COMMITTEE ON APPROPRIATIONS JOHN TABER, New York, Chairman RICHARD B. WIGGLESWORTH, Massachusetts FRANCIS CASE, South Dakota H. CARL ANDERSEN, Minnesota LOWELL STOCKMAN, Oregon JOHN PHILLIPS, California ERRETT P. SCRIVNER, Kansas CHARLES R. ROBERTSON, North Dakota CLARENCE CANNON, Missouri JOE HENDRICKS, Florida W. F. NORRELL, Arkansas JAMIE L. WHITTEN, Mississippi THOMAS D'ALESANDRO, JR., Maryland GEORGE Y. HARVEY, Acting Clerk SUBCOMMITTEE ON DEFICIENCIES RICHARD B. WIGGLESWORTH, Massachusetts II CLARENCE CANNON, Missouri 20 My 47 SMA 1947t SECOND DEFICIENCY APPROPRIATION BILL, 1947 149 HEARINGS CONDUCTED BY THE SUBCOMMITTEE OF THE COMMIT- FRIDAY, APRIL 11, 1947. POST OFFICE DEPARTMENT BUREAU OF THE THIRD ASSISTANT, POSTMASTER GENERAL STATEMENTS OF J. A. BRENNAN, SPECIAL ADMINISTRATIVE INDEMNITIES, DOMESTIC MAIL, 1947 ANALYSIS OF THE ESTIMATE The CHAIRMAN. We have an estimate before us contained in House Document No. 100 of $864,000 for "Indemnities, domestic mail, 1947." This is a deficiency item, and the analysis of the item, shown on page 188 of the justifications, will be put in the record at this point. (The matter referred to is as follows:) Annual Appropriation Act, 1947, Public Law 518-- Estimated deficiency. $2,200,000 3, 064, 000 864, 000 The CHAIRMAN. What have you to say about this? Tell us why you need this money. EXPENDITURES FOR 8 MONTHS, 1946 AND 1947 Mr. KING. The expenditures for the first 8 months of 1946 were $1,246,767.18. For the first 8 months of this fiscal year, 1947, they were $1,831,359.15. The CHAIRMAN. Are you referring to the expenditures of the previous year? Mr. KING. Both of these figures are for 8 months. For the first 8 months of the fiscal year 1946, which was the first figure I gave you, $1,246,767.18. For the first 8 months of this fiscal year 1947, it is $1,831,359.15, an increase in 1947 over 1946 of $584,591.97 or 46.89 percent. The amount appropriated for 1947 was $2,200,000 and we had a carry-over of about $21,000 from the previous year. The CHAIRMAN. You mean of liabilities? Mr. KING. No; cf available money. FUNDS AVAILABLE FOR 1947 The CHAIRMAN. You had an appropriation for 1947, then, of how much? Mr. KING. $2,200,000; but the General Accounting Office reported that they had a sum from the previous year of $21,000 which, of course, could be used for payment of claims for 1946 and prior years. The CHAIRMAN. So you had $2,221,000 available; is that it? ESTIMATED EXPENDITURES DURING LAST 4 MONTHS OF 1947 Mr. KING. Yes, sir. I might make another statement, to give you a more complete picture, Mr. Chairman. I would like to state that during the last 4 months of the fiscal year 1946 we spent $876,887.71 or a total expenditure in the fiscal year 1946 of $2,123,654.89. We estimate that in the last 4 months of 1947, the present fiscal year, we will expend $1,291,450 or an estimated total expenditure this year of $3,122.809.15. Furthermore, we feel that the money now available will be expended and we will have to stop paying claims on the 15th of this month. The CHAIRMAN. Of course, this figure that you are estimating for your claims is larger than the amount that the Budget has allowed you. Mr. KING. Yes, sir. The CHAIRMAN. If your claims ran for the last 4 months on the basis of the first 8 months, you would spend $915,679 in those last 4 months. Is there any good reason why it should be larger than that? Mr. KING. Yes, sir; the last 4 months of the fiscal year usually is heavier in payments than the previous months. The CHAIRMAN. Taking what the Budget has given you, they are allowing you $338,000 more for the last 4 months than the rate at which you were spending in the first 8 months. Mr. KING. That is correct. Of course, the payments in the earlier part of the year usually are smaller. Payments in months like January and February are smaller than in some of the other months. Usually in those 2 months most of the claims involve damage and the average damage claim is usually smaller than the average loss claim. PARCEL POST CLAIMS The CHAIRMAN. These insured claims are all parcel post; are they not? Mr. KING. Yes, sir; entirely. And they represent about 88 percent of the appropriation. There are two factors really that cause this increase in claim payments; a very large increase in business and also a very large increase in the average indemnity that we pay per claim. INCREASE IN AVERAGE INDEMNITY The CHAIRMAN. Why would there be such an increase in the average? Mr. KING. People are either buying higher valued articles or articles that are usually sent in the mails are much higher in price than they were just a few years ago. Back in 1941 our average indemnity per claim was $3.66. Now it is running about $9.67 and we estimate next year it will be about $10.43. If the average indemnity were the same now as in 1941 our estimated need for an appropriation would be approximately $1,000,000, I would say. RECEIPTS FROM INSURED, REGISTERED, AND C. O. D. MAIL The CHAIRMAN. What are the receipts in this insurance activity? Mr. KING. The total number of mailings in 1946 was 260,951,556 with revenue from all sources of $47,549,222.79. The CHAIRMAN. Is that insurance? Mr. KING. That is altogether, sir; registered mail and c. o. d. mail as well. The CHAIRMAN. Does that include the transportation cost as well? Mr. KING. No; that does not include the postage. That includes fees of various kinds but it does not include postage. The CHAIRMAN. It includes the registry fee? Mr. KING. Yes, sir. MAILINGS AND REVENUE (EXCEPT POSTAGE) AND CLAIMS INDEMNITY The CHAIRMAN. Can you tell us anything about the revenue in this insurance field? Mr. KING. Yes, sir. I can furnish you a table such as we have in previous years that will show the mailings and revenue and the claims and indemnities. The CHAIRMAN. We will put that in the record at this point. |