ever, the existence of the postal deficit should not weigh in the balance against it.

How does the postal deficit arise? The Annual Report of the Postmaster General for the fiscal year ended June 30, 1929, places the distributable loss of the so-called "postal deficit" for the year at $87,985,841.

Of this, $1,178,291.67 consisted of retroactive pay to railroad companies, an extraordinary item made necessary by the settlement of a long controversy. Another group of expenses, totaling $31,232,906.52, represents a list of subsidies extended by the department for special purposes, as ordered by Congress. These subsidies would not be extended by any commercial organization. They are not loses incurred in the ordinary course of postal services. They are matters of public policy. If the representative of the taxpayers believe these subsidies ought to be extended the taxpayers should pay for them, as they do. But the postal employees should not be expected to bear the burden of these subsidies as if they were employed by a losing commercial enterprise. Among the subsidies in question are those for handling second-class matter free in counties, differentials in mail contracts favoring vessels of American registry, penalty and franked matter carried free for governmental agencies, free mail for the blind.

The Postmaster General estimates that reduced rates of postage provided by the act of May 29, 1928, resulted in a loss of $21,527,896. These reductions in rates were not the result of a commercial policy calculated to make the Post Office Department a paying enterprise.

The substraction of these items from the total so-called "postal deficit" brings it down to about $33,000,000, which is about the same as deficits of previous years.

Even the "normal" deficit is not attributable to the officers and employees of the post office but to the policy of Congress in fixing the postal rates. Postal rates have not, in general, been increased since before the war, except for a temporary period in the years 1918 and 1919, for war revenue purposes. Indeed, many of the rates have been reduced. This can be said of extremely few other goods and services. The general average of wholesale prices is now some 40 per cent above the pre-war level. The post office must, like every other industry, pay more for what it buys. If the rates charged for its services had been allowed to increase, as they would have done in any commercial enterprise, it would have had no deficit.

The accompanying table shows what would have been the effect if postal rates had been raised as much as the average of wholesale prices, if they had merely been allowed to float up with the price level. It will be seen that if this had happened the department in 1928 would have had not a deficit but a surplus of $273,133,000!

The policy of keeping down postal rates is a policy of subsidizing those who use the service, at the expense of the taxpayers. It may be a good policy. We express no opinion on that subject. One thing is certain, however; it makes it wholly unjust to judge the post office like an ordinary commercial enterprise. The employees are not responsible for the policy, and they should not be made to suffer from it. Congress has no moral right to subsidize the users of the postal service at the expense of the postal employees. Congress should not deny justifiable shorter hours on Saturday because postal rates have been kept down while all other prices were rising.

The best analysis of the so-called postal deficit ever made was by Representative Kelly, of Pennsylvania, a member of this committee, in a speech to the House on January 15, 1930, pages 1817-1826, Congressional Record. We commend a close reading of the Kelly speech to all who are interested in ascertaining the reasons for the so-called postal deficit.

X. SUMMARY AND CONCLUSION

The postal clerks and railway mail clerks in this brief petition Congress to extend to all their numbers the shorter workday on Saturday, or its equivalent, which has been permissive in the department ever since 1924.

Both are shown to be highly skilled occupations, performing duties which impose a high degree of physical and nervous strain.

The abnormal rate of physical defect and d'sease which exists among postal employees indicates accumulated fatigue, and shows the need of more adequate leisure for rest and recuperation.

The rapid growth and wide extension of the shorter day on Saturday, both in private and public establishments, make it both just and feasible to grant the same conditions to the clerks. This is especially emphasized by the predominant practice of closing offices and releasing office employees on Saturday afternoon, since it is with the work of offices that the Postal Service is most closely connected.

The authority of large employers, economists, and specialists in health is quoted, not merely in favor of shorter hours on Saturday but of the 5-day week, which is now enjoyed by nearly 1,000,000 workers n the United States. The Government of the United States can scarcely demand a full day's work on Saturday when so many enlightened employers have gone so far as to do away with Saturday work entirely.

The productivity of both post-office clerks and railway-mail clerks has advanced, through the'r own efforts, to a reasonable extent since before the war, and has thus helped to keep postal expenses down. This advance should be recognized and encouraged by shorter working hours, as similar advances have been in private industry, even when the increase in productivity resulted from machinery rather than from individual competence

The cost of the change, which would not be great in any case, would probably be largely neutralized by further gains in efficiency and decreases in absenteeism, which has been scientifically proved to follow reductions in hours in many other instances.

Even if the cost were material, it would not be just to deny the change on account of the existence of a postal deficit, since this deficit arises from subsidies extended to special postal services by the direction of Congress, and from the policy of Congress in reducing postal rates, while almost all other prices have risen above the pre-war level, including the prices of the good and services the Post Office Department has to buy. If postal rates had risen as much as the average wholesale prices above 1914 there would now be an enormous postal surplus.

In view of these demonstrable facts, it is difficult to conceive how the present petition could justly be denied.

STATEMENT OF EDWARD A. GAINOR, PRESIDENT NATIONAL ASSOCIATION OF LETTER CARRIERS

Mr. GAINOR. Mr. Chairman, I will take up but a moment of this committee's time and yield to Secretary Finnan, who has a brief to submit. I represent an organization of approximately 60,000 members, and the matter of a shorter work day on Saturday is no inno

vation with us. It was instituted in a small way in 1922, through certain permissive regulations under the discretion of the separate postmasters and, during the past eight years, it has grown in observance. It has met with the unanimous commendation of the American people. Tests of public sentiment have been made in various parts of the country, and over 99 per cent of the postal patrons in each instance have commended this idea. The people are for it.

Secondly, it has not operated to the injury of the service and complaints have been rare. Deliveries on the succeeding Monday morning have been made promptly.

Third, in the matter of letter carriers, the objection, of cost, raised by the Postmaster General has no application, or little application. I contend that this bill, which we indorse, the Kendall short Saturday work day bill, could be instituted to-morrow, so far as city letter carriers are concerned, without practically any additional cost to the Postal Service.

Fourth, as has been stated here, the objection of cost does not apply and should not apply. It is worthy of note that, in fixing the rate for the transportation of mail, in the renting of post-office quarters, in purchasing the postal supplies, the question of cost is never raised, and it is only

Mr. SPROUL. I will have to object to that, because it always is and, as far as renting quarters for the Postal Service is concerned, they always advertise for bids and the lowest bidder gets the contract. They are very careful about that.

Mr. GAINOR. Will you yield to a question in return?

Mr. SPROUL. Absolutely.

Mr. GAINOR. When the post offices are renting post-office quarters, do you think it would be a good representation to make by saying that they could not pay the rent because there was a postal deficit? Mr. SPROUL. Certainly not.

Mr. GAINOR. That is the point I am making. You misunderstand me.

Mr. SPROUL. Certainly not; I do not think the quarters come into this proposition. The question here is shall we or shall we not grant the postal employees a 44-hour week.

Mr. GAINOR. Let me submit my question again, which is this: I say in the matter of renting post-office quarters, purchasing postal supplies, or paying for mail transportation the question of the existence of a postal deficit is not raised; but it has been raised during our recent salary increase, and now the main objection filed here to the pending bill, which is generally conceded to be good, is that it can not be allowed, because it will add to the postal deficit. Against that reasoning we take issue, and we cite the history of the Postal Service now to show how these deficits have been created and to show that there is no good reason why postal improvement, postal progress, or postal wages should depend on postal revenues. That should never be applied in any policy of the Post Office Department.

Mr. Foss. Have you any idea what the increase in the cost of postal quarters has been during the last 10 years?

Mr. GAINOR. I saw the citation, but I would be afraid to quote it.
Mr. Foss. I wonder if anyone here can answer that.
Mr. SPROUL. About 50 per cent.

Mr. KELLY. The total cost in 1929 for rent of quarters was $17,500,000.

Mr. SPROUL. It increased about 50 per cent.

Mr. GAINOR. I do not want to trespass on the courtesy of this committee, because we have another witness, but I will ask you respectfully, gentlemen, to take a large view of the problem that is involved. In my opinion the most challenging problem in civilization is to so maintain a dynamic equilibrium in our activities as to provide jobs for men. A very healthy trend, in my opinion, is manifest now in the steady and irresistible reduction of the hours of labor as an indispensable solution of the problem of unemployment. That factor and the natural trend that society must take should be considered, in my opinion, in the disposition of this large question affecting the biggest business in the world.

Mr. SPEARING. Am I correct in understanding you to say that if this bill passed, so far as the letter carriers are concerned, it can be put into operation without any material increase of cost?

Mr. GAINOR. Yes, sir; broadly speaking, that is true; and there are representatives of the Post Office Department here, if they desire to challenge that statement.

Mr. SPROUL. That would come around from the fact they would not have as many deliveries on Saturday as they have on Friday. You would probably have two deliveries on Saturday if you had a 44-hour week.

Mr. GAINOR. It comes around from the fact there is a general cessation of business on Saturday.

Mr. SPROUL. All right. And they are not required to carry out the mail, and therefore they have Saturday afternoon off.

Mr. GAINOR. Exactly. However, it was brought out here that it depends largely on the temper of the various postmasters and on their individual interpretation of their local needs. In many instances it is largely a matter of timidity with reference to making innovations; so that under varying conditions, and under varying auspices, different practices apply in different parts of the country. Here we are seeking uniformity, and are presenting, we feel, an unanswerable case.

Mr. SPROUL. Now, in the city of Chicago, during the last several years, the letter carriers have had Saturday afternoons off; but take it in some of the small towns-Blue Island and Chicago Heightsthey do not have Saturday afternoon off the same as they do in the big cities.

STATEMENT OF M. T. FINNAN, SECRETARY NATIONAL ASSOCIATION OF LETTER CARRIERS

Mr. FINNAN. My name is M. T. Finnan, secretary of the National Association of Letter Carriers, representing approximately 60,000 members in 3,000 different post offices throughout the country.

We have prepared a brief, going into this matter very thoroughly, realizing that this committee is a body of business men and that there are many here who desire to be heard, and we respectfully ask that our brief be incorporated in the hearings.

The CHAIRMAN. Is that the same brief that the president submitted?

Mr. FINNAN. No; I am submitting this. This is the brief which we have placed around at the different members' seats, and we ask that you find time to read it and digest it, and I think it will be illuminating upon this proposition.

In so far as the letter carriers are concerned, they work under what is known as the 8 in 10 law; that is to say, they work 8 hours within 10 consecutive hours, and if they work in excess of that 8 hours on any one day they are paid extra in proportion to the salary they receive. We believe that a short Saturday workday for the letter carriers would not make for a great cost. The first-class mail could be delivered; the so-called junk-that is to say, second and third class mail; the phrase is a technical one used among the men-could well be left over until a later period and delivery of that mail made. When the business houses close the people who are enjoying the benefit of the Saturday workday are not at home, and it is merely excess work to have letter carriers go out and deliver mail in the afternoon.

In this brief, we have presented numerous citations; we have presented a list of firms which give a 5-day week; we present a list of trades which have a shorter Saturday workday, or a 44-hour week, in the cities of over 700,000 population; we present a long list of trades which have, in cities of over 700,000, less than 44 hours-or, rather, a 5-day week. We are not asking for

Mr. Foss. Do you show the increase in wages in these trades that have the 44-hour week now?

Mr. FINNAN. No; but, Mr. Foss, we do show the statements of these men who are operating a 44-hour week, on the productivity of the men, due to the shorter hours; that the employees have produced as much during a 5-day week as they did formerly under a greater number of hours. The letter carrier has increased his productivity since 1981 by a large amount.

Mr. SPEARING. Not 1981.

Mr. FINNAN. 1914-I am traveling a good deal further than I intended to.

Mr. SPEARING. Yes; do not make us any older than we are; it is bad enough as it is. [Laughter.]

Mr. FINNAN. The postal receipts have increased from 1914 to 1928, Mr. Spearing, about 141 per cent, while the number of letter carriers has increased only 59 per cent; the receipts from letter carriers have increased 52 per cent in the same period. This means that the average letter carrier was handling at least 52 per cent more mail in 1928 than in 1914.

A comparison of the morbidity rates of the letter carriers with other industry rates showed that the letter carriers' rate of sickness was 57.5 per cent above that of industrial workers. He was afflicted with such diseases as influenza and grippe to the extent of 143 per cent more; bronchitis, 86 per cent more; neuralgia, neuritis, and sciatica, 73 per cent more; neurasthenia and nervous breakdown, 69 per cent more; diseases of the heart, 154 per cent more; diseases of the veins, 76 per cent more, and epidemic and infectious diseases. 87 per cent more.