STATEMENT OF JOHN L. BLAIR, PRESIDENT, NEW PROCESS CO., WARREN, PA.

After 47 years of steady growth, this company now employs 800 people and annually supplies, entirely by mail, about $20 million worth of competitively priced essential merchandise to 32 million business and professional families, including members of the families of several United States Presidents; 21 United States Senators and 106 United States Representatives; 3 Justices of the United States Supreme Court and 23 Federal judges; 38 United States admirals and generals, 60 top-level United States Government officials, including members of the Cabinet and the White House staff; 9 State governors and many high State officials; 48 well-known authors, 53 top stars of the entertainment world, 13 famous sports figures, 33 leading published, 46 prominent artists and musicians, 29 famed educators and scientists; over 200 board chairmen, presidents or vice presidents of America's leading financial and industrial corporations; plus hundreds of other nationally known leaders in almost every field, all of whom buy needed merchandise from us exclusively by mail.

Many of these people have been steady customers of this firm for long periods of years; the great bulk of our business is repeat orders from satisfied customers. All our orders are obtained entirely from third-class bulk rate letters with merchandise illustrated in actual-color printed folders, inclosed in envelopes addressed to carefully selected individual names and not to such shotgun addresses as Boxholder or Occupant.

These details are cited here because it is essential that Members of the Congress and the Post Office Department management realize that this type of thirdclass mail performs a vital economic service to the public in the distribution of wanted and needed merchandise running into billions of dollars annually, for many millions of intelligent American consumers who rely on third-class mail for easy shopping at low prices.

To penalize such legitimate and selective mail users by imposing destructive rate increases, as H. R. 5836 does, is not only a blow below the belt at these users, their employees, and their suppliers, but it is also a severe infringement of the rights of the many millions of Americans who are, by their own choice, confirmed and regular buyers by mail.

If the Congress desired to eliminate certain unwanted matter from the mails, as may be indicated by recent impassioned appeals from some sources, then legislation or regulations should single out the real offenders and ban them from the mails.

On the other hand, the meat-ax, punitive-rate approach to the complex problems of the postal service, as perfectly exemplified by H. R. 5836 in its present form, can only result in extremely serious consequences reaching far beyond the present realization of those who advocate this approach.

Here, for one example, is what this bill would do to our small company:

H. R. 5836 would increase our third-class postage expense by more than $536,000 a year-and this comes on top of the $200,000 a year increase imposed on third-class bulk mail 5 years ago.

Stated another way, this bill adds a rate increase of 60 percent on top of the 50 percent increase enacted in 1952.

It would require us to pay 21⁄2 times the postage rate we paid only 5 years ago. Such a stupendous postage rate increase would wreak havoc on a great segment of the Nation's industry, and create sudden, widespread unemployment and a terrific epidemic of business failures.

We do not believe it possible for such rates to produce the revenues anticipated, and know that the Treasury's personal corporate tax revenues would suffer dras. tic reductions.

The problem of the postal deficit can be solved, we are convinced, by greatly increased mechanization of all postal operations, followed, if necessary, by moderate and intelligently applied rate adjustments which mail users can absorb without serious economic disruption.

Therefore, we hope the Senate, in its wisdom, will act now to prevent H. R. 5836 from becoming law.

STATEMENT OF PAUL H. BOLTON, WASHINGTON REPRESENTATIVE, ASSOCIATION OF HOME STUDY SCHOOLS, INC.

My name is Paul H. Bolton, Washington manager for the Association of Home Study Schools, Inc., with national headquarters at 1001 Connecticut Avenue

NW., in the Nation's Capital. Our membership, fully listed in the directory accompanying this statement, includes approximately 60 home-study schools all of which are typical of small business in the American economy, and whose services are devoted to offering training "beyond the classroom."

As educators who depend principally upon the United States mails, these home-study schools are vitally affected by any additions to the cost of mailing, and appreciate this opportunity of appearing before your distinguished committee today to urge much greater study of this important subject than can possibly be crowded into these final days of hearings and potential action by Congress before adjournment of this session.

We are deeply appreciative of this opportunity to lay before your committee just a few angles of the matter that may spell the very existence in the near future, of many important but smaller correspondence schools. We underscore with feeling the compliments extended to your committee by Mr. George Brady of the Hearst newspapers in yesterday's hearings. We appreciate the fact that this subcommittee has undertaken a tremendous task, and that through no fault of yours the job had to be begun very late in the congressional session. The House of Representatives spent 72 months on this question. It is out of the question to assume that you can properly weigh all implications and expedite this bill through to passage. We oppose the proposed bill in its present form, and ask particularly that through later amendment, you give proper consideration to the needs and problems of home-study schools, as you have thoughtfully done in certain educational provisions that seek to apply to educational, religious and nonprofit groups.

President Eisenhower gave the most eloquent commendation of home-study schools and training a year ago when he wired greetings to our association's national gathering in Washington, with these observations:

"Work in the field of home study represents an increasingly important contribution to the cause of education in America. Home-study courses are used by the Armed Forces to teach their personnel, by an increasing number of business firms to provide instruction for their employees, and by thousands of men and women all over our Nation who recognize in these courses a practical and inexpensive way of obtaining an education. I congratulate all of you on your part in this educational effort and wish you continuing success! DWIGHT D. EISENHOWER."

Actually, a careful and authentic research report recently compiled by this association, reveals the fact that three-quarters of a million new students are served each year by the correspondence schools of the United States. This represents small business in the average school, but very large achievement and a tremendous record of service, when the accomplishments of this training are counted. A well-known educator recently was quoted as observing that "undoubtedly the greatest educational value today, dollar for dollar, is enjoyed by the person who takes full advantage of the opportunity available through homestudy training."

In H. R. 5836, special reference is made to the rate exception designed to give special consideration of education by making special exceptions for books, library materials, manuscripts, academic theses, scholarly biographies, etc., when exchanged between "schools, colleges, or universities, public libraries, religious, educational and scientific organizations not organized for profit * * *” spelled out in the bill.

as

We note also in referring to the second-class exemptions in the bill now in effect for that class (No. 39 U. S. C. A., sec. 289a) this reference: "And further provided, That existing rates shall continue in effect with respect to any religious, educational, or scientific publication designed specifically for use in school classrooms or in religious instruction classes."

Today's third-class exemptions (according to No. 39 U. S. C. A. sec. 290 (a)) similarly provide: "That the rates prescribed by this section shall not apply with respect to matter mailed by religious, educational, scientific, etc., organizations or associations *

In the text of H. R. 5836 we are impressed by the concern expressed for preserving the "inherent advantages of the postal service in the promotion of social, cultural, intellectual, and commercial intercourse among the people of the United States-as well as for development and maintenance of a postal service adapted to present and future needs" of our national economy.

I am certain that your committee is fully aware of the great problems currently faced in our educational system by reason of the much discussed population growth and the extreme shortage of teaching facilities. The President

recently named Dr. Bevis, retired president of Ohio State University, as head of a special committee to accelerate plans for teaching engineers. Enrollment strains are now faced by all educational institutions, and it is a foregone conclusion that correspondence courses, "training beyond the classroom," must be more and more depended upon to fill in the widening gaps. We should take a lesson from Sweden, with a total population less than that of Ohio, but where correspondence courses are encouraged by the Government, and where privately owned and operated home-study schools are training almost a quarter million students each year.

In these days of intensive consideration of these many facets of the postalrate problem, we earnestly urge that you weigh very importantly the great contributions that home-study schools in the United States-privately owned and operated correspondence institutions are making, and will increasingly be called upon to make, to meet this educational problem.

The stipulation in H. R. 5836 proposing exceptions for universities, libraries, etc., is immediately nullified by the definition "not organized for profit” which removes virtually the entire contribution of home-study schools in meeting this need. To provide strong faculties and to create dynamic training materials, these schools must of necessity be profit-making institutions. The amendment and exceptions we plead for at this time, as spelled out earlier in my statement, should be seriously planned and included, else you will eliminate all but the limited extension courses of endowed and State or denominationally supported schools. Our association's member schools acclaim the recognition of education's importance and services implied in evident attempts to include some assisting rate exceptions in H. R. 5836. We wish to be as eloquent as possible in urging that you help the educators of the Nation to meet this unprecedented challenge of the immediate future-by encouraging and not hampering them in their sincere efforts to offer "training beyond the classroom" with the assistance of the United States mails at rates that are feasible.

Timing is another distinct phase of this overall problem. In her very eloquent testimony or statement before your committee yesterday, Mrs. Marion M. Wilcox-a small manufacturer-gave a classic instance of the hardship that can befall small business by postal regulations being applied without sufficient time allotted for adjustment to such increases. Today's distribution has a velocity that is the envy and marvel of all of the rest of the world-but it still takes planning and calls for definite Government understanding and cooperation. On this point the president of one of America's largest home-study schools, LaSalle Extension University of Chicago, Ill., wired me late yesterday afternoon as I will here quote. His school, presently not a member of our association, is recognized as doing a tremendous job in the correspondence field. He observed: "If postal-rate increases are required, suggest they do not become effective until at least 6 months after passage of bill, to allow all businesses to make necessary adjustments in materials and prices. Installment businesses will not realize benefits of price adjustments until the last payments on terms extending over 1- or 2-year periods. Proposed first-class postage rates would add heavy cost burden on approximately 2 million home-study students at both public and private schools. This is discriminatory. The Government subsidizes many forms of education. Proposed rates would penalize home-study students."

These pertinent observations right from the desk of one of the largest schools in the country will serve to accent the seriousness of our appeal, and to truly underscore the importance of our urge to your committee to ponder this question at far greater length than you will have time for in these closing hours of last-minute hearings. We thank you for this opportunity to appear before you in behalf of both the home-study schools and the millions of future students affected.

(The membership list of institutions, referred to by Mr. Bolton, is on file with the committee for reference purposes.)

STATEMENT BY CURT TEICH, JR., PRESIDENT OF CURT TEICH & CO., INC.,
CHICAGO, ILL.

Honorable chairman and members of the committee, my name is Curt Teich, Jr., president of Curt Teich & Co., Inc., Chicago, Ill., manufacturers of private picture post cards. In behalf of my company and other fellow manufacturers of private picture post cards, we feel that a great danger to our industry is impend

ing; I refer to the increase in postage that has been suggested to your committee to raise the present postage on private picture post cards from 2 cents per card to 3 cents.

For the purpose of clarification, and so that no confusion will result, we will refer to our product as the "private picture post card" which you purchase at newsstands, dime stores, hotels, variety stores, drugstores, and in small towns and hamlets in remote parts of these United States, in the country general store, at 1 cent each to 3 for a dime for the post card, which is then mailable with the affixing of a 2-cent stamp.

The other classification of mailing card for future reference, we will call the Government postal card, on sale at United States post offices all over the Nation at 2 cents each-complete-ready for mailing, which only covers the cost, so to speak, of the stamp.

The Post Office Department, in selling the Government postal card, supplies all of the cardboard. printing, cutting, boxing, wrapping, free transportation to the point of sale, selling to the ultimate user, and finally delivering the Government postal card back through the mail to the party to whom it is addressed, all for the cost of the postage alone.

It might be well for the committee to look into the cost of furnishing this Government postal card free, as the total cost to the Government per year is tremendous.

Private picture post cards, on the other hand, are purchased by the customer and paid for at the point of purchase. The customer then affixes a 2-cent stamp before placing it into the mails, which means that the post office receives a net revenue of 2 cents per card for the handling through the mails of the private picture post card.

We know of no other parallel situation in which the Government is actually underselling private industry, when you take into consideration that the Government postal card is manufactured, distributed, and sold for only the cost of the postage stamp, whereas the 2 cents received from the stamp purchased by the user to be affixed on private picture post cards completely goes as revenue to the Post Office Department.

The private picture post card is not only an educational medium for familiarizing the public with local and national points of interest, but also utilized throughout the United States as a medium to attract additional visitors to national parks and national shrines. In addition, it is a practical medium of correspondence. Many people are attracted to a particular locality through the picture depicted on the private picture post card, which also indirectly results in increased revenues for the United States Government by virtue of attracting tourists to the national parks and historical shrines.

We would also like to bring out the fact that the distribution and sale of the private picture post card makes it possible for thousands of distributors in retail outlets all over the United States to increase their revenues with the resultant ability to pay more taxes. Many small distributors and retailers depend upon the private picture post card and allied items for their livelihood. Therefore, we feel that the increase in postal rates on private picture post cards, with the resultant loss in volume, will adversely affect many thousands of taxpayers over the Nation.

On behalf of my own company and fellow producers of private picture post cards, I would like to recommend to the committee that the postage remain at the present 2 cents per card, as the postage was increased from 1 cent per card to 2 cents per card on January 1, 1952. This amounted to a 100 percent increase, and we feel that our particular product has certainly borne its share of postal increases and should not be prevailed upon again to have a further increase to 3 cents at this time, especially since we know of not parallel where the cost of the stamp and the mailing exceeds the cost of the product.

I would further like to suggest that the committee investigate the cost of furnishing free the Government postal card, a big bulk of which is used by advertisers and commercial enterprises, and we would like to recommend to your committee that the Government put a charge per card on the Government postal card for manufacturing and distribution, and leave the postage of both the Government postal cards and private picture post cards at 2 cents each. If an equivalent charge were made for the Government postal card to cover its cost, the members of the committee would be surprised at how much could be taken off the postal deficit.

SUPPLEMENTAL STATEMENT OF DANIEL JASPAN, LEGISLATIVE REPRESENTATIVE OF NATIONAL ASSOCIATION OF POSTAL SUPERVISORS

My name is Daniel Jaspan. I am the legislative representative of the National Association of Postal Supervisors, which has more than 20,000 members in the postal field service, including custodial and motor vehicle service.

I have already appeared before this committee to endorse H. R. 5386, as reported out by the House Post Office and Civil Service Committee, and as passed by the House, without the Rhodes amendment. Since that time, the Postmaster General has proposed changing the suggested 4-cent rate for first-class mail to a 5-cent rate for nonlocal first-class mail.

In the meantime, our national executive committee has met and fully endorsed the 5-cent rate. We feel that steps should be taken to eliminate the postal deficit and the 5-cent rate would do the most to attain that aim.

The members of the executive committee were greatly concerned, as are the Members of the Congress, with the constantly increasing national debt. We realize that the regular postal deficits have done much to increase the national debt and, unless steps are taken immediately to counterbalance the trend toward increased expenditures over receipts, more will be added to the national debt by the post office.

We know that the average individual will not object to an increase to 5 cents. It will still be a low price to pay for the service rendered. The increases in the costs of all types of communications have been much more than the proposed increase in the first-class rate. There is no logical reason for not charging 5 cents for service rendered to first-class mail.

We hope that the Senate Post Office and Civil Service Committee will report out a bill which will include the 5-cent first-class rate, and that favorable action will be taken by both Houses immediately.

Thank you very much for permitting me to submit this additional statement.

STATEMENT OF PAUL C. STARK, VICE PRESIDENT, STARK BROS. NURSERIES & ORCHARDS Co., LOUISIANA, MO.

Stark Nurseries, located at Louisiana, Mo., for 142 years, have been developed largely by use of the United States mail. We have used extensive mailings to customers and prospective customers and to our part-time salesmen in all parts of the country. We also deliver a large percentage of our products to our customers by parcel post. We have used the United States mail for advertising, promotional, and service to our customers and our salesmen. The results secured from planting our products depends much on the advice and growing directions we give to our customers and our salesmen by use of the mails.

The present depressed economic conditions have seriously reduced sales for our company and many other small-business concerns throughout the country. This is extremely serious to business as a whole and to the Government because the vast number of small-business concerns are the backbone of the American economy and the source of a large percentage of Government tax income.

All these small business concerns use the mails and many depend on the mails, directly and indirectly, as a source of a large percent of their sales and business operations.

Widespread discouragement, retrenchment or failure of a large number of small-business firms would be a very serious handicap to the Nation's effort to get our economy started upward again at the earliest possible time. Confidence of small business will be an extremely important factor in starting the upturn in business conditions.

The helpful understanding and encouragement by the Government and its recognition of the many additional, serious problems now faced by small business will give an important lift to their morale and will encourage them to increase their efforts to improve business conditions. On the other hand, if increases in postal rates are such as to discourage business-getting efforts through the mails, they can be a great disservice not only to the efforts to check the downward economic trend and the increasing unemployment but also to Government tax income from small business.

Much is being said and done by Congress and the administration regarding the need for assisting and encouraging small business. This is very timely and very important as it affects the whole economy. However, if various construc