P. O. Racket?

Suspicious Senators last week thought they had caught the Post Office Department aiding and abetting a new form of racket in post office leases throughout the land. On the Senate floor the Department was flayed for renting, often without competitive bids, not less than 27 offices, including those in St. Paul, Dallas, Grand Rapids, and Columbus, Ohio, from a Chicago syndicate known as Jacob Kulp & Co. It was charged that the Kulp concern did what amounted to a brokerage business in postal leases, had issued some $150,000.000 in bonds on the strength of these leases, which was vastly in excess of the true value of the properties rented.

Under specific attack in the Senate was the Post Office Department's 20-year lease on the St. Paul post office opposite Union Station. U. S. rent: $120,000 per year. Property values appraised by the U. S. court: $317,000. Bonds sold by Kulp on the property: $1,150,000. In March 1928, the Federal Grand Jury at St. Paul expressed its opinion that the lease was "tainted with fraud and corruption." Rent payments thereupon ceased, pending action by the Department of Justice. Nothing has happened in two years.

Originating in the House with St. Paul's Representative Melvin Joseph Maas, the attack on the Post Office Department's leasing system was carried forward in the Senate by North Dakota's Senator Nye and Wisconsin's Senator Elaine. Exclaimed Senator Nye: "The story at St. Paul smells to high Heaven. ... It is a story that possibly rivals the Teapot Dome and other naval oil reserve leases."

Because the St. Paul lease was arranged under Democratic Postmaster General Albert Sidney Burleson, Republican Senators tried to blame him for any wrongdoing. But it was Republican Postmaster General Will Hays who signed the first lease in 1922, Republican Postmaster General Harry Stewart New who renewed it in 1925. Postmaster General Walter Folger Brown was accused of being very slack and indifferent to extirpating the alleged fraud.

To this "General" Brown replied, through Senator Fess on the Senate floor, that he had not seen the files on the case because the Department of Justice held them in connection with the Kulp company's suit to obtain unpaid rent. The Department of Justice, stirred by Senate criticism, issued a statement defending its handling of the St. Paul case.

Senator Elaine offered a resolution to investigate 1,200 post office leases in which he suspected the U. S. was paying "excessive rentals." Colorado's Senator Phipps. Old Guard chairman of the Senate Post Office Committee, succeeded in temporarily blocking the Elaine resolution, but he was unable to prevent the Senate, by a vote of 35-to-25, from knocking out from the Post Office Appropriation Bill an item of $120,000 for the St. Paul rent, put into the measure at the request of "General" Brown.

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