Mr. BROWN. Of course, there are some rates which you can not raise, probably, without reducing volume and reducing net revenue, and the Post Office Department always bears that in mind. We have the law of diminishing return, of course.

Mr. KENDALL. General Brown, I think one of your statements should be corrected, in which you stated that the employees of the Post Office Department have no fixed limit in the number of hours of service. As a matter of fact, do not 95 per cent of your postal employees leave their offices exactly at 4.30? There are only a few who remain in your office and probably a few in the assistants' offices; but the rank and file of your postal employees quit at 4.30 sharp, and at 4.31 they are all leaving the department; is not that correct?

Mr. BROWN. I think it is a rule in our department, as it is everywhere else, Mr. Kendall, to leave pretty promptly at 4.30; but Mr. Kelly was inquiring about my own observation, and I was giving it. I have frequently asked the heads of the various bureaus to keep their force or to come down on Sunday morning. I find that our clerks come when we want them to; when their work is done they go home.

Mr. KENDALL. About 95 per cent leave at 4.30 and about 95 per cent begin work at 9.

Mr. BROWN. I would say as to that that our people usually come in from 8.30 in the morning right along until 9 o'clock. We were asked by the District commissioners what we thought of a scheme to stagger the hours so that the workers in our department would not be coming to work at the same time as the workers of other departments, with a view to lessening the congestion in the streets. An investigation showed that a lot of our people came before 9 o'clock, although, as you stated, they are pretty apt to go out substantially at the same time-at 4.30.

Mr. KENDALL. Another question: How can your department and Congress stand for a policy whereby practically all of the employees of the Government work seven hours per day, which is correct-they begin at 9 o'clock and leave at 4.30 and take 30 minutes off for lunch-whereas the postal employees are working 8 hours per day and, as Congressman Kelly said, they have but 15 days' vacation with pay and only 10 days' sick leave, whereas the Government employees who work but 7 hours per day have 30 days' leave and 30 days' sick leave, if necessary? It seems to me that proposition is unfair to the postal employees. I do not see why they should be required to work an hour longer than the other employees in the Federal Government. Mr. BROWN. I was not here when that rule was adopted, and I do not believe that any 7-hour rule is a fair rule if we are to consider the taxpayer. I think everybody should be willing to work eight hours.

Mr. KENDALL. But, as a matter of fact, they do work seven hours throughout all the departments in Washington.

Mr. BROWN. Well, some do.

Mr. KENDALL. I think 95 per cent do—of all the employees in Washington.

Mr. BROWN. When I was in the Commerce Department our people worked early and late-a great many of them. If you will come up to our department you will find it pretty lively every day until 5.30.

Mr. KENDALL. Well, I go down among the employees; I am up there frequently, and every day that I have been there I know that when 4.30 arrives the great mass of your employees leave immediately. Mr. BROWN. Well, answering your argument as I understand it, I can only say that I think everybody who works for the Government ought to be willing to work eight hours per day, and I think that should be the rule. If there is a small group that work less than eight hours a day I think that legislation should be enacted to increase their hours rather than to reduce the hours of the large group which are working eight hours a day.

Mr. KENDALL. You have that just turned around; the large group of workers work seven hours a day and the small group work the longer hours. I would say 95 per cent of all Government employees work seven hours a day in Washington.

Mr. BROWN. I am not speaking of the Washington force. That is a small proportion of the Government workers. The field force is very much larger so far as the post office is concerned. We have only about 2,000 employees in Washington; we have 355,000 in the field. If our Washington people are having it too soft, I think your legislation should be directed to correcting that situation rather than to shorten the hours of the people in the field.

Mr. HOGG. You mentioned, General, the amounts that are paid for service on the water and in the air for carrying the mail. Now, in the final analysis, regardless of any definition of law, those amounts are subsidies, are they not?

Mr. BROWN. The foreign air mail expenditure is, in my judgment, analogous to that which is made in the development stage of almost any business. Almost any business shows a loss at the start until it is established. The foreign air mail contracts are drawn upon a formula which, when the volume increases-as we hope it will increasewill be sufficient to pay the expenses. The foreign air mail contracts are on a mileage basis, and, if the volume develops which the planes can carry, the service will be self-sustaining under the present schedule of postage rates. So that is a little bit different.

Now, on the ocean mail, I am not a lexicographer. The word "subvention," I think, is the one that is popular on the Hill, but I am indifferent as to what you call it. There is a substantial sum which we pay out for carrying the mails under the merchant marine act of 1928 in excess of what we would be required to pay at poundage rates under the old system.

Mr. HOGG. Considerably in excess?

Mr. BROWN. Yes. I would say eight to one, or eight to ten times as much.

Mr. HOGG. So that you will not be mistaken in my viewpoint, I will say that, in my opinion, the money for these purposes is among the best money which the Government expends. However, in the final analysis, a large part of it is simply a subsidy to certain companies; is it not?

Mr. BROWN. It has a much wider significance than that. I think that, while it is a payment directly to the ship operator, the benefit indirectly falls back to the commerce of the United States and to all of the people who live in it; it is closely associated with our national prosperity as well as our security.

Mr. HOGG. Yes; but granting that, the purpose for which it is expended has little direct relation to the particular use to which the money is allocated?

Mr. BROWN. It has nothing to do, fundamentally, with the Postal Service, if that is what you mean.

Mr. HOGG. That is the fact I am getting at. The rural mail service should be further expanded, but that gives rise to a large deficit, does it not?

Mr. BROWN. Well, under the cost ascertainment, as it has been developed heretofore, it seems to. We are revising that, and, until we get through with it, I should not want to accept any of the figures of the cost ascertainment as final.

Mr. HOGG. It is generally admitted by those who are familiar with the subject, as you are aware, that there is a large deficit in the rural mail division.

Mr. BROWN. Apparently the revenues that arise from the rural service are not as great as the cost.

Mr. HOGG. Do you believe that the department itself has a duty, aside from its interest in the agricultural development, to extend the rural mail, or is that more of an agricultural interest problem?

Mr. BROWN. Well, I have never given very much consideration to that. I have had very little time for academic discussion since I have been in the Post Office Department.

Mr. HOGG. If this is an academic discussion, it is the argument which you gave us.

Mr. BROWN. No, Mr. Congressman; I do not think I made any reference to the expense of the rural free delivery. I did draw attention to the items which were changed by legislation which became effective at the beginning of the last fiscal year and on orders of the Interstate Commerce Commission.

Mr. HOGG. I am inquiring to establish a definite basis. Do you plead the deficit as a reason for the department's decision against the 44-hour bill?

Mr. BROWN. I wanted to cite the wide spread, the increasing spread, between strictly postal revenues and strictly postal receipts. Mr. HOGG. Then you do not plead the deficit as a reason for the department's position?

Mr. BROWN. Yes; I do the growing deficit, the mounting deficit. Mr. HOGG. I am one of the Members of Congress here who officially use the mails much. I send 60,000 pieces of mail a year, as do the most of my colleagues. Under the law this is permissible, and no mail that I have sent has failed to meet the approval of your department. Do you regard it fundamentally as a duty, to me and to my colleagues, of the postal department to distribute our mail, or is that a general governmental duty?

Mr. BROWN. Your official mail?

Mr. HOGG. Yes.

Mr. BROWN. Under the law, it is our duty.

Mr. HOGG. Yes; but it is a rather arbitrary law, is it not?

Mr. BROWN. Yes.

Mr. HOGG. Then do you not think, General, it is just a little unfair and lacking in logic to charge the cost of these things against the postal employees who are seeking a shorter week?

Mr. BROWN. Well, I have not charged them up.

Mr. HOGG. Then we shall not consider these deficits in considering this bill; we will put it on the basis of the work which they do. Is that a fair basis on which to put it?

Mr. BROWN. I do not know that I follow you.

Mr. HOGG. I will restate it: If we shall not consider the deficits which I have mentioned in determining the merits of this bill, we shall leave them out altogether, and put it on strictly an industrial basis?

Mr. BROWN. That is a fair rule to take, I think. I think our business should be regarded as a business in which we have a monopoly to a certain extent. But I have thought all along that the right way to get more pay for postal workers was by the application of the same principle by which they have received more pay in industry, by increasing production. The only way to accomplish this, in my judgment, is by the use of labor-saving devices, which I have been encouraging and hope to get installed in our service. If a man can handle more mail in his eight hours, we can pay him more without increasing our deficit. That is the principle that has been applied to industry and is one of the fundamental reasons for the very great prosperity our country has been enjoying.

Mr. HOGG. We understand, however, that you believe it is not fair to plead the deficit in considering this 44-hour week?

Mr. BROWN. No; I do not want you to understand that at all. I discussed the deficit frankly with you, because I thought it was a pertinent matter at this time.

Mr. HOGG. Regardless of the fact the deficit is made up in large part of subsidies?

Mr. BROWN. Mr. Congressmen, that is not quite an accurate statement. Subsidies do enter into it to a small degree. The two items of subsidy, as you like to call them, amount only to $8,000,000, and the increase in our deficit in 1929 over 1928 was $53,000,000. The franked mail that you talk about, that you participate in, amounts to less than a million dollars a year.

Mr. HOGG. What is the subsidy of the ocean mail?

Mr. BROWN. It was $7,390,000, as we estimated it for last year. Mr. HOGG. And it is just generally estimated that the rural mail means a loss of about $40,000,000, is it not?

Mr. BROWN. No; I would not say that.

Mr. HOGG. How much would it mean as a loss?

Mr. BROWN. As I said to you a few minutes ago, our new Third Assistant, Mr. Tilton, who comes to us from a well-known organization of auditors and accountants, is going over that, and, until he finishes his work, I would rather not make any figures.

Mr. HOGG. I just want to make a final observation: As perhaps you know, I live in the city of Fort Wayne, Ind., where we have many industries.

Mr. BROWN. Yes.

Mr. HOGG. And practically every other industry in that city pays wages equal to those paid to the postal employees and give their men Saturday afternoon off, including several employees of the General Electric Co. I understand that more than 80 of industrial concerns in the United States do the same.

Mr. BROWN. Well, as I said before, in industry the pay is by the hour for the service actually performed; there is no leave of absence with pay, no sick leave. The job is not a certain one; the men are laid off whenever the business is slack, or for any other reason. There is a very substantial difference between the employment in the postal service and in industry. Furthermore, there are the retirement provisions. Now it might be said, superficially, that the worker pays for that; but the scale of pay has been adjusted with a view to taking care of the contributions which he makes to the retirement fund. So that, in my judgment, the situation, if you look at it perfectly fairly, is not comparable at all to industry. Mr. HOGG. I thank you, General.

Mr. Foss. In estimating the additional burden of the 44-hour week do you use the number of substitutes that it would take to make up the four hours lost by regular men?

Mr. BROWN. Yes, sir. Mr. Trotter, I think-whom you all know very well-will be very glad to give you the details of the figures so far as they relate to the First Assistant's bureau.

The CHAIRMAN. Thank you very much, General.

STATEMENT OF CHARLES F. TROTTER, SUPERINTENDENT DIVISION OF POST OFFICE SERVICE

The CHAIRMAN. Do you want to make a statement?

Mr. TROTTER. I would prefer to answer questions, Mr. Chairman. Mr. KELLY. Then let us start in on how you arrived at the cost of this so-called 44-hour week?

Mr. TROTTER. This applies to clerks in post offices, to the carriers, and laborers. We figure that in order to grant them the half day off each week, if it is necessary to substitute for these absentees hour for hour, it would cost us $18,252,135.

Mr. KELLY. Now, of course, you do not contend you have to do that?

Mr. TROTTER. I am just coming to that. But we assumed we would not have to substitute hour for hour, so we figured on a basis of two hours for each four hours off, or one-half time; so that it would cost, in the Post Office Service, $9,126,067. The Second Assistant's Office would bring it up to thirteen million and some odd thousand, which the Postmaster General has mentioned.

Mr. KELLY. In other words, you take every post-office clerk and figure you are going to give two hours off and pay a substitute to take his place?

Mr. TROTTER. Yes.

Mr. KELLY. Do you think that is going to be the operation of this bill?

Mr. TROTTER. I think it would.

Mr. KELLY. You do not think there would be any compensatory time and that a great number of those would get it without payment for two hours?

Mr. TROTTER. I think so. We figure on the possibility of hour for hour; but we do not believe that is going to be necessary; our experience has demonstrated it is not necessary.

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