Mr. DIXON. Would any companies come except those that are not owned by the municipalities?

Mr. GADSDEN. I think it quite likely that the municipally owned will come, too, when the proper time comes. I have in mind the municipally owned water companies up here.

Mr. O'SHAUNESSY. How far will the remission of the corporation. tax go to curing this situation and for how long a time will it keep

it cured?

Mr. GADSDEN. I will answer the second question first-a very short time.

The CHAIRMAN. We will have to go over to the House now.

Mr. GADSDEN. I have finished.

Mr. MOORE. Are you going to submit any amendments with your statement?

Mr. GADSDEN. No; except just the thought that we think justice would be subserved by segregating us into a class and imposing whatever tax

Mr. O'SHAUNESSY. May I ask that Mr. Gadsden be permitted to answer that question? You say "a very short time."

Mr. GADSDEN. I think so, because we have numerous cases where applications have been made for increased rates, and pending increases operating expenses, I am told, have increased to offset what we might expect to get out of 6 cents.

Mr. O'SHAUNESSY. Then any relief that we might grant you would not help the situation?

Mr. GADSDEN. It would help some.

Mr. O'SHAUNESSY. It would help but would not cure?

Mr. GADSDEN. I think atmospherically it will have a tremendous effect on the country at large in enabling us to get increased rates. Mr. O'SHAUNESSY. It will merely help you in other quarters? Mr. GADSDEN. Yes; it will show Congress sympathizes with our position and is going to do what it can to help us.

Mr. STERLING. Has the Capital Issues Committee refused to permit you to sell bonds?

Mr. GADSDEN. Not to us.

Mr. STERLING. Have you tried?

Mr. GADSDEN. Oh, yes. We have no difficulty in getting favorable consideration from the Capital Issues Committee, but we have made. very few, because the bonds are unsalable and unmarketable.

Mr. LONGWORTH. There is no use in getting that permission?
Mr. GADSDEN. No; that is a nugatory act.

Mr. CRISP. I want to make a statement in conjunction with the sentiment of condemnation that has been voiced here in the committee.

The CHAIRMAN. Can we not take that up after recess?

Mr. CRISP. I think it is very unfair and that the statement I desire to make should go into the record.

The CHAIRMAN. We would like to get over to the House. Could you hold your statement until we get back?

Mr. CRISP. It will only take a minute.

The CHAIRMAN. Go ahead and make the statement. I may say that Mr. Gadsden is mistaken as to the corporation's holding. The corporation holds practically according to the statute there.

Mr. CRISP. In the first place, the War Finance Corporation was not created. as an eleemosynary institution. The Secretary of the Treasury stated, and it has been held by the War Finance Corporation, that if it is positively shown that they can not get relief from other sources, then there is a case for adjustment and help. I do not think it is fair for the members of the committee to charge the War Finance Corporation with derelictions, when they do not know the circumstances any more than what has been presented here as to the War Finance Corporation.

Mr. STERLING. I asked whether the public utilities could not get money under this law.

Mr. CRISP. Have they done that?

Mr. STERLING. They have ruled that they could not as a class. The CHAIRMAN. I will say they have not ruled that. I have just read very carefully the decision. The decision is contrary to what I expected and what other members of the committee understood and members have stated. I think, if Mr. Gadsden will read it carefully, he will find that they have not held according to his construction.

Mr. GADSDEN. In justice to myself and my committee, I have not said anything about the War Finance Corporation. The last thing we would want to do in a meeting before this committee would be to criticise the War Finance Corporation.

The CHAIRMAN. Will you come back at half past one?

Mr. GADSDEN. I will be glad to.

The CHAIRMAN. The committee will take a recess until half past one this afternoon.

(Thereupon, at 12.05 p. m. the committee took a recess until 1.30 o'clock this afternoon.)

AFTER RECESS.

The hearing was resumed at 1.30 p. m., at the expiration of the

recess.

The CHAIRMAN. Suppose we hear you, Mr. Cowles, briefly now, since you were on the program yesterday and gave way to two gentlemen from Boston.

STATEMENT OF MR. JAMES L. COWLES.

The CHAIRMAN. Give your full name, so the committee can hear it, and your occupation, what business you are engaged in, and what parties you represent.

Mr. COWLES. I am a writer and student, preeminently on public transportation. That has been my business for the last thirty years, ever since, if you please, I found myself on the ruins of two New England paper mills destroyed by enormous and discriminating taxation. I was under those mills to the extent of $20,000 apiece.

The CHAIRMAN. In whose interest do you appear, or whom do you represent?

Mr. COWLES. I think I represent some at least of the publishers. I am deeply interested in that particular service.

The CHAIRMAN. I understand; the second class postage.

Mr. COWLES. Yes, sir.

The CHAIRMAN. And what publishers' association do you represent?

Mr. CowLES I suppose I am here representing

The CHAIRMAN (interposing). The National Publishers Associa

tion?

Mr. CowLES. I am not, in a sense, employed by them. I am working really for them, for that interest, but not more for that interest than for the entire interest of this country.

The CHAIRMAN. I understand. And your expenses, or your employment, rather, is paid by nobody?

Mr. COWLES. I could not live at all if I did not have some support. The CHAIRMAN. Do the publishers or any publishers contribute? Mr. CowLES. There are publishers contributing to my support. The CHAIRMAN. And you are representing those?

Mr. CowLES. I represent those, of course.

The CHAIRMAN. That is all right. I just wanted to know.

Mr. CowLES. I am the president of the World Postal League, an organization that I established in the city of Boston in, I think, 1913, and my object was and is and has been for many years the extension of the post office over the entire machinery of public transportation and transmission with absolute freedom of intercourse throughout the entire world; for the establishment of cooperation, if you please, in place of competition.

The CHAIRMAN. You have talked with me about this matter very entertainingly and very interestingly several times, and I know the committee would be glad to hear from you on the second-class postage matter.

Mr. CowLES. I want to say for a moment how I came to take that up.

The CHAIRMAN. All right.

Mr. COWLES. I went to the New York and New Haven road and asked for relief. The reply that came to me was practically this: "We own this plant. While you are here you will obey our orders and pay just such transport rates as we see fit to levy." That, to me. was a challenge, a challenge for life, not for myself alone, but for all humanity, because if that was to be the course, then certainly there was a railroad despotism growing up here under which all of us would be slaves, and for one I was not built in that fashion. I had lost a great deal by them, but I determined I would lose every cent that was left before I would yield, and I spent all the money I had in it and spent throughout the life of my daughters, because they were all with me. Mr. Chairman, in this splendid work, and shall 1 ever forget when my daughter Maud threw her arms around my neck as I came down here in 1906 and said me: "Papa, we will stand by you. When I went back from here on that occasion her life had just gone and she had felt the trouble coming. She rushed to the bathroom and in a moment her life was gone out, and she fell dead in her sister's arms.

I have paid, friends, for the work that I have done and whatever success that has come about. When that happened to me my hope was to look about and see if there was not some place where I had got as much power as anybody else had in determining my transport taxes, and I quickly found in our flat rate letter postage the idea.

64059-18-No. 4

First, the gift to us by that great school-teacher, Roland Hill, who gave to the world this wonderful truth, that in public transportation the cost of the service of the transport machinery was absolutely regardless of the distance traversed by any unit of travel upon the moving machinery; that that was also regardless of the character of the matter transported. It was simply a matter of weight and of space, and that was all. Those were the two points he presented before the English Parliament. At that time they had a system of rates-government rates, if you please, at the time-determined by zones, rates so high that the ordinary man could not write a letter. If a workman was seeking work he had to go on his own feet to find it, because he could not meet that system of rates, varying from about 6 cents for a single sheet of paper 15 miles, up to 30 cents or more up to 300 miles. Those rates, said the leading men of that time, were founded on injustice to the poor. Roland Hill proved that it actually cost the English Government fifty times as much to send a parcel a short distance where only a single parcel might be carried than in the great through mail from London to Edinburgh, 400 miles-50 times as much for the short haul as for the long haul-and that was the common law. He presented that to the English Parliament in 1837. It was discussed in England for three years and at the end of that time his idea became law, and then, for the first time in the world's history, did it become possible for the ordinary man and for the ordinary people of the country to combine together for their common welfare, and democracy for the first time became possible, and under it what happened? Under it business grew like the wild wind, with the rates cut from 18 cents for a single sheet of paper down to 2 cents for a half cunce.

The idea came over to this country and immediately caught hold of the leaders of this country, and in 1844 this thought was presented. I want to read it to you because it shows what Congress thought of the post office at that time:

To content the man dwelling more remotely from the town by giving him regular and frequent means of intercommunication, to assume the immigrant who plans his home in the wilderness that he is not forever separated from the kindred and society that still shares his life. to prevent those whom the swelling tide of population is constantly pressing to the verge of the wilderness from sinking into the hunter or savage state, to diffuse throughout all parts of the land enlightenment and social improvement, lifting our people in the scale of civilization and binding them together in patriotic affection,

This, said the House Postal Committee of 1844, is the end of the post office.

Mr. Chairman, the wonderful results that followed the adoption of the flat-rate service of England were so wonderful that the idea spread over the land like lightning. In 1845 a bill was passed in the Senate cutting down our six-zone service, which varied all the way from-I have forgotten now the first, but it ran up to for 400 miles 25 cents, and the lowest, I think, was six cents for 15 miles. This proposition was brought before them, and one of the leading men of New England-who, by the way, once made a trip to Iceland and came back and said that one thing he found there differing from anywhere else was that their post office was absolutely free and supported by the ordinary forms of taxation, and he said that perhaps from that service you might account for the extraordinary intelligence of the Iceland people.

In 1845 the zones were cut down to two zones, 5 cents to 300 miles and 10 cents for greater distances. Other changes were made in the succeeding years, until in 1863 Abraham Lincoln, backed by Montgomery Blair and by Mr. Casson, the Assistant Postmaster General, Congress gave a flat rate here to all the different classes of postal

matter.

During the war period things were checked up in Europe, but right in the midst of the war our Postmaster General suggested a flat rate on international service, and just as soon as the war drums in Europe had ceased to beat they adopted in England a flat rate international service, and up until 1914 we had that service, and we had a 2-cent letter service covering all this country and practically all of England and Canada, and running out a little bit later to New Zealand. This continued here until, I think it was under the leadership of Uncle Joe Cannon, in 1885, the 1-cent-a-pound service on magazines and newspapers was adopted. Then a growth came to this country that was beyond the dreams of anyone. Then was carried out just what the Congress in 1844 said should be the aim of the post office, binding the nation and the whole world together in one grand unit.

This great service, carrying to every part of the country the news from the great centers, educating, increasing business enormously, its advertising telling the people in the far-off countries where they might best satisfy their wants and dispose of their wares, at the same time carried comfort and joy and hope to all the people, and especially to the women of the world. One of my friends, who is over here in the library building, said at that time that the news was that the service had largely decreased insanity among the women in the rural parts of the country. At any rate, it grew and grew and grew, like the wild wind, and to such an extent did it grow that finally a certain gentleman named Lowden, of California, representing the railroads of the country, and seeing in that service a great big object lesson to all the rest of the country, attacked it on the ground that it was a great expense to the Post Office, causing the great deficit to the Post Office.

I met him, Mr. Chairman, and met him with what? I met him with truths given to me-by whom? By no less a man than Hon. Joseph H. Choate, our late ambassador to England. The railways were at that time carrying milk distances up to 330 miles at a rate of one-sixth of a cent a pound in cans and one-third of a cent a pound in crated bottles. Those cars ran at least 400 miles a day. There were not any idle cars. They were not sitting still three-quarters of the time and blocking the tracks. They moved and they were continually on the move, and it was discovered that at those rates the Delaware & Lackawana road was paying their agent, Westcott, a clear income of $50,000 a year to manage the business, and I heard Mr. Choate remark that it looked to him as if that was an arrangement between the president of the road and Westcott to rob the stockholders. If I had been allowed to speak I should have said it looked very much like a scheme to rob the public.

I presented those truths to Congress in 1897. Mr. Lowden made his attack precisely like the attacks you have heard presented to you time and time again. In 1896, almost the 1st of January of that