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Justifiable National Expenditure

JUSTIFIABLE NATIONAL EXPENDITURE.

1. Need of classifying expenditures.

2. The postoffice.

3. How contracts are made with other than railroad and steam boat companies.

4. Contracts with railroad and steamboat companies.

5. The numbering of mail routes.

6. Cost of the star service.

7. Cost of carrying second-class matter.

8. Extension of the postal service. Subsidies.

9. Reasons for granting them.

To. Ought the government to conduct the telegraph service? 1. Ought the government to print postage stamps? 12. Classification and compensations of postmasters.

13. Clerks.

14. Extension of civil service rules to fourth-class postmasters.

15. Expenditure for public buildings.

i6. How they have been erected.

17. Competition among architects should be invited.

i8. The method that should be adopted in making this ex penditure.

19 The amount that should be expended and further directions concerning its expenditure.

20. Further criticism on the present method.

21. Government printing.

22. Cost of printing.

23. The printing of bonds and stamps.

24. Patent office.

25. Salaries.

26. Receipts.

27. Mode of granting patents, etc.

28. Expenditure for fisheries.

29. Department of Agriculture. 3o. How far is its work justified? 31. How far should experimenting go? 32. The life-saving service. 33• A national museum.

1. Under the threefold division of expenditure adopted in this work, those which may be termed justifiable will now be considered. Whatever classification may be adopted, all will admit that stronger reasons exist for making some expenditures than for making others. Though all can float on the broad sea of public welfare, all have not the same buoyancy. A classification of some kind is desirable, not only to bring into clearer relief the nature of the national expenditures, but also to deal with the question of paying them in a more intelligent manner than could be done if all expenditures were regarded as possessing equal merit.

2. The first expenditure to be put under the head of justifiable is that for conducting the postoffice. The items for 1899 aggregated $101,632,160, and the revenues were $95,021,384. At times the revenues have equaled the cost of maintenance; at other times there has been a large deficit. That the service ought to be self supporting is the opinion shared by almost all who have bestowed any attention to the subject.

3. For carrying the mails, in all ways except by rail road and steamboat companies, the Postoffice Department may make contracts for periods not exceeding four years. The proposals must be advertised, and the successful bid ders must give bonds to secure the Government. In some cases contracts can be renewed, but on no more onerous terms than before.

4. In contracting with railroad and steamship com panies, obviously there is no reason for advertising pro posals. The compensation paid them since 1873 may be best shown by the following table : To ascertain the weight of malls, they must be weighed at least for thirty successive days once in four years.

5. All the mail routes are numbered. The route from Philadelphia to Pittsburg, for example, is numbered II0, our, over the line of the Pennsylvania Railroad Company. The length of the route is 353.80 miles, the pay per mile for transportation is $2,o81.93; the sum paid for 1899 was $736,586.83, and the average number of trips per week was 88.35.

6. The star service is costly, for it is conducted with horses, many of the lines are long, and the revenues are small. The department is extending the lines, showing more economy and efficiency, yet often fails, by per mitting contracts for carrying the mails to be sublet, to reward properly those who really perform the service. The practice has long existed of permitting speculators to bid for the contracts, sublet them to others who are willing to execute them for a smaller compensation, and retain the profit. During the debate in the House on the recent Postal Codification bill an attempt was made to confine bidders to persons along the routes described in their bids and to restrain them from sub letting their contracts, but the amendment failed .a 7. Another very costly item is the carrying of second class mail matter. On this, since 1887, there has been a heavy loss. One portion of it is known as "free county matter," which consists of newspapers, etc., mailed free to subscribers living in the respective counties of publica tion. The remainder consists of other periodicals to sub scribers. The total matter carried in 1899 was 664,286, 868 pounds, of which 440,234,281 pounds, or nearly two thirds, belonged to the second class. The cost of carrying this was $37,218,742, about eight cents a pound. For carrying this amount $5,091,322 was received, involving a loss of more than $30,000,000 to the Government and people 1 Is there any reason for making all the people pay so much for the benefit of the smaller number who profit by this service.' 8. How far shall the service be extended, and how shall matter be classified for the purpose of imposing rates ? Shall rates on matter of the same class be uniform, regardless of distance and unequal expense of service on different routes ? These are questions of great importance. Hardly less so is the question of granting subsidies for carrying mails to foreign ports.' 9. The subsidies were granted for a twofold purpose, to compensate for the mail service, and to stimulate com merce. As President Cleveland did not approve this policy, the payment of most of them was withheld during his administration. The Government was authorized to make contracts for five years (first advertising for pro posals) with the owners of American vessels, who were to be paid at the rate of $4, $2, $1 and 2-3 of a dollar per mile respectively for each voyage reckoned at the shortest distances between the ports constituting the routes. The varying compensation was based on speed, and to this end vessels were divided into four classes, those of the first class having a speed of 20 miles per hour; of the sec ond, 16 miles; of the third, 14 miles; of the fourth, 12 miles.' 10. Many strongly favor the public management of the telegraph service. If it can serve the people more cheaply and efficiently than they are served now, and if in so doing it would treat fairly those who have invested their capital and trained themselves to the business, then the Government would be justified in assuming this new function. But can it serve the people more cheaply and efficiently than existing companies ? Does the Govern ment possess any peculiar power by which it can surpass private companies in performing this work? The expe rience of other nations has not developed any.' I 1. In this connection the question may also be asked, Ought the Government print its own postage stamps? The answer turns on the same inquiry, Can the Govern ment save anything in making stamps of a similar qual ity to those which others are willing to furnish? It is asserted that a very considerable saving has been effected by their public manufacture. The evidence is quite sat isfactory that the Government, though making some slips, has been a gainer in doing this work.`' 12. Postmasters are divided into four classes. The first, second and third classes are known as presidential postmasters, because they are appointed by the President. Their number on July I, 1899, was 4,015. The fourth class are appointed by the Postmaster General, and num ber 71,007. The classification of the presidential offices is determined by their receipts; those of the first class are $4o,00o to $600,000 and over; of the second class, $8,000 to $4o,000 ; of the third class, $1,900 to $8,000; and the amount of compensation of presidential postmasters depends on the classification of their offices. The com pensation of a postmaster of the first class is from $3,000 to $6,000 per annum; that of a second class postmaster from $2,000 to $3,000; while the compensation of a post master belonging to the third class is from $1,000 to $2,000 per annum. The aggregate salaries of the post masters belonging to these classes for 1899 was $6,931, 000, and the total gross receipts of their offices was $75, 058,725. The salaries of the fourth class postmasters are based on the tax rents collected and commissions on post age stamps cancelled at their offices.

13. With the exception of the assistant postmasters, cashiers and mere laborers, all employes at free delivery offices are under civil service rules. All employes in the Post Office Departmental service, with the exception of two confidential secretaries and mere laborers are also under the civil service rules.

14. It has been suggested that all the fourth class post masters should come under civil service rules, and be es sentially of a permanent character.

15. Another expenditure that may be classed as justi fiable is that for public buildings. If buildings are not erected and owned by the Government, others must be hired. One of the reasons for erecting them is economy, as the rents paid by the Government in many places are often excessive. Another reason is that a Government building is a sign of national power. By some persons this reason may be regarded as fanciful, yet it is not without some force. Though the building of many of them is subject to condemnation on economical grounds, they are truly of a national character, for whatever be their place of location, the people everywhere may and do transact business in them. Thus the business transacted in the postoffice of New York city consists very largely of letters, etc., sent from all parts of the country, while the contents of a postoffice in a distant territory are received from other places. In like man ner a federal court-house in Wisconsin is for the benefit of the people throughout the country, as much for a litigant in Maine who wishes to sue a person in Wiscon sin as for a litigant in that State. In like manner a custom-house is for the transaction of the business of importers regardless of their place of residence, and therefore is of the most general character. Every pub lic building is truly national, and erected for the benefit of all without regard to their place of residence as much so as the war and naval academies. And for the same reason it may be remarked that those who serve in them ought to be chosen without regard to their State residence, for their duty is to serve the national public, and not the smaller public living in the city or State in which the building wherein their duties are performed is located.

16. Government buildings have been erected in vari ous ways. Plans are prepared by the national architect, and many of them are built by contract, other's by the Government itself. They have been often criticised as lacking variety and dignity ; the architect has shielded himself by declaring that he has been too busy to give the requisite time to work out more tasteful or appropri ate plans.' 17. It has been urged that, instead of requiring the national architect to prepare plans, competition should be invited and premiums awarded for the best plans. Had the Government pursued this policy, all the architectural genius in the country would have been put forth.

18. One of the most serious faults in this expenditure has been the utter lack of method in making it. To some extent, in the larger cities, where the business was heav iest, and the rents paid for buildings were greatest, the needs of the Government were first supplied. The erec tion of buildings in the smaller places has been made on no principle whatever save that of influence! The Gov °See speech of J. W. Maddox, Feb. 28, 1899, 32 Cong. Record, p. 2,908; and debate on the subject, 2d, p. 2,595. The first session of the 55th Congress has since been known as the "public buildings session," because appropriations were passed for so many buildings. They were passed by concerted action. Dur ing the debate our appropriations for the erection of public buildings in the next Congress, Mr. Maddox remarked: "I am ernment has not thought of selecting places where the greatest economy would be effected by having a building of its own, or of the size of the population, or of other important matters. Yet if buildings are to be erected everywhere, and all cannot be erected at the same time, it is evident that the work of construction ought to pro ceed by some principle. The following suggestions are offered. The appropriations for this purpose should be divided into two parts ; for cost of sites and cost of buildings. The cities should be classified by population, and appropriations similar in amount should be made for buildings, excluding the cost of sites, in cities of the same class. Whenever practicable, appropriations for sites should be limited, and if costing more than the amounts specified, the place in which the buildings are to be erected ought to be required to pay the excess. Or, the appro priation for sites might be made on condition of getting suitable ones for the amount appropriated.

19. With this as a guiding principle a sum might be appropriated, whenever the condition of the revenues permitted, to be expended by the Secretary of the Treas ury. In further defining his action in selecting places for buildings, he might be required to erect them,—first, in the capitals of the States ; secondly, other places where the Government has the largest number of offices ; thirdly, in places of the greatest population among cities of the same class ; or fourthly, in the place in each State having the largest population until the circle of States was com pleted. It hardly need be added that they should be built opposed to this method of legislation for this reason: That in my opinion there is not a single measure here proposed which if it was left to stand alone before this House without the support of the combination could pass this Congress. Now, where does it get its support from? Necessarily from a combination of interests. That is exactly the way in which it comes." He further remarked: "We never have any mi nority reports from the public buildings and grounds com mittee or the committee on rivers and harbors." 32 Cong. Record, p. 2,578.

by contract, after proper advertisement for proposals, and contractors should be required to give bonds for the faith ful execution of their promises. Thus, their cost could be kept within the original appropriations. Furthermore, as these buildings are not necessary, their construction might be deferred until times of depression, unhappily too frequent, in which it is difficult for men to find work. The Government could thus equalize to some extent the con ditions of employment, and by so doing render a highly useful service to those who otherwise would not be em ployed.' 20. The utter lack of system in erecting them was im pressively disclosed during the debate in the Senate in 1896, on the bill making appropriations for rivers and harbors.' Representative Wilson of Idaho, urged that as his State had no rivers and harbors to improve, the national expenditure ought to be squared by appropria ing money for a building at Boise City.° Thus the ever lasting vice of local legislation by Congress was once more illustrated. An objector was quieted, as so many have been before, by granting another local benefit. In this way the Government has been continuing for a hundred years, granting more and more special benefits and ad vantages to individuals, corporations, classes, sections and soothing the less favored with whatever sops depraved ingenuity could devise, instead of applying the true rem edy, preparing the people for their private and public du ties, and administering speedy and perfect justice. With

the growth of population and increasing complexity of interests, the time is not far off when the discontent will rage so strong over this balancing-of-favors policy that the Government must abandon it and return to its proper sphere:* "As an illustration of this balancing-of-favors policy may be mentioned the work of the Geological Survey. "It was started," said Senator Wolcott, "as an offset against the ap propriations for rivers and harbors and the improvements of the seacoast that were being made year after year. It was 21. The publications of the Government are a justi fiable expenditure. Perhaps they are even necessary giving the people the information they need and ought to have concerning the business of the Government. For merly the printing of the Government was done by con tract, and the establishing of the public printing office was a radical departure that encountered fierce opposition. The Government has been a gainer by the change. At present the printing office is filled with printers who be long to labor unions and who are under the civil service rules. At times the criticism has been heard that too many were employed, yet the judgment of those who are most familiar with the operations of the printing office is that, on the whole, the Government is more economic ally served than it was under the old system." 22. The books are not attractive in style, yet are printed perhaps as well as they need be. Below is a table containing the rates of renumeration paid to most of the persons employed in the Government printing office.

thought the inland States should have some sort of compen sation for the large appropriations made for other purposes in the other States; and we thought, until we grew old enough to know better, that it might be of help to us." 33 Cong. Record, 6735.

23. For a number of years the Government has printed its own bonds and internal revenue stamps. These are printed on steel plates, which are expensive. Formerly, much of this work was done by private companies, and was very profitable, and for several years they tried to break up the Government department of engraving and printing." At last they abandoned the the work is now done more cheaply by the Government than it could be by private contract. Of course, the profits which an outside company would have made is a prospective loss, but if this is gained by the Government, or distributed among its employes, then the change is justified. So long as the Government can do this work as well or better than private companies, and at a less expense, the door is closed against the criticism." 24. Another justifiable expenditure is for the mainte nance of the patent office. That the public recognition of the work of inventors, and the securing to them of some reward, are within the sphere of Government is so gen erally believed that the question may be passed without further remark. Legislation of this character has been enacted by every enlightened government in the world. Inventors are required to pay to the Government fees for making examinations and securing their patents. These have been changed at different times." 25. The fees are more than sufficient to pay for the salaries of examiners and other officials connected with the department. The highest salary is paid to the com missioner of patents, who receives $5,000 a year, and the assistant commissioner, $3,000.

26. The receipts of the department for 1899 were $1,209,554, and the expenditures, $1,148,663, and the en tire balance in favor of the patent office since its creation in 1836 is nearly $5,000,000.

27. The province of the Government in granting pat ents, the length of time for which the inventor should be protected, how examinations should be made, the granting of extensions, are questions of the greatest practical im portance.

28. The next expenditure to be considered is that in curred by the Bureau of Fisheries for the production of fish food in the rivers and the lakes of the country. The supply has been greatly increased through the highly intelligent efforts of this department. The work, too, seems to be singularly free from politics, and the results, in the popular opinion, have justified the expenditure. In many places salmon, trout, and other varieties of fish had almost disappeared ; through the efforts of this de partment, rivers and lakes have once more become alive with wholesome food." 29. Lastly may be considered the expenditures of the Department of Agriculture. This was formerly a bureau of the Interior Department, but in 1893 was changed into a department of its own, the eighth and last of the Execu tive Departments of the Government. The work of this department consists in distributing seeds, investigating animal products, guarding cattle against diseases, investi gating into the production of food, and collecting agri cultural statistics.

3o. It may be said in justification of the Department that a similar department is supported by nearly every other government!' Most of its work has been in prog ress for many years. On the other hand, it may be asked, why should seeds be furnished to farmers any more than other seeds, wheat, corn, potatoes, to consumers." Why should the Government engage in experiments concerning sugar making and refrain from experiments in milling wheat, or making iron or steel, or discovering new prod ucts in coal tar,—that exhaustless field for the chemist? It is difficult to justify all the work of this Department. A portion of it, relating to the inspection of cattle and food, seems to be amply justified on the ground of pre serving the health of man and beast, but surely the work of experimentation is quite beyond the ken of the Govern ment except so far as this may be needful for the public defense, or to cope with disease. Can it be justified on the ground that half the population of the United States are farmers, and that the results of such experimentation would redound to the benefit of all? This may be so, but why cannot precisely the same argument be used by a person who wishes to have the Government engage in chemical experimentation in iron and steel making, or manufactures in general? Would not new discoveries ul timately benefit every one? Every body needs clothing as well as food; and if experiments were made regard ing the production of wool and woolen fabrics, would not as many share in the benefits as the number who share in the production of sorghum, sugar, or any other agri cultural product? 31. Again, if such experimentation were not under taken by the Government, would not State and local or ganizations of one kind and another be formed for such work ? Cannot this work be performed as well or better by other associations ? Are not the cane and cotton grow ers of the South as able to conduct experiments relating to their products as the Government? May not the same remark be applied to experiments in the production of corn, wheat and other products ? 32. Another justifiable expenditure is for the life saving service. This item is very considerable, amount ing to $3,114,506 for the year 1899. The service is con ducted by the Treasury Department." 33. Lastly, under the head of justifiable expenditures may be considered those of a national museum. Perhaps some would put this expenditure under the next head. It may be said that every enlightened country has a mu seum containing specimens of its natural products and curiosities relating to its national history and growth. Such an expenditure may be justified on the ground that every nation, if worthy of existing at all, is justified in perpetuating the history of itself ; if so, a museum is a part of that history. It clearly possesses an educational value, though not so immediate and direct as some other forms of education.

a 34 Cong. Record, 1244, 1246, 1346, 1702, 1703, 1635, 1640, 3444, 3450.

Statement showing the cost per mile traveled of star service in the entire country and in the different sections on June 30 of the years given: Massachusetts, Rhode Island, Connecticut, New York, New Jer sey, Pennsylvania, Delaware, Maryland, Virginia. and West Virginia.

Second section—States of North Carolina, South Carolina., Georgia, Florida, Alabama, Mississippi, Tennesse, and Ken tucky.

Third section—States of Ohio, Indiana, Illinois, Michigan, Wisconsin, Minnesota, Iowa, and Missour1.

Fourth section—States and Territories of Arkansas, Louis iana, Texas, Indian and Oklahoma, Kansas, Nebraska, South Dakota, North Dakota, Montana, Wyoming, Colorado, New Mexico, Arizona, Utah. Idaho, Washington, Oregon, Nevada, California, and Alaska.

'Every annual report of the postmaster-general for many years has clearly shown the need of correcting this great abuse, which has been followed by a report of the postal committee of the house against it and a debate.

For a valuable report on the cost of carrying the mails, profits to railroads, why they are opposed to a reduction for carrying them, etc., see House Report, No. 991, 56 Cong. 2 Sess., also an interesting debate in the Senate thereon, Cong. Record, May 6, 1898, 31 Cong. Record, p. 5,200; also Senator Butler's speech, May 12, 2d, p. 5,413; also Report of Joint Postal Commission, Jan. 14, 1901, 56 Cong. 2d Sess., No. 2284, and reports Nos. 129, 130, Senate Mis. Doc., Vol. II, 55 Cong. 3d Sess.

For report on increasing the compensation of railway pos tal clerks, see Report No. 739, 54 Cong. 1 Sess.

For evidence of the abuse of mail facilities by sending roll-top desks, carpets, saddles, harnesses, etc., as "official matter," see House Report, No. 875, 54 Cong. 1 Sess. The re port does not show that any horses were sent as mail matter.

For the mode of making contracts with railroad companies for carrying the mails, cost of service, difficulties in ascer taining what ought to be paid, see a very informing speech by H. H. Bingham. 33 Cong. Record, p. 5,550.

Whether railway companies receive excessive compensation or not, see Report of Joint Postal Commission (above described) and speeches by Loud, Moody, H. C. Smith, 34 Cong. Record, 2475, 2635, 2336, and others.

'For a valuable report on subsidies for carrying the mails, see H. of R. 49 Cong. 1 Sess. No. 534, Feb. 16, 1886, especially the minority report.

Concerning subsidies to railways for furnishing special mail facilities, see Report of Joint Postal Commission and speeches especially of J. A. Moon and W. H. Fleming, 34 Cong. Record, 2257, 2259.

'Act of March 3, 1891, 26 Stat. at Large, 830.

'England has lost in eighteen years £7,335,897, or about $36,000,000, in conducting the telegraph service. An annual profit of £47,000 in the beginning has changed into a deficit of more than $3,000,000 a year. See E. F. Loud's speech and elaborate statistics in 33 Cong. Record, 6,756.

For literature on this subject, see an argument in support of the limited post and telegraph by the Postmaster-General together with certain appendices relating to postal telegraphy. Wash., 1890. Appendix H. contains bills, resolutions, reports. documents and speeches in Congress supporting and opposing postal telegraphy, 169.

Concerning the management of the bureau of engraving and printing, see elaborate investigation, Senate Doc., No. 109, 55 Cong. 3d Sess.

'See article, Government's Failure as a Builder, M. Schuy ler, 17 Forum 699.

'Perhaps there has never been a looser appropriation for a public building than that for the naval academy. The House virtually took the matter out of the hands of the naval committee, which was proceeding in an orderly manner to acquire proper data for intelligent action, and blindly in trusted the entire matter to the Secretary of the Navy. See debate, 33 Cong. Record, pp. 4,785, 4,809.

'See Rep. Dockery's speech, June 10, 1896, 28 Cong. Record, 6,432.

'28 Cong. Record, 6,418.

"There was an interesting debate concerning the work of the printing office in which many important facts came out in the House Jan. 18, 1900, 33 Cong. Record, 984.

"See Phelps' Rep. on Printing of U. S. Notes and other Securities, 43 Cong. 2 Sess. No. 150, Feb. 16, 1875.

"The expenditures of the Department of Printing for 1900 were $4,730,211. Of this sum $15,085 were paid for salaries, $4,248,469 for printing and binding, $200,187 for Rep, of Sec'y. of Ag. for 1898, $119,416 for his report for 1899.

"At present the following fees are charged for the different services performed by the Government for inventors: The principal patent fees are: On filing an application for a patent, except in design cases, $15.

On issuing a patent, except in design cases, $20.

In design cases: for three and a half years, $10; seven years, $15; fourteen years, $30.

On filing a caveat, $10.

On an application for the re-issue of a patent, $30.

On filing a disclaimer, $10.

On an application to extend a patent, $50.

On the first appeal from a primary examiner to an ex aminer in chief, $10.

On an appeal from him to the commissioner, $20.

"Salaries of Fish Commission for 1899, $194,014; miscella neous expenses, $176,686; expenses of the thirteen fish hatch eries in Colorado, Iowa, California, Georgia, Washington, Du luth, South Dakota, Montana, New Hampshire, New York, North Carolina, Tennessee, Massachusetts, Texas, Virginia, $46,297.

"Secretary Morton was strongly opposed to this work (see his annual report for 1896) and incurred the senatorial wrath especially for not spending the entire appropriation. There was an elaborate debate on the subject. (See Senate Res. 43, 28 Cong. Record, Index History of Bills and Joint Res., p. 106). Notwithstanding his reasons for not distributing them, Con gress increased the appropriation at the next session. See also debate in the Senate over Ag. app. bill for 1801, 33 Cong. Record, p. 5029, also debate on similar bill for 1899, 31 Cong. Record, 1390; speeches of J. H. Davidson, Jan. 13, 1898, 31 Cong. Record, 5757, and D. H. Mercer, Jan. 13, 1898, 31 Cong. Rec ord, 653.

"See Annual Rep. for 1893 for action of other governments in organizing and sustaining such a department, and Annual Report for 1895 for a detailed statement of appropriations for the department from 1878-94.

"Importance of the Light House Service. See Senator Sargent's Rep., 43 Cong. 2 Sess. No. 605, Feb. 4, 1875. Life saving and coast-guard service, see Rep. Covert's speech, in 1878, 7 Cong. Record, 1664, and especially speech of T. Scudder, May 4, 1900, 33 Cong. Record, 7092, describing the duties of surfmen, their compensation and history of their work.

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