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pass an act to repeal the so-called round-trip provision. That provision, as you know, provides that the Post Office Department shall pay the full-car rate for the return of an empty mail car.

When those provisions were enacted, most of the cars were RPO cars, and RPO apartment cars;

in other words, they were distributing cars or post offices on wheels. The situation is reversed today. Most of the cars are for the purpose of handling storage mails and storage mails are moved in any kind of car-box car, horse car, refrigerator car, baggage car, express car-any kind of car. It does not call for special equipment, in other words. So whatever justification there was for the round-trip-pay provision, it has disappeared a long time ago. So the policy of the Department is to secure its repeal.

I might state that the Interstate Commerce Commission takes the view that they have the power to eliminate the round-trip provision. We do not quite agree with them, but we are going to give them a chance to do it. We are going to put in the full case before the Commission.

Mr. CANFIELD. Very good. Do you recall when the Postmaster General last addressed the Congress asking for the repeal of this provision?

Mr. WIPRUD. I do not recall the exact date; it was a few months ago.

Mr. CANFIELD. Will you be good enough to insert that information in the record ?

Mr. WIPRUD. Yes, indeed. Mr. CANFIELD. Thank you. (The following statement was supplied later:) On May 17, of this year, the Postmaster General transmitted to Hon. Olin D. Johnston, chairman, Committee on Post Office and Civil Service, United States Senate, the Report of the Post Office Department on the Repeal of the RoundTrip provisions of the Railway Mail Pay Act of 1916.

ANALYSIS OF SUPPLEMENTAL ESTIMATE

Mr. Gary. We will insert in the record at this point an analysis of supplemental estimate of appropriations for the fiscal year 1951.

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Post Office Department - Analysis of supplemental estimate of appropriations, fiscal year 1951-H. Doc. 659

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Postal OPERATIONS, 1951

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

GENERAL F. C. CORNWELL, EXECUTIVE DIRECTIVE DIRECTOR, BUREAU OF

FACILITIES C. N. BRUCE, DEPUTY ASSISTANT POSTMASTER GENERAL, BUREAU

OF POST OFFICE OPERATIONS
N. B. WENTZEL, DEPUTY ASSISTANT POSTMASTER GENERAL,

BUREAU OF FINANCE
H. E. STINE, DIRECTOR, DIVISION OF MONEY ORDERS

Mr. Gary. The next item is a request for $7,172,000 for postal operations. In this connection we will insert in the record the tables on page 5 of the justifications, which show that H. R. 7786 carries $1,786,000,000 for postal operations for the fiscal year 1951. The estimated obligations as of June 9, 1950, are $1,793,172,000, which leaves a deficit of $7,172,000.

Postal operations, 1951 Post Office Department Appropriation Act, 1951, H. R. 7786.--- $1, 786, 000, 000 Estimated obligations (as of June 9, 1950) -

1, 793, 172, 000 Estimated additional supplemental appropriation ---

7, 172, 000 Analysis of supplemental appropriation Activity and account: Mail handling and window service at post offices:

Additional

amount Contingent expenses.

$200, 000

requested Clerks, third-class offices.

50, 000

$250,000 Mail collection and delivery: Special delivery service: Special delivery service.

173, 000 Rural delivery service: Rural delivery service...

6, 080, 000
General services:
Operation and care of buildings:
Salaries, custodial service..

$104, 000
Equipment, public buildings

565, 000

669, 000

Estimated additional supplemental appropriation --- 7, 172, 000

GENERAL STATEMENT

Mr. Gary. Who will justify this item, Mr. Strom?

Mr. STROM. Mr. Chairman, it will be justified by Mr. Bruce, Mr. Cornwell, Mr. Wentzel, and Mr. Stine, as the various activities are covered. The $7,172,000 is for three activities; mail handling and window service at post offices; mail collection and delivery; and general services. Two-hundred and fifty thousand dollars is for mail handling and window service; $173,000 for mail collection and delivery, special delivery service and $6,080,000 for rural delivery service, and $669,000 for general services. That is a total of $7,172,000.' Six million four hundred and seven thousand dollars is for the cost of Public Law 500 and $765,000 is for the new money order system.

Mr. Bruce will justify the cost of Public Law 500 with reference to clerks in third-class offices, special delivery service and rural delivery service.

LONGEVITY SALARY INCREASES

Mr. BRUCE. Of this amount of $7,172,000 embodied in this deficiency $6,303,000 is for the payment of the cost of Public Law 500, which was approved May 3, 1950, for clerks third-class post offices, special delivery messengers, and rural carriers. All of this increase is due to the operation of the longevity provisions of that act and it is that increased cost necessitated by that law that all of that part of this deficiency is based.

Mr. Gary. What about the other item?

Mr. STROM. $104,000 is incident to the same law, for salaries of custodial employees, and Mr. Cornwell will discuss that item.

Mr. CORNWELL. The item of $104,000 is to enable the Department to pay longevity as provided for in Public Law 500 to persons in the custodial service who are paid an hourly rate of compensation, Public Law 500 having been enacted subsequent to the submission of the regular estimates for the fiscal year 1951. It provides for thepayment of 5 cents per hour additional after 13 years, 10 cents after 18 years of service and 15 cents after 25 years of service.

Mr. Gary. If there are no questions, we will pass to the next item.

NEW MONEY-ORDER SYSTEM

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Mr. STROM. The next item covers initial requirements for the new money-order system, a total of $765,000; $200,000 of that will be paid out of our allotment “Contingent expenses” for money-order forms and $565,000 out of the allotment “Equipment, public buildings. Mr. Wentzel and Mr. Stine are prepared to answer any questions you may have on these particular items.

Mr. Gary. Are they a part of the $7,172,000?

Mr. STROM. Yes, sir. The $7,172,000 is made up this way, Mr. Chairman: $6,407,000 for Public Law 500 and $765,000 for the new money-order system.

Mr. Gary. Let us have some explanation, please, of the need for this additional money for these purposes.

Mr. STINE. We expect to begin operations with our new moneyorder system next July 1. In the meantime, we will have to supply all postmasters with adequate working quantities of the new form of money order, printed on a tabulating card, which is designed to supplant the existing blue paper money order, with which you are no doubt familiar.

Mr. GARY. What is the new form; of what does it consist?

Mr. STINE. It is a tabulating card. I have one here which shows the tentative design of it. You will notice that it will be prepunched at the time of manufacture, to denote the serial number and also the regional office designation. We will have 12 regional offices, one adjacent to each of the Federal Reserve banks. The order will clear as a cash item in the hands of banking institutions, which is not the case with the present paper form of instrument. And we will make the verification of a postmaster's accountability direct from the instrument itself, which we do not do at present.

I might mention that at that time, July 1 next, when we introduce the new card form of money order, it will also supplant the postal note which is now being sold in first- and second-class post offices.

Mr. Gary. What is the reason for putting this on cards such as you have shown us?

Mr. STINE. Surveys of our money-order system have progressed over the past 3 or 4 years with the primary objective of doing something to reduce the disparity between our revenues and our cost of operations. The existing paper form of instrument has been in use with practically no major basic change for 40 years, the audit being performed in the General Accounting Office. The audit is conducted not from the money order itself but from a tabulating card which we punch representing each money order. Due to the delays in auditing accounts and the fact that errors are made in punching these tabulating cards representing each order, it makes for a very unsatisfactory audit. We propose to verify the issuing postmaster's accountability in the field at these 12 regional offices and we hope to do it in considerably less time and at less expense than obtains under the present system.

Mr. Gary. In other words, this is a more modern method of handling your money orders and you think that it will promote efficiency and economy in the handling of them; is that the situation?

Mr. STINE. I am sure of that.

Mr. Gary. You have some kind of tabulating and punching machines in some of your offices; we noticed one of them in New York.

Mr. STINE. Yes, sir. We have seven of what we call electrical accounting units where this tabulating equipment is now installed, and which tabulate about 80 percent of the paid money orders. The other 20 percent go direct to the General Accounting Office at Asheville. The reason for part of them being diverted to Asheville is that it is not feasible or practical or economical to tabulate paid orders at these electrical accounting units unless an office pays in excess of 500 orders per day.

Mr. Gary. Will this new method result in fewer tabulating-machine operators?

Mr. Stine. Yes, I would say so. Of course, the equipment that we use now consists of key punchers and tabulators, sorters, and collators. We will continue to use some of those with the exception that we will have a greatly decreased number of key-punch operators, the reason for that being that in the studies and the formulation of this new money-order system we have collaborated with the General Accounting Office, the Treasury Department, and the Federal Reserve Board, and out of it has come an agreement with the Federal Reserve banks by which these paid money orders will be channeled to the 12 Federal Reserve banks. At that point, as the Federal Reserve bank balances with its remitting institutions it will simultaneously punch into the money order its amount. So there we will have delivered to the regional post office adjacent to the Federal Reserve bank a money order with the serial number, regional office number, and the amount already punched into it and consequently we will need less key-punch machines.

Mr. Gary. I believe you pay those key-punch operators approximately $1,000 more annually than such operators are paid in the other departments, is that correct?

Mr. STINE. That is true; yes, sir. They are paid under the regular postal clerk schedule.

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