pounds, 5,000 pounds comes to $53.425. Deduct this from the $171 actually paid and we get $117.575 as the overpayment on every such mile of railroad. Route 161010 (see 1902 report, Table H is 1,228.22 miles long and is paid on 18,759 daily pounds for transportation only $389,603.66. Of this $210,025.62 is for the first 5.000 pounds and $179,578.04 for the other 13,759 pounds. The amount of this gratuity on this one route is $144,407.97. Add payment on same route for rent of postal cars, $34.551.40, and we have a contribution on this one route for the two of $178,959.37. In Table C (1903 report, pp. 160–299) there are 303 routes carrying 5,000 pounds and over, and they cover 57,166 miles. This gratuity yields 57,166 X $117.575, or $6,721,321.48. This, added to the $5,401,670.97 paid for postal cars and special facilities, makes $12,122,992.81 thrown away on the two in a single year.

The third line of overpayment is the excessive price on all weights up to 5,000 daily pounds. For the excess over 5,000 pounds the yearly rate is $21.37 per ton per mile, which is a little more than what should be paid for all, with no extra charges.

The fair price for all weights, always including the cars in which the mails are carried, is $20 per ton per mile per year-a little less than is now paid on the excess over 5,000 daily pounds. The fig ures of the daily weights should become the yearly price per mile in dollars and cents. Route 161010, already mentioned, is 1,228.22 miles long and is credited with 18,759 daily pounds. Multiplying these figures together and cutting off the last two figures of the product, representing the decimals of the distance miles, we get $230.401.79. as the fair payment on that road; the actual payment, including rent of postal cars, $424,155.06.

In the following Table D are taken 23 routes with increasing daily weights from Table H, 1903 report, beginning on page 340, and to them is added route 109004, which is paid for the largest number of daily pounds in the country.

Twenty dollars per ton per year per mile is, on routes operated seven days a week, 5.48 cents per mile; on routes operated six days a week, nearly 6.4 cents a mile. The average revenue per passenger car is substantially 20 cents per mile, and the average number of passengers 10. The weight of passenger and baggage carried by hand and in baggage cars is about 200 pounds, or 1 ton to the car on the average.

If it is claimed that the pay for the lighter-weight routes at $20 a ton is small, so is the service. On the minimum routes, at $42.75 per mile, are being paid more than $11,000,000, and it is quite likely that the routes carrying less than 5,000 pounds daily are paid as much as are paid on those carrying more than the 5,000. Not that the pounds of the former would equal those of the latter, but the payments for those pounds are grossly unequal.

TABLE D.-Twenty-four routes at price of $20 per ton and at the present prices.

Sympathy may be invoked for the railroads on the loss of revenue this $20 a ton scale would cause. But the new figures would still leave the mails a most profitable part of the railroad business-perhaps the most profitable part. Poor's Manual of Railroads, 1904, introduction, page ix, reports the gross amount of passenger earnings for the 1903 year as $428,713,109. Payments to railroads for the mails for same year, 1903 report, page 157. $41,886,848.59. The mail business was a little less than 10 per cent of the whole, and at a fair price would probably not have exceeded 4 per cent in dollars.

Little of the matter mailed reaches its destination in the bags it started in. It may be shifted from pouch to pouch, from sack to ack, or from sack to pouch one or many times. But there was no pouch or sack in the mails that did not at some time or place get There and was not then counted into the 801,602.902 pounds of equipment.

The railroads of the United States are paid much more for mail service than the railroads in Europe. Mr. Henry N. Castle, late Auditor of the Treasury for the Post-Office, in Harper's Weekly, July 3. 1905, writes: "More money is paid every year by the United States to the railroads for carrying the mail than is paid by all the mations of Europe combined for all kinds of mail transportation." And he tells us that in France, in Switzerland, in Germany, in Austria, in Italy, and in Belgium a large part of the mails is carried free. The mail business stands to regular railroad business very much as in the post-office second class stands to all other revenue matter. Other revenue matter springs from second class; the mass of railroad business springs from the mail, and would be impossible without it. The Post-Office could carry second class free rather than kill it; and the railroads, were there no mails, would lose their business and have to pass dividends. Surely their managers ought to

help in the fixing of a price for mail transportation equitably commensurate with what they earn on regular passenger traffic, and not struggle to make a milch cow of the people of the country and draw from them collectively larger rates of streamage than the individuals give.

In what I have said here about paying the railroads at the rate of $20 per ton I will not claim that my figures are absolutely correct. I have heard a good many things here this week that made me feel af little wobbly on two or three matters, but the figures I have given will certainly class somewhat in trying to find out what we are all) trying to reach.

Senator CARTER. At that point permit me to ask a question. If we paid $20 per ton for the aggregate weight, that being 1 cent per pound, if 50 per cent is made up of equipment, upon which, of course. we could not collect any revenue at all

ter.

Mr. GREEN. I do not see why you should not on second-class matYou have to carry it.

Senator CARTER. In our own sacks.

Mr. GREEN. What if they are your own sacks? You are furnishing them to the man to put his stuff in; he does not have to furnish any sacks.

Senator CARTER. I am referring now to the Government revenue. The sacks are 50 per cent of the aggregate weight. If we paid $20 per ton for carrying both the sacks and the matter on which a revenue is collected, it follows that it costs the Government 2 cents per pound, or $40 per ton, to do the business for which it receives $20.

Mr. GREEN. If it is all second-class, but the second-class equipment is not 50 per cent. The second-class equipment is only 7 per cent. according to the post-office figures. According to those figures the average weight of a bag of second-class matter is 46 pounds. That makes the equipment of that about 7 per cent.

Senator CARTER. The loss, then, if loss exists, to be compensated by other considerations, would be the payment for carrying 7 per cent of equipments as dead weight, for which no compensation would be received?

Mr. GREEN. Yes; and if there were no other returns of the profitable kind of matter to the Government from second class, I do not see how anybody could claim that you ought to carry a certain class at a loss of one cent or anything; but what I claim is that in figuring what you ought to charge second-class matter consideration should be given to the profitable mail that second class creates.

Senator CARTER. But, as I understand your proposition as to letting the second-class matter, in which you include periodicals Mr. GREEN. Everything that is printed; yes.

Senator CARTER. You would have the Government pay to the railroads the entire receipts for that matter, or $20 per ton, and stand as a loss, to be compensated otherwise if practicable, the cost of handling and the cost of transporting the sacks.

Mr. GREEN. Yes.

Senator CARTER. Which would be at the rate of $20 per ton? Mr. GREEN. Yes that is, the Government would simply get what is paid the railroads in that case.

pass

Senator CARTER. You would collect from the railroads and the money over to them, and our handling in wagons and on star routes

and rural free-delivery routes and city delivery would all be a total loss unless compensated for in the volume of first-class mail which would flow from the operation.

Mr. GREEN. First and third and fourth class, yes; that is the argument exactly.

POSSIBLE REDUCTION IN RATES OF POSTAGE.

What reductions in rates of postage would the price of $20 a ton per mile per year to the railroads for carrying the mails make possible? On the business of the 1903 year this saving would have been $20.472,292.14, or half of the $41,886,848.59 paid that year to the railroads. In the 1904 year they were paid $44,695,610.36 (report, p. 151). half of which is $22,347,805.18. The total expenditures according to report, page 4, were $152,362,116.70. From this deduct the saving, $22,347,805.18, and we get the corrected expenditure of $130.014.311.52, revenue, 1904 (report, p. 3), $143,582,624.34, leaving surplus of $13,568,312.82.

First-class matter is low enough already. Two cents an ounce pays for transportation enormous distances, and yet is so little that men in multitudes pay it every day for letters mailed and delivered inside their own city. The percentage of drop matter in the large cities, first-class matter, is variously estimated at 30, 40, or even 50. A glance at a heavy mail delivered to business houses in New York will often show three-quarters of all to be drop letters that have never ridden a rod on a steam railroad. Taking the Post-Office as a business enterprise only, its massive justification is the service of firstclass matter, and by the contribution of other matter to that, all else is to be financially judged. It contributed (see Table K) in 1904 $113.552,703.83 out of a total revenue of $143,582,624.34, almost 80 per cent.

Next to this is printed matter, whether periodical or not. That a certain weight of matter is or is not issued periodically makes no difference in the value of what is printed, nor does it affect to any extent the cost of carrying it. Printed matter, as already pointed out, is an indispensable feeder of first-class matter.

Make all printed matter, bound or unbound, 1 cent per poundthat is, extend the provisions of second-class to cover all printed matter, whether periodical or not, and take in everything printed that does not violate some law of the land, doing away with any possible discrimination other than that. That leaves only merchandise. If the postage on that is made 1 cent for 4 ounces, or 4 cents a pound, then the business of 1904 would be something like this. The special weighing sheds no light on the proportions of third and fourth in the class" third and fourth.” Assume half and half.

The pounds and percentages of revenue matter, 1904, shown in Table L, are:

TABLE L.-Business of 1904, first class unchanged, third class merged in second at same price, and fourth class (merchandise) at 4 cents per pound, assuming equal pounds for third and fourth.

There has been and is a widespread hostility to advertising, for which there is no justification. This found expression in a clause of the law of 1879: "Provided, however, That nothing herein contained shall be so construed as to admit to the second-class rate regular publications designed primarily for advertising purposes, or for free circulation, or for circulation at nominal rates." Advertising is never a primary purpose. All publications are issued either to help some object or "cause" or, as generally, to create and stimulate profitable business. Technical "reading matter" and advertising are alike means to a further end, are never "designed primarily for advertising purposes." Advertising was conjoined with reading matter in literature, and especially in periodical literature, long before the setting-up of second-class matter. But since that time its growth has been enormous, almost incalculable. Publisher and advertiser join to create periodicals. Part of their contents is furnished free by those who have something to say; part is bought by the publishers from associated presses, telegraphs, local correspondents, and writers; and part is furnished by advertisers-that is, by customers who pay for the privilege of so much space to stimulate their private enterprises. In this, publisher and advertiser are at one, and with them almost the entire community.

For this advertising very large sums are paid. Without the income from advertising an average periodical could not pay out the money spent for its reading matter. And it stands to reason that the volume of advertising could not be kept up and continually increasing unless that advertising brought adequate returns. Writing "ads" has grown into a profession. They are intended and adapted to draw and hold the public attention. And they do. Many of us in a new issue of a periodical go through the advertisements first. It is manifest that they serve the public in two ways-one by the contents of the advertisements themselves; the other by the better reading matter the publishers can and do furnish, which without the advertisements they could not.

Beyond this service of advertising to the general public, how does it affect the post-office? Its contribution to that is exceedingly large. Not only does it stimulate that institution by the mail matter originating in the increased development it awakens, and