ent upon the post office as the basis of their jobs. These jobs make for production and increased revenue to the Government. The post office itself is the Nation's medium through which desires and ambitions are stimulated, and which results in more jobs, more production, and thereby a higher standard of living. I do not see how we can look upon the post office in any other light. It certainly is not a business. If it were, it would not be operating thousands of small-town post offices at a loss, it would not be transporting free literature for the blind, it would not be transporting free mail for all Federal offices, it would not be performing many other free services. It is impossible to say exactly how bad we and other businesses would be hurt, but there is no question but what these proposed increases would reduce business, employment, and revenue to the Government from loss in income taxes. I urge you not to make any further increases in postal rates whatso ever. Mr. MILLER. Do you sell at a lower price than a regular department store for comparable quality? Mr. WILKIN. We do not undersell. If we did, would you expect the store to undersell us? Mr. MILLER. No; that is a matter of business. You get what you can for your merchandise, and let the buyer beware. That is the way you do business, anyway. The CHAIRMAN. Do you operate on the same basis as the Real Silk Hosiery Mills? Mr. WILKIN. Similarly, Mr. Chairman. However, we do not have branch offices. The CHAIRMAN. In other words, a customer or purchaser can pay cash for the order and in that way obviate the c. o. d. charges? Mr. WILKIN. That is true. Mr. CROOK. Mr. Chairman, I have two or three short questions. The CHAIRMAN. Very well, Mr. Crook. Mr. CROOK. Mr. Wilkin, do you have a union shop in your place of business? Mr. WILKIN. No. Mr. CROOK. What is your hourly wage? Mr. WILKIN. Our hourly wage is an average of 70 cents per hour. Mr. CROOK. What percentage of your expense do you attribute to your postage bill? Mr. WILKIN. It is our biggest item, and I cannot say off-hand what the percentage is. Our postal bill will run about $100,000 a year. The CHAIRMAN. You are decidedly the largest user of the mail at the Greenfield, Ohio, post office? Mr. WILKIN. Yes. Greenfield and Leesburg. The CHAIRMAN. Mr. Wilkin, I know something about your standing and also about the volume of the postal business that you did back in the late 1930's because I was at your town for the dedication of the new post office building. I represented the Post Office Department in the ceremonies back in 1937 or 1938, as I recall. The postmaster told me about your concern, and what the business of your concern meant to the postal receipts of that post office, and incidentally, to his salary out there. He was very praiseworthy of the manner and type of business that you conducted, and the cooperation that you had given to the post office there. Mr. WILKIN. I appreciate knowing that. The CHAIRMAN. I heard the comment on the fine spirit displayed by the officials of your company, and the contribution you were making to the growth and welfare of the community. Mr. WILKIN. I appreciate knowing that, Mr. Chairman. Mr. GOLDEN. How many employees do you have? Mr. WILKIN. We have 116. The CHAIRMAN. Greenfield is a small town. I would say it is a town of approximately 4,000 or 5,000 population, is it not? Mr. WILKIN. Yes, it is about 4,500. Mr. CROOK. Have you increased your salaries for help in recent years? Mr. WILKIN. Yes, we have increased the salaries. Mr. CROOK. What was the average salary paid prior to the last increase? Mr. WILKIN. We do not make a general raise. I mean, we make raises when we promote people and when it is necessary to make raises. Mr. CROOK. At what salary do you start your employees? Mr. WILKIN. When the minimum wage was 40 cents an hour, we were paying 40 cents. Since then, of course, we have gone up to 70 cents, over that period of time. I cannot say offhand what period of time that was. The CHAIRMAN. How many different prices do you have on the different qualities of men's and women's hosiery? Mr. WILKIN. The men's prices will run from 49 cents to 71 cents per pair. The CHAIRMAN. How about ladies' hosiery? Mr. WILKIN. Ladies' hosiery will run from $1.29 to $1.95. Mr. REES. What is the cost to send a half dozen pairs of hosiery from Greenfield, Ohio, to Kansas City? Mr. WILKIN. I can only estimate that, Mr. Rees. A half dozen pairs of ladies' stockings possibly would be 212, perhaps 3 pounds. What the rate is on that I do not know. That is probably the fifth zone. I might say that I am not too well acquainted. I had to give some time and research to get these figures to find out our average order and to find the average zone we ship the merchandise to. Mr. REES. What does it cost to your your package through the mail? Mr. WILKIN. It cost 42 cents prior to January 1, 1949, and that rate at the present time, I believe, would be possibly 49 cents or 50 cents, although I am not sure. The CHAIRMAN. Are there any further questions of the witness? If not, thank you very much, Mr. Wilkin. The next witness is Mr. James M. Mosely, president of the Mosely Selective List Service, Boston, Mass. STATEMENT OF JAMES M. MOSELY, PRESIDENT OF THE MOSELY SELECTIVE LIST SERVICE, BOSTON, MASS., AND CHAIRMAN OF THE POSTAL COMMITTEE OF THE NATIONAL COUNCIL OF MAILING LIST BROKERS, MAIL ORDER LIST CONSULTANTS Mr. MOSELY. Chairman Murray, Mr. Rees, and committee members, I am James M. Mosely, president, Mosely Selective List Service, Boston. I am here as chairman of the postal committee, National Council of Mailing List Brokers, mail-order list consultants. I shall present seven points vital to the future of bulk, third-class mail. The business of members is to search out large, medium-size and many small companies, even individuals, that we believe can sell specialties direct by mail to the consumer. These mail sellers are located in every State of the Union, and in every congressional district. Their sales mail is sent out under the $10 per thousand presorted bulk, third-class-mail rate. These firms make tests of 1,000 to 5,000 each to the customer or inquirer lists of other companies throughout the Nation. If the first test is passable, and many of them are, the direct mail sellers make retests of 5,000 to 25,000. If that succeeds, then a large mail campaign is launched to the balance of each successful list. That balance may be anywhere from 25,000 to 1,000,000. This means a sale of bulk third-class postage by the post office of $250 for 25,000 pieces, or $10,000 for postage on a 1,000,000 mailing. Thus, we list brokers are indirectly salesmen for the post office and, in a sense, its "partners." Every time we help start a new volumemail-order seller or help a present mail-order company to grow, the post office in that town or city automatically receives more cash revenue, and without sales or advertising cost on the part of the post office. Many a third- or fourth-class post office has been lifted to a higher class, with more income for the postmaster, because the office had acquired specialty mail sellers or list owners. Our council members schedule millions of pieces of $10 per thousand presorted bulk thirdclass mail a year. We constantly develop new quantity customers for third class, first class and the post office. Members of the National Council of Mailing List Brokers maintain a close contact with over 12,000 mail-order sellers and list owners throughout America. These firms are estimated to mail 14 billion pieces of bulk third-class mail a year, and spent over $12,000,000 a year for that form of postage alone. These mail sellers and list owners employ over 100,000 workers. They pay substantial taxes. They buy from suppliers, such as envelope makers, printers-including newspapers with job printing departments-lettershops and other graphic arts concerns; they pay for large indirect employment, much of it union, in the graphic arts industry, which so strikingly demonstrated its importance in the recent war. This mail-order-bulk third-class piece of mail usually consists of a sales letter, a circular, and order form. It often includes a return Government reply card, or air-mail card; air-mail envelope, or Govenment reply envelope, on which the mailer pays the return postage. These mail order people don't guess. They have to know to stay in business. They keep a complete record. They know their costs and results, what the "top" is they can afford to spend to get business, just how long it takes to deliver mail and to get their orders back. Most of these mail-order sellers use a small unsealed postage-saver 634, or a long No. 10 envelope, either with a precanceled 1-cent stamp, a l-cent meter, 1-cent precanceled stamped envelope, offered by the post office, or a 1-cent printed permit. 1. Bulk third class is an important-in fact almost a major instrument-to help business overcome the present difficult recession and financial conditions. It is an efficient, dynamic, and economical method for increasing sales and creating new customers at this time, when larger volume and wider markets are so imperative for a stable national economy. Most mail-order direct-mail sellers are middle-size and a great many are small companies which depend entirely or largely on the post office to sell specialities, $1 to $5, direct mail to the consumer. For instance, a farmer in New Hampshire markets his maple sirup as candies by mail. A California fruit grower offers attractive gift packages and does a good Christmas business. Correspondence courses for helping ambitious people get ahead, business services which spread news and information, baby-chick sellers, Christmas-card merchandisers, accident-insurance companies, book publishers and clubs; publishers of news and informative magazines, sellers of shoes, ties and other useful merchandise, and nurseries which market horticultural specialties, are typical. One of the most successful recent campaigns under the $10 per thousand printed indicia, brings sets of reproductions of the art treasures of the Metropolitan Museum of Art for only $1 per set, with album included, to families everywhere in America. The American Bible Society has raised money to send Bibles to all parts of the world from a campaign to outside lists under the $10 minimum. General Eisenhower, as president of Columbia, sent a series of three letters to the alumni, the first one by first-class mail to clean the list, and the next two bulk third class, to raise funds for education. He writes good copy, too. CARE has just been doing a campaign under $10 per thousand meter, under the headline: "Look, Mother, * * it's growing!" It sells an American on mailing $4 to send CARE's seed package of 28 different vegetables, enough for a large garden, for Europeans; one more example of how bulk third class can do a constructive job. Many farmers and war veterans depend on mail order direct mail. The Department of Commerce issues booklets to help them start the mail-order business. Some farmers' wives get "pin money" by selling eggs, broilers, or preserves to city folks. Farmers and small town folks find buying by direct mail brings them a wide selection and makes it easy to order. Small catalogs under the third-class pound rate are used to offer Christmas cards and gifts, farm supplies, bulbs and seeds, baby chicks, and hatching eggs. Bulk third-class mail calls for a minimum of 200 pieces to a pound or a minimum of 20 pounds. It has made possible direct mail as an advertising medium which ranks with newspaper, radio, and magazine as a means of building business. Housewives are mailed coupons to redeem at their dealers at a aving instead of having them left at the door. These are sent under third class, but in the past were delivered direct to the home, and an increase in rate might make it necessary for them to be delivered that way again. Your gas station reminds you by mail when to change your oil. Uses and scope of third class are almost limitless if the present $10 per thousand rate is kept to encourage maximum activity. Over 3,000,000 small-business men, including many who couldn't afford magazine, radio or even newspaper advertising, now use or are prospects for bulk third-class-mail campaigns. But they could not make it pay if the third-class rate is boosted out of their reach. They would be the ones to be the first and most seriously affected. In total. they now are large postal patrons and can continue to be, if the $10 rate on third class is retained. Mail order companies work on a narrow margin. Some companies take a loss on the first sale. Out of a 1,000 mailing they do well to get 15 or 20 new customers a thousand, but, they then can follow up those customers for more sales. During the war, few cash reserves were accumulated because of the shortage of paper and things to sell. Results this spring on specialty mail order, according to a check-up by our council, have taken a terrific nose-dive. Mailers are proceeding with more than usual caution. To increase the third-class rate during this recession would prolong it and kill "a-borning" a whole new crop of bulk third-class-mail users hoping soon to start tests. It would throw out the use of 40 percent of the thousands of marginal lists on which the list owners now receive good rental checks from lists brokers. The average mail order direct mail campaign in volume costs $50 per thousand, of which bulk third-class mail is $10 per thousand or 20 percent of total expense. A 100 percent increase in third class to $20 per thousand would make total cost $60 per thousand, of which postage would be 3313 percent-entirely out of proportion. A powerful drive to sell more, maintain employment, taxes, pros perity, can be successful in many cases through vigorous use of bulk third class at the present tested and popular $10-per-thousand rate. As Secretary Snyder pointed out the other day in Boston: * The time has come to get out and sell. The market is there; we have to sell people the manner in which we conduct our own economics at home has a vital influence on economic progress in most other regions of the world. 2. Bulk third class creates an immense amount of highly profitable first-class revenue. Presorted third class develops thousands of large and small new patrons for all post offices. Bulk third class is the volume traffic builder for the post office. First-class mail has been shown by the post office to make $150000,000 a year as the chief monopoly of the Post Office System. Even after adjustment for $225,000,000 in salary increases passed last summer, excess of income over outgo is forecast at $175,000,000 or more a year and is likely to move up again with general post office volume. Any practical method of building up more first-class revenue will contribute materially to reduce the deficit. Mail-order mail constantly sets in motion a rapid series of profitbringing action on first-class mail to and from the mail seller. |