nst the contention of the department, which was
for an amendment of the law, the publishers contended that the law,
while no doubt not altogether perfect, was in the main sound and just,
and the rate of postage of 1 cent a pound was as great a boon as was
ever conferred by Congress. They denied that it was in any sense a
subsidy.[351] They also denied the existence of a deficiency, and
contended that so far from its being true that the Post Office business
involved a loss, there was each year a profit of millions of dollars.
This result they arrived at by estimating the cost to the Post Office of
the distribution of Government free matter, and the cost of the rural
free delivery, which they added together, setting the total against the
deficit shown in the published accounts of the department. By this means
a balance of profit was obtained for each year. The estimated postage
payable at the usual rates in respect of the free matter was of course
an item legitimately to be added to gross revenue; but it was doubtful
whether the cost of the rural delivery service could be deducted from
gross expenses, as the publishers insisted, on the ground that the
service was "extraordinary."

The publishers made a further allegation. At that time the express
companies cut even the very low existing cent-a-pound rate on
second-class mail matter for short distances, and if that rate were
raised the range of their competition would be extended. With a 2-cent
rate a much greater proportion of the traffic would inevitably fall to
them. This would, of course, be very advantageous to the companies, to
whom, as to railways, any increase in the volume of traffic handled
would be welcome. These express companies had for many years been
faithful supporters of the Republican party, and behind the suggestion
to increase second-class rates the publishers were convinced there was a
desire on the part of the leaders of the party to reward their faithful
allies.[352]

But perhaps the chief contentions of the publishers, which the Post
Office was bound to some extent to admit, and would in any case find it
difficult to meet, were the claim that newspapers create a vast quantity
of first-class mail; and the claim that since the payment made to the
railway companies in respect of the transportation of the mail is based
on a sliding scale, decreasing as the volume of traffic increases, the
weight of second-class matter brings down appreciably the rate a