r HE • »•.■.:*..-. Telephone Memoranda UC-NRLF A Few Facts and Opinions Foreign and Domestic In response to an inquiry, Theodore N. Vail, President of the American Telephone & Telegraph Company, made this statement December 19, 1913: Our telephone system has been the study of investigators from many countries. It has been considered the world's model, not because it is the largest, but because it gives the best service and is more useful to the public than any other system. Such succeaa as we have achieved has come from our study of facts and our willingness to be guided by them. We have not endeavored to sell our telephone system to the government for the reason that the facts as we have gleaned them during the last thirty years from all parts of the world, have not justified such a course. Our people are personally familiar with every telephone system that today exists. The telephone experience of Japan or France, is as closely studied as the experience of one of our American cities. We have freely given our aid to make the government systems in foreign lands as good as possible, believing that every advance in the art helped us to advance. We have never found any foreign subscribers as well serrwl as our subscribers, nor any foreign public receiving greater advantages from the telephone than the American public. We recognixe our responsibility to the telephone-using public, which is practically the whole public, and for that reason favor an intelligent, painstaking, thorough, scientific study of the proposals for public owner- ship. We cannot be content if facts which we know to exist are carelessly ignored. But if all the facts are discovered, understood and exploited, we are bound to be content with a decision based on those facts. m AMERICAN TELEPHONE AND TELEGRAPH COMPANY Information Department NEW YORK w r GIFT OF /^■. ^\=\ OUTLINE Public Sentiment Pages Foreign 9 American 9-1 1 Public sentiment in Great Britain, the product of costly experience, is now practically unanimous in condemning its Government telephone service ; enlightened public senti- ment in the United States, as reflected in the press, shows that Americans intend to profit by the experience of other countries, and that the proposal to substitute political management of our telephones and tel^[raphs, for the highly efficient management of private enterprise, will not be tolerated by our democratic spirit of initiative and self- reliance. Economic Aspect 11-15 The science of political economy is well epitomized, as to government ownership, in the words of Thomas Jefferson : "Having always observed that public works are much less advantageously managed than the same are by private hands, I have thought it better for the public to go to market for whatever it wants which is to be found there." Economists, from Adam Smith down, emphasize Government's "incom- petency as a business agent," and warn us that it is fatal "to multiply the activities of government so as to bring about vexatious interference with liberty or to restrict legiti- mate enterprise." Although one economist. Prof. H. C. Adams, objected, in 1887, that ' monopolies, under "private financiering," tend to maintain prices at the h^hest profit- able point, his objection has since been overcome by the institution of public regula- tion (see "R^ulation vs. Ownership"). According to Prof. Adams, only industries of "Increasing Returns" tend naturally to monopoly, and Adams doubted that the tele- phone is such an industry, as did other economists. Foreign Experience No Precedent 15-23 It is unsound to argue that Americans should adopt Government Ownership merely because many Europeans have adopted it. Conditions differ. An easy-going. Govern- ment-ridden European will tolerate much that the impatient, exacting "we-want-what- we-want-when-we-want-it" American would not tolerate a minute. The American's ideal of service is diflFercnt : quality first, with as reasonable a price as possible, rather than cheapness first, with what service cheapness will buy. Political systems differ ; long tenure of office in Europe permits greater efficiency and continuity of management; public officials in America are turned out of office just as they begin to "learn the ropes." Despite such advantages as Eurojjean governments may possess, their expe- rience with Government Ownership of telephones and telegraphs has not been such as. to recommend it to this country. Arbitrary and Irresponsible Administration Foreign (Official) 23-24 (Editorial) 25-26 American ( Official) 27 " (Editorial) 27-28 "From Government there can be no appeal." Private companies are subject to com- plaints, Init governments are subject only to petitions. Under Government Owner- 3 347251 Pages ship the public finds itself practically powerless to obtain relief from abuses. (See "Regulation vs. Ownership.") Government employees, protected by a rigid civil service, possess little eagerness to please the public. The heads of private companies must account strictly to the stockholders and the public for the funds invested in the enterprise, but governments are notoriously irresponsible in accounting for public funds, so that taxpayers — unlike stockholders of a corporation — have no exact means of finding out what is done with their money. Private concerns are strictly liable for damages to persons and property ; public bodies limit liability, or evade it altogether. Comparative Efficiency Official 29-30 Editorial 30-34 Government management is never so efficient as private. It is handicapped by inertia, red tape, and uncertain tenure of office among the executives. Private employees work less by the clock than holders of government jobs. Their initiative is not circum- scribed by definite limitations. Their inefficiency is not coddled by political influences. Results, in the field of telephones and telegraphs, amply bear out the superior efficiency of private management, both as to economic operation, and the extent and quality of service. Service Foreign {Official) " 35-38 {Editorial) 38-42 In point of service, there is no comparison between the government managed telephone of foreign countries, and the privately operated telephone in the United States. Only Americans who have traveled abroad fully appreciate why foreigners envy us our privately operated telephone service. The delays, mismanagement and general inade- quacy of Government telephones in Europe are illustrated by numerous instances. Government telegraphs are equally uninviting. The only telegraph service abroad com- parable with our own is that known as "preferred" or "urgent", for which double and triple rates are charged. The bulk of European telegrams are "ordinary", and {e. g. on the Continent) must wait their turn — often for hours — before despatched. Rates Foreign {Official) ; 42-45 {Editorial) 45-48 American {Editorial) '. .;.\ 48 • The familiar cry of "cheap rat|^under Government Ownership is misleading. Gov- ernment Ownership is no panaflKor rates : foreign Government telephone systems are constantly harassed by rate dissatisfaction, which is aggravated by political pressure. The doctrine "Political might makes right", renders impossible a fair and equitable adjustment of rates under Government Ownership. • check abuses of private corporations, than to regulate and check its own. For example, ' / it has rigidly enforced strict standards of accounting among private corporations, though its own accounting is notoriously lax and inadequate. (See "Arbitrary and Irre- sponsible Administration.") It would be the height of folly to embark upon Govern- ment Ownership just when Government Regulation is beginning to show what it can do. Post Office Official 96-98 Editorial 98-102 Government management of the Post Office is no precedent for Government operation of telephones and telegraphs. The postal service is unique in its simplicity of make-up and ease of operation ; despite which it meets with annual deficits, even though millions in expenses annually incurred by the Post Office, are charged to other departments. Its administration by the Government in this country has revealed defects which, in more complex enterprises, would be fatal alike to good government and good service. The argument that the parcels post is a precedent is eqiially unsupportable. It involved no change in the nature of Post Office work, but merely increased its volume, throwing the brunt of the added load upon private carriers. PUBLIC SENTIMENT (Foreign) The Times, London, England, November 2, 1913 : The chorus of complaints against the London telephone service which has echoed through our columns during the past week will, it may be hoped, serve as a corrective of the prevailing official sat- isfaction with the British system. The Times, London, England, May 18, 1912: The experiment of the Manitoba Government with interior grain elevators seems to have resulted in failure. * * * In a speech in the Legislature, the Hon. R. P. Roblin, Provincial Premier, explained that the Government embarked upon the experiment as the result of a long popular agitation in which it was represented that the grain dealers were robbing the fanners and that "the panacea is to be found in Government-owned elevators." He added, "I took the voice of the demagogue as the voice of die public, and I consequently made a mistake." The Daily Mail, London, England, Februar)- 5, 1912: The complaints of telephone users grow in force as they accumulate in numbers. Every class of the community is represented in the increasing army of disgusted subscribers, and if a small percentage of the complaints which pour into the office of the Daily Mail are duplicated to the newly formed Telephone Users' Association that organization will find its hands more than full. One indignant user asks what would be the advantage to the community of the nationalization of the railways, land, and mines if the new telephone system is an example of efficiency under Government control. Several subscribers write that complaints to officials only draw stereotyped acknowledgments. Apparently the replies are suggested by that useful post office volume "The Excuse Book." The Daily Mail, London, England, February 2, 1912: The widespread dissatisfaction with telephone services, expressed in many letters in the Daily Mail recently, has led to the formation of a Telephone Users' Association, with Mr. Goldman, M.P., as chairman. The Daily Mail, London, England, Februar)- 1, 1912: Many complaints about the inefficiency of the telephone service continue to reach the Daily Mail. The Post Office may say that the staffs and the system are the same as they were under the National Telephone Company, but the fact remains that subscribers are almost unanimous in stating that since the Post Office took over the telephones there has been a marked decline in their efficiency. (American) Washington, D. C, Herald, January 5, 1914 : If the voice of the press of the country affords any clue to public sentiment, the people of the country have pronounced with practical unanimity against Mr. Burleson's proposal. Paterson, N. J., Press, December 24, 1913: The press of the country without discrimination of party, has with practical unanimity declared the project (». e., the proposal for government ownership of telephone and telegraph) untenable. 9 ; J „. ,, ; JBropklyp, N. Y., Citizen, December 11, 1913 : '■' " There are so many other matters which will have to be dealt with before it can become worth while entering into any detailed argument over what had better be done about the telegraph and tele- phone lines that the question must remain in the academic list on this side of the Atlantic for another decade at least. It is, indeed, true that there are not a few intelligent people who think otherwise. They have become convinced in various ways that it would be a good stroke of business to enter these fields right away. But it is not doubtful that the great majority of the American people are in no such mood. The complaints of the two services have been so few and are really so trivial, as compared with other great branches of industrial life that call for attention, that the average American, who is nothing if not practical, declines to bother himself much in the premises. Philadelphia, Pa., Ledger (Quoted in the Rochester, New York, Post Express, October 8, 1913): For Federal regulation of interstate concerns the nation will vote its indorsement. For government ownership the nation will vote only its stoutest condemnation. Rochester, N. Y., Union Advertiser, December 19, 1913 : We do not believe that the people want government ownership of the telephone, the telegraph or the transportation service. The present laws for the regulation of the public service corporations seem to be adequate. Baltimore, Md., American, December 16, 1913: It may also be said that the control of the wires by the government would be a precursor of conditions such as exist in France, where the labor organizations have the telegraph and telephone employes of the government in their fellowship and thus have the government in important respects under their thumb. All this leads to outright socialism. The United States wants none of it. Pontiac, Mich., Press, December 23, 1913 : Wouldn't the acquisition of telegraph and telephone lines pave the way for the government ownership of railroads? Would the service be any better than it is now and could the government operate these industries without loss, or friction, or political interference? Wouldn't there be many problems from which we are now free? In brief, is there a public demand, a public necessity, for such a step, and would it be advantageous to the government and the public to undertake, in these cir- cumstances, a move in a direction that may be wrong? Mr. Burleson seems to be confident, but as we see it, is on very uncertain ground. St. Paul, Minn., Dispatch, October 9, 1913 : Even a Congress of radical Democratic persuasion would gag at the thought of plunging the country into a system which is unsuccessful abroad and from which the three leading foreign nations would gladly escape if they could enjoy the benefits of modernized American services. Jacksonville, 111., Courier, December 19, 1913 : We are justly jealous of the extension of government activities, and we have not as a nation felt called on to do for the people what other agencies could do as well. Chicago, III., Journal, December 22, 1913 : The best thing about the peaceful dissolution of the telegraph and telephone trust is the evi- dence it affords that President Wilson has no intention of adopting the suggestion of his postmaster general, and moving for immediate government ownership and operation of telegraph and telephone lines. The country is to be congratulated on the very evident fact that his recommendations are not to be followed. 10 BuflFalo, N. Y., Enquirer. December 22, 1913 : Those who question the wisdom of government ownership merely as a business proposition, however, are only a part of the array in opposition. Another very strong corps of objectors hold that running telegraph and telephone systems is not suitable work for the United States government. Mansfield, O., N'eu's, February 5, 1914: The more closely this policy is examined, the more hopeless does it appear. The question, of course, is a political as well as a business one. If we desire a great, powerful, centralized Govern- ment we can go far toward the realization of our wish by putting it in charge of the railroads and other business enterprises. By so doing, we shall greatly weaken, and perhaps destroy, those very institutions designed by wise men to hold despotism in check and to safeguard the independence, initiative, and freedom of the citizen. We should have an army of voters bound to the state — that is, the administration — by the closest and most selfish ties, and strong enough to mold it to their purposes. ************ Men are, we believe, banning to see the dangers inherent in this whispered program. Many who in their hearts oppose it and shrink from it, have made the mistake of talking and thinking of it as "inevitable." Nothing is inevitable as long as there is the slightest chance of preventing it. Those who are proposing to "accept" what they think they can not head off, ought, we think, to express them- selves clearly and forcibly. We believe, as we have said, that public opinion, as a whole, is far from favorable to this plan. It is a grave mistake to interpret silence as acquiescence. Syracuse, N. Y., Journal, December 18, 1913: There is no general demand for the Federal government to buy the telegraph lines. There is no great necessity for such an act. Widespread as is its use, necessary as it has become in business circles and great as is its convenience in the home, it has not yet reached that place in the affairs of man where Uncle Sam should feel even the suspicion of a need to take over the mighty system in order that he might furnish cheaper service. ECONOMIC ASPECT Speech of Representative Lewis on Telephones and Telegraphs before Congress on December 22, 1913: Mr. Speaker, there is a science of political economy; it speaks with an authority, not to say with a thoroughness of analysis and breadth of view, which I could not claim. It speaks, too, with a responsible sense, a knowledge of these perplexing varieties and complexities of modern society and industry. From statement made by Thomas Jefferson in 1808: Having always observed that public works are much less advantageously managed than the same are by private hands, I have thought it better for the public to go to market for whatever it wants which is to be found there. From "The WeaUh of Nations," by Adam Smith (1776. Vol. II, Bk. V., Ch. II, p. 300: The Post Office is properly a mercantile project. The government advances the expense of establishing the different offices, and of buying or hiring the necessary horses or carriages, and is repaid with a large profit by the duties upon what is carried. It is perhaps the only mercantile pro- ject which has been successfully managed by, I believe, every sort of government. The capital to be advanced is not very considerable. There is no mystery in the business. The returns are not only certain, but immediate. 11 From "Principles of Economics," (1911, Volume II, Book VII, Chapter 62, Page 409), by F. W. Taussig, Professor of Political Economy at Harvard University: The continued progress which it (i. e. government ownership) should maintain calls for keen- ness, vigor, enthusiasm, single-minded devotion to professional tasks on the part of trained adminis- trators and experts. Only an intelligent and self-restrained democracy, or a very capable autocracy, can enlist such men and get them to do their work in the best spirit. The German Empire and the German states, in their post office, telegraph and telephone, ^perhaps in their railways, unmistakably in their military organization, have maintained a high spir'it of ambition and emulation. But the Australian colonies seem to have secured simply humdrum management ; honest, to be sure (and for this much we in the United States, to our shame, must pay our tribute of respect), but devoid of life and vigor. No democratic community, with the possible exception of Switzerland, has shown in its public industry a spirit of progress comparable to that of private industry. From an article by Dr. Jacob Gould Schurman, President of Cornell University, published in the New York Tribune, February 25, 1912 : In the United States the central government possesses under the Constitution a minimum of governmental functions. Yet even among us the public business is conducted with much less energy and efficiency than private business. Although some European states own and manage the railways — never, however, with great success — we hesitate to invest our government with this function because of its incompetency as a business agent and the inefficiency to which it is doomed by partisan politics. From "Public Finance," (3rd Edition, 1903, Book II., Chapter 3, Pages 228-229), by C. F. Bastable, Professor of Political Economy at the University of Dublin, Ireland : One difficulty common to most forms of state industry arises from the necessity of dealing with large numbers of employees. The tasks of the modern State are sufficiently varied and compre- hensive to take up all the ability and time of administrators, without adding unnecessarily to their duties. Public industries, however, require for their efficient working a body of organized hands, obtained by free contract. An unavoidable consequence is the possibility of disagreement between the State and its helpers, culminating perhaps in the last weapon of industrial war — strikes. * * * That this is not an imaginary danger is proved by the fact that in July, 1890, there were "strikes" at the municipal gasworks in Leeds, at the London Post Office, and in the Metropolitan Police, and also a "mutiny" in the Guards ! From "Railroad Transportation" (1885, Chapter 13, Page 257), by Arthur T. Hadley, LL. D., President of Yale University: Government ownership of the telegraph prevailed in Continental Europe, because each country was more or less of a bureaucracy ; that is, the civil service governed the country, and was so well organized that it extended itself as a matter of course. In America the civil service is not so well organized, does not govern the country, and is not allowed to extend itself as a matter of course. Political reasons decided the question in favor of a government telegraph in Europe. Political reasons form the main ground against a government telegraph in the United States. From the preface to "The History of the British Post Office," by J. C. Hemmeon, Ph.D., pub- lished under the direction of the Department of Economics, as Volume VII of the Harvard Economic Studies (January, 1912) : Possibly a democratic type of government should, from the financial point of view, interfere least in the direct management of economic institutions, on account of the pressure which can easily be brought to bear upon it for the extension of such institutions on other than economic grounds. If non-economic principles are to be substituted in justifying the initiation or increase of government ownership, a popular form oi government seems the least suitable for the presentation of such as shall be fair to all concerned, not to mention the difficult problem of dealing with those members of the civil service who do not hesitate to make use of their political power to enforce their demands upon the government. 12 From "The Principles of Political Economy," (1864, 5th edition. Part 1, Chapter 9, Pages 218 and 231), by J. R. McCulloch: Perhaps, with the single exception of the conveyance of letters there is no branch of industry which government had not better leave to be conducted by individuals. It cannot, however, be too strongly impressed upon those in authority, that non-interference should be the leading principle of their policy, and interference the exception only; that in all ord- inary cases individuals should be left to shape their conduct according to their own judgment and discretion ; and that no interference should ever be made on any speculative or doubtful grounds, but only when its necessity is apparent, or when it can be clearly made out that it will be productive of public advantage. From "Expansion of Races," (1909, Chapter XXVIII, Page 433), by Charies Edward Wood- ruff. A.M., M.D : Hugo R. Meyer, formerly Professor of Political Economy in the University of Chicago, has investigated this matter for many years, * * * He proves conclusively that it is always a disaster to the society if the ruling units take charge of matters which the working units alone are able to do. The delusion is widespread that if government only take charge of something it is done properly, even though it has not the brains or bodies to work with. It is forgotten that the brains of the country are apt to be in the employ of corporations and will not work for the poor pay of government office. The delusion arises in the lower layers of society — the less intelligent ruled elements — which always look up to the rulers to initiate and manage everything for them. It is the Russian peasant's stupid way of demanding everything of "The little father" — the Czar. It is the sign of racial childishness and the opposite of the Aryan democratic spirit. Meyer proves that State ownership or regulation invariably paralyzes industry because it interferes with that private initiative which has made America the leader. • • ♦ In the great public utilities, telegraph, telephone, trolley lines, railroads, lighting power, we lead the world. State management in Europe has paralyzed advancement — individual liberty in America has pushed it. From a speech by Charles E. Hughes, Justice of the United States Supreme Court and ex- Govemor of New York; delivered before the Republican Oub of the City of New York, January 31, 1908: Our government is based upon the principles of individualism and not upon those of socialism. We do not seek to multiply the activities of government so as to bring about vexatious inter- ference with liberty or to restrict legitimate enterprise. We deprecate all unnecessary governmental action. But our individualism does not justify unbridled license. Its aims may demand, and fre- quently do demand, the intervention of government with necessary restrictions and regulations, not to curtail the liberty of the people, but to protect it. From the Congressional Record, January 15, 1914, p. 1753: MR. M(DON. * • * If you shall adopt the policy of the purchase of the telegraphs and tele- phones, you will have proceeded far to the federalization of power. You will have added thousands of offices to your Government. If you should go further and become the owners of the railroads, you would see a vast army of people who would be in control, a Federal menace to human rights and human liberty under a Constitution and laws in which the people have no part in selecting the officers to administer. Macon, Ga., News, December 19, 1913: John Stuart Mill, one of the clearest and most profound thinkers of the nineteenth century, 13 applied his practical philosophy to the subject of government ownership, and among other things he said: A cogent reason for restricting the interference of government is the great evil of adding unnecessarily to its power. Every function superadded to those already possessed by the government causes its influences over hopes and fears to be more widely diffused, and converts, more and more, the active and ambitious part of the public into hangers-on of the government. If the roads, the railways, the banks, the insurance offices, the great joint stock companies, the universities, and the public charities, were all of them branches of the gov- ernment; if the employees of all these different enterprises were appointed and paid by the government, and looked to the government for every rise in life ; not all the freedom of the press and the popular constitution of the legislature would make this or any other country free otherwise than in name. And the evil would be greater, the more efficiently and scien- tifically the administrative machinery was constructed. He declared also that the perfection of government ownership would establish an in- iquitous bureaucracy. Philadelphia, Pa., Public Ledger, October 26, 1913: In the new edition of the "American Commonwealth," James Bryce says that the railroads can- not be taken over in this country and worked by the National Government as the railways of Switzer- land and many of those in Germany and the Austro-Hungarian monarchy. And he added: "Only the most sanguine state socialist would propose to impose so terrible a strain on the virtue of the American politician, not to speak of the effect on the constitutional balance between the States and the Federal authority." St. Louis, Mo., Times, December 22, 1913 : Incentive to achievement along individual lines cannot be taken away from a people save to their great detriment. The fundamental principles of Republican form of government are best exem- plified by as little government as possible, and not by as much as possible. San Antonio, Tex., Express, December 19, 1913: The argument that the United States is the only one of the leading countries of the world that is not operating telegraph lines is * * * specious, because this country has a form of government different from that of most of the other great nations, which cost many thousands of lives to estab- lish, and that has been the admiration of all the world. This, the people of the United States will not willingly relinquish for a monarchical or centralized form of government, towards which it might be headed were Mr. Burleson's policy carried out. Philadelphia, Pa., Public Ledger, December 18, 1913: Mr. Burleson might go further; if communication of intelligence is important, so is transporta- tion of both human beings and freight, and therefore the next logical step would be the ownership of our twenty billions of dollars worth of railways. Transportation of foodstuffs is important, but more important yet is the food. Plow can a prudent and wary Government permit the nation to be endan- gered by allowing the farmers and other busy-bodies to retain in their private possession the very staff of life? That would be foolish, of course, and therefore a beneficent paternal Government should, logically, control the means of production as well as the instruments of transportation and of commun- ication. But whence originate the food-stuffs and other necessaries of life? From this goodly earth; from the land, which, combined with labor, is the source of practically all wealth : is it safe to leave the land in private hands? Logic — the Burlesonian communistic, socialistic, Texas logic — compels a logical statesman to conclude that the land must be owned, controlled and tilled by the Government. From "The Science of Finance," by Professor H. C. Adams (1898: Part II, Bk. I, Ch. 2, Pages 274-5) : If it be true, as has been argued in the courts, that an increase in the volume of the telephone 14 business beyond a certain point necessitates a corresponding increase in expenses, this fact excludes the telephone industry from the class of industries industrially monopolistic. From "Economics," by Professor A. T. Hadley, President of Yale University (1896, Pages 170-1): Shall telephone charges be based on the message, as in long-distance business, or on the instru- ment, as in the ordinary local business ? The former is the more logical basis, but it involves decided difficulties. The public, in local telephone exchanges, distinctly prefers the latter method. But if a company charges by the instrument and not by the message, we are brought face to face with the remarkable fact that the expenses per unit increase with an increase in the volume of business done. In a town with only 100 telephones in operation, the expense to the company per instrument and the rate which can be profitably charged is far less than in a city with 1,000 instruments. In the one case, it need only be prepared to make ninety-nine connections for each subscriber ; in the other, it must ar- range for nine hundred and ninety-nine. This will serve to illustrate the highly experimental character of the problem of rate-making in the newer forms of industry. It is difficult enough for the investors to find agents who can be trusted to experiment with property under these conditions. Still more diffi- ctUt is it to find public officials who can be trusted to experiment with other people's property. From "Introduction to Economics," by Professor H. R. Seager, of Columbia University (3rd Edition, 1905, Ch. 23, Legal and Natural Monopolies, pages 450-2) : It (i. e. the telephone service) is not subject to the law of decreasing expense. On the contrary electrical engineers maintain, and with apparent reason, that the larger the number of subscribers served through one exchange the larger is the expense per subscriber of rendering the service. This is because the exchange stations must be so arranged that each new subscriber — or pair or quartette of subscribers where two or four party lines are used — may have his wire connected readily by each of the many operators required in a large office with that of any other subscriber. If one operator is able to attend to the calls of fifty subscribers and the office serves one thousand, this necessitates twenty different terminals at the exchange for each wire. If the number of subscribers doubles, each separ- ate wire must be let in at forty points. If five thousand subscribers are to be served, each wire must have one hundred distinct terminals. In this way the expense at the central office increases by multi- plication rather than by addition. For five thousand subscribers not five times, but twenty-five times as many connections are needed as for one thousand. Nor is there the saving of expense outside the central office in the telephone business that is to be found, for example, in connection with electric- lighting. For the best service it is necessary to have a distinct wire for each new subscriber. Fair service can be given to two parties on the same line. Four-party lines are less satisfactory. Lines serving more than four have been found to work so badly that they are now little used in cities. Thus as regards outside wiring the expense grows uniformly with the number of subscribers. There are, of course, on the other hand, economies in administration, etc., which result from an increase in the number of subscribers and which must be taken into account. On the whole it appears to be true, however, that increasing rather than diminishing expense is the law of growth in the telephone busi- ness. FOREIGN EXPERIENCE NO PRECEDENT From "Modem Industrialism," (1904, Part III, Chapter 4, Pages 270-1), by P. L. McVey, President of the University of North Dakota. What may be accomplished under a monarchy by a centralized government is a markedly different thing from the results likely to come from a government under a democracy. Australia stands as an example of democratic administration. The governments are by no means so free from political influences as those of Germany and do not offer such excellent results. But on the other hand the experience of Australia would be nearer what might be expected in England or America, were the state system introduced rather than that of the German States. 15 The administration of the Australian railroad is pretty well typified by a statement of Sir George Turner to the effect that no man of the class (naming a number of high grade managers) would leave England to enter the services of an Australian colony. The parliaments have insisted upon the retention of staffs created under political managements of former administrations and have inter- fered with the transactions of the railroad departments for political reasons. The railroads are starved because of the heavy demands upon the treasury for other purposes, the result is poorly equipped roads carrying small train loads at high cost per ton mile. Expenses are not always paid out of current income and resort is had to borrowing that materially increases the public debt. Demands of all kinds are made by every class, from every section and these are of such a nature that they preclude anything like management on the long-sighted principle ; the roads are run for the present and with the future in view. The errors of judgment are not written off as in the case of a private company but are laid upon the taxpayer, whose very industry is burdened by a condition over which he has no control. The results in Australia may be summed up in three brief statements: (1) Systematic borrowing until the State Debt is beyond any reasonable limit ; (2) dependence upon the State for employment without reference to the product; (3) reliance upon government borrowing for continuance of prosperity. These in addition to high rates and inefficient management complete the record of the Australian systems. From "Aspects of Public Ownership," by Sydney Brooks, published in the North American Review, August, 1911, Pages 206-207: Another set of considerations that are even more relevant concern not so much the kind of undertaking that it is proposed to nationalize or municipalize as the kind of people who will have the management of it when it passes under public control — their political traditions and habits, their administrative experience and efficiency, their standards of official honesty, the whole environment and atmosphere in which they will be called upon to discharge their functions. Here, again, it is not possible to lay down any hard and fast rule. But at the same time, it is not merely possible and permissible, but vitally essential to insist that the differences between towns and countries in external circumstances, political formation and character, industrial instincts and administrative aptitudes, are just as great as between individuals, and that these differences profoundly affect the problems of Public Ownership and make it more than usually imperative to submit the argument from analogy to a merciless dissection. Local and national ownership and operation of the chief public services will be one thing in a country, like Germany, where the bureaucratic tradition is strong and individual initiative perceptibly weaker than collective initiative, and another thing in a country, such as the United States, where the best brains are to be looked for outside of the municipal, State and Federal Governments and where the unit has consistently shown itself immeasurably more enterprising and efficient than the group. * * * An enterprise that is conducted successfully and with economy under a stable administrative system may break down altogether under a regime that favors a succession of officials on short or precarious tenures or that is exposed to the unremitting pressure of commercial or political interests. From "Principles of Economics" (1910, 6th edition, Appendix A, Page 753), by Alfred Mar- shall, one time Professor of Political Economy at Cambridge University: In Germany an exceptionally large part of the best intellect in the nation seeks for employment under Government, and there is probably no other Government which contains within itself so much, trained ability of the highest order. On the other hand the energy, the originality and the daring which make the best men of business in England and America have but recently been fully developed in Germany; while the German people have a great faculty of obedience. They thus differ from the English whose strength of will makes them capable of thorough discipline when strong occasion arises but who are not naturally docile. The control of industry by Government is seen in its best and most attractive forms in Germany ; and at the same time the special virtues of private industry, its vigor, its elasticity and its resource are beginning to be seen in full development there. In conse- quence the problems of the economic functions of Government have been studied in Germany with 16 great care, and with results that may be very instructive to English-speaking people; provided they recollect that the arrangements best suited for the German character are perhaps not quite the best for them; since they could not, if they would rival the Germans in their steadfast docility, and in their easy contentment with inexpensive kinds of food, clothing, house-room and amusements. From "Municipal Ownership In Great Britain," by Professor Hugo R. Meyer, 1906, Chapter 6, p. 114: In the days of Adam Smith, speakers and writers on questions of public policy, when con- fronted with perplexing problems, used to surmount the difficulty by saying, "It has been done in China." The public speakers and writers of to-day make a similar use of Germany, Australia, and New Zealand, countries concerning which the general public has acquired more misinformation than an energetic and well-informed man could correct in a lifetime. From "Principles of Economics" (1911, Volume II, Book VII, Chapter 62, page 409), by F. W. Taussig, Professor of Political Economy at Harvard University: The continued progress which it (i. e. government ownership) should maintain calls for keen- ness, vigor, enthusiasm, single-minded devotion to professional tasks on the part of trained adminis- trators and experts. Only an intelligent and self-restrained democracy, or a very capable autocracy, can enlist such men and get them to do their work in the best spirit. The German Empire and the German states, in their post office, telegraph and telephone, perhaps in their railways, unmistakably in their miliUry organization, have maintained a high spirit of ambition and emulation. But the Austra- lian colonies seem to have secured simply hundrum management ; honest, to be sure (and for this much we in the United Sutes, to our shame, must pay our tribute of respect), but devoid of life and vigor. No democratic community, with the possible exception of Switzerland, has shown in its public industry a spirit of progress comparable to that of private industry. From "Railroad TransporUtion" (1885, Chapter 13, Page 257), by Arthur T. Hadley, LL.D., President of Yale University: Government ownership of the telegraph prevailed in Continental Europe, because each country was more or less of a bureaucracy ; that is, the civil service governed the country, and was so well or- ganized that it extended itself as a matter of course. In America the civil service is not so well or- ganized, does not govern the country, and is not allowed to extend itself as a matter of course. Poli- tical reasons decided the question in favor of a government telegraph in Europe. Political reasons form the main ground against a government tel^raph in the United States. From The Nation (New York), March 14, 1912: We subscribe to no such dogma as the "impossibility" or "absurdity" of government owner- ship or management of public utilities. It is all a question of expediency — a question, to be sure, turning often on extremely broad and deep considerations, and not merely on the immediate facts of a given case, but still a question of expediency. It is fair to acknowledge, and to take for what it is worth, such an experience as that of Switzerland, especially as Switzerland is a democratic republic. But before we jump to conclusions r^jarding our own country, we must look certain large and vital facts in the face. Of these, the most obvious relates to the mere geography and history of the coun- try. The United States is a vast new country, whose area — we speak of the contiguous territory, not counting Alaska, or the insular possessions — is 3,000,000 square miles ; Switzerland is an ancient and fully settled country, with an area of 16,(XX) square miles. Texas alone could swallow up sixteen Switzerlands, and the population of Texas is barely more than that of Switzerland. It would take nine Switzerlands to make a Montana, but the people of Montana are only one-tenth as many as those of Switzerland. Evidently, the problem of reconciling the demands of the present, and of weighing the needs of the future, for this vast Continental area, filled with a restless, energetic and rapidly growing population and big with mighty changes almost from year to year, is not to be compared with that presented by the transportation problems of the compact and ancient little mountain republic of Europe. 17 From "Aspects of Public Ownership," by Sidney Brooks, published in the North American Review, August, 1911, pages 200-201 : * * * One of the most common and preposterous fallacies of our times is to suppose that there are any political dogmas which are universally true or any political prescription which can be applied indiscriminately or any political machinery which does not depend for nine-tenths of its value upon the engineers and the local conditions under which they work. * * * The type of mind which argues that because Glasgow has made a success in owning and operating the local service of street-cars, therefore Pittsburg or San Francisco would be equally successful and should at once follow in Glas- gow's footsteps, is a type of mind that really ought not to be allowed to meddle with politics. It is fundamentally incapable of appreciating the fact that the forces which determine the success or fail- ure of any and every political experiment are infinitely more local than general and more personal than mechanical. New York Tribune, December 19, 1913: It is to be borne in mind, too, that governmental service in some other countries is possible up- on the theory exactly the reverse to ours. Their theory is that the Government should be compre- hensively paternal and so should do as much as possible. The American principle is, everything should be left to private initiative, which the general welfare does not require to be done by the Government or which the Government cannot do very much better than private individual or cor- poration. The burden of proof of one of these latter conditions, therefore, rests with the advocates of the change. Extract from an editorial in the Seattle, Wash., Times, September 23, 1913: That the acquisition of the telegraphs would constitute a grave issue none can question. The question of governing the union employes of the present corporation, much as it is to the fore in present discussions of the subject, would be one of the smallest items. There is no real comparison between the situation in European governments, where telegraphs are publicly administered, and those that would be developed in the United States. In Europe, they are under national control as a war measure or because the governments need the financial returns accruing from their operation. Neither of these needs is present in the republic. San Francisco, Cal., Post, October 13, 1913 : England, on the other hand, is thickly settled; there are no "dead lines" through unprofitable territory and the Government has not been required to make extension into isolated districts to be operated at a constant loss. From "Public Finance" (1899, Part II, Chapter 10, Page 264), by W. M. Daniels, formerly of the Department of Political Economy, Princeton University, and recently appointed by President Wil- son member of the Interstate Commerce Commission: If we are to make use of analogy as a guide in such matters, the experiment which deserves our most careful study is the English experiment with the telegraphs. Here was a nation whose industrial habits were most nearly like our own. Here was an industry whose acquisition cost far less than the railroads, and whose administration was immensely simpler. Moreover, conservative financial opinion had pronounced in favor of the experiment. So careful a student as Jevons had concluded that state telegraphs would be successful largely for the same reasons which had made the state management of the post successful. It was found, however, that the economies secured by unity of management were oflFset by the higher salaries paid to employes, and that the government had to obtain a monopoly for the state telegraph, though formerly such an intention had been disclaimed. The financial failure of the experiment is hardly in question. A successful pressure of the telegraph personnel for higher pay, and an invincible demand by the public for lower rates, proved to be the upper and nether mill- stones between which the financial success of the undertaking was ground to powder. 18 New York Times. December 28, 1913 : Conceivably the service which might suit EngHsh customers would not serve the want of Amer- icans, but the fact is that the British envy us what the Representative (Mr. Lewis) describes as un- fit for our approval. It is sure that no American will envy England's telephone service as described in the leading British Journal. According to the London Times "the history of the telephone in the United Kingdom has been of a lamentable tale of bureaucratic blundering tolerated by a community which has failed to conceive the potential method of communication, and to insist upon its effective organization on a business basis." The fact which shows British inappreciation is that the telephones per 100 population are 1.4% in England to 8.1% in the United States. London has 2.8% per 100 and New York has more than London, Berlin, Paris combined, although London alone has a larger population. The reason for the British backwardness, which Mr. Lewis wishes us to emulate, was the British ownership of the postal telegraph. * ♦ ♦ In the opinion of those who have experience of the British system "the money value of the time and temper wasted by the public from a bad service is a far more serious consideration than any reasonable charges imposed for a good one, on the principle that speed and reliability are more im- portant than cheapness." Providence, R. I., Journal, January 1, 1914: That the telephone is a vexation in England, is shown by the comparison of the telephone and the mail: 17.7 is the percentage of telephone messages and 80.5 is the percentage of the communica- tion sent by mail. The preference for the mail in Gr^at Britain thus is nearly 5 to 1. In the United States conditions are reversed: The mail takes less than 41 per cent, of the messages, while more than 58 per cent, is handled by the telephone companies. Philadelphia, Pa., Public Ledger, December 22, 1913: The London Times has had an expert review the situation for the benefit of its readers. His conclusion published a few days ago, ought to be interesting on this side of the ocean, also. He points out that the Government decided several years ago to take over all telephone lines and that the private company, which was operating under a terminable franchise, did not make the improve- ments in its plant that it would have made had it anticipated retaining control of its business. But he says, even if telephone progress had not been retarded by the impending Government control, "the rapid advance that is a vital commercial necessity to the country is not being made for the simple rea- son that a Government department is, to judge from experience, unable to carry on a great profit- making commercial concern on a sound business basis." During both periods, therefore, the period of private control and since the Government has taken over the private lines, he concludes that the telephones and the public "have suffered, and still are suffering from the influence of government control." San Francisco, Cal., Chronicle, December 31, 1913: In many countries with Government-owned 'phones, the system is a joke. Indeed, it is a mark of social distinction to have a "number." As for the telegraph, it is closed down for 24 hours every week in certain government ownership countries and it is impossible to send messages after 9 o'clock at night or before 8 o'clock in the morning. Lowell, Mass., Courier-Citizen, December 24, 1913: Meantime the telephone service of this country is the most efficient in the world. No foreign service that Mr. Lewis can find so much as approaches it either in extent or in excellence. Com- pared on the basis of the number of available exchanges to be talked with, the rate in the United States is infinitely lower per subscriber than it is in any other country on the foot-stool. The rate is constantly decreasing; the number of new telephones is steadily rising. 19 ' New York Evening World, December 22, 1913: How many Americans have had actual experience of government ownership as it' exists in other countries? How many Americans understand how foreign are most of its results to our habits of personal freedom and to our standards of efficiency? In England the increasing burden of the government telegraphs upon taxpayers has been no- torious. Germany makes its government telegraph system a handy instrument of espionage. France, although a republic, does much the same. Government in both these countries is essentially bureau- cratic. Wherever even a degree of militarism prevails, government ownership is bound to lend itself to spying and repression. Moreover, any American who has ever done any telephoning in France does not need to be told of the exasperating inefficiency and slowness of the French system. The same applies to Italy. Switzerland hasn't found out yet whether it likes government ownership or not. The system was adopted on a theory of unification that may work in a country the size of Switzerland. Govern- ment ownership for less than four million people is a different thing from government ownership for one hundred million. Japan took over its railroads, telephones and telegraph to provide war assets. The result has been in every way bad. The Japanese Government, forced by military burdens to economize, has found itself unable to make extensions. Not fifty miles of new road have been built since govern- ment ownership became a fact. It takes six months to get a telephone installed, and the less said about the service the better. Americans who are used to enterprise, initiative, rapid improvement and wide extension in their public utilities, to say nothing of personal liberty and freedom from surveillance in their conduct and business, will find government ownership as it works in other countries a poor argument for foist- ing it upon Uncle Sam. Utica, N. Y., Herald-Dispatch, December 20, 1913: If Government control of wire systems could anywhere be made a success from a financial standpoint, it would be in Great Britain, where political influence is reduced to a minimum in the op- eration of public utilities. Yet the British Government has notoriously failed to make either the tele- graph or telephone branch of the Post Office service self-sustaining. It is, therefore, reasonable to suppose that with the vastly greater temptation which the numerous wire systems of this country would offer to intriguing politicians, the ventures of government operation would be a disastrous failure. New York Evening Sun, December 19, 1913 : But there can be little doubt that if a referendum were taken among the people who have had a chance to try Government-owned systems of Europe and the privately-owned systems of the United States, the Government ownership proposal in this country would be snowed under. Boston, Mass., Advertiser, December 11, 1913: Where Mr. Burleson could find such example is difficult to imagine. Surely not in England where the Christmas mail was recently threatened by a strike of Government employes. It was only the announced determination on the part of the British authority to call out the troops and use them in the interest of the Post Office, which prevented the strike from being called. Should Mr. Burle- son turn to France for his illustration, he would have to explain away the terrible strike which tied up French railroads some years ago. Had not the Premier called the military reserve and set them to the task of running the rail- roads, France would have nearly starved in a very short time. Mr. Burleson ought to know that in Canada there are several Government-owned railroads which are in a plight to which the present condition of the B. & M. is as nothing. Brooklyn, N. Y., Eagle, December 18, 1913 : Over his Government telegraph lines an Englishman may send a telegram for 6 pence, but at 20 the end of the year the taxpayers, as a whole, must make up the heavy deficit due to a combination of low rates with the expensive management which government operation of public utilities everywhere entails. Mr. Burleson is not fortunate in citing the British system as an argument in favor of his policy, and there is also a Government telephone service in Great Britain, and it is notoriously among the worst in the world. Brooklyn, N. Y., Times, December 18, 1913: But the main objection to the proposal arises from the fact that a distinct deterioration in service would be the inevitable result of the acquisition by the Government of these great public utili- ties. As President Vail of the Telephone Company well points out, there are more telephones in New York City than in the entire United Kingdom where the Government operates the system. In for- eign countries the telephone is not a necessity. Indeed, it is in a sense a luxury. With us it is as necessary as the trolley car or the restaurant. Chicago, 111., Manufacturers' News, December 18, 1913: Since England took over the tel^^raph lines, it has been confronted with an annual deficit of approximately $6,000,000. This does not prevent the telegraph employes from asking for a 15% ad- vance in wages. The English ministry is opposed to further advance in the postal and telegraph employes' wages for reasons that their wages and pension allowance have been twice advanced during the last six years. The public also resents the demand made at the holiday season. The present ministry is having an exceedingly hard fight to give the Government employes and working men, in general, everything they asked for, including old age pension, insurance and higher wages without running the country so badly into debt that it will never get out of it. New Haven, Conn., Register, December 13, 1913: Fortunately government ownership of telephones, either national, state or municipal has been tried out in a good many parts of the world. While it seems in some instances to be working fairly well, its failure has been so marked in many well observed cases as to lead to the suspicion that it really is a failure everywhere. For even the fact of a good service would not alone serve to commend it. VN'e need to know that it promotes economy in the use of the peoples' money, and conscientious accounting for the great capital entrusted. This has not been the showing. Lawrence, Kansas, Gazette, December 4, 1913: Government ownership does not seem to help things along to any great extent. In England, where the Government owns the telegraph as well as the postal lines, there is a strike coming on that threatens to trouble the Kingdom grievously. The government employes want an advance in wages ; the Government refuses to grant it ; the employes have ordered a Christmas strike, and have begun the trouble by destroying records, smashing typewriters, short-circuiting the wires and play- ing other little jokes of the kind. Erie, Pa., Dispatch, December 8, 1913: That strike in Great Britain of the Government's postal and telegraph employes, 100,000 of them, was averted just in time. It would have been a particularly nasty time for such a strike. That, by the way, is one of the pleasant possibilities of Government ownership. The only difference would be that in this country the number would be so much greater and the chances proportionately so. Chicago, 111., Inter-Ocean, October 7, 1913: It may be expedient to take over or destroy the present telephone and telegraph companies: The Inter-Ocean is among those who believe it is not expedient. In other countries "Government- ownership" has made lower efficiency and high costs. 21 Some years ago it was figured, nor was the accuracy of it denied, that British government ownership of the telegraph had loaded upon the taxpayers a loss of $175,000,000, increasing at the rate of $5,000,000 a year. Boston, Mass., Truth, November 22, 1913 : Public ownership of railroads, telephone and telegraph would mean socialism ; and if anyone wants to know what that means let him spend a few months in New Zealand, as Mr. Geo. W. Moore, of Brookline, Mass., recently did, getting first hand information in the Socialist hot-bed of the world. "The country," said Mr. Moore, "is run by labor leaders for the benefit of labor leaders and is practically bankrupt. English capitalists have furnished the money to keep the Government going so far, but further loans have recently been refused. ************ "Practically the only right enjoyed by the alleged freeman is the right to be poor and abstain from work." ************ "Graft, inefficiency, laziness, indifference, poverty and vice seem to be the principal products of the system, and in the production of these it is all that can be desired of the vicious opponent of modern civilization." Lawrence, Mass., American, November 14, 1913: Mr. Samuel found, to' be sure, as we all know it is true, that on this side of the Atlantic long distance calls do not always get through, that there are exasperating delays and that wrong numbers are sometimes given here as well as in England. But more important to know is his remark that in his official opinion the British Government telephone will some time become as efficient as he found the American private system. That means, of course, that if we make telephonic communica- tion a government service, it is more likely to deteriorate than improve ; for the British Post Office is so efficient that it would be folly to expect that American Government telephone would be as well administered as the British. Leslie's Weekly, New York, November 6, 1913: Governmental telegraph ownership is not an open question, however. Great Britain has en- joyed government ownership and operation of telegraph lines for the past forty years, and in that time its Post Office telegraph monopoly has produced a total deficiency of $87,000,000. At present taxpayers of Great Britain are paying at the rate of $4,200,000 annually to enjoy the luxury of gov- ernmentally operated telegraph lines. The principal reason for this is uncommercial and extravagant management due to political control. New York Commercial, October 31, 1913: The British taxpayer and telephone user is growing highly indignant over the delay in revi- sion of telephone rates. He knows that the present telephone rates are a burden and a cause of confusion, and he evidently believes that the telephone business has been in the hands of the Post Office Department long enough to give its officials a chance to plan a permanent system and rate of charges for the use of the telephone. The Liverpool Daily Post, a staunch government organ, has recently devoted considerable space to the scandalous break-down in the telephone service in that city and to the utter inefficiency of the postal authorities when handling this branch of their work. The telephone business is in its infancy in England and its growth has been completely stunted since the government got hold of it. With the post office in charge of the telephone service in Liverpool the suburban post offices in that city close very early in the evening and the telephone switchboard closes with the rest of the post office. The result is that telephone service is practically suspended through the residence districts and a large part of the business section of a city that is the third port in the world, and from eight o'clock in the evening until seven o'clock in the morning two-thirds of the subscribers to the telephone service find their communication completely cut off. 22 Boston, Mass., Commercial Bulletin, October 11, 1913: According to the London Times, Parliament was induced to transfer the telegraph lines to the State in 1871, in the belief that the .monopoly would be a lucrative one for the country. To what extent this expectation has been borne out is disclosed by the statement that the forty years of Gov- ernment monopoly of the telegraph have produced a loss of more than $87,000,000. That the Government has not made a commercial success of the telegraph is due, says the Times, to extravagant management and political control. Traffic has shown a steady increase and innumerable improvements have been made in equipment and methods of working, yet it costs the Post Office appreciably more to handle a fifteen-word message of to-day than it cost to handle a thirty-word message of twenty-five years ago. St. Paul, Minn., Dispatch, October 9, 1913: England went into the experiment with the telegraph, found the estimate cost quadrupled, and after doubling the Government investment encountered an annual deficit of over $5,000,000, and now coldly proposes to deteriorate the service and increase the rates to balance the books. With our rap- idly increasing efficiency of service and cheapening of cost, what would America think of a proposal like that ? Minneapolis, Minn., Tribune, October 8, 1913: France has one telephone for each group of 171 inhabitants. We have a telephone for each group of 12. Our service is so superior to that of the French that their journals are now calling for improvements in the direction of the "American standard." England has had an extremely unhappy experience with her state-owned telegraph system. She paid four times the estimated cost to obtain it ; and she has since doubled her capital expendi- ture. The investment has never earned interest ; it has failed to pay operating expenses. The New York Times gives the commercial loss of the transaction at "$175,000,000 some years ago," and states "that the current loss is $5,000,000 annually." Germany owns both telegraph and telephone. Her Government managers have estimated the annual depreciation of the plant at 45,000,000 marks. A sinking fund has been maintained several years at that rate. The maintenance has lately required so large an increase that this allotment has been reduced to 25,000,000 marks. Seattle, Wash., Times, September 23, 1913: In Europe they are under national control as a war measure because the Governments need the financial returns accruing from their operation. Neither of these things is present in the republic. The experiments along these lines previously have not been distinguished by their success. The Government cable to Alaska is a case in point. Seattle residents have had a bitter experience with the high rates imposed on communication with the territory. ARBITRARY AND IRRESPONSIBLE ADMINISTRATION {Foreign — Official) British Parliamentary Debates, Official Report, April 24, 1913, p. 632: Mr. Alan Svkes: * • * With regard to the question of the telephone service * • • I may mention a case * * * which also happened to an hon. Member on this side, and the hon. 23 Member happens to be myself. My telephone, which is often out of order, was out of order on a certain occasion, and I sent a message to the officials. Nothing was done, and it was still out of order the next day. I sent another message the next day, but nothing was done. I did not send a message the next day, but I sent one the day after. Still nothing was done. I then took advantage of the fact of being a Member of the House of Commons, and addressed a personal letter to the Post- master-General and put the position before him, and with his usual courtesy he took it up, and the question was inquired into. The reply he sent me was to the effect that no record had been made of the first complaint, that an operator had received the second complaint and had considered that the machine was all right, and had not reported it to the engineer, and that the engineer had exam- ined the third complaint and could not find anything wrong, and it was only when I communicated with the right hon. Gentleman and the engineer made another examination that it was found that there was something omitted and that the telephone was not in proper order. If I had not had an opportunity of communicating with the right hon. Gentleman the telephone would in all probability still be out of order, and I should probably have done what a good many others do who use the tele- phone, got tired of making complaints and perhaps thrown up my telephone. Truth, London, England, December 11, 1912: His Honour Judge Gye made some very strong comments last week at the Portsmouth County Court upon the iniquity of telephone contracts. He had to determine a claim by the Postmaster- General for telephone rent. The subscriber had given notice of discontinuance. The Post Office authorities cut off communication, but left the instrument and then sued for the rent. This under the contract they are empowered to do. Judge Gye remarked that it was "a shockingly immoral con- tract," and he said so "advisedly and intentionally." He had no option but to decide for the plaintiff, for the case was governed by a decision in the High Court, though he was convinced that an injus- tice would be done the defendant. He, however, marked his opinion by making an order for pay- ment of the amount claimed at the rate of 6d. a month. His Honour's condemnation of the contract is not a whit too strong, and I trust his remarks will be brought to Mr. Herbert Samuel's notice. Anyone who has read the contract through knows that it is inequitable, and places the subscriber absolutely at the mercy of the department. British Parliamentary Debates, Official Report, May 20, 1912: Mr. Godfrey Collins: I desire to draw the attention of the Postmaster-General to three points on his estimate. The first is the misleading profit shown by the Post Office. The second is the large and growing loss on the telegraph service; and the third is the danger that the telephone service may show a loss to the public in future years. According to the House of Commons Paper No. 96, the profit on the Post Office is £5,153,000. Naturally, the House and the public think that is the true profit ; but when we come to analyse these figures more closely, we find that the Post Office do not charge themselves with the cost of works and buildings, amounting to £569,000, nor with rates and taxes, amounting to £126,000, nor even with stationery and printing, amounting to £196,000. In other words, the profit is a fictitious profit to the extent of 20 per cent., and the figures which I have mentioned include these and other charges amounting to £890,000. So, therefore, the profit made was positively some 20 per cent, less than the statement issued by the Postmaster-General led us to anticipate. From the Report of the Royal Commission Appointed to Investigate the Postal, Telegraph and Telephone Services of the Commonwealth of Australia (ordered to be printed October 5, 1910) : 70. The Department furnishes annual statements showing only revenue receipts Stetemenu from its chief branches, and the total expenditure, including new works, for all branches Useless pf t}jg service. Such statements are absolutely useless for the purpose of supplying the requisite information to determine the financial position of its several branches. 24 {Foreign — Editorial) ' The Times, London, England, December 26, 1913: "Hope Deferred" sends us the following details of his experiences in obtaining the telephone. Commenting on the state of "hopeless confusion" they indicate, he says: — "In our case it was stated that 'special steps' were being taken. The result of these 'special steps' was that we had to wait for the telephone 23 days after handing in the agreement. If such unwarrantable delays occur with 'special steps,' whatever must it be like without them?" November 5, 1913. — Applied to X'auxhall Bridgeroad Post Office, asking what to do to obtain a telephone. They directed me to the Westminster District Post Office. They in turn directed me to the Contracts Office, 34, Gerrard-street, Soho, to whom I wrote on November 5. November 11. — Having received no reply, I applied to a third post office and was given a third diflFerent address — namely, 144a, Queen \ictoria-street. I went personally here and found what I needed — the telephone agreement, which I filled in and signed then, November 11. November 14. — Wrote to the Controller, but received no reply. November 17. — I wrote to the Secretary, G. P. O., complaining of the excessive delay and difficulty in getting the telephone. This resulted in a printed fomi by return of post saying that the matter should receive attention. November 19. — Still dead silence from the Controller's office, so 1 wrote again reminding them that we were wanting the telephone and that they had had the agreement eight days, etc. November 20. — No reply. Wrote again to the Controller. November 21. — Received a letter from the Controller (dated 20th inst.) saying that the mat- ter had been referred to the sectional engineer and that the matter would receive "prompt and adequate attention," etc. I spoke to the sectional engineer by telephone, and he knew nothing about us, but promised to send a man round to-morrow (22nd). November 22. — .Again spoke to the sectional engineer by telephone. He denied his promise of yesterday ; said that they were busy, that they were making special efforts in our case, and that we should have to wait. November 24. — Practically all my letters to the Controller are completely ignored ; wrote to him once again to remind him about our telephone. November 25. — Received a letter from the Controller dated 22nd, and altered in pencil to the 24th, acknowledging my letters of the 19th and 20th inst., and saying, inter alia, "special steps are being taken to complete the circuit at an early date." It is interesting to observe that it took two days to post this letter. Another letter about the entry in the Telephone Directory dated 22nd, and altered in pencil to the 25th, shows a period of three days Ijctween writing and posting. November 27. — I received two different letters of the 26th inst. from the Controller giving our "probable" telephone number. One of these letters also states "the completion of the installation is receiving special attention." On November 28 and 29 the instruments were put up in our offices, and it had been promised by the sectional engineer, by telephone, two or three times, that the installation should be completed by the 29th at the very latest without fail. December 1. — I telephoned to the sectional engineer, and he said, "Oh, isn't your telephone completed yet?" He advised me to ring up the Controller's office, which brought forth the usual promises, but no result. December 2. — Wrote a formal letter of complaint to the Secretary, G. P. O. Communicating with the sectional engineer by telephone, I was now informed that there was some more outside work to be done, but that we should have the telephone in a few days. December 4. — The telephone was actually completed, and we were able to use it from about 4 p. m., 23 days after the handing in of the agreement. Leicester, England, Mail, December 23, 1912: In reference to the State acquisition of the telephones, with which we dealt in a leading article last week, a local correspondent calls our attention to the onerous and one-sided conditions which the 25 Postmaster-General has inserted in the form of contract which subscribers have now to sign. He objects particularly to the seventh and ninth paragraphs of the "general conditions" under which the Postmaster-General can break the contract without penalty or responsibility while, if the subscriber is guilty of the slightest lapse in any matter whatever, he is liable to a fine in the form of "liquidated damages" where no damage is done. Under the tenth paragraph enormous powers of inspection are given, not only to the subscribers' premises, but "all other premises under the subscribers' control," while another paragraph provides that the certificate of any subordinate official of the Post Office shall be "conclusive evidence" of the matters certified. Our correspondent wrote to the Postmaster-General pointing out clause by clause the objectionable points in this agreement, only to be told that it had been drawn up by a solicitor and could not be modified. "Those who think," adds our correspondent, "that the State ever can run a business at its best, speak without knowledge." The Times, London, England, December 19, 1913: Charles Straker and Sons (Limited), Bishopgate-avenue, who were sued in the City of London Court, yesterday, by the Postmaster-General, for 18s. 9d., balance due for telephone calls, complained that they had been charged for 30 times as many calls as they had had and said they defended the case in order to make a public protest. Mr. Registrar Wild, in giving judgment for the Postmaster-General with costs, told the defendants that there was no remedy, no matter how much they were overcharged, as they had signed an agreement admitting that the Postmaster-General's books were unquestionable, however inaccurate they might be. The defendants must go to Parliament and get the agreements altered. They could not do without the telephone, and yet they could not get it without signing an agreement under which they had no voice in the question of the number of calls. Troy, N. Y., Record, October 6, 1913 : Prince Charles Wreed, captain of a cavalry in the German army, has been fined $7 because poor telephone service caused him to tell the girl operator that he considered her office a hog pen. The Prince's offense comes under the head known as beamtenbeleidigung. Being a Government employe, the girl could insist that her service should be respected. In extenuation of his act the officer said that the service was really almost worthless. While the prosecution acknowledged this con- dition, the fact that he had been discourteous could not be overlooked. Fortunately for many of our people, they are not using the telephone service which is under Government direction. Rochester, N. Y., Post-Express, October 6, 1913 : Complaint against the wretched telephone system of one of the Government exchanges in a European city brought out the official threat that if the expression of dissatisfaction did not cease, the telephone service in the city would be discontinued for one year. There is talk of the nationalization of American telephones and telegraphs. The Daily Mail, London, England, September 16, 1912: The Englishman's home is supposed to be his castle. Alas ! it is nothing of the kind. Every person who signs a telephone contract opens his gate to the wooden horse, and from that moment the particular Briton becomes the veriest slave, helpless, without redress, and minus the most ele- mentary rights, save the right to pay and overpay — in advance. The amazing thing is that the Briton does it, but he does. The Daily Mail, London, England, February 6, 1912 : Most serious of all the complaints against the telephone service is the financial loss entailed by wrong calls. Correspondents protest against their helplessness in the matter. They have no remedy in check- ing the calls debited against them. They must pay for whatever number of calls the authorities state is registered against them. Argument, the subscriber's own record of his calls are of no avail. If he does not pay the official reckoning, his telephonic connection is peremptorily severed. 26 (American — Official) Congressional Record, January 15, 1914: Mr. Calder: * * ♦ An employe of a railroad or any other corporation or employer can bring suit in a civil court for damages for injuries received, and can recover an amount assessed by a jury. An employe of the Government is estopped from bringing any such action, no matter what the cause of his injuries may be, and he lias no redress whatever. From official statement issued by Postmaster-General Burleson, for publication in morning news- papers of May 30, 1913: * * * Notwithstanding the great zeal displayed in the effort to place the Department on the so-called paying basis and the resultant injuries to the service, the claim of the former Postmaster- General that the service actually yielded a profit in 1911 has no foundation in fact. * * * It is to be further noticed that the balance-sheet as heretofore prepared concerned itself en- tirely with the revenues from postage and the operations of the Department and expenditures under the appropriation for the service of the Post Office Department. In addition to this, the Department should be able to make a complete statement of its financial status, which should include the admin- istrative expenses of the Department, the expenses of the Auditor's office, and a fair charge for the maintenance of Federal buildings used exclusively or in part for post-office purposes as items of cost. It has not been the custom to include these in the balance-sheet. From the Message to Congress by President Taft, January 17, 1912: Notwithstanding that voluminous reports are compiled annually and presented to the Congress, no satisfactory statement has ever been published of the financial transactions of the Government as a whole. Provision is made for due accountability for all moneys coming into the hands of officers of the Government, whether as collectors of revenue or disbursing agents, and for insuring that authorizations for expenditures as made by law shall not be exceeded. But no general system has ever been devised for reporting and presenting information regarding the character of the expendi- tures made, in such a way as to reveal the actual costs entailed in the operation of individual services and in the performance of particular undertakings ; nor in such a way as to make possible the exercise of intelligent judgment regarding the discretion displayed in making expenditure and concerning the value of the results obtained when contrasted with the sacrifices required. (American — Editorial) New York Sun, December 22, 1913 : A wise and virtuous Congress has decreed that the post-offices over which Mr. Burleson presides shall sternly repress the habit of correspondence on Sundays, and every conceivable obstacle is cour- ageously interposed between the man who wants a letter and the object of his desire. Would a Gov- ernment telephone be conducted on the same high principles ? It is notorious that many frivolous conversations are carried on over the wires on the first day of the week. Moreover, these conversations are frequently for the promotion of plans that have not the approval of those who would restore the New England observance of the day to a country which has somewhat discarded it. Could a Government telephone system countenance such trivialities? Certainly not: the exchanges would shut up on Saturday nights and open on Monday. St. Louis, Mo., Times, December 22, 1913 : It is a perfectly simple proposition that those who seek to govern large public services should be amenable to the law. So long as individuals seek to perform these public services, there are always methods of redress when injustices have been done. If these methods are not practicable or if they are not applied, the fault is one that can be remedied. But the government is greater than the law; and into its composition there go large numbers of men who are incompetent and others who are dishonest. 27 Chicago, 111., Inter-Ocean, May 27, 1913: In connection with the collapse of the recreation pier at Long Beach, Cal., on Saturday, by which thirty-six persons were killed and nearly twice as many seriously injured, there are circum- stances which should give pause to some eager advocates of "public ownership" and of the "more government" proposition generally. The pier belonged to and was erected by the city of Long Beach, which is a seaside suburb of Los Angeles. It was built eight years ago, and is stated in the Associated Press dispatches from the scene to have received since no repairs on the part which fell, directly in front of the "municipal auditorium" which was a part of the structure. In a word, public ownership did not secure any better attention to the safety of the public using the pier than would have been given by the most "greedy and reckless" private ownership. In fact, it probably secured less attention, for had the pier been a private enterprise the responsible public officials would have had somebody else instead of just themselves to inspect and regulate and keep up to the mark, demanded by considerations of public safety. Saturday Evening Post, December 14, 1912: There is hardly a state, city or town in this country that makes an intelligible statement of its fiscal operations and condition. Every state, city and town publishes once a year a thing it calls a treasurer's report or an audi- tor's report — usually a very bulky thing, containing an interminable maze of figures. We venture to say offhand that, as to about two-thirds of these reports, the best expert accountant in the United States could not construct from them such a concise and intelligible showing of income, outgo, indebt- edness and cash on hand as the New York Stock Exchange requires from every corporation whose securities it lists. As to three-quarters of them, we venture to say that, if any such confused, occult statement were laid before the directors of a railroad, those directors would stand up in righteous indignation and discharge the whole accounting department on the instant. New York Times, April 3, 1912: There are those who are urging that we should administer the telegraph and telephone through the government, and who support the proposal by pointing to the success with which the Post Office is administered. This current year the Post Office reports a surplus * * * But the Post Office sur- plus disappears if it is charged with the cost of the buildings in which it transacts its business. If it were to be charged with all other unitemized costs, it might appear that the stamp which costs 2 cents at the Post Office window really cost the buyer as much again. It is sure that the Post Office itself has no idea what it costs to carry a letter or newspaper either one mile or a thousand miles. In other words, the Post Office shows a profit by ignoring the burdens carried by all commercial un- dertakings and transacts its business in defiance of the first conditions of solvency in private affairs and contrary to the principles it enacts for the guidance of common carriers. To-day the franking privilege burden on the Government rivals the former pass burden on the railways. Depreciation is an unknown entry in Government accounts. Income is so far despised that it is proposed to operate the Panama Canal without tolls, although there are other than financial reasons to the contrary. From "Principles of Economics" (1911, Vol. II., Bk. VII., Ch. 62), by F. W. Taussig, Pro- fessor of Political Economy at Harvard University : * * * Every person who has looked into the accounts of a railway or iron works or large manufacturing concern knows how necessary it is to analyze the figures, and, above all the state of the capital account, before judging whether the management has been good. To supervise public offi- cials, and to judge whether their administration has been efficient, becomes the more difficult as plant is larger and more complex. The more one is disposed to entertain general doubt as to the probable success of public officials, the more is one averse to intrusting such business to their hands. 28 COMPARATIVE EFFICIENCY (Official) Congressional Record, January 19, 1914, page 1973: Mr. McCumber: * * * No one will deny that we can not expect the same personal interest, the same curtailment of expenses, the same unfailing watchfulness when the Government has to pay the bills as when we must pay them ourselves. Government ownership of railways, telegraph lines, and other public utilities means bad service, extravagance, and a menace to the rights of all the people. Extract from a paper by R. C. Erskine (Civil Service Commissioner, Seattle, Washington), read at the First Annual Conference of the League of Pacific Northwest Municipalities, October 24 and 25, 1912: The other day I asked four large employers in Seattle which they would rather hire of two men of equal natural capacity and training, one having worked for a city and the other for a private employer for the five years since leaving school. Three of these employers said they would hire the man who had been with a private concern and the fourth said that while private employment was more apt to develop a good worker than public, it was the policy of his house not to hold a man's past business experience too much against him and he would give either of the applicants a chance to make good. From "The U. S. Government's Shame" (1908), by Edwin C. Madden, Third Assistant Post- master General from July 1st, 1899, to March 22nd, 1907, pp. 25-26: The average time of Postmasters General is less than two years. They come in at the head of a service of which they know practically nothing and never stay long enough to learn. If all the Post- masters General for the past twenty years could be taken one at a time and questioned, it is doubtful if one of them would be able to tell offhand the rates of postage on mail matter, much less any of the vast details of the great system. British Pariiamentary Debates, Official Report, May. 20, 1912, pp. 1599-1600: Sir G. Doughty : * • • I listened with very great interest to the right hon. Gentleman's state- ment respecting the telephone service. I know it is very bad, and it requires very great changes before it might be called decently comparable with either the United States or Canada. * * * In the United States they have over eight million telephones in constant use, and they can do it on the very best lines owing to their long experience and their method of working. British Pariiamentar}- Debates, Official Report, June 19, 1911, p. 86: Mb. Morton : * * * I am sorry to hear to-day that the Americans are so far in advance of us in this matter of the telephone. We pride ourselves, I suppose, on being as much advanced as other people, but it is worth while bearing in mind, now we are told that the Americans are a long way in advance of us in their telephone service, that the service there is under a private company and. that they are obliged to look after their customers better than a Government Department. British Pariiamenur>' Debates, Official Report, June 19, 1911, p. 52: Mr. Herbert Samuel (Postmaster-General) : ♦ ♦ * We have been closely watching the de- velopment of the telephone system in the United States — the country which was its original home, and where it has reached its highest development. For many years representatives of my Department have been visiting the United States in order to acquire information there. The head of the telephone branch of the Post Office has been to the United States, and the chief engineer has also made an ex- haustive studjr of the telephone system there. The telephone traffic manager has only just returned. We have established a system of travelling scholarships for Post-Office engineers which will enable 29 Defects in management them to go over to the United States for considerable periods in order to make a minute study of the telephone in that country. From the Report of the Royal Commission appointed to Investigate the Postal, Telegraph and Telephone Services of the Commonwealth of Australia (ordered to be printed October 5, 1910) : Disregard of ^^"^- * * * So far as Construction materials are concerned, the Department mrthlfds! '""""^ has been working in a most primitive manner, exhibiting an utter disregard of ordi- nary business methods, and entailing a cumbersome and expensive system of purchase. 9. Your Commissioners, during their inquiry into the management of the Post and Telegraph Department, discovered defects which were due to lack of efficient management as distinct from the system of control, and also defects which were in- herent in the system. In framing this Report endeavors have been made to broadly and system. Separate the defects of system from those of management. It is evident that an in- ferior system, even under sound management, would make for an indifferent service. When, however, an inferior system is associated with a weak and limited manage- ment, the results are disastrous. Report of Select Committee on Post Ofiice Servants (ordered printed by House of Commons. July 24, 1907) : Salaries of Sorting Clerks and Telegraphists {In the Provinces). Par. 254. Representations were * * * made (to the Committee) that the minimum estab- lished wage was * * * insufficient. Par. 256. The department replied that in their opinion the rates of pay and the avenues of promotion were adequate. * * * "That the Government was obliged to tolerate, owing to Parlia- mentary pressure, a degree of inefficiency which in private employment would lead to dismissal of the employee." (Editorial) The Daily Mail, London, England, January 2, 1914: Why is it that Government ownership and management of the telephones is practically always a failure? Why is it that for every thousand Europeans there is only one telephone, while for every thousand Americans there are fifteen? Why is it that the country which has done most to improve the telephone, both technically and commercially, and to popularise its use is the country in which its operation and development have been, and still are, exclusively the work of private enterprise? Why is it that not one of the innumerable discoveries that have transformed the telephone industry in the last thirty years has emanated from a Department of State, that European Governments have been the last to adopt them, and that the verdict which experts are obliged to pass upon them, with, perhaps, two partial exceptions, is that they have not learned their business ? Why is it that there are great and famous towns in Europe at this moment where methods and machinery that were abandoned twenty years ago in America are still in use? Why is it that throughout the length and breadth of Great Britain and the Continent hardly a single efficient long-distance service is to be found ? Why is it that in New York one can invariably get the number one wants, and get it at once, while in London one has often to wage a prolonged and embittering battle with a slow operator, insufficient lines, and a con- versation — if any conversation ensues — that is only audible when it is interrupted? The broad answer to all these questions is that the alertness and enterprise that are essential to telephone development cannot be expected from a Government Department. The characteristics of the bureaucratic mind and temperament forbid it. The organization of a Government office, with a virtually irremovable staff, forbids it. 30 The Daily Mail, London, England, December 27, 1913: Mr. Samuel has recently returned from a visit to the United States and Canada. The contrast between the telephone service he encountered there and the parody of it over which he presides at home must have filled him with mortification. Nor can he well have escaped realising that the es- sence of a telephone system, and the sole test by which its value can be judged, is its efficiency ; that it is either efficient or it is nothing but an exasperating mockery ; and that a cheap service which is also unreliable is far more expensive than a comparatively dear service that can always be depended upon. The Times, London, England, December 3, 1913: On the other hand, the fact remains that in America the exchanges, with practically the same equipment as is used in London, are able to give their subscribers a much more prompt and efficient service, as a matter of practical certainty. The shortcomings of operators in this country must not, therefore, be attributed entirely to the arduous and harassing nature of their work. The root-fault appears to lie in the system, in the conduct of the telephone business by a Gov- ernment Department instead of by private enterprise. The Times, London, England, July 20, 1910: In most European countries the need for rapid electrical communication is just as great as it is in America, and were the supply as efficiently organized as it is in America there would be almost as great a demand for the telephone service here as there. The fact that there is only one European telephone to ten American telephones must point to some general cause of slow or arrested develop- ment. From the National Telephone Journal, London, England, reprinted in the Financial Times. London, England, February 22, 1910: In America, on the one hand, the telephone service is rapidly being developed to its utmost limits; in Europe, on the other hand, State-controlled, the telephone system is either, at best, moder- ately developed, or else absolutely starved. There is no doubt that in a well-organized company the freer stimulus given to individual merit and capacity, and the reaction of the latter both on the quality and earning power of a service, benefits a far wider circle than the shareholders — namely, the public at large. New York Press, February 15, 1910: U. N. Bethell, vice-president of the New York Telephone Company, has received a letter from M. Millerand, Minister of Posts and Telegraphs in France, asking if the New York Company will take on six young telephone officials from Paris and give to them a thorough practical training in the telephone business in all its branches. Bulletin des Abonnes au Tiliphone (Telephone Subscribers' Bulletin), Paris, France, Febru- ary, 1909, p. 3 (Translation) : In New York it takes 13 seconds and a half to obtain a local communication. In Paris, are we assured of obtaining a local connection at the expiration of 13 minutes? Telephone Engineer, Chicago, III., December, 1913: Former Postmaster-General James, a very high authority, has never favored Government own- ership of the telephone and telegraph business. He has gone so far as to say that were the Post Office department managed with the same skill, energy and business capacity that characterizes the manage- ment of our great corporation, it would be practicable to reduce letter postage from 2 cents to 1 cent and still leave a balance in favor of the Government. There is not a particle of doubt that a better mail service than we now have could be had under competent private management at a cost at least $50,000,000 a year less than the people are now pay- 31 ing. Neither our Government nor any other, can manage the telephone and telegraph with half the economy and efficiency of private ownership and direction. New York Press, December 27, 1913 : The Government will owe a billion dollars, say, but for all practical purposes of the Govern- ment it will be as if the deficit didn't exist. The Government will have to pay $40,000,000 a year in- terest, say, but for all practical purposes of the Government it will be just as if it wasn't paying any interest at all. The Government will have to pay into the sinking fund several more millions a year, but for all practical purposes of the Government it will be just as if it weren't paying in a cent. That is to say, this will all be so if the Government can and does operate the wire service as efficiently and as profitably as it is now operated. If it doesn't, of course, that will be a horse of a different color. And that is really the whole question. Waterloo, Iowa, Reporter, December 23, 1913: When the Government owns and operates the railroads, the telegraphs and telephones, rates will be much higher than they are now or else the Government will become bankrupt, as it cannot do any business as cheaply and efficiently as it would be done under private management, if interest on bonds necessary to acquire the properties is taken into consideration. Philadelphia, Pa., Inquirer, December 22, 1913: Telephone and telegraph companies are run on a scientific basis. Expenses are watched with great care. If anything goes wrong the remedy is promptly applied. Could the official red-tape of the Government be relied upon to reduce the efficiency of the private corporation? We seriously doubt it. England runs its telegraph through its Post Office Department, but financially it is a great loss. The deficit for forty years has averaged more than $2,000,000 annually. The present deficit is more than $3,000,000, and the recently acquired telephone service is another expensive experiment. Albany, N. Y., Journal, December 20, 1913 : Again it is the question of efficiency of service. Would efficiency be maintained at the stand- ard established by the private corporations ? These have every incentive to give the best service pos- sible. They need all the patronage they can obtain, since they are in business for private interests. The better they satisfy their patrons the more business they are likely to get. And they know that if they fail in any important particular, complaints can and will be made to agencies of the Govern- ment. New York Sun, December 20, 1913: The Telegraph and Telephone companies are among the best administered institutions in the world. Their systems are the result of long and sharp competition and the enlightened application of the best science and the most expert energy to the betterment of their systems. They are constantly meeting new demands of the business and they are voluntarily reducing rates wherever business permits. The Postal service — but perhaps it is better merely to say that for years to come there will be work enough for the Government in improving the machinery in its present field of operation, without undertaking the preposterous and unnecessary extension of functions which Mr. Burleson's annual report so complacently proposes. This is the plain truth of the matter. New York Press, December 20, 1913 : Whoever knew a Government building to be constructed as quickly, as cheaply and as success- fully as a corporation or an individual constructs a similar building? Whoever knew a Government service to be performed with the dispatch and efficiency a similar service is performed by a private enterprise? Whoever knew Government employees to work the hours that other men work? Whoever knew Government employees to put into their work, long hours or short hours, the steam that other men put into theirs? 32 Whoever knew the highest talent for organization, for administration, for business manage- ment, to seek Government jobs? All this has a direct and vital bearing upon the proposal of men close to the administration to put the United States Government into the telephone and telegraph business. Saginaw, Mich., Courier-Herald, December 19, 1913: Government ownership works very well in countries which have a comparatively stable admin- istration, in short there are no frequent changes of officials or reversals of policy. It is very ques- tionable just how well it could be expected to work in a country like our own in which there is likely to be a complete change of administration and an entire overturn of Governmental theories and prac- tices every four years. A business cannot be most successfully conducted which is likely to be placed in wholly different hands at short intervals, whose governing officials are likely to be appointed not for efficiency, but for political considerations, are likely to have had no experience with the depart- ment in which they are placed, and may fly off on entirely new and unexpected tangents. IndianapoHs, Ind., News, December 18, 1913: We know, as a matter of fact, that Government management is always more costly than pri- vate management — and usually far less efficient. In England at the present time there is much com- plaint of bad telegraph service. Even our own postal service is far from what it ought to be. The Times, London, England, December 1, 1913: There is no doubt that the superiority of the American system has been attained in a great measure by administrative ability in its organizers and the wide field of opportunity, with few serious obstacles of competition, in which they have worked. Their outlook has been steadily national, not parochial. They have realized that defective telephonic communication is, in every sense, bad busi- ness, and that the factors constituting good service, in the order of their importance, are (1) speed and accuracy in securing connections; (2) volume and clearness of sound transmitted; and (3) cost. They have realized that the money value of the time and temper wasted by the public over a bad service is a far more serious consideration than any reasonable charges imposed for a good one, and they have therefore proceeded on the principle that speed and reliability are more important than cheapness. Telephone Engineer, Chicago, 111., November, 1913: Thousands who are responsible for good telephone service to-day have studied it with intense concentration for thirty years. We would respectfully urge that all politicians who contemplate the advocacy of Government ownership devote at least an equal period of time to its investigation. By that time either the political efficiency of the country will be wondeVfully changed or they will have decided that the thing cannot be done. Boston, Mass., Herald, November 28, 1913: Of all the agencies under heavens among men for conducting ordinary business, the Govern- ment of the United States is the least efficient. Its long range of operations — for Washington is a good ways off — its log-rolling by Districts and States, its necessary subordination to the demands of its organized employees, its redundant pay-rolls, all spell inefficiency. The general public pays the price, partly for the service at the time it is performed and later in general taxation. This is the way it is now paying for the Post Office and for the parcel post and for everything else. Government ownership once secured, would mark the end of improvement in the transmission of intelligence by these two agencies. Do you realize how private enterprise would run the light- houses? By an automatic arrangement, just as the electric street signs are flashed on and off and without the need of individual attendance aside from supervisors. Will the Government ever do this? Never. Its ^im is not to save labor, but to make it. Is Congressman Curley studying to find ways of 33 reducing the pay-rolls in the Charlestown Navy Yard? If he were would he remain Congressman long? * * * The visitor to the National Capitol, taken into the Bureau of Engraving and Printing, will there be shown presses turned by human hands, with the suave explanation of the Government-paid atten- dant that the work is of such a delicate character that no form of mechanical power can be safely ap- plied. This is sheerest humbug! There is not a shred of engineering testimony to that effect. If anything, the electric power of the present day is superior in uniformity and responsiveness to any that the human arm can supply. This is only one of the countless devices for making work, and openly advocated as such by the legislative agent who forced the requirement from a timid Congress. Springfield, Mass., New England Homestead, October 18, 1913: It took twenty years' persistent public effort to induce Congress to authorize parcel post. How awful it would be if, every time we wanted some improvement in railways, telephones or telegraphs, we had to wait for Congress to grant it. New York Times, October 4, 1913: It is interesting to nofe that it is always the prosperous private undertakings which the Gov- ernment covets in the interest of the people. The Government never pioneers and develops and pro- duces profit where none was before. The Government specialty is spending $2 in the place of $1, and hiring two men in the place of one. It is true that Government officials sometimes have delu- sions of grandeur in this respect, but the realization of the dreams are subject to such sad awaken- ings as overtook the British Government's dabbling with wireless communications. Th^ Saturday Evening Post, February 15, 1913: The statement that Collector Loeb, of the port of New York, will resign promptly on March fourth is only one among many instances which remind us that business wants able men, but the Gov- ernment does not. We understand Mr. Loeb has made an exceptionally good record as collector of the port of New York. If he had made an exceptionally good record for the Steel Trust or a railroad or bank the employer would naturally be anxious to retain his services. To that end it would make him every reasonable assurance of permanent tenure, higher position and better pay — without inquiring to what political party or church he belonged. As an employee of the United States Government he might have made a record that astonished the world, but the employer would have no use for him after March fourth — no inducement of permanent tenure, higher position and better pay to offer him. Brooklyn, N. Y., Life, February 8, 1913 : Professor Pupin of Columbia recently took exception to the casual remark of a gentleman who, being asked what he considered the three greatest institutions in the world, answered: the Roman Catholic Church, the German Army and the Standard Oil Company. Professor Pupin told him he was right only as to the last, for the three greatest institutions in the world were the Standard Oil Company, the General Electric Company and the American Telephone and Telegraph Company. Whether the professor was right or wrong these institutions testify to our organizing ability and if our government were run as they are, Germany would be taking lessons from us and one might talk of municipally operated subways without being popularly regarded as lacking in the upper story. From an article entitled "The Government and the Railroads," by Arthur T. Hadley, LL.D., President of Yale University, published in Youth's Companion, April 18, 1912: * * * An employee of the United States Government feels less assured of the permanence of his position than an employee of most of our private corporations. He is less certain that efficient service will result in promotion, and far more apprehensive of outside interference with his work by people who know nothing of the real conditions under which he labors. 34 SERVICE (Foreign — Official) Extract from Minutes of Proceedings of a Deputation from the London Chamber of Com- merce, which waited upon Postmaster-General Samuel, July 4, 1913: * ♦ * Those of us who visit America are quite satisfied that the trunk (long distance) serv- ice in this country is not in anything like the shape of the trunk service in the United States. I do not think anyone who visited the United States would say that the trunk service here could be com- pared with the trunk service over there. Letter from R. P. Houston, M. P., to Herbert Samuel, British Postmastef-General (The Daily Mail, London, England, June 13, 1913) : H the present chaotic and maddening telephone service you supply to the public is to continue I would suggest that the Government provide special lunatic asylums for those subscribers who will be driven mad by the use of what I believe to be the most inefficient and exasperating telephone serv- ice in the world. British ParliamenUry Debates, Official Report, April 24, 1913, pp. 621-622: Mr. Long : * ♦ * Since the telephone was taken over by the Post Office the actual service has in many cases not been so good, and complaints have enormously increased. I speak as one who has used the telephone himself at his own residences under the National Telephone Company and to- day under the Post Office. I have found nobody whose experience differs from my own, and I say that there were less complaints then than there are now, that I had less interruptions in the conversa- tions which took place, and that the system worked better and more smoothly. British Parliamentary Debates, Official Report, April 24, 1913, p. 594: Mr. Goldman : * * * There is no comparison between the trunk (long distance) service here and that in the United States. In the United States the trunk service is known as a no-delay serv- ice, while in this country it is known as an all-delay service. Statement by C. S. Goldman, M. P., in an article in The Daily Graphic, London, England, March 3, 1913: Our telephones may truly be described as "the get-them-when-you-can service." This is not good enough. The post is regular. Deliveries can be relied upon to be made at a certain hour ; even telegrams have some certainty in time ; and when one person at one end of the wire wishes to speak to another person at the other end of that wire he should be able to do it quickly and well. The tele- phone in this country is a disappointment as a vehicle of efficient and reliable communication. From Parliamentary Debates, Official Report, Great Britain, May 20, 1912: Mr. Baird: I wish to say a few words about the telephones in London. I think the transfer of the telephones to the Government has been a proof of the calamity of pushing upon the Govern- ment the control of a monopoly upon which the comfort of the public depends. After a considerable experience of telephones in a great many countries, I have no hesitation in saying that there is noth- ing, even in Abyssinia, half as bad as the telephone service in London to-day. British Pariiamentary Debates, Official Report, May 20, 1912, p. 1660 : Sir Gilbert Parker : • • ♦ that reform has not been carried out in the telephone system is evident to everybody who has suffered as I have from morning until night, having a good deal of business to do over the telephone wires. There has been nothing said to-day in criticism of the tele- phone system which is not abundantly justified, because if you go to the utmost comers of the world you will find a better system in existence than is to be found in this country, and particularly ini London. 35 The Daily Mail, London, England, February 9, 1912: Lord Devonport, chairman of the Port of London Authority, wrote in The Times yesterday as follows : "As Parliament is not at present available, may I be allowed through the publicity of your columns to inquire of the Postmaster-General on what date he hopes to restore the telephone service to its normal state of efficiency and usefulness? At the moment, so far as the Port Authority is con- cerned, it has ceased to be a reliable aid to business." From "La gestion par I'Etat et les municipalites" (State and Municipal Mismanagement), by Yves Guyot, Ex-Minister of Public Works, France, 1913, pages 349-50 (Translation) : In 1905, on returning from the United States, I found again, in Paris, all the charms of the telephone. I rang, but it was only at the end of one or two minutes that the operator answered. I heard calls, other numbers, conversations ; and I waited until they were good enough to say, "They don't answer," — referring to houses where employees are stationed at the telephone permanently, — or else the refrain, "Line is busy," which, of course, cannot be verified until later on. I took a notion to complain. As a result, I had to do penance for a fortnight. No one could get connection with me, nor could I get connection with anyone else. I felt that I had earned a re- ward for my patience. The Administration, obsessed by this subscriber who complained so persist- ently, said to me at last : "Come and see the Gutenberg exchange." I went to see the Gutenberg exchange. I spoke of the United States, where, in New York, even in the busiest hours, all connections are made almost instantaneously. "What do you expect?" said the official who accompanied me, and whom I met in New York. "Those are private companies !" From Official Report, by Senator Emile Dupont, in the 1912 Budget, Post & Telegraphs, in French Senate Document No. 35, Appendix to Stenographic Report, Session of January 30, 1912, pages 74-75 (Free Translation) : COMPLAINT OF THE BOARD OF TRADE OF THE CITY OF VALENCIENNES. * * * We are bound to state that, at present, it is useless to count on the telephone as a rapid means of communication between Paris and our city. The Postal Administration has known this fact for several years. At the end of the year 1908 it made arrangements for the construction of a third circuit between Paris and Valenciennes. The work of line construction commenced at the beginning of 1909. At the present moment it is not yet finished. Now each time that this subject is brought by our Chamber of Commerce to the attention of the Administration the answer is received that opera- tions are continued without interruption, that they are pushed with vigor, but there is no result. Now what is the need of taking three years in order to construct a telephone circuit of 230 kilometres (143 miles) ? Isn't this disconcerting? Statement of Deputy Joseph Noulens, Reporter of the Committee of the French Chamber of Deputies on Posts and Telegraphs (as published in Le Journal, Paris, reprinted in the National Tele- phone Journal, London, England, September, 1908, p. 24) : The universal indignation 4 times greater than in the British system. Allowing for difference in population, there are more than four American telephones to one British telephone. This disparity is increasing rapidly in favor of America, as the development of the American system is increasing just twenty times more rapidly than that of the British system. If the comparison is extended to the whole of Europe, it is found that the Bell system has just twice as many telephones as all Europe. The entire group of twenty European countries with an aggregate population of 405 millions can only muster 2,583,000 telephones as against the 5,142,692 telephones of a single organization in America, serving a population of be- tween 80 and 90 millions. The telephone development in proportion to population is therefore ten times higher in America than it is throughout Europe. From the London, England, Times, July 20, 1910: In Europe the general existence of State telegraph monopolies has doomed the telephone to a Cinderella-like existence, and no fairy prince has yet appeared from among the ranks of the politicians with sufficient insight to recognize the possibilities of the suppressed and harassed telephone and to 61 secure them full scope. The fortunate Americans have no State monopolies, and both telegraph and telephone have been left to work out their own salvation as industrial enterprises. Under these conditions the telephone service has experienced a prodigious development. The wonderful facilities provided by a system of instantaneous and direct communication appeal readily to such a practical people as the Americans, and the efficiency and scope of the telephone in America have been so steadily improved and extended that the telephone service has become part of the daily business and social life of the people to an extent unapproached in any European country. Extract from "Public Finance," by C. F. Bastable, Professor of Political Economy at the Uni- versity of Dublin, Ireland (3d Edition, 1903, Book II, Chapter 3, Pages 210-211) : The dealings of state agencies with new inventions are the worst blot on public administration, and it seems that there is this risk in the state telegraphs, that though they are quite up to the stand- ard at their inception, they almost insensibly fall behind as it advances with growing knowledge. This consideration belongs to economic policy rather than finance, which, however, suffers from any hindrance to commercial expansion and is certainly not likely to gain by state telegraphy. (American — Editorial) Boston, Mass., Advertiser, December 22, 1913: Another serious objection to Government ownership is that under it expansion would be much slower than at present. The telephone companies are pushing their lines constantly into new territory and opening up a larger part of the country. Very few will contend that the Government would attempt to extend its lines into new sections except after petitions had been brought by the people therein. And even then a vast amount of red tape would have to be unrolled before anything would be done. In other words, instead of leading the demand, the Government would follow it, which means a great deal to the development of the country. * * * The initiative of private enterprise always has been far greater than that of the Government, in any line, for a number of reasons. And it is difficult to see how this can be changed, because of the absence of direct responsible authority in Government matters, and the divorce between the operating and financial departments. Nothing could be done until the money had been provided and the delay in Congressional appropriation is proverbial. Northampton, Mass., Gazette, December 18, 1913 : As a private enterprise the telephone company is very successful and is also very accommodat- ing to public well-being. The Amercian telephone system will, in 1913, have gross revenues of close to $220,000,000, which means a gain during the last six years of $90,000,000, or 70%. The balance of net profits for dividends will be around $50,000,000, compared with $30,000,000 during 1907. The Bell system is devoting 31 cents of every $1.00 of gross to maintenance and depreciation, which means an outlay of close to $70,000,000 during 1913. New York Journal of Commerce, December 12, 1913: When a large sum of money has been embarked in plant adapted to a specific purpose, the public administration always looks with disfavor on any new invention that may involve the scrap- ping of that plant. While the same may apply to any large private enterprise, nevertheless while the field is open competitors with no accumulative plant are always to be found ready to risk their money in exploiting the new idea on the chance of reaping immediate profit. New York Commercial, November, 1913: If the city of New York or the Federal Government at Washington owned the telephone sys- tem of the municipality or the nation, as the case might be, and should make such ample provision for future needs as the private corporations are now in the habit of doing, the cry of graft and extrava- gance would be raised at once. No administrator of public aflfairs would dare to spend money intelligently in this way. 62 Extract from an article by Dr. Jacob Gould Schurman, President of Cornell University, pub- lished in the New York Tribune. February 25, 1912: The most that any government has ever done is to provide honest and efficient officials for the conduct of public business along lines already established and by the use of methods and agencies already familiar in private business. Creative epochs in industry are the work of individuals, not of governments. FINANCIAL CONSTRICTION {Foreign — Official) British Parliamentary Debates, Official Report, April 24, 1913, pp. 593-594 : Mr. Goldman: * * * Take the trunk (i. e., long distance) service to which the Postmas- ter-General also referred. There was an exclusive monopoly. The Government have been run- ning the trunk service for fifteen years and we can test their intentions and activities by their work in connection with that service. If we look at the records we see in the figures relating to trunk service the rapid development which is characterising itself in all branches of telephone ser- vices abroad. I find that in the years 1910 to 1912 there has been no actual increase. There has actually been a drop in construction which also coincides with a decrease in the additional circuits that have been added to the service. In 1910 the expenditure in respect of the service was £371,776; in 1911 it was £279,855, and in 1912 it was only £255,000. In other words, the expenditure on the trunk service has declined by no less than one-third. In 1911 they added no fewer than 182 fresh circuits ; in 1912 there actually is a reduction down to 145. During this period there has been a steady increase in telephones in the local areas and it is an elementary fact that the more people use the local service, the more people require the trunk service. No doubt the Postmaster-General did rec- (^;nize the neglect of his own service in the matter of these trunks, because he suddenly came forward last year and stated to the House that he intended to spend in the coming year £1,000,000 on the trunk service. Again, the promise of the Postmaster-General in that respect has not been real- ized, because, instead of having spent £1,000,000 as he intended to spend, on the trunk service, the expenditure only amounted to approximately £500,000. British Parliamentary Debates, Official Report, April 24, 1913, pp. 592 ff.: Mr. Goldman : ♦ ♦ ♦ The United States ♦ ♦ * spent last year no less than £8,000,000 on additional plant, and propose to do the same this year, as compared with the insignificant amount which the Postmaster-General now proposes to spend on the telephone service. This continued delay in carrying out necessary construction is most discouraging to those who had hoped for efficiency in the Post Office management. When we faced the Postmaster-General last year with our criticisms, he silenced us by saying that he intended to spend £2,700,000 on the telephone service this year. Again he has not fulfilled his promise. From the Report of the Royal Commission Appointed to Investigate the Postal, Telegraph and Telephone Services of the Commonwealth of Australia (ordered to be printed October 5, 1910) : PMjtian fcitiBc 45 jhg starved condition of the services is largely answerable for the imper- fect working of the telephonic and telegraphic installations. 63 46. The reason assigned by all the officials for the failure to place the ser- vices in proper working order was want of sufficient funds. There is evidence that the Department in 1901 endeavored, through the Treasurer of the time, to obtain the necessary funds to place the services in an efficient condition by resorting to a loan, but Parliament refused to sanction this proposal. The curtailment of funds at that AHe^ed want of period was apparently the result of the desire to keep the cost of Federation within a limit of £300,000 per annum. The adoption of that course, in spite of the de- mands of the Post and Telegraph Department, is, in the opinion of your Commis- sioners, evidence that the system of management is faulty, in that it permitted the Treasurer to assume financial control of services for whose efficiency he was not responsible. This aspect of the position is emphasized by the fact that the Treasurer was at that time aware of the necessities of the Post and Telegraph Department, not- withstanding which he returned to the States Governments the whole of the surplus revenue beyond their constitutional proportion. * * * fhe Central Executive, though representing to the Postmaster-General the omission to supply sufficient funds, should have more persistently urged upon him the results that would occur from a of funds. '^'"^**'''"'°' continuation of the starvation policy. This matter will be further dealt with in the financial section of this Report. 115. The result of unduly curtailing expenditure was pointed out repeatedly by the Department, and the required provision was made on the Estimates, but was reduced by the Treasurer. The longer reconstruction is deferred and the longer installation of a new system is postponed the more expensive the work becomes, on account of extensions made to the old system. Construction methods were found to MnitTucTion™*"' '" ^^ practically the same as in 1901 as the Department claimed it had been impossible methods. {q improve those methods since that date, although the adoption of improved methods would obviously have tended toward economy. It may be mentioned that between 1886 and 1904 the New York Telephone Company's plant was reconstructed three times to bring the equipment up to the highest standard, and to render the service more effi- cient. From 1900 to 1907 the Bell Telephone Company, United States of America, spent about £70,000,000 on telephone undertakings. From speech by Deputy M. T. Steeg, in the French Chamber of Deputies, Session of June 23, 1910 (French Senate Document No. 165) : The history of the telephone is only the story of successive programs, very brilliantly conceived, but never realized for lack of resources. (Here Deputy Steeg reports a series of transactions indicating how the administration of tele- phones by the French Government has been hampered through financial constriction, and goes on to say) : Next M. Millerand took up the study of the bill, completed a program of reforms and was looking for a disinterested person who would lend him the 100 million francs needed to effectuate the plan. Not being able to borrow for the needs of the services, the Administration asked the Cham- ber of Commerce of Paris to do what the Administration was incapable of doing. (Foreign — Editorial) Le Journal des Transports, Paris, France, December, 1912 (translation) : We said the State is a very poor businessman indeed. It is also a wretched financier. The 64 report of M. Dalimier, a radical who cannot be suspected of republicanism, furnishes us startling proof of this. *♦♦♦******** It is not necessary to add any more. The criticisms directed against the Postal, Telegraph and Telephone Administration in the Chamber and before the Budgetary Commission, will, alas, be use- less. All the irregularities, all the imperfections we have pointed out, are inherent in the system of operation by the State, of services for which it is unprepared. We repeat again and again that the State was not meant to be a business man. The criticism of the Post, Telegraph and Telephone Admin- istration can be applied equally to the Powder monopoly, the National Printing Office, the Match monopoly, the Arsenals and the State Railway Administrations. New York Press. June 21, 1910: Telephone interests here are watching closely developments in Germany, where criticism has been provoked because the supplementary budget for telephone purposes amounts to only 25,000,000 marks, as compared with 44,800,000 marks in 1907. 60,000,000 marks in 1908, and 45,000,000 marks in 1909. It is contended that the Post and Telegraph Department of that country is too parsimonious, and, in asking for so small an amount, has not paid proper attention to the need for improvement and extension of its system. The Times, London, England. July 20, 1910: The public of European countries finds itself denied a highly developed and efficient telephone service, and thereby suffers incalculable daily loss. European capital goes freely to America to develop the telephone there, but the European politician and the European Government official refuse to allow European capital, or any other, to develop the telephone in Europe. (^American — Editorial) Extract from the report by S. Gale Lowrie (appointed by the Wisconsin State Board of Public Affairs, 1912, to study Budget systems) : It takes but a small minority to block an appropriation. A slight majority in one house can refuse a grant for a service which the entire lower house, part of the upper house and the governor earnestly desire. This is a minority rather than popular control. The theory that the annual system of appropriations increases the control of the people over appropriations harks back to the time of limited appropriations for royal services and has no place in our modern legislative systems. Frequent comparisons have been made of late between governmental work and that of a busi- ness enterprise, and although there are well recognized differences between them there are many points of similarity. It would be impossible to conduct any industrial enterprise upon such a policy of temporary planning as the limited method of support implies. Every large project must have a design carefuly thought out and running through a period of years, and in order that a plan may have permanency it must have a method of support which is not likely to be interrupted at frequent intervals. TAXATION (Foreign — Editorial) New York Times, December 18, 1913: England's postal telegraph has produced a deficiency of i 17,455,861 sterling in order to make the British postal tel^raph a success. The taxpayers have paid a deficit averaging £400,000 for forty years and are now paying at the rate of £840,000. 65 (American — Editorial) Chicago, 111., Farm and Home, January 1, 1914: Admitting both the merits and demerits of the present system, unless cost of service were less tmder government ownership than at present, rates could be no lower unless the deficit was made up by general taxation. Higher taxes to offset the loss in the transportation department would be unpopular indeed. There is no magic in ownership and operation of utilities by corporation or by township, county, state or nation. It is a question of management. Receipts must be enough to pay all expenses or the deficit must be made up otherwise. Either way the public has to bear the cost. The peasantry of County Cork said when hoftie rule seemed imminent years ago: "We will neither plow nor plant because now the Government will support all of us." The Government is the people. Sometimes it is easier to supervise and control than to operate. Boston, Mass., Herald, December, 1913: It ought to be understood by all intelligent people that everything performed by public agen- cies, whether of city, state or nation, costs 50 per cent, more than the same service done under the support of self-interest and private initiative. And that extra 50 per cent, the public must pay for not necessarily in prices immediately affixed. The excess usually comes out of general taxation and is widely diffused. Syracuse, N. Y., Herald, December 18, 1913: If the Government should take over the telegraph lines and cheapen the rates of service, the real beneficiaries would not be the mass of the people, but only a relatively small proportion thereof. Whatever else might be said to the principle thus put in practice, it certainly could not be called the principle of the "greatest good to the greatest number." Extract from the address of Seth Low, President of the National Civic Federation, delivered at its Fourteenth Annual Meeting in New York City on December 11, 1913: I make no apology, therefore, for pointing out briefly, on this occasion, some of the difficulties attaching to government ownership and operation of railroads in a country like ours, with a Federal government evolved as ours has been, covering half a continent. Such information as I can command leads me to believe that in Germany, France, Australia, Italy and Austria, the earnings of the state- owned railroads in each country barely equal, if they do equal, the sums paid in taxation by the rail- roads of the United States. Providence, R. I., Daily Journal, October 12, 1913: How many of the farmers and the working men of the United States use the long distance telephone and telegraph? This is a question that has not been answered. Probably very few are interested in rates because they are not called upon to have long distance conversations. But if the Government should duplicate the existing trans-continental lines at an expense of several hundred of millions of dollars, no one could escape the heavy tax levy. Why should a man who has no use for long distance messages pay taxes for a government telephone system? Extract from an article in The American City (New York), April, 1913, by George C. Whipple, Consulting Professor, Brooklyn Polytechnic Institute: The recent special report of the Bureau of the Census on financial statistics of cities of over 30,000 inhabitants * * * showed that in 145 cities the annual revenue receipts had increased in eight years from $20.12 to $27.24 per capita, a gain of 35.4 per cent. The payments for expenses and interest increased from $16.37 to $20.53 per capita. The governmental costs were higher in the larger cities. In New York City the budget appropriations were $26.90 per capita in 1900 and $34.30 in 1910. The report also shows that in many cities, and especially in the larger ones, the bonded indebtedness is increasing alarmingly. 66 As long as the cities continue to grow and assessed valuations continue to increase, the danger ahead is not so easily discerned ; but what will hapi>en when our cities cease to grow, when the interest on the debts incurred begins to bear more heavily on the taxpayers ? Will the remedy be retrenchment or repudiation? Were the trouble confined to cities the case would be bad enough, but it is not confined to them. State debts are increasing, and county debts, and debts incurred by metropolitan districts and by public service corporations. Thinking people are becoming troubled as to how these debts are to be paid. EMPLOYEES {Foreign — Official) Hull, England, Eastern Morning News, November 24, 1913, reporting a mass meeting of postal employees at Hull: J. McCarthy (Chairman of the Postal Telegraph Qerks' Association) : ♦ ♦ ♦ The Com- mittee told them that in spite of repeated challenges to the staff no evidence was brought forward to support the proposition in the matter of wages, and that the Post Office servants suffered no disad- vantage as compared with other workers. He wanted to say that that was not true. His own asso- ciation, the Postal Telegraph, proved up to the hilt that the telegraphists employed by the private cable companies were in receipt of something like 30 per cent, higher wages than the Post Office workers. News item in the Daily News and Leader, London, England, October 28, 1913, reporting a meet- ing of representatives of the various postal unions : Mr. Stewart, secretary of the Postmen's Federation, explaining the objects of the conference, said the postal unions should join together in order to fight "the common enemy." He was sorry to have to refer to the Postmaster-General as the "common enemy," but it was no use mincing words. If there was one thing which had made it necessary for Ihem to consider amalgamation it was the publication of the Holt Committee's report. Article by L. G. Chiozza Money, M. P., published in the Daily News and Leader, London, Eng- land, October 10, 1913, referring to the report of the Holt Committee on Post Office Servants, Wages and Conditions of Employment: • * ♦ But the Committee use a very poor argument when they say that the Post Office has "no difficulty in recruiting a sufficient number of persons competent for the duties they have to per- form." That is the excuse made by every bad employer. Never was yet a sweater who did not assure you, and truly, that his victims were eager to take his pay, and that he could get heaps more at an even lower rate. Resolution passed by the executive committee of the Amalgamated Society of Telephone Em- ployees, published in the Electrical Industries, London, England, October 8, 1913: The committee particularly emphasizes the fact that no allowance has been made for the admit- ted increase in the cost of living ; it emphatically protests against the proposal to increase the number of working hours as applied to certain grades ; and rejects as totally inadequate and insignificant such paltry modifications of pay and conditions as are recommended. Further, it calls upon His Majesty's Government to deal immediately with the existing position, which can only be regarded as urgent and dangerous. Resolution of the Associated British National Telephone Engineers, published in The Electri- cian, London, England, October 3, 1913: This meeting of National Telephone engineers views with grave concern the recommendations. 67 of the Select Committee on Post Office Servants, and is strongly opposed to the acceptance of the report by His Majesty's Government, on the grounds that the recommendations would not appear to be based on the evidence tendered, and moreover the report lends itself to a harsh and prejudiced interpretation in its application to the staff transferred into the service of the State from the National Telephone Co. Many anomalies remain, such as the placing of officers in Post Office grades the maxima of which were, are, and will continue to be, according to the recommendations, below the actual salary the officers were receiving at the date of transfer; and the drafting of officers perform- ing the same duties and borne on the same class under the National Telephone Co. into different grades under the department, much to their detriment. The creation of artificial barriers as stumbling blocks in the lines of promotion of capable and experienced officers is regarded as a retrograde step, and highly detrimental to the maintenance of the high standard of efficiency attained under the Telephone Company. * * * The degradation of responsible supervising officers from the major to the minor staff, the imposition of longer hours of duty and the proposed transfer of officers to a grade inferior to that which they at present occupy is considered reactionary, arbitrary and unjustifiable on any grounds. The scales of pay and the annual increments proposed are quite inadequate, and incommen- surate with the increased cost of living, conclusive proof of which is given in the recent returns issued by the Board of Trade. Statement by Mr. L. S. Summers, organizer of the Amalgamated Society of Telephone Em- ployees, published in the Nottingham, England, Guardian, August 28, 1913 : Mr. L. S. Summers declared emphatically that the conclusions come to by the Holt Committee were entirely unsatisfactory. (Applause.) The whole of the transferred staff were indignant at the recommendations arising out of the transfer from the National Telephone Company to the Post Office. (Hear, hear.) The recommendations of the Select Committee meant an increase of 2j4 hours' work per week; while as regarded pay, whereas the Amalgamated Society submitted 27s. a week as a minimum living wage, the Select Committee recommended the miserable wage of 26s. — a disgrace to the Government of the country. (Applause.) Resolution of the Amalgamated Society of Telephone Employees, published in Morning Post, London, England, August 27, 1913: * * * This meeting expresses strong indignation at the unsatisfactory recommendations con- tained in the report of the Holt Committee. We pledge ourselves to support the Executive Committee of the A. S. T. E. in whatever action may be deemed advisable, but we are also of opinion that the Executive Committee should adopt a much stronger line of action to secure immediate redress on the many grievances still existing. Resolution of the National Joint Committee of Post Office Employees, concerning the Report of the Parliamentary Committee on Wages and Conditions of Service in the Post Office, printed in the Times,"London, England, August 23, 1913: * * * this meeting declines to accept the report of the Select Committee as a proper verdict on its just and moderate claims. It emphatically states that no juggling with pence will dispose of the admitted increase in the cost of living, and it regards the proposals to increase the working hours of the staff under the guise of a concession as an insult to the intelligence of the Post Office employees. Financial Times, London, England, April 2, 1913: Mr. Jeffreys, an official of the Amalgamated Society of Telephone Employees, was called be- fore Mr. Holt's Select Committee on Postal Workers' Grievances at the House of Commons yester- day, and on behalf of the staff of the National Telephone Company, taken over by the Post Office at the time of the transfer of the company's undertaking, complained that the Government pledge that no official should suffer by the transfer had, in fact, been violated. Their prospects of promotion had, he contended, been seriously depreciated. 68 Extract from a news item in the Herald, Glasgow, Scotland, March 22, 1913, giving an account of the annual meeting of the Amalgamated Society of Telephone Employees: The Chairman, in his inaugural address, said that they of the staff of the old National Tele- phone Company were now in a position * * * to appreciate the effect of the many disadvantages under the new conditions of service * * * Future prospects of the staff generally, find in particular the prospects of the electrical staff, were of so hopeless a character that many members had already given up the service in disgust. Those who, owing to the telephone industry in the United Kingdom being a State monopoly, and through various circumstances, must of necessity continue in the employ of the State, were working under State conditions with the iron of discontent scaring into their souls. ♦ * * The main point so far as the staff was concerned was that State service had been tried and found wanting. Extract from a resolution and comment thereon by Mr. Thomas (delegate for telephone em- ployees) at a meeting of the Birmingham Trades Council, published in the Birmingham, England, Post, December 9, 1912: "This meeting of the Birmingham Trades Council draws the attention of the Postmaster- General to the unsatisfactory condition of the staff of the late National Telephone Company, parti- cularly in the matter of lower annual increment, lower lodging allowance, overtime rates, sick pay, and lower maxima in the various grades, and calls on him to fulfill his promise made to the employees when the Transfer Bill was in Committee; and maintains * * * that the manner in which the telephone operators had been treated is a menace to progress which cannot be tolerated." In moving the resolution, Mr. Thomas * • * pointed out that the Postmaster-General prom- ised that the employees should be treated not only with justice but with generosity. Mr. Thomas gave several instances of reductions sustained by telephone workers. The workpeople had been classified in a disgraceful manner, many of the first-class certificated operators having been reduced to second and third class. From a pamphlet printed in 1910 by the Italian Postal Telegraph Qerks' Association, Hon. Filippo Turati, Member of Parliament, Italy, President (translation) : Even the foreign press has occupied itself with this problem (of the telegraph service), laugh- ing at us merrily. The Government, on *the other hand, has inverted things ; pays less for overtime labor ; has done even more ; paying everyone badly, it has forced the workers to struggle amongst themselves for this overtime work, degenerating into "Krumiri." And the Government is convinced that it will win much in this affair, and will make an excellent sj>eculation. The workers have understood, and everyone knows that the masters have nothing to gain by killing and exhausting the blood of the workers. But the government docs not yet understand these elementary matters, does not under- stand the danger that accrues to industry from tired and discontented workers which renders fraud inevitable. (Foreign — Editorial) From a letter from the Marquis de MontebcUo, President of the .Xssociation of Telephone Subscribers, to the Editor in Chief of Le Matin, Paris, France, reprinted in the Bulletin des Abon- nes au Telephone (Bulletin of the Telephone Subscribers' Association), Paris, France, December, 1913 (translation) : Note: — Roubaix ranks 12th in population among French cities. Permit me to request the aid of the wide publicity of the Matin to call attention to the truly scandalous conditions under which the postal, telephone and telegraph services operate at Roubaix. * * • I shall speak to you only of the telephone service, adding, however, that the postal and tele- graph services are no better organized. 69 The solitary, narrow staircase which serves the various floors is repulsively filthy and falling into ruins. The tottering railing is altogether lacking in several places. The rooms reserved for the various services are in the same state of dilapidation ; the walls have not been painted or papered for several decades; the floors are rotten and enormous holes open up under one's feet; the ceihngs are falling down and must be supported by timber braces and by props. These ridiculously confined quarters are arranged in a manner contrary to the most elemental laws of hygiene and of comfort; one roasts in them in summer; one freezes in winter; the atmosphere is not fit to breathe ; the arrangement of the furniture does not permit the removal of the dust that has accumulated for years ; a single little door serves as an exit for about fifty employees ; no measure of precaution has been taken against a conflagration, which is always imminent, unless the presence of a bucket of water can be regarded as such a precautionary measure. This bucket, however, also serves as a washstand for the whole staff of employees ! From a speech delivered at Tourcoing, France, by the Marquis de Montebello, the President of the Association of Telephone Subscribers, printed in the Bulletin de l' Association des Abonnes au Tele- phone (Bulletin of the Telephone Subscribers' Association), Paris, France, December, 1913 (trans- lation) : Note : — Roubaix ranks twelfth in population among French cities. The lecturer speaks of the visit which he made during the morning to the telephone exchange at Roubaix, which serves Roubaix and Tourcoing. "I saw there," says he, "a prehistoric installation; the old shelf -switchboard, which has been abandoned abroad for nearly thirty years, is still in use there. The offices are arranged under conditions contrary to all the principles of hygiene and even to simply humanitarian principles. It is disgraceful, ignoble, inhuman. If a business man had such offi- ces, the labor inspector would have them closed immediately. In the most barbarous countries," he adds, "employees are not treated as at the exchange at Roubaix." He mentions in particular that, for their only wash-stand, they have an old zinc bucket in which they have had to stop up a hole with plaster. From the Civil Service Gazette, London, England, October 18, 1913, referring to criticism by L. G. Chiozza Money, M. P., concerning recommendations of the Holt Committee on Post Office Servants (Wages and Conditions of Employment) : * * * Mr. Chiozza Money is a supporter of the Government, but he does not mince matters. He states quite plainly that the argument used by the Committee, and concurred in by the Secretary of the Post Office (i. e. — -that the Post Office has no difficulty in securing employees at the wages it offers) — is the argument which is used by every "bad" employer. He thus asserts that the Post Office is a bad employer. We do not dispute the truth of this assertion. The Post Office is a bad employer, and yet the Post Office is one of the most important parts of the machinery controlled by a State which claims to be "the model employer." The Electrician, London, England, August 15, 1913: The condition of affairs at the present moment is much more serious from the engineering aspect, for we understand that so numerous have been the resignations from among the engineering members in what we may term the "National Telephone section" of the staff that those in authority are becoming greatly concerned. * * * The reasons for the defection are alleged to be that the en- gineering staff generally is dissatisfied with the conditions in their particular branch of the State serv- ice, not so much from the pecuniary side (though there is discontent on that score), but because of the lassitude and absence of "momentum" which confronts them and seems to pervade the very atmo- sphere. These men feel that promotion is blocked for years to come, and that what little advancement they may hope to gain will be determined by seniority in the service rather than by their engineering qualifications. They feel that any initiative or foresight they possess is of no use to them, while their work is rapidly losing that absorbing interest it once had for them. The result is, we learn, that the best of the juniors are rapidly leaving the service, while the seniors of the old service, for whom the 70 task of obtaining other employment is more difficult, are tending to become slack and inert through the depression of their surroundings. The Telegraph Chronicle and Civil Service Recorder, London, England, July 18, 1913: The better pay and prospects offered by cable companies have been instrumental in depleting BM. (tel^raphic code for Birmingham) of two capable juniors * * * who have shaken the dust of the local telegraph office off their feet and started with the Eastern Company at a commencing sal- ary of no less than 8s. per week in advance of what they were receiving from the what-ought-to-be- but-aint model employer, and with the assurance of an annual increment worth the having and a max- imtmi such as would positively cause the death of some of our noble administrators if it were suggested to them that Government employees, doing the same work, should have a chance to attain. The Northern Whig, Belfast, Ireland, March 22, 1913 : We publish this morning some very interesting and important statements made yesterday by Mr. Preston, president of the annual Conference of Telephone Employees. According to his remarks, the whole telephone staff are simply disgusted with the conditions of service under the Government. The Glasgow, Scotland, Herald; March 22, 1913 : ♦ ♦ ♦ The State on the first serious attempt on a large scale to buy up and manage a public utility has failed to demonstrate that it is a model employer. The Government telephonist is worse off than he was when he worked for a private employer, whose first concern was to earn a dividend. Article by the Parliamentary Correspondent of the Daily Herald, Glasgow, Scotland, reporting a meeting of the Telephonists' Branch of the Postal Telegraph Qerks' Association, published January 22, 1913: Mr. W. J. Ash : * * • men who have to be experts in their profession, who work on con- tinuous and extremely responsible night duty, have the paternal incentive to good work of a maxi- mum salary of 30s. a week. * * • Increditable as it may seem, these men have not even been established at a regular post office rating. That is, their job is considered a sort of superior blind alley, and they are as good as shown the door after ten years' faithful service. Manchester, England, Evening Chronicle, December 11, 1912: That the employees of the National Telephone Company are anything but satisfied with their experiences since becoming State servants is indicated by the fact that a protest meeting on their behalf, is being called this week in Manchester. The "ideal employer" is, in many cases, demanding lower wages and longer hours than the old company found necessary to successfully work the system. The company's employees also have another legitimate grievance. When they were taken over promo- tion was promised on the basis of work done, but despite the fact that they had had in their hands an overwhelming proportion of the telephone exchanges and lines throughout the country very few of the superior positions have been given to them. ♦ • • Here, again, we have an example of broken promises and favoritism unworthy of this "model employer," ♦ *" ♦ Neither are the public any better pleased with the change, and the net result of the transfer has been another proof of the unsatisfac- tory character of the much-vaunted State Services. Manchester, England, Evening Chronicle, E>ecember 11, 1912: It is customary for a certain class of writers and speakers to hold up the State as the ideal em- ployer. • * * But it is well known that Post Office workers have many real grievances which they cannot get remedied, and now it appears that the vagaries of State management are causing seething unrest in the Labor Exchanges and the Telephone Service. The grievances in both cases appear to be quite legitimate, and they are bad enough to bring about organized effort to secure readjustment of conditions. Under-payment for the work done and preferential treatment in regard to promotions are the chief causes of complaint in both cases. 71 Leeds, England, Mercury, November 15, 1912: A memorial submitted to the Postmaster-General on behalf of the telephone employees sets out that grave unrest exists amongst the staff all over the country, particularly amongst those em- ployees who have been taken over from the National Telephone Company's staff. ************ The chief allegations are that the men and women employees are considerably worse off with respect to ordinary, overtime, and Sunday pay, sick pay (reduced by one-third in the case of non-es- tablished employees), and persons, while hours are longer in nearly every case. Pall Mall Gazette (London, England), November 13, 1912. Article by Filson Young: A little light was thrown for me the other day on the mysterious cause of the inefficiency of the telephone service. I was talking to a linesman as he ate his dinner outside one of those curious^ little combinations of tents and caves which establish themselves for an hour or two at the comers of London streets. I asked him why, if the same staflf had worked the system under the National Telephone Com- pany, they could not do so with equal efficiency under the Government. "It is quite true," he said, "it is the same staff, but the conditions aren't the same. Our pay remains the same, but our conditions are less good. All our old arrangements have been knocked out and no new ones put in their place. Take my case. Under the National Telephone Company I could have gone on being promoted until I became a" — I forget what. "Now I can only go on to such and such a grade, at thirty-five shillings a week. * * * "Now," added my friend, as he prepared to descend again into the cave, "a few people feeling like that in a service make no difference. But when you get thirty or forty thousand people all dis- satisfied and all discouraged — well, the service is bound to suffer. It stands to reason, don't it?" Birmingham, England, Post, November 2, 1912: Widespread discontent has prevailed among telephone employees since the transfer of the service to the State, and meetings are being held throughout the country, under the aegis of the Amalga- mated Society of Telephone Employees. Grievances, it is said, are felt in practically every department of the service, but they are declared to be more acute in the electrical and engineering sections. These departments were considered by the Post Office authorities to be unworthy of a proper grade, and a large number of the employees were classified as "unestablished workmen." Emphasis is laid on the fact that although the men in this department are qualified electricians, and that many of them have passed examinations and gained certificates, in some cases in the provinces the rate of pay has been 5j'2d. and 6d. an hour. Some of these engaged in these sections receive 29s. 3d. per week, but the average is considerably below that earned before the transfer. It is further declared that the majority of the employees have to work longer hours, while the rate of pay for overtime and Sunday work has been reduced; sick pay has also been reduced to two- thirds in the case of unestablished workmen, and pension benefits have, as the result of the lack of classification, been abolished in many instances. John Bull (British weekly published by Horatio W. Bottomley, M. P.), September 28, 1912: Is it not a puzzle that everybody is complaining since the telephones were taken over by the State? The same staff is employed, and there is no apparent reason why it should behave differently. Now the unseen fact in connection with the Post Office telephones is that the whole staff is a seething mass of discontent. * * * Work, pay, prospects, sick-leave, pensions — in fact, all the es- sentials of their careers — remain unsettled, and it is not to be wondered at if the strain on their minds interferes with their alacrity and good temper. I)!*********** The result of all this chaos and pin-pricking is that men go about listlessly, and their overseers, being also disheartened, feel no call to remonstrate. * * * The men are loth to strike, but they feel 72 that they have been very badly treated and that they would be perfectly justified in taking strong measures to secure their rights. (American — Official) Congressional Record, January 19, 1914, page 2018 : Mr. Beakes: * ♦ * The fault with the civil-service system, as I view it, is that when a man gets in, after a few slight and immaterial promotions, there is nothing ahead. In business cir- cles, outside the Government service, a man begins down in the ranks and he is spurred on by the knowledge that if he shows unusual knowledge, skill, efficiency, or capacity, there is almost no limit as to how far up the ladder he may climb. There is always something ahead for him. But in the civil service, after one or two rungs of the ladder, there is a blank wall and nothing ahead. Congressional Record, January 16, 1914, page 1826: Mr. Griffin : * * * The employees in the Postal Service, and particularly the city and rural carriers, post-office clerks, and laborers, are paid only for the actual time they are employed. When overtaken by sickness or if they meet with an accident and become incapacitated for duty their pay ceases at once. It matters not if an accident was caused by the grossest negligence on the part of the Government, these employees have no redress for damages, not even for the loss of salary. They are laid off without pay until they are able to assume their official duties, and should the sickness or accident be of a nature to confine them for a period of more than 150 days they are notified to hand in their resignation, because a department rule provides that no employee will be excused for a longer period, no matter what the cause may be. Congressional Record, January 16, 1914, page 1826: Mr. Griffin : ♦ * ♦ It has been stated that the personnel of the Postal Service changes every seven years, and this will give an idea of the small percentage of those who do make it their life work. And now, Mr. Chairman, what is the reward for these men and women who give the best >ears of their lives to the public service? Well, it is hard for me to say it, because I detest ingrati- tude, governmental or otherwise, these employees are forced to resign when they become superannu- ated, unceremoniously kicked out, and told that they are inefficient and can no longer do the work re- quired of them — outlived their usefulness. It is one of the saddest incidents of our governmental life. Thrown out with the flotsam and jetsam of humanity who have no aim or object in life, because years of ardent labor have used up their energy and vitality. Yes, Mr. Qiairman, like an obsolete piece of machinery or a broken piston rod, they are thrown on the scrap heap. Congressional Record, January 16, 1914, page 1846: Mr. Reilly: ♦ * ♦ It was not until I became a member of this body that I learned that old worn-out letter carriers and other superannuated employees of the Government were not retired on part pay, but, on the contrary, were dismissed from the service when they could no longer keep up the pace. One of the first letters I received after being elected a Member of Congress was from an old postal employee, who had received an official notice from \\\s postmaster informing him that he had been oflF duty the allotted number of days in the year allowed by the department and that his resignation would be accepted. The simple statement of that heart-broken man asking me to assist in having him kept on the rolls made my heart ache. He had spent 34 years of his life pounding the pavements in all kinds of weather and at all hours of the day and night, and was known and loved by the citizens of the community he served, composed of all classes and creeds and political affiliations. He had not only given the best years of his life to the Government in building up the Postal Service, but was at an age and in such a condition that he could not hope to find employment of any kind. He was in such financial straits that if thrown on the world he would have to depend on the bounty of relatives or friends, or else become a public charge. What a cruel, cruel fate to leave a man to who had lived an honorable, upright life and was a model citizen. Why, Mr. Chairman, if this man had worked for a railroad company or a banking 73 institution or a large corporation of any kind, and was treated in such a manner, it would be the subject of public condemnation. But being a life-long employee of the Government no one seems to take more than a passing interest in him. We legislate here to curb the trusts and the railroads and corporations, and denounce them as soulless, but I believe it would be well for us to reflect and take a few leaves from the book of rules which govern them in their treatment of their employees. Congressional Record, January 16, 1914, page 1846: Mr. Reilly: * * * i believe the Government is the poorest-paying employer in the world, and I say that intending to include therein all branches of the service from the man who receives $800 to the man who receives $8,000. I believe that the same service with the same ability, the same intelligence, the same faithfulness given to this Government if given to a private corporation would receive in reward double the pay on an average that the Government pays to-day. New York Press, December 8, 1913 : Poor pay in the Government service is sending many scientific experts outside for employment, says George Otis, Director of the United States Geological Survey, in his annual report, made public to-day. In the last four and a half years forty-one geologists have left the Government, primarily to better their financial condition. The salaries they received from corporations averaged nearly two and one-half times the salaries paid them by the Geological Survey, says the Director. Statement by George von L. Meyer, former United States Secretary of the Navy, as reported in an article published in the Sunday Magazine of the New York Tribune, February 2, 1913: I hope to see the prominent and successful men in public life in this country in the future look for private secretaries among college graduates, because in that way they can find men specially prepared and equipped. But there can be no doubt of the fact that the great majority of government salaries are inadequate and that they are not particularly attractive to ambitious and energetic young men who are capable of great things. Statement by Henry L. Stimson, former United States Secretary of War, as reported in an article published in the Sunday Magazine of the New York Tribune, February 2, 1913: The purely monetary rewards and opportunities of the government will never be so great as those offered in the business and professional world elsewhere; and if the government service is to be maintained upon a high and increasing level of proficiency, it must meet competition from other quarters by some compensating features that will attract the best talent to its service and retain it. Statement by John C. Black, former President of the United States Civil Service Commission, as reported in an article in the Sunday Magazine of the New York Tribune, February 2, 1913 : Government employees who make good in scientific work, and even in clerical and executive work for the government, can always command better salaries outside the public service, and outside corporations are constantly looking for such men who have shown special efficiency. Article in the New York Tribune, Sunday Magazine Section, February 2, 1913: The son of a particular friend of Charles Nagel, Secretary of Commerce and Labor, came to him two years ago and asked him for a job. "I'll give you this job," said Mr. Nagel ; "but, in return for it, I want your solemn promise that twelve months from to-day you will lay your resignation upon my desk. In that way you will make sure of not hopelessly burying yourself." The young man kept his promise, resigned at the end of the year, and a little later secured a good position in private life, one carrying the assurance that, if he worked hard, he would go higher and higher in the business. In a vein similar to Mr. Nagel's, Champ Clark, Speaker of the House of Representatives, once said to a young man from his district, "My boy, you can do better for yourself by going back to the 74 woods at home and mauling rails than by taking a clerkship under the government. You'll get no job from me." Statement by Frank H. Hitchcock, Former Postmaster General of the United States, as re- ported in an article published in the Sunday Magazine of the New York Tribune, February 2, 1913 : He who intends to make his work for the government a life-work must decide to endure great sacrifices financially. After a man has reached or passed a certain degree of efficiency and responsi- bility in the service, he finds that he gets less money for it, far less money, than is paid by business concerns for relatively the same work. I should say that he discovers that he is working for at least one-fourth, perhaps one-fifth, of what he could be making on the OjUtside. And this is specially true because a man who does responsible work for the government is part of the biggest business concern in the world. He has to learn how, and know how, to handle tremendous problems, to become a trustworthy part of the gigantic system. He is taught to develop and exercise his judgment, and his self reliance must necessarily increase as he discharges his duties. Nevertheless, with all this equip- ment and ability, his salary does not rise proportionately. He recognizes that he could be making more money in other lines of endeavor. (A merican — Editorial) From an article reprinted in the Congressional Record, October 31, 1913, pp. 6517 ff : To have and to hold a Federal position in Washington is, in most instances, to mortgage one's better prospects and potentialities in the boundless world of independent endeavor for the temporary possession of a place easy to fill and the rewards of which allure because they are never disappointing in their regularity. Working for Uncle Sam, which at first is a vocation, oftentimes becomes a disease, and an in- curable one. The saddest plaint one ever hears in Washington — sadder than the wail of the rejected office seeker — is that of the helpless and hopeless Government clerk lamenting his unhappy lot. He re- alizes that he is "in bad," and yearns for one more chance to right himself. He is in the net and can not escape. He should like to extricate himself, but that is impossible. Perhaps his head has whit- ened and his hands have palsied in the service, and his years of steady employment are unrepresented by a dollar saved. His fate is sealed. The departments of Washington teem with professional men who are afraid to cut loose from a sure thing with the Government, be it ever so humble, to try earning a livelihood at the thing for which they are better adapted or for which they have qualified after years of preparation ; but they have shrunk into moral and intellectual cowardice. Conscious of strength for higher altitudes, they strain and fret in the denser atmosphere of the monotonous plains of Government life in Washington. It is pathetic to behold them — a struggling, heartless, hopeless mass. • * * * * * • *>* * * 4r Then there is the reconciled class of Government clerks, made up of those who are content to drift with the current of clerical routine. They are pursuing the lines of least resistance. The Gov- ernment gait is easy-going — no hurrying, no rushing, very humane hours, 30 days' vacation, 30 days* sick leave, two pay days in each month. "Oh, what's the use of kicking? Pretty soft, this, after all. Guess I will stick it out." So, in dourse of time, the reconciled clerk is lost in the great ag- gregate. Certainly there are hundreds in the Government service in Washington that make good, just as there are hundreds who could not earn as much compensation for their labor in any other field. But there is a lamentable disproportion between those who raise themselves above the level of medio- crity and those who never detach themselves from the undistinguished mass. When one clerk climbs 75 to the loftiest peaks in the mountainous range of successful endeavor, 50 never see over the heads of those that make up the army on the plains below. The percentage of young men who have used a position in the departments of Washington as a stepping stone to higher things is pitiably small. Of course, some have "graduated" from the de- partments to places out in the world, where their departmental experience was converted into a posi- tive help, but the number who have so succeeded forms a sad and disheartening contrast with the over- whelmingly larger number that have entered the departments in Washington only to remain in ob- scurity. Saturday Evening Post, September 13, 1913: Federal salaries have not been systematically revised during all the years when cost of living has been steadily rising. One soulless corporation after another has adopted a pension scheme for its employees. The Government has none. From the insufficient data at hand it is calculated that some- thing like ten thousand injuries to Federal employees rise every year from industrial accidents; and in compensating the victims the Government lags much behind the standards that the people through legislative action have enforced upon private employers. * * ** * * * * * * * * Doctor Rubinow reports in The Survey seventeen fatalities and a hundred and twenty-four in- juries in the rural mail delivery service, and eight fatalities and four hundred and forty injuries in city mail delivery — for none of which was a cent of compensation paid. Altogether he mentions six- teen hundred injuries, three hundred and ninety of them fatal, without compensation! On a like record from the Steel Trust, the halls of Congress would ring with denunciation — which illustrates again that the Government, though very free with advice to others, will not conduct its own business decently. Leslie's Weekly, March 6, 1913: There are many * * * able, experienced public servants * * * who will have to drop out because of the change in administration at Washington. Their retirement means a positive loss in dollars and cents to the government. It is a costly piece of business to train new men. Too great a proportion of our public officers are content to be rubber stamps. From address by Professor Thomas H. Reed, of the University of California, at the Fifteenth Annual Convention of the League of California Municipalities, published in Pacific Municipalities, February 1, 1913: Herein lies the inferiority of our public service to that of other countries where merit appoint- ment and good behavior tenure prevail for all offices, and to the service of private corporations whose self interest rigidly forces into power men broadly trained and tested by experience. We carefully select a clerk in the assessor's office, whose only duty is to drive a pen, by competitive examination, and then give the responsible work of the assessor to an amateur. The Evening Sun, New York, January 30, 1913: * * * Joseph Powers, who works at Station P, which is situated in the Produce Exchange, hurt his back and was laid up for eleven weeks when an iron stool on which he was working sorting mail collapsed. Powers's pay stopped the instant he struck the floor. All the money he got while he was off duty was $8 a week, which he received from the New York Letter Carriers' Association. 76 POLITICAL ASPECT (Foreign — Official) Extract from Minutes of Evidence, Second Report of the Royal Commission on Civil Estab- lishments, presented to British Parliament, 1888: Sir Thomas Henry Farrer, Bart*., called and examined. » 20.012. * * * There is a certain difficulty in the softheartedness of heads of departments and of ministers. But there is a very much greater difficulty in the pressure which is put upon them by members of the House of Commons. That is the real difficulty; the real difficulty of the public service is getting rid of bad men, and the real difficulty of getting rid of bad men is that no minister will face the pressure which is put upon him from outside. 20.013. {Mr. Hanbury.) Have you had much personal experience of that? — Yes, I have, be- cause I have been plagued all my life at the Board of Trade with inefficient men that I wanted to get rid of, but have been unable to do so. Debate in the House of Commons on the Telegraph (Money) Bill {London Times, June 29, 1907): Mr. Buxton, Postmaster General : When the charge was made against the Post Office of carry- ing on a telegraph service at a loss his withers were unwrung. The blame should really fall on the shoulders of the House of Commons, to whom he would say, if he could address it as an individual, "Thou art the man t" * ♦ * He thought it was only fair to the Post Office, and it might be rather advantageous to the House, that they should know who was the real culprit. It was not the Post Office, but the House of Commons. Unfortunately there it stood. ************ Mr. Austen Chamberlain: Said * • * he did not think that when it (the Post Office) undertook a commercial business it should run it at a loss, and he could not see why in matters of this kind the tax payer should be expected to provide a service for the minority who used it without exacting in return some reward beyond the bare interest or sinking fund of the capital. Hansard's Parliamentary Debates, July 6, 1905, pp. 1350 flf.: Lord Stanley (Postmaster-General) said the demands made by employees generally before the Bradford Committee, with the pay of all the supervising classes raised in proportion would have meant the payment from the Exchequer of no less than £2,500,000 a year. He was entitled to ask when was this to cease. Honorable Members knew better than he how they were being bombarded with applications from Post Office employees and other classes of Civil Servants for increases of wages. This had taken a form which was not illegal, but which he could not help thinking was an abuse of thdr rights, to wit, the form of a political threat. They had circulated an appeal in which they ex- pressed very clearly and very frankly their intention, and it was one of which the Committee would have to take note now, or it would be much worse in the future • ♦ * it was abusing, as it seemed to him, their rights as voters. It was nothing more nor less than blackmail. It was nothing more nor less than asking Members to purchase votes for themselves at the General Election at the expense of the Public Exchequer. Both sides would have to make up their minds that some means should be devised by which there should not be this continual blood-sucking on the part of the public servants. From "The British State Telegraphs," by Hugo R. Meyer, 1907, pp. 133-4: Before the Postmaster General had introduced into Parliament his scheme for improving the positions of the telegraphists, sorting clerks and postmen. Lord Frederick Cavendish, in his position as 'Scrred M Pcrmannit SccreUrjr o( the Britiib Board of Trade froni 1867 lo 1886, and a* member of the Playfair Commit- iiea oa the Ciril Serricc. 187«. 77 Financial Secretary of the Treasury, had written the Postmaster General as follows ; * * * "The persons who are affected by the change now proposed are, as you observe, no fewer than 10,000, and the entire postal service numbers nearly five times as many. Other branches of the Civil Service em- ployed and voting in various parts of .the United Kingdom, are at leaist as numerous in the aggregate as the servants of the Post Office. All this vast number of persons, not living like soldiers and sailors outside ordinary civil life are individually and collectively interested in using their votes to increase, in their own favor, the public expenditure, which the rest of the community, who have to gain their living in the unrestricted competition of the open market, must provide by taxation, if it is provided at all." From "The British State Telegraphs," by Hugo R. Meyer, 1907, pp. 234-235 : The Chancellor of the Exchequer, Mr. Austen Chamberlain, spoke as follows: "The question at issue was not one between the two political parties. It was above parties. It was whether there was to be good economical government in the country at all, or whether the Civil Servants in the employ- ment of the Crown could make such use of their votes, as citizens, for the purely selfish purpose of forcing the public to pay more for their services and so increase the expenditure of a great Department of State. He did not know how long they could go on in the position they had now reached, under which pressure was brought to bear on Honorable Members of all parties by their constituents. He was certain that if any scheme could be devised * * * so that they might take this question alto- gether out of the region of political life — not merely out of party life, but out of Parliamentary life — it would be a great advantage. It would tend to preserve the Civil Service free from that political in- fluence and independent of the changing fortunes of party which had been their great boast and security in the past." From "The British State Telegraphs," by Hugo R. Meyer, 1907, pp. 305-306: Of course not all cases of intervention by Members of Parliament are as successful as was the intervention of Mr. Bradlaugh, which resulted in the promotion of eleven men out of fourteen who had been passed over as "not qualified for promotion," or, as was the intervention of the Member of Parliament whose name was not revealed, which brought about the revocation of the promotion of the ablest man in the Post Office at Sheffield. Indeed, the principal effect of these interventions is not to force the Post Office to retrace steps already taken, it is to prevent the Post Office from taking certain steps. These interventions modify the entire administration of the British Post Office. They compel the Postmaster General and his leading officers to consider the political aspect of every proposal coming from the local postmasters, and other intermediate officers, be it a proposal to promote, to pass over, to discipline, or to dismiss. Statement by the Hon. R. W. Hanbury, M. P. ("The British State Telegraphs," by Hugo R. Meyer, 1907, pp. 177-178) : Another fact which Members ought not to overlook was the political pressure which was far too frequently exercised by Civil Servants upon those who also represented them. That was a great and growing danger. It was chiefly in London that thi.s pressure was brought to bear. * * * He would give an instance of the way in which these Civil Servants spoke of the expediency of political pres- sure. At one of the great meetings which had beer, held, a speaker said there were 8,000 postmen in London, and that he hoped every one would have his name upon the register (of voters), so that at election times they could exercise their influence upon candidates and advocate the cause of higher wages. He was of the opinion that political pressure ought not to be brought to bear in that way. Ordinary workmen could not exercise the same power, but Civil Servants could, and, whether their agitation succeeded or not, their position was secure, so that it was a case of "Heads, I win; tails, I don't lose." * * * Before the Royal Commission (of 1888), which had inquired into the Civil Service establishments, evidence was given with regard to the way in which pressure was brought to bear in certain constituencies upon Members, and he thought that the almost unanimous feeling of the Commission was that, if this state of things continued, it would be necessary to disfranchise the Civil Service. 78 From "The British State Telegraphs," by Hugo R. Meyer, 1907, p. 305 : If the answer given by the Postmaster General is unsatisfactory, the Member of Parliament gives notice that he will bring the matter up again on the discussion of the Estimates of Expenditure. In the meantime he brings to bear, behind the scenes, what pressure he can command. And he often learns to appreciate the grim humor of the reply once given by a former Minister of Railways in Vic- toria, Australia, to a Victorian Royal Commission, to the query whether political influence was exer- cised in the administration of the State railways of Victoria. The reply had been : "I should like to know how you can have a politician without political influence ?" From "The British State Telegraphs," by Hugo R. Meyer, 19U7, pp. 139-140: Sir Lyon Play fair, who had been Chairman of the Royal Commission on the Civil Service, 1874 to 1876, and the author of the Playfair Reorganization of the Civil Service, 1876, testified as follows before the Royal Commission of 1888 : "Unfortunately Members of Parliament yield to pressure a great deal too much in that direction, and they are certainly pressing the Exchequer to increase the wages and salaries of the employees of the Crown. * * * In a private establishment a man looks after his own interests, and if a person came to him and said : 'Now you must increase the salaries of these men by $100 or $250 all round,' he would say : 'You are an impertinent man, you have no busi- ness to interfere,' but you cannot say that to Members of Parliament, and there is continual pressure from Members of Parliament to augment the salaries of the civil servants." Statement by D. A. Ross, member of the Manitoba Legislature. (Winnipeg, Manitoba, Free Press. November 6, 1913) : In the administration of all the public utilities of the province, the elevators, the telephones and every other enterprise, the Roblin government have contaminated the name of the province with po- litical leprosy. {Foreign — Editorial) Winnip^, Manitoba, Free Press, June 15, 1912: It is matter of public knowledge that the telephone system has from the beginning been run as the main part of the Government's political machine, the Commission being subjected to constant in- terference and control, as in the case of the rate reductions on the eve of the last elections. That particular piece of Government control of the Commission is on public record, in the statement made by the chairman of the Commission, when under examination before the Public Accounts committee of the L^slature. The hiring of Manitoba Government Telephone employees has been on political lines, the Com- mission being loaded up with brigades of political workers. In like manner the hiring of rigs and the purchase of supplies for the numerous telephone gangs throughout the Provinc* have been conducted on political lines. (American — Official) From the report of VV. Q. Gresham, Postmaster General of the United States, year 1883, p. 35 : The establishment and operation of a postal telegraph as a monopoly, or in competition with private companies, would, it is insisted, reduce rates which are now exorbitant and protect the public against the abuses and evils deemed to be inseparable from the service as it exists. In either event an CBormous expense must be incurred. But without dwelling upon that consideration, it is clear that an efficient execution of either plan will necessarily involve the employment of a multitude of opera- tors, messengers, mechanics, and laborers, and thus largely add to the patronage of the Government. An increase of that patronage beyond what is indispensable to the public service is to be deprecated and avoided, and it is one of the dangers which threaten the purity and duration of our institutions. In Europe the telegraph is under the control of the public authorities. With us, the administration is the 79 Government in action, and may, for the time being and for all practical purposes, be considered the Government itself. In seasons of political excitement, and, to some extent at other times, is there not ground for serious apprehension that the telegraph, under the exclusive control of the dominant party, might be abused to promote partisan purposes and perpetuate the power of the administration? But if it could be kept entirely free from such influence, I should hesitate to sanction a measure providing that the United States shall become the proprietor of telegraph lines, and operate them by its officers and agents. Fitchburg, Mass., Sentinel, December 20, 1913: Former Senator Bourne of Oregon is quoted in a Washington dispatch to the following effect: "Senator Bourne states that he has not a dollar's interest in telephone or telegraph securities and that he is theoretically in favor of government ownership, though practically bitterly opposed to it. "The ex-Senator's most startling deduction is that government ownership would result eventually in complete domination of the government by its own employees, who would vote themselves such hours and pay as they chose. Mr. Bourne submits the following figures : Number 1911 Government civil employees 410,332 1912 Telephone employees 221,000 . 1912 Telegraph employees 40,000 1911 Railway employees 1,669,000 1909 Electric employees 209,729 1904 Water transportation 188,000 1907 Express companies 79,284 Total 2,818,345 Under government ownership and operation there would soon be more than three million gov- ernmental employees," Mr. Bourne says. He continues : "Taking into consideration the fact that in the last ten presidential elections the president has been elected by a plurality varying from 7,000 plus td little over 2,500,000, the thought naturally arises that three million governmental employees could absolutely control the government under our political machinery, the tendency being more pay, less service in governmental employment, resulting in resistless efforts on the part of outside labor to secure government employment because less onerous and more remunerative, with accumulative dissatisfaction and irritation in all private enterprises." Congressional Record, January 15, 1914, page 1753: Mr. Moon ; * * * You are drifting rapidly to the exercise of central power. If you shall adopt the policy of the purchase of the telegraphs and telephones, you will have proceeded far to the federalization of power. You will have added thousands of offices to your Government. If you should go further and become the owners of the railroads, you would see a vast army of people who would be in control, a Federal menace to human rights and human liberty under a Constitution and laws in which the people have no part in selecting the oflficers to administer. Washington, D. C., Post, December 11, 1913: Senator Bankhead, of Alabama, chairman of the Senate committee on postoffices and post roads, is a pronounced opponent of government ownership. "I recognize it is the tendency of the times, but it is a dangerous tendency," he said. "I don't want to see the government go into any business that can be transacted as well or better by individual enterprise." From The American Commonwealth, (New Edition, 1910, Vol. II, Part 6, Chapter 106, Page 701 ) , by James Bryce, British Ambassador to the United States : It (j. e. the railroad) can hardly be taken over and worked by the National Government as are the railways of Switzerland and many of those in Germany and the Austro-Hungarian monarchy. Only 80 the most sanguine state socialist would propose to impose so terrible a strain on the virtue of American politicians, not to speak of the effect upon the constitutional balance between the States and the Federal Authority. From remarks of Senator Joseph R. Bristow, of Kansas, before the United States Senate {Con- gressional Record, August 29, 1913, p. 4303) : I wanted to suggest to the Senator, by his permission, that there is a wide difference between the running of a wholesale house and the administration of a government position. The Senator knows well that the man in control of a wholesale house is interested in the development of a business for profit. The man in charge of a political office in Georgia or Kansas or any place else is appointed there, if it is outside of the civil service, nine times out of ten because of political service that he has rendered to members of the party in power. The Commissioner of Internal Revenue is not free to go out and select the men who he thinks will administer the office better as is the man in charge of a business concern ; he is bound by political obligations and ties. Now, we may theorize all we please, but that the Senator from Georgia knows to be a fact. From Preliminary Report of the Joint Commission on Business Methods of the Post Office De- partment and Postal Service, February 10, 1908: The appointments of postmasters, clerks in postoffices, and many other grades of the service are still largely affected by political influence, and it is to be feared that nominations made have often in- sufficient regard to the fitness of the applicant, to his previous experience, or to his familiarity with the routine of the postal service. Moreover, the frequent changes in the personnel of the service naturally operate adversely to its efficiency. As compared with this condition, in well-administered commercial concerns promotion is by merit alone, no other influences being considered ; and the different parts of the business are intrusted to heads thoroughly familiar with the whole routine work, who are held responsible for the work and are given practically a free hand in the selection, promotion, and retention of their subordinates. Congressional Record, January 20, 1914, p. 2035: Mr. Murdock: * * * Now, I do not take much stock in the battle that has raged here be- tween the two old parties about civil service. It is a resumption of the ancient and diverting game of the pot and the kettle. The Republicans say that the Democrats are not friendly to the merit sys- tem and the Democrats say that the Republicans are not friendly to the merit system. Both of them are right. Congressional Record, January 19, 1914, p. 1972: Mr. McCumber: • ♦ • Government ownership of railways, followed by Government owner- ship, as it must be, of other public utilities, means that the army of employees, organized as they always will be, will become the complete masters of the Government and the Govemm. nt but the subservient tool to the interests of this great army. That army will be powerful enough to dictate every policy of Government. No man in any district in the United States would be strong enough to make his race as a Member of Congress if his ideas of the value of the wages of these Government employees did not correspond with their idea of the worth of their services. Whenever the Government puts itself in the position of owner of public utilities, it becomes the prey oi an organized class of people, which will result in legislation against the mass of the unorganized people of the country. Congressional Record, January 17, 1914, p. 1958: Mr. Campbell : Suppose a Republican should have a higher grade than a Democrat for the same office, then what would you do? Mr. Cox : Ah. I have had to go up against that ever since I have been in Congress, I am sorry to say, where Democrats in my district who had taken rural-route examinations and were several points the highest in the grade. I have gone down to the Post Office Department and tried to get them to 81 appoint the Democrat, but was told that some Republican referee in the State of Indiana, after both Republican United States Senators were defeated, had to be consulted, and their orders had to be obeyed ; and the result was time and again that Democrats failed to get the position, although holding the highest grade. From the Congressional Record, January 17, 1914, p. 1959: Mr. Cox ; * * * I mean to say this, for the third and last time that I am going to say it, that if I have any control or any voice in the selection of persons to fill positions in my district where a competitive examination has been held, that if a Democrat gets on the eligible register he is going to get the appointment. Congressional Record, January 17, 1914, p. 1921 : Mr. Post : I want to give the gentleman a concrete illustration to show that the merit system, as it has been administered heretofore, has been indeed prostituted to politics. In the city of Spring- field, Ohio — and the gentleman is familiar with that city — we have a post office where there are 107 employees, and of that number only 6 are Democrats. I want to ask the gentleman if in the city of Springfield, in the application of the merit system, that office has not been prostituted to politics? * * * Right here, under the very nose of the Goddess of Liberty, right in front of the Capitol here, in the Congressional Library, you have 496 employees under the civil service, and less than 50 of them are Democrats. Have you not prostituted the merit system to politics in that case? Those people are there under a Republican administration. Congressional Record, January 17, 1914, p. 1958: Mr. Cox ; * * * You have evolved and manufactured a new definition of the merit system which has been a political merit system. By a political pull it has found its way into the appointment of civil-service employees so that you have filled practically every department with Republican em- ployees at home and abroad, the exceptions being indeed very few. You have paid no attention to merit, ability, intelligence, education. These things were wholly unknown to you in your appointments. You were governed solely and exclusively by the political rule of political expediency ; you have ap- plied this test faithfully; have never faltered or fallen by the side along this line. Out of 1,900 rural route carriers in the State of Indiana to-day I assert it to be a true fact, for I have investigated it, that less than 5 per cent, of this 1,900 rural route carriers are Democrats; the remainder were Republicans when appointed and Republicans to-day, and were it not for encumbering the Record I would place in it a volume of correspondence from 82 of the 92 counties in my State conclusively showing this con- dition to be true. Congressional Record, January 17, 1914, p. 1950: Mr. Steenerson : * * * The gentleman from Tennessee predicted dire results to the Govern- ment and the people if postal activities should be extended to telegraphs and telephones. I do not think we are ready for that. Certainly not as long as the spoils system in the Civil Service remains a debated issue. From the Congressional Record, January 17, 1914, p. 1959: Mr. Cox ; * * * i have seen school-teachers in Indiana carrying a two-years' license — and this requires considerable of an education in Indiana before one can earn a two-years' license — I have seen them stand civil-service examinations for rural-route carriers side by side with ward politicians, men with practically no education whatever, and yet invariably the ward politician received the job. Congressional Record, January 17, 1914, p. 1916: Mr. Kahn : * * * I am not surprised at the attitude of the gentlemen on the Democratic side of this House. The pressure for place is undoubtedly very great. Your Democratic constituents are demanding their reward. They want the jobs. They insist on their pound of flesh. Not alone are 82 the civil-service positions sought for, but various executive chiefs have demanded the resignation of postmasters, United States marshals, district attorneys, and other Federal employees, even though those officials still had two or three years to serve under their commissions. Happily some of these men have had the backbone and the courage peremptorily to refuse to surrender their commissions and to demand that their official conduct be investigated, to find out why they should be removed from office. Congressional Record, January 17, 1914, p. 1908: Mr. Rucker : ♦ * * There are Democrats growing up in the country everywhere who are entitled under a Democratic administration to recognition ; and if that means going back to the spoils system, then I am a spoilsman and I have no apology to make foi* it. (Applause.) Congressional Record. January 17, 1914, p. 1906: Mr. Borland: ♦ * * It has been my experience and observatiaon that not only was the postmaster named by some political officer in authority for political purposes and named without any special regard to his experience in that post-office business, but that same authority named also the assistant postmaster, and without consultation with the postmaster. And not only that, but it has frequently happened, I will say to my friend from Indiana (Mr. Bamhart), that the assistant post- master was named from the faction of the party that did not happen to land the postmaster. I have known of cases — and I have no doubt my friend has, too — where they not only did not work in har- mony, but where they did not trust each other personally, and I have always regarded it as a political blunder, if no worse, to put those men under political appointment. Congressional Record, January 17, 1914, p. 1^7: Mr. Cooper: Is it not true that under the policy or practice suggested by the question of the gentleman from Missouri (Mr. Rucker) assistant postmasters were appointed in this way: The Member of Congress wanted it understood that if John Smith was appointed postmaster it was done upon the express condition that John Brown should be the assistant postmaster, and that in many cases the postmaster had to ag^ee to that before he could get the appointment, and in that way the Congressman fixed up a part of his own machine? Mr. Rucker : That is exactly what I would do in every case, and I have no apology for it. Mr. Borland: It would be bad enough under the old conditions; but under the altered condi- tions, since the Post Office Department has become distinctly a business institution, there is no justifi- cation whatever for appointing these men for political purposes. Congressional Record, January 17, 1914, p. 1956: Mr. Cox : * • * On September 30, 1910, President Taft by an Executive order turned into the civil service approximately 2,400 assistant postmasters. Of these 2,400 assistant postmasters less than 500 of them had ever been subjected to or had ever stood a written competitive examination. The remainder of them, 1,900 in number, had beyond dou^t been appointed to their respective positions solely and exclusively because of their peculiar fitness politically. Congressional Record, January 17, 1914, p. 1956: Mr. Cox: * • ♦ We have had in this country a "pretended" civil service for the last 30 years or more. I call it "pretended" civil service because that is all it is, all it ever was, and all it ever will be until the Civil Service Commission amends its rules and regulations in regard to certifying eligibles who have passed a civil-service examination. Talk to me about merit system all you please. We do not have merit system under civil service, never have had, and never will have until the rules and r^ulations of the commission are amended so as to make it strictly a merit system. The trouble with the civil-service system as it is administered to-day, in my judgment, is that you give a leeway for any and all persons and parties to play "football" with it, and the Republican Party for 16 years has played "football" with it under the leeway. 83 Congressional Record, January 17, 1914, p. 1907: « Mr. Borland : * * * I do not even believe those men are appointed in all cases for party service. I believe they are often appointed for service to some political officeholder who has the rec- ommendation of their appointment. Mr. Rucker : The gentleman ought not to go that far. Mr. Borland: I will go that far. Mr. Borland: I say that they are appointed not necessarily for party services, distinguished as such, nor because their views upon party questions are sound, and would appeal to the mass of the voters in their district if they were candidates for an elective office; but they are appointed be- cause they have been politically useful to the man who recommends their appointment. Why, they may not have been serving the party. They may have been serving only a faction. They may have served only a political boss or leader. (Applause.) I object to either the postmaster or the assistant postmaster being made the official whip cracker over the heads of the men in the classified service, in the interest of either party, faction, or boss. (Applause.) Congressional Record, January 17, 1914, p. 1957: Mr. Switzer: How will you do in Indiana? Mr. Cox: Exactly as you have played politics and "football" with the civil-service law for 16 years ; I propose to turn the tables on you and do exactly as you have done ; and, so far as your State is concerned, I take it that if a Democrat gets on the eligible register there will be enough warm Democratic blood in the members of this House from the State of Ohio to see to it that Democrats are appointed. Mr. Switzer: Then you are not going according to the civil-service policy? Mr. Cox : Yes ; we are. We will be administering it exactly as the civil-service policy was administered by you and your party ever since you have been in power, and that is, see to it that every time a Democrat wins out in the written competitive examination, if he goes on the eligible register, see to it that he gets the position. Congressional Record, January 17, 1914, pp. 1957-8: Mr. Cramton : And thereby you have admitted that your party is to-day playing football with the civil service? Mr. Cox : This is exactly what you have done with the civil-service law for the last 16 years, and you know it to be true, and you cannot blame the Democratic Party for retaliating in self-defense. Mr. Cramton : Never mind your reason ; but you admit you are doing it. Mr. Cox : Whether you call it playing football or not, by your own example you have set the pace, and if we turn the trick on you, you should not blame us. I am a partisan ; of course I am, and frankly state to you that if a Democrat gets on the eligible register for fourth-class postmaster he is going to get the appointment if I can aid him in so doing. Congressional Record, January 17, 1914, p. 1958: , Mr. Cox ; * * * Now, in response to queries from gentlemen on the Republican side, let me give you an instance as to how you have played football in the past with public offices. I had a Republican friend two years ago who wanted to be reappointed postmaster in my district, and, being a member of the Committee on the Post Office and Post Roads, I thought I might give him some little influence with Postmaster-General Hitchcock. I called upon the General, and was told by him that the little post office in a little town of about 2,500 was on the auction block and that if the postmaster could deliver the delegates to the district meeting that would select the delegates to attend the national convention he could receive the appointment. I informed my friend by letter, and he car- ried out my orders to a certain point, but failed to carry them out to the final conclusion, and the result was that he did not get that post office. 84 Mr. Switzer: What was the highest bid? Mr. Cox : The bid was for the nomination of the Republican President in 1912. A Member: Who told you that? Mr. Cox : Mr. Hitchcock. Congressional Record, January 17, 1914, p. 1959: Mr. Fess: Do I understand that it does not matter what the regulation, the gentleman is opposed to civil service on the merit system? Mr. Cox: No; I am opposed to the way in which you have administered it, or your party rather. Mr. Fess : Then why does the gentleman not endeavor to Administer it differently ? Mr. Cox : Because partisans will administer it in a partisan way. Congressional Record, January 17, 1914, p. 1958: Mr. Cox : I am not quarreling with the Civil Service Commission. I imagine, so far as the examining of the papers are concerned, it is fair; but you have had an underground tunnel, a sub- terranean passage, whereby in some way or manner the Democrats in my part of the country have had no show on earth; and this became so obnoxious out in Indiana several years ago that bright, active, intelligent young men — Democrats — flatly refused to go forward and stand examinations. Speech of Representative Moon, Chairman of the Committee on Post Offices and Post Roads, published in the Congressional Record, January 15, 1914, pp. 1750-51 : Mr. Moon : * ♦ • There are, I believe, 2,560 assistant postmasters in the United States. If they had been properly examined and placed under the civil service, would 98 per cent, of them have been Republicans? No; it could not have been so. And yet that is the practical fact. If those 43,000 men in the fourth-class offices had been examined, would 95 per cent, of them have been Repub- licans? Gentlemen, you know how easily it is done. You know the manner of examination. I refer to these matters to show you that the examinations are never just what they ought to be. They may not always be fraudulent, but tliey arc not examinations for the purpose of .ittaining an efficiency record. They are examinations controlled by favoritism and prejudices. What is the result of the examination? How is it that all of these Republicans get into office and no Democrats ? The examination is certified to the department ; the three men, in the opinion of the examiners, that made the best grade arc placed upon the eligible list. There may have been one Republican and two Democrats who passed, or it may have been the opposite; but the Congressman, if a Republican from that district, is called upon to say which one of the three shall have the office, and, of course, gives it to a member of his party. I do not, from a partisan standpoint, blame him. But if the examination is held for the purpose of efficiency in the public service, there would be no question about the fact that, if it had been honest and fair, the man who obtained the highest grade would obtain the office. Congressional Record, January 15, 1914, p. 1758: Mr. Copley: * ♦ • In the spring of 1909 the Legislature of the State of Illinois was trying to elect a United States Senator, and at one time I counted in Springfield, the capital of that State, the city where the L^slature met, 168 Federal employees, all there for the purpose of trying to bring about the re-election of a man to whom they were under obligation for the generous salaries which they enjoyed and whose term expired forever March 4, 1909. Many of these employees spent months in a vain effort to continue that policy, which had proven so obnoxious to the people of the State of Illinois. From the 18th Annual Report of the Cook County, Illinois, Civil Service Commission, 1913 : During the preparation of the current budget the Finance Committee, at the urgent request of the heads of departments, increased the salaries of several of the "old and faithful employees," whose 85 services were described as "indispensable to the office." In February, 1913, when the Supreme Court declared the Civil Service Act, covering these positions, to be invalid, the department heads were pow- erless to save these "indispensable employees" who were swept away and their places taken by persons named from "outside" by the ward leaders. In one instance, an excellent teamster was named and forcibly appointed a stenographer. In another instance, a saloonkeeper, of undoubted parts in the liquor business, was made a clerk and his duties subsequently abolished to save the office books from ruin. In another case, a flat building janitor became a tax clerk. At least thirty of the politically appointed county employees are pluralists on the pay rolls of the state, city or park districts. Nine of them are members of the State Legislature. Congressional Record, October 10, 1913, p. 6235: Mr. Clark: * * * i am opposed to the whole civil-service propaganda. (Applause.) I am opposed to it because I believe it is hypocritical, insincere, and fraudulent in its every aspect, and, as my friend at my right suggests, damnable. Mr. Speaker, I am opposed to it because I believe with Andrew Jackson that to the victor belongs the spoils. Extract from one of the speeches of Theodore Roosevelt (published in the biography of the latter by Jacob A. Riis) : We hear much of the question whether the government should take control of the telegraph lines and railways of the country.. Before that question can be so much as discussed, it ought to be definitely settled that if the government takes control of either telegraph line or railway it must do it purely to manage it as a business undertaking and must manage it as a service wholly unconnected with politics. I should like to call the special attention of bodies interested in increasing the sphere of state action — interested in giving the state control more and more over railways, over telegraph lines and over other things of the sort — to the fact that the condition precedent upon success, is to establish an absolutely non-partisan system. When that point is once settled, we can discuss the advisability of doing what these gentlemen wish, but not before. Report on Lewis Publishing Co. and Various Lewis Enterprises, by the House Committee on Expenditures in the Post Office Department (House Report No. 1601), March 1, 1913: For nearly seven years the Government of the United States, through the Post Office Depart- ment and the Department of Justice, has been almost continuously prosecuting Mr. E. G. Lewis or the various enterprises with which he has been connected. * * * Every effort that the organized power of two great departments could exert has been used at enormous expense. As a result several large business concerns managed by Mr. Lewis have been ruined, among them the People's United States Bank, the Lewis Publishing Co., and the University Heights Realty and Development Co. ; many hun- dreds of small investors have lost their savings ; and the sad example has been shown the world of the powers of a great Government exerted successfully in an effort to ruin a single individual, and yet he has not been convicted of any violation of law. * * * William A. Ashbrook, Joshua W. Alexander, William C. Redfield, Walter I. McCoy. (American — Editorial) Utica, N. Y., Press, December 22, 1913 : Government ownership of the telephone and telegraph lines has not worked out successfully where it has been tried. Here in this country it would increase the army of federal office holders, helping those who are in to stay in and then when a change came there would be a general ousting of trained and competent employees to make way for untried and incompetent people who had a polit- ical pull; and there is too much of that already vvilhout going into it more extensively. 86 Philadelphia, Pa., Press. December 22, 1913 : Patronage in Government appointments is inconsistent with efficiency and has been in the past one of the greatest of public evils. Civil service reform seeks to get rid of this evil and under our latest Administrations very largely succeeded. That reform is now discredited and the spoils system is again in partial operation. While this lasts certainly it will be no time to add another great army of employees to the public service. If the Government shall ever assume the new responsibilities it should be only when merit, skill and experience are secure in service independent of the outcome of popular election. Burlingtpn, Vt., Free-Press, December 20, 1913 : « Would it be good for the country or for the employees themselves to be thrown into politics ? Would it make the likelihood of a fair voice in elections greater to have this vast addition to the mul- titudes of federal office holders? Would it make the task of governing easier to have all the necessary additional work laid upon the National Government? The wheels of Government creak a little already with the burden we put upon them. If we make the Government try to act so entirely beyond its sphere, where are we to end ? Will it not be demoralizing as well as expensive ? Torrington, Ct., Register, December 20, 1913: It may also be said that the control of the wires by the Government would be a precursor of conditions such as exist in France where the labor organizations have the telegraph and telephone em- ployees of the Government in their fellowship and thus have the Government in important respects under their thumb. Ft. Wayne, Ind., Ne-ws, December 19, 1913: Let all public utilities be Government owned, and we find the country in control of an office holding class, a class that is able to operate the Government in its own interests and which does not hesitate to do so. Nothing is as thoroughly conducive to National decay as a Government dominated and controlled by an office-holding class. Of necessity this class becomes parasitical as it increases its power and at the same time its efficiency declines. Its sole object appears to be to obtain the piaximum compensation for a minimum service, and to saddle itself upon the country like the old man of the sea. Asbury Park, N. J., Times, Deceml)er 19, 1913: If the merit system were employed in the Government service in practice as it is in principle, it might be proj>cr to supply an efficient army of employees to man this gigantic enterprise, but this is impossible. Conditions in the postal system are more nearly perfect than in any other under Govern- ment r^ulation, but even here the most desirable offices are filled by {)oliticians. Philadelphia, Pa., Inquirer, December 19, 1913: Most of the telegraph offices of the country, though not the larger ones, are in charge of railway operators. If these were sworn into the Government service it would not be satisfactory to the rail- ways, for the employees would naturally obey regtdations of the Washington administration. There would arise a body of Federal officials enormous in its extent and larger in number than all in the service to-day. What these might effect as a political organization could not be predetermined, but we may be pretty sure that it would be an important factor. New York Telegraph, December 13, 1913: Another danger lies in the fact that a mighty army of civil service employees would be added to the Federal payroll. They would clamor for a higher wage — and get it. And if the time ever should come when a majority of the voters of this country are beneficiaries of the public treasury, directly or indirectly, then the party in power will be self -perpetuating. We have a fair example of what an addition to the civil service list means in the compact, unionized body of rural free delivery carriers. When the rural free delivery was first proposed in Congress by Tom Watson, he made the point that such mails would be delivered, in the main, by 87 farmer boys who would be willing to earn a little extra money, say, $20.00 to $25.00 a month, be- tween spells at the plow. There is not to-day, possibly, a rural free delivery carrier in the United States who would lower his dignity by standing for half an hour between the plow handles. He is a political leader in his com- munity — a man of substance; and it may be remarked in passing that, almost to a man, the carriers opposed the institution of a parcel post, and, on the ground that it increases their work, they are now demanding more pay. Telegraph operators and telephone operators are not structurally different from other folk. They would soon be demanding not what their services were worth, but what the dominant political party was willing to award in anticipation of political favors to come. Chillicothe, Ohio, Gazette, December 12, 1913 : Chicago has had an alleged civil service system for years. Here is how the "Public Service" tells us it works : Forty thousand persons are on the public payroll in Cook County, in Chicago. It is estimated that one out of every 20 male adults is a city or county employee. Many are not under civil service regulation. The Cook County Civil Service Commission in September made a report declaring that the total amount of salaries paid county employees not under civil service could be reduced 50 per cent., or $1,072,000, provided ordinary efficiency supervision was used. The report described many instances of misfit political appointees. From the address of Seth Low, President of the National Civic Federation, delivered at its Fourteenth Annual Meeting in New York City, on December 11, 1913: * * * try to imagine, if you can, how the conflicting interests of different parts of the United States could be harmonized when the same government is responsible for railroad operation everywhere. The annual bill for the construction of public buildings for the Federal government has acquired the popular name of "pork-barrel" ; because it is so universally recognized that appropria- tions for this purpose are made to gratify local sentiment and to promote the interests of individual Congressmen more than upon the merits of the matter, as determined by careful inquiry. What pos- sibility is there that the administration of a system of National railroads would be, or could be, carried on under our democratic government in any other spirit ? And in what possible way could the general interests of the people of the United States, in the matter of transportation, be less well served ? Furthermore, the political consequences of centering such power in Washington are beyond calculation. Scranton, Pa., Scrantonian, November 9, 1913 : In spite of civil service rules and other supposed safeguards, it is a fact that nearly every place holder is with the governing powers that be and the acquirement of public utilities on a National scale would prove a tremendous lever for political control by the party in power, if it cared to use it. Saturday Evening Post, November 9, 1912 : In spite of civil service reform, the spoils system is pretty largely in control of the Federal Government, and virtually in complete control of many state governments. Naturally, heads of depart- ments, who are the president's political advisers, change with a new administration ; but many subordi- nates in the most responsible positions, who ought to stand or fall solely by the value of their work, are turned out for political reasons. Civil service rules protect the clerk in his humble job, but not in his ambition to reach the more responsible position, that is still the spoil of politics. Marshals, revenue officers and postmasters by the thousand are appointed because of their politics, or fail of reappointment on the same ground. The public is taught to regard Government office as a "plum," to be won by political service. The same rule obtains in state and city. Deputy treasurers, assistant auditors, game- wardens and oil inspectors get and hold their jobs through politics. Citizen Jones, of Oskamoosa, is congratulated and envied by his fellow townsmen upon having landed the fish inspectorship — because it pays more than he could earn in any other way by the same effort. Saturday Evening Post, November 1, 1913: The Government can operate telephones and telegraphs — and railroads, for that matter — on business principles. It cannot operate them on spoils principles, except at a cost that would make the experiment a National calamity. The busy little grafters in both Houses of Congress, who distribute public offices as rewards for political service, fairly foreclose the Federal Government from some fields that it might enter successfully but for them. So long as the public service is burdened with this patronage graft, an extension of that service to new fields may well be viewed with alarm. Fall River, Mass., Herald, February 12, 1913 : "I hope to receive by return mail your remittance of $39. Please do not compel me to make another call." These words did not appear in a little note attached to an overdue tailor's bill nor are they in any way connected with a coal man's account ; they are contained in a letter written to the postmaster at Beebe, Ark., by Gordon H. Campbell, treasurer of the Republican State committee dur- ing the presidential campaign of 1912, according to testimony brought out at the hearing in Washing- ton. Mr. Camp did not accept the letter seriously. As a result he is no longer postmaster. He was compelled to resign under protest a few weeks ago because of suddenly discovered inefficiency, dere- liction of duty and divers and sundry other things of which he has no knowledge. But if the plain truth were known it is more than probable that Mr. Camp was kicked out of office because he refused to contribute three per cent, of his annual salary to the political machine in his State. Utica, N. Y., Press. July 25, 1912: One of the most fruitful causes and occasions for complaint in political campaigns is that the politicians control all the office holders, their clerks and subordinates with great effort at caucuses and election time. The postmasters, for example, are selected by their prospective Congressman with a view to their political activity and ability, and they are expected to be exceedingly useful every two years when the member seeks renomination and re-election. That is true of every person on the public payroll, state, county and city. They make an organized army which is frequently very efficient. Suppose that all the employees of the express, telephone, telegraph and railroad companies were also on the public payroll, owing their positions in greater or less degree to the political favoritism of those in control of the government? ITiat would multiply the army very materially, and the bread and butter question is an extremely strong argument. It would be practically impossible to oust from power the party which had this multitude of workers at its command. Whoever happened to be Presi- dent of the United States under such a system coukl hold office indefinitely if he wished to, and per- haps somebody would. Washington, D. C, Post, June 17. 1912: Even drastic civil service rules cannot nullify the unwritten law that "to the victor belongs the spoils." So long as there are politicians, politics will play its part in the government service, and if that service is extended to public utilities, the administrations of the latter will be marred by political influence and favoritism. Saturday Evening Post, May 18, 1912: Somewhere round the post office you will find a formidable placard headed in blood-red type — Warning Against Activity in Politics by Federal Officers and Employees. The postmaster who hung it up was appointed on the recommendation of a senator or representative exactly because he had been active in politics. He knows very well that if his party, or his faction of his party, is defeated he will be turned out when his term expires, or before. He knows the post office offers him no permanent employment and that, whatever his record may be, he has not the slightest chance of advancement. The better positions and larger salaries will not go to those who have performed valuable service in the department, but to those who have performed valuable service in politics. So it is in other depart- ments. 89 Extract from an article entitled "The Government and the Railroads," by Arthur T. Hadley, LL.D., President of Yale University, published in Youth's Companion, April 18, 1912 : Congress at each session invests a large amount of public money for the improvement of trans- portation facilities through the agency of a river and harbor bill. Is this money wisely invested, with a far-sighted view toward the public interest? No. Each member of Congress is more concerned with the immediate demands of his district than with th general needs of the country. Thousands of dol- lars are wasted in dredging streams that cannot ever be of any considerable use, while large and much- needed improvements are either postponed or carried on in a half-hearted and inefficient manner. Editorial by Theodore Roosevelt, in The Outlook, April 6, 1912 : I have before me as I write the original of a letter sent to Mr. Figley, the postmaster at Hast- ings, Oklahoma, by Mr. James Harris, the Chairma of the Republican State Committee. The en- velope is marked "personal," together with a memorandum to return it after five days to the Harris Brothers. The letter itself runs as follows : Dear Sir : I am in receipt of the following letter from the Department : "The commission of Newton S. Figley, Postmaster at Hastings, Oklahoma, will expire Feb- ruary 28, 1912. When last inspected, this office did not appear to be in a satisfactory condition, and unless the postmaster can be relied upon to raise the service to a higher standard of efficiency it is be- lieved that he should not be reappointed. The department will be pleased to receive as promptly as possible an expression of your views as to what action in this case will be for the best interests of the service. "I hope you have your office in first-class condition and will continue to have it so. "H you will bring in a delegation to the State and District Conventions instructed for Taft and Jim Harris, I will see that you are reappointed. "With best wishes, I am, Very truly, (Signed) J. A. Harris, Chairman." Mr. J. E. Dyche, of Oklahoma City, Oklahoma, who forwarded the letter to me, writes in an entirely friendly spirit about Mr. Harris, and say that Mr. Harris has admitted to him that the letter is genuine, and that, moreover, he knows Mr. Harris's signature. Statement by James Dalrymple, Manager of the Glasgow Municipal Tramways, as published in the Boston, Mass., Transcript, January 31, 1906: To put street railroads, gas works, telephone companies, etc., under municipal ownership would be to create a political machine in every large city that would be simply impregnable. The political machines are already strong enough with their control of policemen, firemen and other office holders. If, in addition to this, they could control th thousands of men employed in the great public utility corporations, the political machines would have a power that could not be overthrown. I came to this country a believer in public ownership. What I have seen here, and I have studied the situation carefully, makes me realize that private ownership under proper conditions is far best for the citizen of American cities. New York World, December 26, 1913 : National ownership of telegraph and telephones would mean a governmental monopoly of com- munication. It is not enough to assume that in most cases and under most administrations the privacy of this business would be respected. We must take into account conditions that all experience shows may easily arise under exceptional men and extraordinary temptation. Less than six years ago it was found that Roosevelt was spending more than $7,000,000 a year on three thousand secret service agents, the whole s 'stem being in violation of the spirit of the law, and part of it in violation of the letter of the law. When Congress undertook to assert its constitutional powers over government expenditures, Mr. Roosevelt had the effrontery to declare in a message that 90 this action was taken because Congressmen themselves were afraid of being investigated by its spies. We have had in this countrj' a benevolent McKinley with Mark Hanna behind him. We have had an easy-going Grant with Zach Chandler at his elbow. Who will say such characters and combinations will not appear again? National monopoly of communication would be more than an instrument of oppression, it would be a mighty promoter of oppression. There would be an espionage in every suspected post office, spies at every suspected telegraph station and eaves-droppers at every suspected telephone booth. All these instruments of communication would be in the power of politicians and political organizations. Baltimore, Md., Star, December 18, 1913 : "Control over all means of communication of intelligence" would mean that every telephone and telegraph operator would be a Government employee and a potential Government spy. That ad- ministration which desired to muzzle the press might, under cover of a carefully prepared set of rules, beyond the immediate reach even of Congress, debar from the telegraph system press messages which proved displeasing to the powers that were on the simple plea that it was thus preventing the dissemina- tion of "false" information. Baltimore, Md., American, December 16, 1913: It is seen at a glance that with the government m control of the telegraph, with the system of party government in force, the situation would be that of the telegraph lines under control of a party. In his speech to the suffragists Mr. Wilson laid down the principle that he as head of the nation is also the head of his party and governed by it. So that the President of the United States and his fellows of the administration, as good partisans, would be called upon to use or pervert the power of the telegraph for their own purposes. Hence they would suppress classes of newspaper dispatches upon the ground that they werejlibelous or otherwise subject to suppression. With a compliant attor- ney-general to refer the matter to, the way would be open for legal sanction. Thus there might be established the worst form of indirect censorship of the press through partisan control of the telegraph — not only might be, but would be. There are too many politicians as it is who fume and fret under the lash of publicity, and control of the chief medium of publicity would enable them to reduce the United States under forms of law, not ostensibly violating liberty, to a condition little better than that of Russia. Washington, D. C, Post, February 14, 1913: Another strong objection to government monopoly is that it breeds bureaucracy, the worst of paternalism's sins. The old world governmentally is in the clutch of that off-shoot of monarchism, and evidences are not lacking that democracy as practiced in America to-day is taking a strong slant in the same direction. Bureaucracy as we see it at work brushes Federal and State laws aside, sets up its own standards of administration, and tramples private rights ruthlessly. "Anything that is right is l^al" is bureaucracy's motto, and its bill of rights is something to behold. World's Work, December, 1906— article by T. B. Womacle, formerly Judge of the Supreme Court of North Carolina : It was a part of Governor Morehead's dream that North Carolina should have a great through system of railroads from mountains to seashore. To carry out this idea, a charter was obtained for a road from Goldsboro, the eastern terminus of the North Carolina Railroad, to the coast at More- head City, a place named in honor of the Governor and then considered a great city of the future. The state took 12,000 of the 18,000 shares of stock, appointed a majority of the directors, and has had absolute control. This road has now been operated by the state of North Carolina for nearly half a century, in war and peace, by Democrats, by Republicans, and by Fusionists — each with varying degrees of fail- ure. The private stockholders for years have pleaded for a lease, or for anything to avoid a con- tinuance of political mismanagement. During these many years no dividend has been earned, though 91 one or two presidents declared dividends of one or two per cent, per annum for political effect, when every cent should have been used in betterments. The stock value ranged from ten to twenty-five cents. Finally, under the administration of Governor Aycock, it became known that the administra- tion had determined to heed the cries of the private stockholders and the sound business judgment of the people of the state, and lease this last of the State's railroads. A great sigh of relief went up from mountains to sea. * * * The effects of the lease were immediate. The first year of private management improved the road-bed and equipment to a point never before approached. The road is being extended and new connections made, and is run upon business, as opposed to political, methods. From "Philosophy and Political Economy" (1893, Book 5, Chapter 2, page 372), by James Bonar : There seems to be nothing in the theory of development to point us clearly to any centraliza- tion of all industrial organization in the State. It has yet to be shown in practice that beyond a cer- tain limit, centralization would not be fatal to the spontaneous organization which has as yet been the main source of all industrial progress. From "Railroad Transportation" (1885, page 49), by Arthur T. Hadley, LL.D., President of Yale University : Once let the idea go forth that it is the duty of the state to take care of everybody, and every- body will cease to take care of himself. REGULATION VS. OWNERSHIP (Official) From decision of the Supreme Court of the State of Washington (120 Pac. Rep. 861, at 869) : In its search for remedies and while seriously considering municipal, state, or government ownership, the public, by reference to the police power of the state, has almost unwittingly * * * solved the problem, and has by the application of fundamental as well as established relative proposi- tions of law gained every advantage of ownership without assuming its burdens. * * * With the power to fix rates established, the process of elimination of unjust rates became a mere matter of detail based upon mathematical calculation ; the only question giving any ground for debate being the basis of calculation. * * * While rivalry may be promoted, monopoly in the sense of oppression is made impossible. The benefit of ownership is enjoyed, while its dangers — not the least of which is the political activ- ities of great armies of public employees — are no longer a menace to those who, to avoid the hazards of public ownership, have unwittingly subscribed to the conditions prevailing before this and other states entered upon the policy of public control. Extract from the Second Inaugural Message of Governor Adolph O. Eberhart to the Legis- lature of Minnesota, 1913 : In my opinion, public utilities must be either owned or controlled by the people. Where the control can be vested in a fair, impartial and competent authority, removed as far as possible from political influence, it is far superior to ownership. It has been found by experience that it is very difficult to keep municipally owned plants out of politics. As a general principle it is true that the state or the city should not go into any business which can be transacted as well by individuals. From speech by Judge Lorin Cray, of Mankato, Minn., published in Public Service, Chicago, 111., November, 1913, page 176: After all, it occurs to the writer that while we yet remain ordinary human beings, uncontrolled by divine impulses, that the safest way to deal with public utilities is to foster private ownership and 92 adopt a system of careful regulation, as distinguished from actual control. The power exists, and the means are at hand, but we should be just. Extract from a speech by George A. Lee, Chairman of the Public Service Commission of W^ashington, before the Educational club of the Tacoma Gas Company, Tacoma, Washington (Pub- lic Service, May, 1913, page 167) : Public service regulation as evidenced by the public service commission law of Washington, is the alternative of municipal control and ownership. Such regulation affords and secures all the alleged benefits and advantages of municipal ownership without the evils and disadvantages incident thereto. If such regulatory laws secure good service and reasonable rates and safe and efficient in- strumentalities and facilities then, certainly, there can be no logical or conclusive argument in behalf of the surrender of such r^;ulation for the experimental and dangerous plan of municipal ownership. In my judgment the passage of public service laws in many states within the last few years marks a new regime and gives the public that service and those rates to which they are entitled and gives the companies that rate of return which the constitution permits them and at the same time avoids the dangers and pitfalls of municipal regulation and municipal ownership. Extract from speech of President Woodrow Wilson, at a meeting of the Federation of Demo- cratic Qubs in Pennsylvania, held at Harrisburg, June 15, 1911. (Reprinted in the Congressional Record, August 14, 1912, page 11824): The regulation of corporations is hardly less significant and central. We have made many experiments in this difficult matter, and some of them have been crude, and hurtful, but our thought is slowly clearing. We are beginning to see, for one thing, how public service corporations, at any rate, can be governed with great advantage to the public and without serious detriment to themselves, as undertakings of private capital. Experience is removing both prejudice and fear in this field, and it is likely that within the very near future we shall have settled down to some common, rational, and effective policy. The regulation of corporations of other sorts lies intimately connected with the gen- eral question which ramifies in a thousand directions, but the intricate threads of which we are slowly beginning to perceive constitute a decipherable pattern. Measures will here also frame themselves soberly enough as we think our way forward. From President Taft's Special Message to Congress, February 22, 1912. (Reprinted in the New York Times, February 23, 1912) : This presents the question of government ownership of public utilities, which are now being con- ducted by private enterprise under franchises from the government. I believe that the true principle is that private enterprises should be permitted to carry on such public utilities under due regulation as to rates by proper authority, rather than that the government should itself conduct them. This pin- ciple, I favor, because I do not think it in accordance with the best public policy thus greatly to increase the body of public servants. Extract from a speech delivered by ex-President Roosevelt on October 19, 1905, at Raleigh, N. C. (Mitchell, S. D., Republican, December 4, 1913): I do not believe in government ownership of anything which can with propriety be left in pri- vate hands, and in particular I should most strenuously object to government ownership of railroads. But I believe with equal firmness that it is out of the question for the government not to exercise a supervisory and regulatory right over the railroads ; for it is vital to the well being of the public that they should be managed in a spirit of fairness and justice toward all the public. Actual experience has shown that is it not possible to leave the railroads uncontrolled. (Editorial) Atlanta, Ga., Constitution, December 19, 1913: It must be remembered that in this country we have now all the advantages and none of the disadvantages of government ownership. We have strict government r^;ulation of prices and prac- 93 tices. We can enforce reasonable rates. And the Government has nothing whatever of the respons- ibility. This is not to reckon with the enormous sum in taxes paid to the states and nations. This would be lost under government ownership. Springfield, Mass., Republican, December 18, 1913 : President Taft's Postmaster, Mr. Hitchcock, recommended government ownership of telegraph lines without including telephone Hnes. President Taft did not, however, endorse the idea — Mr. Wick- ersham, his attorney-general, no doubt voiced Mr. Taft's view in a letter to the Interstate Commerce Commission about a year ago, in which telegraph and telephone business was declared to be a natural monopoly, impossible to run on competitive lines, yet best run to "the reasonable satisfaction of the public under Government control and regulations with private ownership retained." * ******** * * * Government regulation of the telegraph and telephone companies has not been tried out; the Interstate Commerce Commission has had jurisdiction over them but for a very short time. Give this policy a trial first of all. Philadelphia, Pa., Public Ledger, October 26, 1913 : President Wilson carefully weighed the matter of the two alternatives of private and Govern- ment regulation and of Government ownership and management, and he said: "Government regu- lation may in most cases suffice. Indeed, such are the difficulties in the way of establishing and main- taining careful business management on the part of the Government, that control ought to be preferred to direct administration in as many cases as possible — in every case in which control without adminis- tration can be made effectual." Joliet, 111., Herald, October 24, 1913: Mere cheapness is a secondary consideration with the American people. We must have ser- vice even if we have to pay for it. We cannot expect Pullman seats at immigrant rates, but we are not going to drive a public ownership policy to the point where we shall have emigrant seats at Pull- man prices. Regulation, not confiscation, is the solution of the telegraph and telephone problem. Brooklyn, N. Y., Daily Eagle, October 2, 1913 : Government ownership and operation of telegraph and telephone lines would be a venture for which no substantial justification could anywhere be found. Government control of these utilities in foreign countries, particularly in France, has not been a success. We do not need to repeat foreign experiments and foreign failures here. No substantial interest is asking for the change. Government, Federal and State, either now has or can obtain sufficient power of regulation over telegraph and tele- phone companies to protect the public against extortionate rates and inefficient service. That power already resides in the State of New York, and such protection is all the public requires. Power to regulate is all that Government should seek or expect in relation to these public utilities which are essentially enterprises for private operation not fields for wild experiments in State Socialism. Extract from the Report to the Board of Trustees, New Seattle Chamber of Commerce, Seattle, Washington, submitted January 17, 1913, by the Executive Committee Bureau of Taxation : The establishment of a municipal telephone system can be justified only upon the ground that it is necessary to insure good service and reasonable rates from the present system ; a need which is at present filled by the Public Service Commission with which any citizen may lodge complaint. Extract from the report of the Department on Regulation of Interstate and Municipal Utilities to the National Civic Federation, January, 1913: Whatever may be the views of any individual regarding the desirability of having the State reg- ulate the conduct of public utility enterprises, all must agree that the signs of the times point clearly in one of two directions — either to public ownership and operation, or to public regulation of private 94 ownership and operation. Competition, relied upon in the earlier days to protect supposed public in- terests, has failed completely. Competition in a public service business is war, and General Sherman's description of war applies as well to the public service industry as to the battlefield. The furnishing of a transportation, gas, water, electric, telephone or other public service is, and should be, naturally a monopoly. Unregulated monopoly in any field of endeavor is abhorrent to Anglo-Saxon people. While regulation of pubHc utilities must be based on full recognition of the monopolistic character of the business, it is also true that recognition of monopoly invites public regulation or public ownership and operation. The Department believes not only that public regulation is preferable to public owner- ship and operation, but that public ownership and operation may be deferred only by reasonable public regulation. From statement by Cardinal Gibbons, published in the New York Evening Sun, September 4, 1912: I believe in the proper regulation of big business combinations and the broadminded at the head of these vast business enterprises would, I am sure, welcome fair and intelligent Government control. Such control should be of a nature to assure the people good service at prices which would protect the honest investor, it should prevent industrial warfare, should end political interference and should encourage honest effort to serve the people with the utilities which they require. It must be remembered by those who so foolishly demand public and Government ownership that year by year the great public utility corporations are becoming more and more the property of the public. For instance, five years ago, when Theodore N. Vail became President of the American Tele- phone Company, there were 18,000 stockholders ; now there are over 50,000. This corporation serves 25,000,000 people daily. In 1901 the Baltimore & Ohio Railroad had 3,256 stockholders ; now it has over 11,000. Ten years ago the Pennsylvania Railroad had 27,870 stockholders; now it has over 72,- 000. In the same period the Great Northern Railroad has increased its stockholders from 700 to 18,- 000 ; the New York Central from 9,872 to over 22,000. At the present time, it is stated by authorities, the owners of the railroads in the United States number not less than 2,000,000 people. When there are added to these the owners of stocks and bonds in other public service corpora- tions, it will be apparent to all fair men that public ownership of the proper kind is already here. Mil- lions of our people have a direct and personal interest in the public serving business, and they are not going to be misled by any of the unfounded and theoretical beliefs of the Socialists of Government ownership. From the "Principles of Economics," Vol. II, Book VII, Chapter 62, pp. 417-418, by F. W. Taussig, Professor of Political Economy at Harvard University, 191 1 : For the present, however, and as far in the future as we can see, the main task before demo- cracy in America is that of making more simple and smooth-working its political machinery ; of secur- ing plain honesty and routine efficiency in the accepted functions of government ; and of regulating with some tolerable success the industries of the monopoly type. When good results in these compara- tively simple problems have been achieved, it will be time to turn to the larger and more complex problem of public industry on a greatly extended scale. From the "Principles of Economics," Vol. II, Book VII, Chapter 62, p. 413, by F. W. Taus- sig, Professor of Political Economy at Harvard University, 1911: The clear alternative, then, and only alternative, to public management is public regulation. Ideally, regulation is less good, but practically it may be much better. Reasonably successful regulation is more easy to attain than reasonably successful public management. Statement made by Charles E. Hughes, Justice of United States Supreme Court and ex-Gov- cmor of New York, in an address on January 31, 1908, in New York City: I do not believe in governmental ownership of railroads. But regulation of interstate transpor- 95 \ tation is essential to protect the people from unjust discriminations and to secure safe, advantageous and impartial service, upon reasonable terms in accordance with the obligations of common carriers. Extract from "The Problem of Monopoly," (1904, Chapter 6, Pages 115 and 120), by J. B. Clark, Professor of Political Economy at Columbia University: The difference (t. e. in public benefits) between a thorough system of governmental regulation and a system of governmental ownership is by no means as wide as it appears; and what difference there is, is in favor of the regulated private ownership. Such ownership, if unregulated, has little to commend it. * * * We would better make a thorough test of the alternative plan and adjourn the question of public ownership till the plan of public control shall have been proved a failure. That it is wise, before resorting to government ownership, to experiment with regulation more earnestly and judiciously than we have ever done, is sufficiently clear. Extract from "Modern Industrialism," (1904, Part III, Chapter 4, Pages 271-272), by P. L. McVey, President of the University of North Dakota: * * * It is, therefore, impossible to say "a priori" that a government shall own and operate its great industries. Each State must determine what things it can do best. The day of laissez faire has passed and regulation or ownership will be the method of conducting industry. Experience in trusting elaborate industrial functions to a democracy is not large, and where tried, not convincing in its results. A nation must first have the necessary civic capacity before it can successfully cope with the great industrial problems and even then the union of economy and enterprise is not assured. In the control, even of the ownership of monopolies, the State has a field of action to which it may well confine its efforts. Extract from "American Railway Transportation," (1903, Part 4, Chapter 29, Page 427), by E. R. Johnson, Professor of Transportation and Commerce, University of Pennsylvania: The regulation of railroads in the United States is apparently not to be accomplished by means of Government ownership. The commission system has been on trial in the States for thirty years and in the National Government for sixteen years, and while the results accomplished are not fully satis- factory, the system has not been a failure. The success of the Federal commission has been far less than it might have been had the demonstrated defects in the law of 1887 been corrected ; but the wis- est plan for the United States to follow, at least in the immediate future, is to improve the methods and agencies of regulation now being employed, rather than to attempt the enormous task of purchas- ing and operating two-fifths of the railway mileage of the world. POST OFFICE (Official) From "Public Finance" (1899, Part II, Chapter 9, Pages 215-218), by W. M. Daniels, for- merly of the Department of Political Economy, Princeton University, and recently appointed by Pres- ident Wilson member of the Interstate Commerce Commission: The post-office, upon investigation, proves to be unique in more ways than one. The risks in- volved in the ordinary processes of trade and manufactures are wholly absent. The system of trans- portation of which it avails itself is ready to its hand. "It has made use of existing and well-known agencies, where the only difficulty was one of organization," says Lord Farrer, who adds : "It is a merit of the undertaking, regarded as an official institution, that there is very little of that speculative element about it which is the life-blood of commercial activity." The capital which the state is required 96 ^ to furnish is comparatively small in amount. * * * Add, finally, to the other peculiar char- acteristics of the post-office this, that an increase in its volume of business does not ordinarily involve a corresponding increase in its working expenses, and that the great postal reforms and improvements have as often been forced upon the department from outside as they have originated within its own official circle, and we are in a position to understand why, as Adam Smith says, it is "the only mer- cantile project which has been successfully managed by * * * every sort of government." Where other enterprises call for venturesome and speculative activity, the post-office requires orderly routine ; where the former demand much fixed capital, the post needs comparatively little; where in ordinary business transactions prices vary even for the same service, the post-office has always one price for the same service; where other industrial enterprises, if mismanaged, long escape exposure and protest, the Argus-eyed public is daily inspecting the efficiency of the postal service; where the freight agent is puzzling over a complicated railway tariff, the postal clerk has the same simple regulations to guide him to-day and to-morrow. From Table No. 4, "Comparison of Postal Revenues, Expenditures, Etc., Fiscal Years 1837 to 1912, Inclusive," — Report of the Auditor for the Post Office Department, in Postmaster General's Re- port for Year Ending June 30, 1912 (Page 335). It should be noted, in connection with the figures given below, that the accounts include only those audited by the Auditor for the Post Office Depart- ment, and that the Auditor for the Treasury Department audits other expenses of the postal service, not included in the Postmaster General's Report. The total net deficit from the operation of the Post Office Department, 1837-1912. according to the figures shown below, is $330,725,306.29. Fiscal Year. 1837* 1838 1839 1840 1841 1842 1843 1844 1845 1846 1847 1848 1849 1850 1851 1852 1853 1854 1855 1856 1857 1858 1859 1860 1861 1862 1863 1864 The aOcc Audited Postal Surf>lus. $ 813.384.58 174,751.47 227,512.56 286.739.94 131.894.62 Audited Postal Deficit. $ 191,928.75 151,879.61 174,713.72 91,960.46 1,124.213.30 78,618.84 61,340.12 36,850.13 633,318.22 200,819.16 1,923,022.85 2,742,364.67 2,352,699.98 3,326,856.15 3,487,046.52 4,153,718.40 5,234343.70 3,489,028.26 10,652,538.66 5,251,966.98 2,826,144.35 142,625.14 404,814.72 Fiscal Year. 1875 1876 1877 1878 1879 1880 1881 1882 1883 1884 1885 1886 1887 1888 1889 1890 1891 1892 1893 1894 1895 1896 1897 1898 1899 1900 1901 1902 Audited Postal Surplus. 1,253,923.57 2,181.352.57 Audited Postal Deficit. $6,820,320.84 4,647,253.04 6,127,356.02 4,905,029.28 3,415,933.00 3,221,953.48 2,821,959.11 3,907,057.29 7,481,410.22 7,068,495.10 4,145,018.20 3,772,466.03 6,169,104.44 5,400,764.44 7,150,610.13 6,110,975.97 5,716,788.75 9,977,515.32 10,230,442.13 8,444,201.31 11,431,579.41 9,054,551.75 6,630,135.60 5,410,358.10 3,981,520.71 2,961,169.91 of AodiUH' for tiw Pott Office Dcpertnwnt wu created by act of Congren approved July 2, 1836. 97 Audited Postal Audited Postal Audited Postal Audited Postal Fiscal Year. Surplus. Deficit. Fiscal Year. Surplus. Deficit. 1865 917,249.50 1903 4,586,977.16 1866 933,851.10 1904 8,812,769.17 1867 3,972,351.92 1905 14,594,387.12 1868 , 6,545,348.20 1906 10,542,941.76 1869 6,363,737.20 1907 6,692,031.47 1870 5,097,854.11 1908 16,910,278.99 1871 4,358,752.21 1909 17,479,770.47 1872 4,749,094.11 1910 5,881,481.95 1873 6,128,892.84 1911 219,118.12 1874 5,757,908.07 1912 1,785,523.10 From articles in the North American Review, June and July, 1902, on "Defects and Abuses in Our Postal System," by Henry A. Castle (then Auditor, United States Post Office Department) : All public men and patriotic citizens should know more about the postal service, take a more lively interest in it, watch its development carefully, and guard its integrity with jealous zeal. It is an exceedingly vital part of our government polity — all the more vital because it is, strictly speaking, not a public function at all, but is more probably a private or corporate enterprise engrafted on the gov- ernment's mechanism under pressure of an imperious necessity. All the avoidable abuses are not actually existent. Many are only in embryo, but with well ma- tured aspirations, already menacing. The irrepressible enthusiast who disclaims against government by injunction is loudest in advocating further innovations that would soon lead to government in the hands of a receiver. There is loud and influential demand for the postal telegraph, postal savings bank, and a postal life insurance bureau. There are wild, vague cries for the absorption of all rail- ways under government ownership and Post Office Department management. It may be true that the government could send out telegrams at reduced rates and pay expenses ; but little compact England has lost $3,500,000 a year trying to do it, and is very weary of the experi- ment. ****** ***!ti:|i The fallacy of calling our postal system self-sustaining even if on the face of the books and on its present foundation it should fail to show a deficit at the close of some fiscal year, does not occur to casual observers, but it is recognized by all who study the subject. A railway company doing a busi- ness of nearly $1,000,000,000 a year, which was required to pay no interest on bonds or dividends on stock would be a financial phenomenon. It is conceivable that the mail service might be so managed by a corporation as to yield satisfactory results and pay a small dividend, provided it performed no gratuitous services for the government as a condition of its existence. As now managed the Post Office Department has no "plant" whatever. All it owns in the way of personal property is mail bags, mail locks, letter boxes, carrier's bags and a few similar inconsequential items of equipment. Even in public buildings it is the tenant of the Treasury Department. (Editorial) Chicago, 111., Journal, December 22, 1913: Postmaster General Burleson spoke of government telegraphs and telephones as being fore- shadowed by the parcel post and postal savings bank. The reference is not happy. Only last week Mr. Burleson asked for an immediate emergency appropriation of $1,000,000 to run the parcel post till next June. No one knows or can know for at least a year to come whether the parcel post will pay its own way or not. As for postal savings banks, the amount on deposit in these institutions on the latest date for which figures are available was $35,392,622 — about 40 cents per capita for the American people. 98 Washington, D. C, Post, December 20, 1913: Replying to the objection that government monopoly in Europe has proved a failure financial- ly in every such undertaking. Postmaster General Burleson remarks that our [>ostal service is self-sus- taining. But if we ask what made it pay expenses, whether by means of its own activities or by legis- lation which gave it a big advantage over private enterprise, the ground is cut from under the argument. An act of Congress sufficed to give the post office department the right to compete with the express companies, without consulting public opinion. But when it comes to binding the government to incur the enormous expense involved in the purchase of telephones and telegraphs and depleting all the State treasuries of their income* now derived from taxes and franchises assessed against the com- panies owning the lines, some 15,000,000 voters may be on their feet demanding the last word in the transaction. , Rochester, N. Y., Herald, December 20, 1913: The delivery of a letter is a comparatively simple undertaking. It may be trusted to men of no technical mechanical training or skill. It need be performed with only a moderate degree of celerity. It requires a comparatively small permanent investment in plant. It is, in a word, a simple function whose processes are easily understood by both the servant and the served ; yet with all these elements contributing to the efficiency and ease of performance, there is continual complaint that the mail ser- vice does not satisfy expectations or needs. * * * This being true of the mail, how much more true would it be of the vastly more difficult and more urgent service of the telephone and telegraph under Government operation. Boston News Bureau, December 20, 1913: Now the notable circumstance is that so far no good reason is given why Uncle Sam should tackle the new job. Waiving contention as to legal power — which Mr. Mackay does contest — the only definite reason advanced by the Postmaster is that success in parcel post administration demonstrates federal capacity to run telephone and telegraph, since these also are means of communication, and their scope is so big that federal "unselfishness" is needed. Here is the fallacy of the undisturbed middle, as r^ards "means of communication," embracing letter, parcel, tel^ram, and telephone call as being iden- tical in substance and treatment. As well say that canoe and dreadnought make equal demands on builder and user. Here is ignored the fundamental distinction of character. The other difference of character as between federal conduct and private conduct of large en- terprises should by now have impessed itself on the citizens' consciousness. Governmental costs average close to 50 per cent, above those of competing private enterprise wherever comparison is pos- sible. The Aldrich assertion as to $300,000,000 annual waste has since been little curtailed by efficiency commissions; the testimony of the Burleson and Lewis proposals would be to multiply it. New York Press, December 19, 1913: Mr. Don C. Seitz, a well trained and very successful manager of a large publishing concern, gave G)ngress a flat challenge only a few months ago. If Congress and the rest of the Government would confer upon him the necessary license, he offered, within a few days to form a syndicate to take over and operate, as a private enterprise, the whole post office system, under Government regulation and to give a vastly and more frequent (sic) postal service than is now given by the Government, and to lower postage rates for all classes of business, except, of course, the oceans and oceans of Congress' own "dead head" stuflF. New York IVorld, December 19, 1913: The World has extensive business relations with the post office department. It is one of the principal patrons of the telegraph companies and the telephone company. We can assure Mr. Burleson that if the telegraph and telephone service that we pay for was as incompetent and unsatisfactory as the postal service that we pay for, it would be very difficult indeed to print a great newspaper. We can 99 further assure him that it will be a sorry day for this country if intelligent American sentiment ever countenances the placing of all revenues and channels of written and spoken communications under the autocratic control of a partisan, political, post office department. Buffalo, N. Y., Evening News, December 19, 1913: It is only within the last year or so, or since the directorship of Postmaster-General Hitchcock that the government showed even a penny of profit. That is done by taking off a great mass of service that costs a great deal and yet is not charged as it should be, but it is due also to a miserable service in many places. Buffalo has suffered not a little in that respect. Complaints have gone to Washington for a score of years without improvement to speak of. In fact, there have been years not very far behind us when citizens ceased complaining because it was hopeless. This does not imply fault in the local managers, but fault in the general policy of the department about equipment and facilities for han- dling the mails in the best way. Mr. Burleson's suggestion that the government spend several hundreds of millions in acquiring the wire service of the country and take on its payroll some hundreds of thousands of operatives, comes at a time when the Postmaster-General in Great Britain, where the telegraph service is a public monopoly, is compelled to go to Parliament for an enormous subsidy in order to put his department on a living basis. It has become so run down under the endeavor to operate it so as to make a better showing than when it was in private hands. Syracuse, N. Y., Journal, December 19, 1913 : The people of Syracuse don't want an agitation of the purchase of any other "transportation adjunct" to the postal service until the efficiency of the postal service has been raised ; and they but echo the voice of protest of the entire country because the inequalities and inefficiencies in the service in this city are probably duplicated in every city in the United States. Troy, N. Y., Record, December 19, 1913: The plan of Postmaster-General Burleson for government ownership of the telegraph and tele- phone lines would receive more attention from the people if he first would perfect the government postal system. The room for improvement in that service is so great that he can find plenty of room for active and effective work without having the national wire lines added to his burdens. Besides, the people just now are not in a mood to have the telegraph and telephone offices organized as are those of the postal department, with non-working heads drawing large salaries merely for political reasons. Springfield, Mass., Morning Union, December 19, 1913: Meanwhile the difference between conducting a postal service over privately owned railroads and by means of privately owned cars and the purchase outright and operation, independently, of pri- vate interest, of the telephone and telegraph systems, is clearly apparent. Mr. Burleson says that other principal countries have government owned telegraph and telephone systems, but he neglected to state that not one of those countries has a system that approaches in efficiency the American systems. Newburgh, N. Y., Journal, December 18, 1913: Assuming that Mr. Burleson's figures are correct, however, the dividend which the post office department is alleged to have declared, the first, it is admitted, since 1883, would be regarded as a pretty poor demonstration of capacity in the business world. As for the parcel post, it is still an ex- periment and while it is a good institution and one that is appreciated and patronized by the public, the question arises whether or not it would be so amazingly profitable if the Government were com- pelled to pay the railroad what it is worth to carry parcels. ' New York World, December 18, 1913 : Has the Government sufficiently proved its mastery even of railroad regulation, let alone 100 ownership and operation, to warrant its venture into these new fields ? When it has done so and when it can offer an economical postal service which will attract and not drive away business, there will be time enough to talk about piling on to it other businesses. Attleboro, Mass., Sun, December 16, 1913: Experience in the navy yards where the Government pays $2,000,000 more for a war ship than a private contractor charges, has been as illuminating as the conditions in the Government printing office where type is still set by hand because fewer would be employed and at less expense if there were used the typesetting machines which even the smallest private office owns. By charging off rent and building expenses to the Treasury Department, the post office apparently pays expenses and the parcel post has not yet existed long enough for a financial test. I New York Times, December 12, 1913: "Mr. Burleson's comparison with the parcel post is also an absurdity," said a high authority in the telephone business. "To make the existing postal system available for package business, the de- partment has only to add a clerk here and there and fix rates. The organization was ready. As for the fact that foreign Governments operate the wire systems, it should be remembered that the older nations were monarchies, with all powers in the hands of the ruler. They have gradually been work- ing down to democracy. Here we started as a democracy with property and rights in the hands of the individuals, and it is proposed to vest these rights in the central government. Money cannot buy an organization, nor the brains that have created it. It is a thing of very slow growth, which can be killed over night. Philadelphia, Pa., Public Ledger, October 3, 1913: The Post Office Department has been managed with far less efficiency and economy than any of the great industrial companies or the railroads. Political expediency rather than a good service has for many years been the policy in that Government-owned institution. Toledo, Ohio, Blade, October 7, 1913 : Before we have Government-run telegraph offices and Government-owned telephones, let us feel certain that the Government can do it without having to ask Congress to make up its losses on telegraph and telephone service as it has to ask it to cover the losses on the handling and delivery of the mails. New York Press, October 4, 1913: The Government already had all the necessary machinery in existence and in operation, for the continuance of the postal business. It had the offices, it had the expert managers and superintendents, it had the trained men, it had the established routes by railroad, water, horse and land. It already had virtually everything that was essential to the success of the postal business. It had it working out under the test of long experience. All it had to do, in fact, was to chuck the parcel post system into the post office system and let it go at that. But it hasn't any telegraph service. Outside of military specialists it hasn't any expert that knows the fine points about the telegraph service. It hasn't any facilities for conducting the tele- graph business. Unless it took over the whole telegraph business as it stands with all the persons now engaged in the telegraph business to help out the Government, it couldn't operate in that field the way it operated in the parcel post field. From article entitled, "The Abuse of the Congressional Frank," by Robert D. Heinl, published in Leslie's Weekly (New York), January 30, 1913: A member of Congress who is a candidate for re-election can have his political documents printed in the Congressional Record, and then as has been explained he can send them through the maib free of charge. He has to pay the actual cost of printing of the documents, but the envelopes 101 for mailing them with the congressional frank appropriately stamped on them, are furnished free, at public expense. However, since he does not have to pay any postage, which is by far the largest item, he reaches the voter with comparatively little expense to himself. The candidate who is op- posing the man in office must pay full postage on all matter that he sends through the mails. Washington, D. C, Post, December 11, 1913: The one example of Government monopoly — the post office department — to which the pro- moters of the scheme can point with pride, was created to fill a want in a field that private enterprise had not gone into, a condition of affairs and the only condition, that gives warrant and consent to Government ownership of utilities. 102 i UNIVERSITY OF CALIFORNIA LIBRARY This book is DUE on the last date stamped below. m^ .^^963\2*. REC'D Lu MAY 10 1960 'CIRCULATION DEPT. MAY 2 mPL^^^j ^ REC U >.iJ \b MAY 3 1 i9So NOV S^SSi' FEB 22 1976 '^^Ji^ KCCIR. 0RN2276 LD 21-100m-12,'46(A2012sl6)4120 APR 11 1988 /^ «^ 2^c He 38/9 UNIVERSriT OF CAUFORMA L1BR.ARY U.C. 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