This provision is essentially necessary in view of the bill establishing the Parcels Post, effective January 1, 1913, which will result in taking from the express service traffic for which the railroad companies now receive compensation and transferring it to the mail service; the bill referred to containing no provision for payment to the railroad companies for the increased tonnage to be handled in mail cars, although such provision was made for the star routes and the city wagon service. (c) For pay for Apartment Cars on some basis that will compensate for the service. That the Postmaster General has himself recognized the justice of such a change, is indicated in the following quotation from page 3 of House Document No. 105:-- "* * * an additional amount may be allowed for railway post office cars when the space for distribution purposes occupies 40 feet or more of the car length. No additional compensation is allowed for space for distribution purposes occupying less than 40 feet of the car length. This distinction is a purely arbitrary one and without any logical reason for its existence." (d) For a fair allowance to the railroads for the side and terminal messenger service which they perform for the Post Office Department, according to the value of this service to the Post Office Department. The necessity for this is also emphasized by the establishment of the Parcels Post which will undoubtedly add greatly to the expense of the service. (e) That all rates of pay should be definite and not subject to the discretion of the officers of the Post Office Department. Other inequities exist under the present law, but are due to the administrative methods rather than to the law itself. _Question 2._--Is the underlying principle of the plan embodied in the enclosed bill a proper basis for compensation? If not, wherein is it improper, and why? _Answer._--The underlying principle of the plan embodied in Senate Bill No. 7371 is not correct. Any plan of compensation based upon operating cost and taxes, plus six per cent. for profit, is fundamentally wrong, because it makes no allowance for return upon the property employed.