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The CHAIRMAX. How much do you anticipate you can save a year by the use of this terminal ?

Mr. SHAUGHNESSY. I have not figured what the saving will be, but we need this for the purpose of taking care of the very rapid increase in parcel-post business.

The CHAIRMAN. Here is what has happened about it. We have several terminals now in which the mail service is carried on; to get the mail into the terminals we have to transport it across the streets in motor trucks, and it is proposed by the establishment of this station, which is under way, to transfer all of the terminal activities to this station and have everything under one roof, which will do away with the necessity of transporting the mail across the streets from one railroad to another. They will have facilities for loading and unloading about 60 cars of mail in and out at a time, and they expect to be able to save in overhead charges about $800,000 a year in this way. I have made some investigation of this myself.

Mr. SHAUGHNESSY. That is the report that was made by the committee.

The CHAIRMAN. Have you an itemized statement showing how this $817,000 was made up!

Mr. SHAUCHNESSY. Not with me, but I have a complete report from our committee, and it has been reviewed by experts furnished by the Bureau of the Budget, who have themselves gone through it very carefully and checked it up.

The CHAIRMAN. We would like to have that here because here is where you have to get action.

Mr. SHAUGHNESSY. I will include in the record such an itemized statement.

The CHAIRMAN. We want to know what it consists of, what advantage will result by the installation of this equipment, how much it will expedite the mails, how much it will save, and the necessity of these facilities from the mail movement standpoint.

Mr. SHAUGHNESSY, I will include that in the record and make it complete.

Note.-The estimate for an additional appropriation of $817,000 for Railway Mail Service, miscellaneous expenses, 1922, covers equipment for the new Union Terminal R. P. O., Chicago, Ill., as follows: For belts......

$150,000 For conveyors, small chutes and motors.

400,000 For spiral chutes...

50,000 For furniture and incidentals.

155, 000 For cafeteria and equipment.

15, 000 For carpenter shop..

7,000 For machine shop..

10.000 For battery charging room equipment, 10 tractors, 16 extra batteries, and 40 trailers...

25. 000 For automatic telephone system.

5, 000 Total...

817.000 The building is planned for the handling of mixed parcels received at the terminal in gurneys on belts from the first floor to the third floor, and a primary separation will be made from the two main feed belts leading from the first floor onto eight other belts, which will take parcels to second, third, fourth, and fifth floors for secondary and final distributions. The numerous conveyors, chutes, and elevators provide rapid and ready means of lowering the mail to track level for loading into storage and mail cars. From 40 to 50 cars may be in process of loading and unloading at one time on tracts under the building and adjacent thereto.

The belts will avoid congestion on platforms, elevators, and work floors. It is much more rapid than any other method of distribution, clerks handling from 16 to 20 pieces per minute, which amounts at the minimum to more than 900 sacks per clerk per day. The conveyor system is essential to the operation of the plant and represents the minimum equipment needed and is so arranged that it actually saves floor space. The primary separation of mixed parcel post mail can be made on belts arranged in tiers in half the floor space required by any other plant. The dispatch of all mail over ceiling belts saves space on each distributing floor. The expense of operation and upkeep is small and the saving in man power will offset the cost for the equipment in a few years. It is estimated that the receiving and primary belts will save 66 distributors at an annual salary of $1,850 and 20 porters at $1,350 per annum and that the dispatching belts will save 68 porters at $1,350 per annum, a saving of $240,900 per annum. The initial cost of the conveyor equipment is also offset by a reduction in the number of elevators, tractors, and trucks required to handle the mails. The efficient operation of the plant depends upon the amount and character of the equipment to be provided. The specifications for the equipment have been carefully worked out and meet the exact requirements under which it will be used. To avoid interruptions through breakage special consideration has been given to the strength and durability of tractors, trucks, racks, and distributing tables. The machinery and carpenter shops should have a complete equipment of tools and machinery in order to make all repairs and alterations of conveyors and equipment promptly. Any unnecessary interruption through lack of tools and machinery to make repairs promptly would be an expensive proposition. The charging station will be used for recharging tractor batteries. The incinerator will be used to dispose of waste. The plans have been made with a view to simplifying every operation and will make possible the operation of the plant officiently with a minimum of experienced help

The most pressing problem confronting the Chicago post office is the necessity for space for the handling of outgoing parcel post and paper mails. In the Railway Mail Service the problem of proper Terminal R. P. O. space is one that is met at the present time by the leasing of space in several scattered buildings. This necessitates extensive automobile service for hauling, causes delays and liability of damage to the mails. None of the railroad stations has adequate accommodations for large volume of bulk mails originating at or passing through Chicago. At the Northwestern Depot all mails must be elevated from street level to track level, which is very slow and tedious. The very nature of the proposed building and its location adjacent to the Union Station make it ideal for the purpose of handling this class of mail.

The space available for post office purposes in the Chicago office, stations, and terminals has been entirely inadequate to accommodate the postal business. Temporary relief has been obtained from time to time by the rental of small units, but this proved unsatisfactory and expensive. During heavy periods of mailing, parcel post matter has necessarily been worked on the pavements to the detriment of the mail. Because of the dearth of floor space, the necessary distributing cases can not be installea, with the result that large quantities of mail are thrown to the railway post offices that should be distributed in the post office. The space available for the swing room comprises but 2,400 square feet, located in the subbasement, to accommodate 4,000 or more employees. These accommodations are entirely inadequate and have subjected the department to severe criticism.

Chicago is the largest parcel-post center in the United States. The Federal building was completed before the establishment of the parcel-post service, so that no arrangements were made for the handling of this class of mail. The driveway, which is located beneath the building, is too narrow to permit one truck to pass another that is parked at right angles to the loading platform. In order that vehicles may pass through driveway, those loading and unloading must park at an acute angle. The platform itself is not of sufficient width to accommodate the hand trucks necessary to the expeditious handling of the mails, and because of structural conditions additional space can not be secured.

It is proposed to discontinue the rental of all other terminal railway post offices in Chicago, namely, the La Salle, Northwestern, South State, Union, and Jefferson. The consolidation of these several terminals will result in considerable economy in clerical force through the elimination of the overhead charges in the way of supervisory force. There will also be an economy resulting from the reduction of the number of clerks necessary to perform distribution through centralizing and consolidating the several distributing units now scattered in terminal railway post offices. It is estimated that the average load per car will be increased at least 5 per cent. The officials of the Chicago post office estimate that the economy in automobile service will approximate $80,000 or $100,000 annually. Based upon the foregoing, the following are suggested as being proper items of expense which can be offset against the rental of the building.

La Salle Terminal R. P. O...

$14,000 Northwestern Terminal R, P. O..

20, 260 South State Terminal R. P. O..

15, 310 Union Terminal R. P. O.

38,000 Jefferson Terminal R. P. O.

9, 300 Clerical force, estimated saving.

150,000 Automobile service, estimated saving.

80.000 Estimated saving car space, resulting from better loading (estimated 5 per cent) based upon 43 cars per day being loaded at this plant...

225,000 Total.....

551, 870 It is believed the foregoing is a reasonably conservative estimate of the possible economies. In addition there will be other advantages which can not be given any accurate monetary value, such as the better loading of storage cars, as well as the elimination of distribution space in railway cars, and a better and more satisfactory parcel-post service through more careful handling and advancement in delivery by being made up into thousands of direct sacks in the initial handling.

The department has the right to remove at the expiration of the agreement any and all conveyors, machinery, chutes, furniture, and equipment which may be placed in the building by the Government.

FOR TRANSPORTATION OF FOREIGN MAILS BY STEAMSHIP, AIRCRAFT,

ETC.

The CHAIRMAN. The next item is for the transportation of foreign mails by steamship, aircraft, or otherwise, and there is a deficiency of $1,960,000 for 1921. How did that occur?

Mr. SHAUGHNESSY. That occurred through incorrect visualization of what the situation was going to be. We have very little control over the foreign mails, and they must of course be handled. The people who made the estimate for that year did not think there was going to be such a rapid resumption of the foreign-mail business, but it grew very rapidly when it started, and it is growing rapidly to-day. Not only that, I find that the former administration made an arbitrary reduction in this item from the figures presented by the Foreign Mail Division without any good reason for it.

The CHAIRMAN. What rates do we pay to the foreign-mail steamships?

Mr. SHAUGHNESSY. We pay foreign-mail steamships, translated into our money and our weights, approximately 40 cents a pound for first-class mail and 4 cents a pound for fourth-class mail.' That is the international agreement in regard to rates.

The CHAIRMAN. That is under an international agreement ?
Mr. SHAUGHNESSY. Yes.

The CHAIRMAN. This $1,960,000 is to pay obligations already incurred ?

Mr. SHAUGHNESSY. Yes, sir; for the transportation of the mails.
The CHAIRMAN. It is not paid now?
Mr. SHAUGHNESSY. No.
The CHAIRMAN. It is still due ?
Mr. SHAUGHNESSY. It is still due.
The CHAIRMAN. You submit a deficiency of $480,000 for 1922 ?

Mr. SHAUGHNESSY. That is an estimate, and it is the best estimate the foreign mail division has been able to figure out. This year they have been running behind and they estimate they will need that much to settle their obligations for the rest of the year, although they are very much in the air as to just what the situation is going to be.

The CHAIRMAN. Do we pay out more than we get?

Mr. SHAUGHNESSY. The foreign mail service is a revenue-producing branch of the Postal Service.

The CHAIRMAN. Is any part of this 1921 deficiency on account of aircraft service anywhere?

Mr. SHAUGHNESSy. There was service by aircraft between Cuba and Key West.

The CHAIRMAN. But it did not continue very long, did it?
Mr. SHAUGHNESSY. No; I canceled that arrangement.
The CHAIRMAN. That was at the rate of $30,000-8 year?

Mr. SHAUGHNESSY. Yes, sir; but the service did not continue very long.

The CHAIRMAN. They just started and quit? .

Mr. SHAUGHNESSY. I canceled that arrangement because it was not working out properly. We do pay a small sum, $200 a trip, for handling the foreign mail from Seattle, Wash., to Victoria, British Columbia; that is, on infrequent occasions.

The CHAIRMAN. When was that established ?

Mr. SHAUGHNESSY. That has been in effect for several years. We use a seaplane to take the mail that accumulates at Seattle, after the departure of the transpacific steamers, and overtake them at Vancouver, British Columbia. In that way we advance the mail by a week or 10 days.

The CHAIRMAN. How much does that cost?
Mr. SHAUGHNESSY. I do not believe it costs us over $1,500 a month.
The CHAIRMAN. How much mail is handled in that way?

Mr. SHAUGHNESSY. To the best of my recollection, it runs about 10 or 12 sacks of first-class mail.

The CHAIRMAN. A day?

Mr. SHAUGHNESSY. No, a trip; they will probably make a trip twice a week. These trips are made in connection with the departure of the transpacific steamers.

The CHAIRMAN. It is for the purpose of giving the people of Seattle an opportunity to have mail transported tnat would otherwise have to wait for the next ship?

Mr. SHAUGHNESSY. No; not for Seattle alone. It is for the purpo e of handling the accumulated mail that comes in from all over the country. In that way it is advanced a week or 10 days.

The CHAIRMAN. Do you think it is necessary to have this $180,000 additional for that purpose ?

Mr. SHAUGHNESSY. I do. It is possible we will not need all of that amount, and yet it is possible we will.

The CHAIRMAN. How much of it do you need?

Mr. SHAUGHNESSY. I can not tell, because there is no real basis for figuring. I have had the foreign mail division before me two or three times, and this estimate is made according to the best information they have as to the amount of money they will need to carry them through. As I say, there is a possibility of not needing the whole amount, and then there is a possibility of a very sharp increase in the foreign mails which will use it up. But this is their best judgment. They started off with an estimate of $1,000,000, and it has been boiled down until we got it to this amount.

The CHAIRMAN. Have you the figures on which you based this calculation?

Mr. SHAUGHNESSY. I have not the figures in detail.

The CHAIRMAN. We would like to have them.

Mr. SHAUGHNESSY. I will include them in the record, and they will represent our best judgment on the situation.

The CHAIRMAN. We would like to have as much detail as possible so that we can get some idea of how your minds work.

Mr. SHAUGHNESSY. I will be glad to put that information in the record,' as follows:

NOTE. - The current appropriation for the transportation of foreign mails is $5,920,000. The expenditure for the quarter ending September for the transportation of foreign mails was $1,323,073. This is a slight increase over the corresponding quarter ending September last year, when the expenditures were $1,176,000. The indications at this time are a sharp increase in the amount of foreign mails handled and on that account, and particularly in connection with the coming Christmas season when it is expected a very heavy parcel post mail will be exchanged between this country and the foreign countries, we figure a 50 per. cent increase in expenditure over the September quarter, making a sum of $1,994,609.

For the quarter ending March it is expected that the heavy Christmas mails will be decreased materially and for that reason only a 20 per cent increase is figured over the September quarter, or the sum of $1,587,687. For the quarter ending June, the natural expected 10 per cent increase in mail business is figured over the September quarter, or the sum of $1,455,380, making a total of $6,360,749 for the current fiscal year, as compared with $5,920,000 appropriated, and an actual expenditure for the previous fiscal year of $6,660,000.

The probable expenditures for the current fiscal year have been stated in round figures as $6,400,000, which would require a deficiency of $480,000. It is very difficult to estimate correctly in connection with the handling of foreign mails because of the unsettled conditions generally in foreign countries, which cause them to change their parcel post arrangements, and furthermore, the rapidly changing condition with reference to the steamship lines, due to the fact that we pay American flag steamers 50 per cent more than we do foreign flag steamers, and we are unable to determine the extent to which American flag steamers will be put in the general passenger steamship trade.

USE OF UNITED STATES SHIPS IN TRANSPORTING MAIL.

Mr. Wood. Do we make any special effort to have our mails carried in our own ships?

Mr. SHAUGHNESSY. We do that; we preference our own ships, even though it adds materially to the cost of transportation, and that is one thing that has added to the cost. We pay twice as much for handling mail on our own flag steamers as we do if the mail is handled on foreign flag steamers.

Mr. Wood. Why is that?

Mr. SHAUGHNESSY. That is a provision of law that was passed to assist the American steamers. As I say, we preference our own ships on every occasion that is possible; that is our policy, and we are not trying to save money by utilizing foreign steamers. We give the mail to an American steamer if the service is anywhere near satisfactory.

Mr. KELLEY. When you patronize a Shipping Board vessel the money is paid into the Treasury of the United States, so that really does not make much difference.

Mr. SHAUGHNESSY. Yes; but there has been very little of that; the Shipping Board has very few ships of its own, because all of their passenger ships are allocated to operators.

Mr. KELLEY. But those operators are operating as agents of the Shipping Board and the Shipping Board receives a certain percentage, so that any money you pay them for carrying the mail really comes back into the Treasury.

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