When the questions of the desirability and practicability of establishing a system had been decided, there still remained the difficult and important question of the scheme of rates of charge on which the system should be based. Some of the witnesses before the Sub-Committee advocated a uniform rate, representing that a graduated rate was undesirable and would be unacceptable, as giving a special privilege to certain sections of the people. A more general opinion was that a flat rate would be unsound economically. With such a rate, the express companies would step in and take all the profitable traffic; and it would, moreover, be necessary to fix the rate so high as to render it prohibitive for goods of low value and for the purpose of moving traffic on the rural routes. In a country of vast extent the actual cost to the Government for the transportation of parcels of the same weight would differ widely in proportion to the distance for which they were conveyed in the mails, and the differences would be sufficiently great to render it easily possible to graduate a scale of postage approximately in accordance with the distance and the actual cost. The department estimated the cost of transportation for mail matter to be 1·32 cents for each 200 miles, and taking this as a basis, differential rates in respect of transportation were arrived at for a series of zones. The charge for handling, i.e. for collection, delivery, administrative and all other incidental services, was calculated as an altogether separate item. The Sub-Committee had the evidence of Mr. John L. Newbold, a gentleman of long experience in a transport business which dealt mainly with small parcels for delivery within the limits of the City of Washington, and was therefore in a high degree comparable to delivery service which would be performed by the Post Office in respect of parcels. Mr. Newbold offered to contract with the Government to handle all post parcels for delivery within the City of Washington at 5 cents a parcel, with a limit of weight of 25 pounds. Estimates by similar delivery companies in New York City indicated the cost to them of packages up to 25 pounds, which was a little over 5 cents per package. The department's estimate of the handling cost of fourth-class matter showed a cost of a fraction under 3 cents for the first pound, with an approximate increase of 20 per cent. for each additional pound.