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Mr. SHAUGHNESSY. It really does, but the Shipping Board, as you know, has no very great passenger service. We do use them all we can.

Mr. KRAM. Would you like to have a statement with reference to the appropriations under the office of the Second Assistant Postmaster General ?

The CHAIRMAN. Yes, sir.

Mr. Kram. I have not the items of the appropriations, but will furnish those to the committee.

Mr. SHAUGHNESSY. I have them here. The CHAIRMAN. Mr. Kram, instead of putting this in by piecemeal, why do you not put in a statement covering all of these so-called savings that you were talking about.

Mr. KRAM. All right. I was going to ask that permission and I will furnish that to the committee.

Mr. SHAUGHNESSY. The statement is this: That of the seven appropriations not itemized for this year we now have

The CHAIRMAN (interposing). This is for your branch, but we want a statement as to the whole service. Mr. SHAUGHNESSY. Well, I will make a statement as to my

branch. There is at least $10,000,000 unexpended, and there is a possibility of that going to $12,000,000.

The CHAIRMAN. Do you mean at the end of the year?

Mr. SHAUGHNESSY. Yes, sir. We take no particular credit for saving that, except that the Railway Mail Service has been very alert in contracting the service to correspond to the decrease in the postal business.

DEFICIENCY IN OPERATION OF POST OFFICE DEPARTMENT.

Mr. Wood. How nearly self-sustaining is the Postal Service?
Mr. Kram. It is very far from being self-sustaining.
Mr. WOOD. About how far?
Mr. KRAM. This year over $80,000,000.

Mr. Wood. We have heard a lot of talk during years past with reference to the Post Ofice Department being self-sustaining, but it never has been self-sustaining, has it?

The CHAIRMAN. We had a deficiency last year of $10,000,000 covering one or two years.

Mr. KRAM. The Post Office Department proper has been selfsustaining during several years, but there is an actual deficiency this year, just completed, of $157,000,000, $76,000,000 of which is chargeable to four prior fiscal years because of payments made to railroads under this decision by the Interstate Commerce Commission.

The CHAIRMAN. But we provided for a lot of that.

Mr. KRAM. That has all been provided for, but that altered, of course, the fiscal statement made by the department with reference to its surplus and deficit.

Mr. Wood. How much of that is attributable to increased pay?
Mr. KRAM. The whole $76,000,000.
The CHAIRMAN. And that covered a number of years?

Mr. Kram. Four years. The estimated deficit for the fiscal year 1923 is about $75,000,000.

Mr. BYRNS. How much did the increases fixed by Congress in the way of compensation for clerks, etc., amount to? The CHAIRMAN. That is $115,000,000 a year. Mr. KRAM. That was for salaries paid employees.

THURSDAY, NOVEMBER 10, 1921.

OFFICE OF THIRD ASSISTANT POSTMASTER GENERAL.

STATEMENT OF MR. W. I. GLOVER, THIRD ASSISTANT POST

MASTER GENERAL.

FOR PAYMENT OF LIMITED INDEMNITY FOR INJURY OR LOSS OF DOMESTIC REGISTERED

MAIL.

The CHAIRMAN. “For payment of limited indemnity for the injury or loss of pieces of domestic registered matter, insured, and collect-on-delivery mail” you are asking a deficiency appropriation of $1,200,000 for 1921. In that year you had an appropriation of $3,000,000. Tell us how it happens that you need $1,200,000 as a deficiency?

Mr. GĽOVER. It is one of those conditions we can not figure on, and I do not know that anybody can figure exactly just the number of pieces of insured and C. O. D. parcels that will be lost and we will have to pay the insurance on. The total pieces of insured matter for the fiscal year 1921 was 116,326,664, and the total pieces of C. O. D. matter was 26,325,267, or a grand total of 142,651,931.

The CHAIRMAN. What is the revenue from that source ?
Mr. GLOVER. I have not the total revenue.

The CHAIRMAN. You ought to be able to give us the amount of revenue received if you are going to be able to prove to us the necessity for this appropriation. How are we going to calculate on an appropriation of this kind if we have not any information as to your revenue ?

Mr. KRAM. Mr. Chairman, we can supply the amount of revenue which is considerably in excess of the appropriations already made and this additional sum asked for. We have those figures.

The CHAIRMAN. Why did you not bring them with you? Did you expect to get this appropriation by just asking for it, without having any information ?

Mr. GLOVER. No, sir; we did not but will furnish a statement for the record.

The CHAIRMAN. Tell us why you need $1,200,000.

Mr. GLOVER. The claims for 1921 paid in by the postmasters in the field were 90,818, and the 1921 claims paid by the department were 128,120, and paid by the department since June 30 up to October 15, 37,088, making a total of known 1921 claims of 256,026.

The CHAIRMAN. Tell us how much they amount to.
Mr. GLOVER. Those are the only figures I have, Mr. Madden.

The CHAIRMAN. We are not so much interested in the number of claims as we are in the amount. It is dollars you are speaking for, and that is the thing we are dealing with.

Mr. GLOVER. I was going to show you the amount the C. 0. D. claims and the insured claims would take in dollars.

The CHAIRMAN. No; you told us how many were paid, but you have not told us how much they amount to in dollars.

Mr. GLOVER. I have those figures, but not the amount taken in; but, as Mr. Kram says, we can submit those figures to you. I am now giving you the amount of claims. That would make a total of 256,026 claims, and the claims anticipated were 379,393, and taking from that the claims already paid of 256,026, would leave the amount outstanding of 123,367.

The CHAIRMAN. How much would that total be?

Mr. GLOVER. That would be 22,111, at $12.01 per package, for the C. 0. D. claims, amounting to $265,553.11. The amount of insured claims would be 101,256, at $8.90, which is the average we strike for the insured claims, amounting to $901,178.40, or a total of $1,166,731.51, and for the registered mail an amount of $33,268.49, which added to the other total would make a total of $1,200,000.

The CHAIRMAN. Is that in addition to the $3,000,000 already appropriated ?

Mr. GLOVER. That is in addition to the $3,000,000; yes, sir.

The CHAIRMAN. You do not know that you are going to have these claims, do you, or have you received them already?

Mr. GLOVER. They are coming in all the time. Of course, we have a great many in the office now awaiting payment out of these 123,000 claims.

The CHAIRMAN. What is the amount of insurance taken on packages? Mr. GLOVER. The limit is $100 and on registered packages $50. The CHAIRMAN. What is the average amount paid ? Mr. GLOVER. On the insured $8.90 and on the C. 0. D. $12.01.

REVENUES FROM REGISTERED MAIL.

The CHAIRMAN. We would like to know the revenue that comes from this source.

Mr. GLOVER. We can get that information very quickly.

Mr. KRAM. If I may be permitted to make a statement, Mr. Chairman, fees have been collected from the public for the service that the department has rendered considerably in excess of the amount that has already been paid out in claims. Fees undoubtedly are or will be in the possession of the department before the end of the fiscal year for at least one-third to one-half more than the total amount that will be appropriated. The service is a revenue-producing service, the fees being considerably in excess of the losses sustained, and the appropriation asked for here is to make good to the public the insurance that has been provided by law and for which fees have been collected.

Note.-The fees collected during the fiscal year 1921 are as follows: Registered mail..

$7, 820, 501. 40 Insured parcels.

6, 268, 000. 02 C. 0. D. parcels.

2, 699, 848. 65

Total...

16, 788, 350.07

Mr. ANTHONY. Is not this percentage of loss unduly high?

Mr. GLOVER. No; I do not think it is. It is running just about the average.

PERCENTAGE OF LOSS OF PARCELS HANDLED.

Mr. ANTHONY. What is the percentage of loss of parcels handled in this way?

Mr. GLOVER. In actual number of parcels of C. 0. D. or insured matter?

Mr. ANTHONY. Of both classes that you are now talking about. Mr. GLOVER. It would be less than 1 per cent. .

Mr. ANTHONY. I thought you said that there were one hundred and some odd thousand parcels lost?

Mr. GLOVER. The total insured pieces was 116,000,000, and the total pieces of C. 0. D. was 26,000,000, or a total of both classes of 142,651,931.

Mr. ANTHONY. And how many were lost?
Mr. GLOVER. In 1921, a total of 256,026.

Mr. ANTHONY. Two hundred and fifty-six thousand separate shipments were lost?

Mr. GLOVER. Yes.

Mr. ANTHONY. That seems to me unduly high. I do not think an express company has any such percentage of loss in packages handled, do you?

Mr. GLOVER. I think they do. I think they have more than that.

Mr. ANTHONY. Where do you find that these 256,000 lost packages go? Mr. GLOVER. Well, they are stolen. Mr. ANTHONY. By employees of the service?

Mr. GLOVER. Yes; and others. I would not say it was all the fault of the employees of the service. Of course, we do lose a great many packages through our employees due to the class of men we have to employ in the department. Of course, that has been done away with to a great extent and we have not been employing that class of uncertain quality in the past year, and we are slowly weeding them out of the service, but there is depredation work that is going on all the time.

The CHAIRMAN. What is the average time required to make an adjustment of one of these claims?

Mr. GLOVER. That varies, but the average time is about three months.

The CHAIRMAN. Do the people get their money within the three months' period?

Mr. GLOVER. Yes, sir; unless it is a very serious case and has to go through many post offices and then oftentimes we have troublesin getting the postmaster to respond to our inquiries.

The CHAIRMAN. Are postmasters all over the country authorized to make settlement of these claims?

Mr. GLOVER. Yes, sir; for insured parcel post only. Not for C. 0. D. matter.

Mr. Sisson. Two hundred and fifty-six thousand packages lost out of a total of 142,000,000 would make about 1 loss in about 600 packages, or just a little more than that?

Mr. GLOVER. Yes. Mr. KELLEY. What part of this anticipated loss has already been adjudicated ? In other words, what part of the $1,200,000 you think you will need has already found its way into your office ?

Mr. GLOVER. I should say almost half, because as soon as the fiscal year closes they begin to come into the department from the field in very great number, because a postmaster likes to get rid of all that stuff for the past fiscal year which he is then out of.

Mr. KELLEY. So you can estimate from your experience just about the loss by months for the balance of the year?

Mr. GLOVER. Yes.

Mr. KELLEY. Then about half of it is an established loss and the other half estimated ?

Mr. GLOVER. Yes. We can really never estimate the amount of lost packages, both insured and C. O. D., for the simple reason that we are liable to have a great snowstorm or blizzard; we are liable to have a railroad strike or a breakdown of the express system, and on account of certain conditions in certain parts of the country, and people will flock to the mail for the delivery of their packages. There are so many conditions that we can not account for that we will always have to ask for a deficiency in our indemnity claims.

Mr. SLEMP. How do you account for the very large increase in this indemnity loss, from, say, 1912 or 1913 to 1921 or 1922. What is your theory about that?

Mr. GLOVER. We had an express and freight embargo during and following the March and April, 1920 strike that brought that up and they just dumped on to us all these packages, which increased our insured parcel-post business for those months more than 40 per cent over our estimates.

Mr. SLEMP. But it has been growing rather rapidly. In 1912 you only had $18,000 and in 1920 you had $2,100,000.

Mr. GLOVER. Our business has very materially increased since that time.

The CHAIRMAN. The Parcel Post System was only established in 1913.

Mr. SLEMP. That is the reason I asked the question. I thought perhaps that accounted for it.

Mr. Glover. Yes; and our service is really improving.
The CHAIRMAN. You mean it is increasing:

Mr. Sisson. The packages shipped out of Mr. Madden's town take up about half of this, just from one concern, Sears Roebuck.

The CHAIRMAN. There are two large concerns there. Mr. Glover. Yes; you take Sears, Roebuck and Montgomery Ward and one or two other large concerns like that—of course, Sears, Roebuck have now several dispensing houses throughout the country.

The CHAIRMAN. This deficiency is for 1921. Why is it you have not had the adjustments made before now if you make them on an average of three months ?

Mr. GLOVER. Because they have six months to file their claims after the close of the fiscal year. After June 30 they have up to December 31 to make their claims.

The CHAIRMAN. You are not certain about the amount that you will need ?

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