I doubt that there is any company in the field doing more than a half million dollars a year volume.

In New York, where we operate, I would say New York represents about one-twentieth of the whole industry.

We have been directly hurt by Government competition.

A little less than a year ago the Postmaster General issued a regulation permitting the post office to just about go into our business. Mr. KARSTEN. What Postmaster General was that?

Mr. OPOLINER. Mr. Summerfield.

This regulation permits the post office to take circulars, without a specific address, and blanket a specific area designated by the advertiser.

Mr. HOLTZMAN. Excuse me.

Mr. OPOLINER. Yes, sir.

Mr. HOLTZMAN. Would that apply to an apartment house, too? Mr. OPOLINER. Yes, sir. The way it works in an apartment house: We go up to the top floor, go in, and proceed on down, putting one circular under each door.

We are not permitted to use the mailboxes.

Mr. Postman walks into the house and just sticks one circular into each mailbox.

Mr. KARSTEN. Let me ask you this: You don't have any address on this thing at all?

us.

Mr. OPOLINER. I would like to show it to you, sir.

Mr. KARSTEN. That has been just the last year or so?

Mr. OPOLINER. Yes, sir. That regulation came out in August, and it took us a few months before we found out how it was affecting We have lost close to 50 percent of our business to the post office. I have here a batch of circulars which show the type of address that is required by the post office, namely, no address. They just print on it Patron, Letter Carrier Route, and designate the area, and the post office distributes it.

Mr. CONDON. That is this same Postmaster General who has been asking for an increase in third-class mail?

Mr. OPOLINER. Yes, sir; may I continue for about 2 or 3 points and then answer your questions?

Every one of the circulars which you gentlemen are receiving now is from an advertiser who, up until recent times, used a house-to-house distributing company.

I see Mr. Osmers is holding one from his neighborhood.

Mr. OSMERS. That is right.

Mr. OPOLINER. That one was distributed by Federal Distributing Co., who is joining with us in an attempt to save our industry.

Mr. CHUDOFF. Mr. Chairman, I can refer to the Park Distributing Co., 400 block, Spring Garden Street.

Mr. OPOLINER. Mr. Seidman is cooperating with us, and you will find his name on the title page of that letter you have.

Mr. CHUDOFF. He is the one who has been complaining to me. Mr. OPOLINER. Yes. He has lost a substantial volume of business. All over the country distributors have lost substantial volumes. We have taken this matter up with the post office, and we have asked them, "What do you fellows want from our lives? Why are you taking our business?

They have a stock reply. "We're doing this to save money. We're saving the taxpayers money."

Mr. KARSTEN. This practically confiscated your business.
You have a list, I suppose, of all these people.

Mr. OPOLINER. No; no list.

Mr. KARSTEN. How do you do that?

Mr. OPOLINER. We do not use the mails.

Mr. KARSTEN. You do it by mail?

Mr. OPOLINER. Mr. Karsten, what is your home town?
Mr. KARSTEN. St. Louis.

Mr. OPOLINER. There are distributors in St. Louis. If a merchant in one corner of St. Louis wants to cover the area where his store is, he designates the area; he turns the circulars over to the distributor; the distributor's men go through that area, putting the circulars under each door.

Now, it is no longer necessary. Mr. Advertiser just takes the circulars to the post office, printing that so-called patron address on it, and the post office then tells each carrier, letter carrier, “Here is a batch of circulars; put one in each letter box on your route."

Mr. KARSTEN. Then the Government practically confiscates your business?

Mr. OPOLINER. Definitely, sir.

Mr. KARSTEN. Under General Summerfield's order?

Mr. OPOLINER. The answer to that is yes.

The post office excuse or explanation for it was that they are saving money.

You may recall in past years you probably in your homes received mail addressed Occupant, Apartment So-and-so, such-and-such address. In order to handle that mail, the mail got the same treatment as any other mail. It had to be sorted, and so on.

Somebody got the idea-had a very good idea: "Why should we waste time sorting this mail? We can take a whole batch and tell the letter man to put one in each mail box, without bothering to sort it.'

Mr. KARSTEN. Is that part of the new dynamic program?

Mr. OPOLINER. Yes, sir.

Mr. KARSTEN. Is that what you are telling me?

Mr. OPOLINER. Yes.

Mr. KARSTEN. It is part of the new, dynamic program?

Mr. OPOLINER. Yes.

But the post office didn't reckon with the human element. The people who were using direct mail are still using direct mail. So, there has been no elimination of the sorting. It has eliminated very little of the sorting.

Now, to us this is tremendous. The post office says, "It is only small to us. It's about 7 percent of our previous third-class volume." Seven percent of the post-office third-class volume is 70 percent of the distributing industry's volume, and that is where they got the volume, from us.

Mr. KARSTEN. These carriers are seeking an increase in salary. This is probably one of the reasons they are seeking this increase. Mr. ÕPOLINER. That is true, sir.

Mr. KARSTEN. Caused by Summerfield's order, actually?

Mr. OPOLINER. Yes, sir.

Mr. BROWNSON. Mr. Chairman.

Mr. OSMERS. Mr. Brownson.

Mr. BROWNSON. The carriers have sought an increase in salary nearly every year for the last 6 years. I doubt if this new class of mail had as much to do with their request this year as the high cost of living and low salaries.

Mr. CHUDOFF. Mr. Brownson, I just want to say to you I think they are now motorizing the mailman. The load is so heavy they can't carry it on their backs. Each mailman is going to have a little truck now, and those trucks cost money, and they have to buy gasoline to operate them.

Mr. OPOLINER. Mr. Chairman, I have some comments which might answer some of these questions, if I may continue.

Mr. OSMERS. I think you will probably regret you didn't read your statement, Mr. Opoliner.

Mr. OPOLINER. Yes, sir.

Mr. OSMERS. You probably regret it already.

Mr. OPOLINER. Yes, sir.

May I continue for about 2 minutes more?

Mr. OSMERS. I think it might be helpful to you if we permitted you to finish.

Mr. OPOLINER. Yes, sir.

We have attempted to find out whether the post office has saved money, and has done this profitably.

We wrote to the post office for figures. Their story is that "We are still saddled with the antiquated accounting system we were left with. We are trying to revise it. At present it takes us a long time to get figures. We will not have any figures for you for a couple of weeks.

That has been going on months.

As recently as last week I called the Assistant Comptroller to get the figures. He couldn't supply them.

I had to go do a little research of my own. I went around to various spots in the metropolitan area of New York City, Nassau County, and I spoke to the superintendents of the mail there. They told me this was happening: Formerly a letter carrier never made or very seldom made 100 percent of his stops. He never had a piece of mail for every person on his route. Now, 2 and 3 days a week, especially on Tuesdays and Wednesdays, when the food stores send out their circulars, he makes 100 percent of his stops. Consequently, there is overtime pay, and there has been revision of routes to put on more mailmen to cover this.

This is saving the taxpayers money.

I asked the various superintendents of mail: "To your knowledge, have any people who formerly, before this regulation, gave you addressed mail have any of them given you the simplified address?" This is called simplified address mail. I prefer to call it what most newspapers do-junk mail.

"Have any of them given you this junk mail, addressed so you don't have to sort it?"

"No; all this junk mail we are getting is from new customers, new customers to the post office; formerly the customers of my company and companies like us.

In some of the small towns throughout the country, where there are no distributing companies, the local newspapers found they have lost volume. They have lost advertising volume, I should say, and an

advertiser, instead of placing his ad in the local newspaper, now prints a circular and has the postoffice distribute it.

To me, that is direct competition with private enterprise.

The postmaster says—

Mr. KARSTEN. Competition.

It is confiscation.

Isn't that what you said at the outset?

Mr. OPOLINER. Well, I don't want to quibble over a word.

Mr. CHUDOFF. Let me ask you one question which I think would be interesting to the committee.

Mr. OPOLINER. Yes, sir.

Mr. CHUDOFF. What does the post office charge to deliver these? Mr. OPOLINER. The post office charges a flat rate up to a certain size, up to about an 18-page tab, 20-page tabloid. You can put it in at $15 a thousand, a penny and a half apiece.

Mr. CHUDOFF. What do you charge?

Mr. OPLINER. Our rates vary with the size of the territory and the type of territory. If it is in a scattered territory, the rates are higher. For heavier pieces we charge more, because we need more vehicles to keep supplying the men.

For example, in Levittown, the minimum rate we would charge in Levittown that is Levittown, N. Y., not Levittown, Pa.-is $24 a thousand.

In the last few months we haven't distributed a single piece in Levittown.

Mr. BROWNSON. Who uses these circulars? Is it mostly big business or small business?

Mr. OPOLINER. Both.

Mr. BROWNSON. Both?

Mr. OPOLINER. Yes. Retailers, small retailers, retailers in general. In New York the larger retail stores stick to the newspapers.

In some towns throughout the country even the large stores use it. The bulk of our business has been from small and medium food chains, and some larger ones. I mean Safeway is not exactly a small chain. They use circulars.

Grand Union is not a small chain.

On the other hand, Big Ben is a small chain. They have used circulars.

An independent—a man with one store-he can't afford to use a newspaper ad. He can't afford to pay for 2 million circulation when he needs 5,000.

Mr. BROWNSON. Then this post office order, which I am not entirely in accord with, by any means, is saving that man running a small business a penny on every circular, isn't it?

Mr. OPOLINER. Yes, sir. Directly, yes. But it also costs the tax

payer money.

Mr. KARSTEN. Is that a subsidy, that penny, you are talking about? Mr. OPOLINER. I don't quite follow you, sir.

Mr. KARSTEN. Would you call that penny this mailer is going to save a subsidy?

Mr. OPOLINER. Yes.

Mr. KARSTEN. Would that be classified as a subsidy?
Mr. OPOLINER. Definitely.

51144-54- 8

Mr. KARSTEN. The businessman is getting that subsidy from the Government?

Mr. OPOLINER. Oh, yes. It costs the Post Office an average I was able to get this from the Post Office-it costs them an average of 2 cents apiece. It costs the Government an average of 2 cents apiece, or $20 a thousand to distribute the circulars. That is average, in good territory and bad. In bad territory, I am certain the cost to the Government is higher; but the Post Office doesn't break it down that

way.

They have given us a 2-cent figure. They say that is what it is. They don't tell us it might cost 22 cents in Levittown and only a penny in the Bronx, where distribution is much easier.

Mr. OSMERS. Just to narrow this down, first, I think the committee and myself would prefer you didn't use that term "junk mail," because some of us deliver some great State papers with the simplified address system.

Mr. OPOLINER. I will apologize to you, sir.

Mr. OSMERS. I would like to ask you this question, because I want to get this in the record here, somewhere.

Mr. OPOLINER. Yes, sir.

Mr. OSMERS. Has the Post Office Department been able-I think you said they weren't able to furnish you with any figures as to what has happened to the revenue and costs since the institution of the simplified mail?

Mr. OPOLINER. As of last Friday, when I called the Assistant Comptroller of the Post Office Department, no. He promised figures in 2 weeks. The last time I spoke to him about 2 months ago he said he would have them in a month.

Mr. CONDON. Mr. Chairman, I just want to raise this point of inquiry: I am quite in accord with what this gentleman has said, and I think it is a serious problem, certainly for people in that type of business. I asked the question once before if we were going to have these Government agencies over when we have specific instances, and at that time the statement was made we probably would not. Í disapprove of that Post Office order. I have talked with a number of postal employees. They feel it is a bad order, too.

Does this committee have jurisdiction to go into that, or is that properly in the Post Office and Civil Service Committee, and can we get the Postmaster General over here and make him justify this 7 percent increase in third-class mail, which we are losing money on already?

Mr. OSMERS. I don't know the answer to it, but I don't see any reason why the Postmaster General wouldn't come over here and testify if we asked him to do so.

Mr. CONDON. I would like very much to have this new regulation explained and justified, because nobody has ever been able to do it to me yet.

Mr. OSMERS. I think there is another side to this question, and Mr. Opoliner has touched upon it, too, and that is the business they are now getting in the post office, or in his situation, is additional revenue. That is, the people who used addressed mail are still using addressed mail, if I gather what you said correctly.

Mr. OPOLINER. Yes, although the Post Office's purpose was to eliminate that addressed mail.