1960. Hon. DONALD J. IRWIN, DEAR REPRESENTATIVE IRWIN: As a resident of Fairfield County I would like you to be aware of my intense opposition to certain postal-rate increases now under consideration by your committee. Undoubtedly in your deliberations you have been exposed to a great deal of fact and argument. What I have to say may add a little more to your knowledge of the pertinent facts. I urge you to consider most seriously that third-class mail has already absorbed unusual increases in the last 8 years. During that time bulk third-class mail rates have risen by 100 percent, and as you know the one-half-cent increase which becomes effective July 1 would make the total increase in the last 8 years 150 percent. We are all very much aware of the accusing fingers that have been pointed at bulk third-class mail as a money loser for the Post Office. I submit that this reasoning is based on a fallacy. As you know, the lower rate for bulk mail is not a subsidy-it comes about because of the following factors: (1) Bulk third-class mail is presorted, tied out and packaged at the mailer's expense so that the Post Office Department does not have to perform these costly functions, and the mail goes through the entire distribution process with a minimum of handling by Government employees. (2) Many thousands of post offices are maintained throughout our country for the primary purpose of making postal facilities for receipt and delivery of firstclass mail available to our citizens. Bulk third-class mail, by adding volume, simply insures better usage of these facilities and certainly is not responsible for the primary cost of installing and maintaining such facilities. (3) Bulk third-class mail receives deferred treatment, in consideration of its lower rate, and obviously, therefore, increases the utilization of otherwise idle facilities and personnel. At the same time it brings the Post Office millions of dollars of extra revenue. It was with these facts in mind that the classification of bulk third-class mail was instituted in the United States, and these points are as valid today as they were then. A parallel illustration of this reasoning is the postal system of Canada, which eagerly seeks increased use of this class of mail to increase their dollar income at minor increase in cost to the postal system. I maintain that bulk third-class mail is profitable to the U.S. Post Office. It has been maintained that further increases in bulk third-class rates will not affect the volume of third-class mail, will not affect the economic health of third-class mail users, and will not affect the economy of any municipality or State. These statements are simply not true even though they are apparently based on a scientific survey. I have been connected with the direct-mail advertising business for 20 years and I have seen at firsthand specific decreases in the use of third-class mail, as a result of postal-rate increases. In my present connection with a large direct-mail service organization I have experienced pressure by our clients for us to reduce our charges for our service to absorb rate increases, and this has reached a point where it is no longer possible to do so-in spite of continued efforts to cut costs and make operations more efficient. My company, in one location alone, employs more than 1,000 people on the average. When our volume drops, as it undoubtedly will with punitive-rate increases, we must lay off workers. This produces additional unemployment in the small Westchester County city where we are located. Those who favor 55906-60- -38 increases in third-class bulk-mail rates should ask some of these people whether such rate increases would have no economic effects. Obviously, my own income would be directly affected which in turn affects my ability to buy goods and services and has an effect on the volume of general business done by those from whom I buy. When you multiply this situation by the millions of people directly or indirectly employed in direct-mail advertising, it is impossible to say that rate increases would have no economic effect. I will very much appreciate any consideration you can give to these views. Sincerely yours, M. L. PILERT. MILWAUKEE DUSTLESS BRUSH CO., Hon. Toм MURRAY, Chairman, Post Office and Civil Service Committee, House of Representatives, Washington, D.C. HONORABLE SIR: My name is George Hunt. I am president of the Milwaukee Dustless Brush Co. which has been manufacturing brushes in Milwaukee for 60 years. Our products are essential industrial maintenance tools. We sell them by mail, therefore we are vitally concerned with bulk third-class postage rates. We are a small business. Our annual sales are under $1 million. Even though we have a history of over half a century of successful manufacturing experience behind us, we are finding it increasingly difficult to operate at a profit. A major factor in this situation has been the tremendous increase in bulk third-class postage rates which have gone up 100 percent since 1952 and which are scheduled to further advance to 150 percent of 1952 prices on July 1 of this year. I do not expect you to accept this statement without the support of accurate figures. For the 4 years prior to 1959, we spent an average of $33,000 a year for third-class postage. The amount did not vary more than 6 percent from year to year. On January 1, 1959, the cost of bulk third-class postage was increased one-third, so our expenses for postage went up one-third. In 1959 we spent $44,000 instead of $33,000 for third-class postage. We didn't do very well last year. We showed a profit, before taxes, of only $22,500 which was a gross of 3.7 percent on sales. That's about as low as you can go and still stay in business. Of course, last year's profit was reduced $11,000 by our increase in postage expense. If postage rates had not been increased on January 1, 1959, our profit, before taxes, would have been about 6 percent on sales. That's not good but it is not nearly so disheartening as 3.7 percent. Now let us assume that the one-half cent increase in third-class rates had not gone into effect on January 1, 1959. Our costs would have been lower by $11,000 and our profit would have been higher by the same amount. Out of the $11,000 increase in profit, the Federal Government would have gotten $5,200 and the State of Wisconsin $800 in increased income taxes. It would have left us $5,000 additional with which to buy new machinery. Would that be bad for everyone concerned? The Post Office Department has developed some truly amazing propaganda in its relentless drive for higher and still higher postal rates. Much of this propaganda is based on a jumble of figures emanating from the Department itself-figures which are inaccurate and incomplete and which the Department juggles indiscriminately and without consistency in its desperate effort to prove its point. Again, I would not ask you to accept this statement without citing a few from among many examples which could be chosen. In its survey of postal rates, in order to prove the necessity for higher thirdclass rates, the Department conveniently fails to include a factor to compensate for the deferred nature of third-class mail. Just as conveniently, in the same survey, in order to prove the necessity for increased first-class rates, the Department adds a factor to compensate for the preferred nature of first-class mail. This, I submit, is deceit. The Department has had Budget Director (formerly Assistant Postmaster General) Stans come forward and say, "Postal losses are equal to almost half of the total increase in the national debt in the last 13 years." This statement was made in support of higher postal rates. By implication, postage rates are responsible for this deplorable situation; otherwise the statement would not have |