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law for this expenditure, and in order to present all the facts I have directed to be prepared in the Second Assistant's office, to be annexed to this report, a tabular statement of the items of this description during some years, showing the routes on which it has been allowed and the particular circumstances of each case.

Accounts for these apartments have been suspended to await a careful inquiry to determine what is the duty of the Department in respect to them, and the attention of Congress seems to be required to the subject.

Steamboat Service on the 30th of June last was performed on 116 routes, aggregating in length 11,997 miles, at an annual rate of expenditure of $511,669. There was a decrease of one route and of $33,571 in annual cost during the year.

Steamboat service becomes less desirable as railroads are built upon such routes that post-offices may be either supplied from them directly or by means of short star routes; and the contracts under which they are paid generally impose a cost greatly disproportionate to other carriage. Scrutiny into the circumstances of some of these routes has been made by the present Second Assistant Postmaster-General, under general directions to that effect, and his report shows the results so far realized. Such changes have been ordered in the mode of supply, or contract prices so reduced as a condition of continuance, that between May and September a net decrease in the annual charge for the service, as theretofore performed, of $74,336 has been secured. While the examinations in progress on other lines are not yet sufficiently complete to determine action, enough has been shown to give reason to think a further reduction of cost may be gained during the year.

The Star Routes,-the Departmental designation of all routes of mail carriage, except railway and steamboat lines,-numbered on the 30th of June 12,371, aggregating in length 232,222 miles, and then stood at an annual rate of charge of $5,414,804, au increase of 642 routes, 5,443 miles, and $324,863 in cost for the year. The increase was chiefly in Western States and the Territories. Between the 1st day of April and the 30th of September there has been, however, in each month a decrease effected in the cost of the service of $9,945 in April, $6,244 in May, $1,065 in June, $75,564 in July, $50,153 in August, $5,725 in September, amounting to a total saving in the annual cost of $148,696. This was done, as in case of steamboat routes, by a study of the circumstances affecting the service, and cost of it, upon some of the many star routes, and by annulling existing contracts and making others, or by effecting an arrangement with existing contractors for a diminished price, and in some cases by discontinuance of routes not desirable. It may be also remarked of this branch of the service that there is reason to expect some further reduction in the ratio of expense may be secured. Necessarily, time must be expended to carefully examine the peculiar condition of each case, in order that no detriment to the public shall result from the attempt to diminish the cost, and this has usually been accomplished by the personal examination upon the ground of a competent inspector.

In all cases the sufficiency and convenience of the new service provided has been anxiously regarded, and the changes of mode hitherto made have, it may be safely affirmed, afforded in no case inferior, and generally better facilities than the service supplanted. Notwithstanding, as every reduction affects some pecuniary interests unfavorably, much opposition and some clamor have been sometimes encountered, and, it may doubtless be anticipated, will be further heard.

An interesting tabular comparison is given by the Second Assistant Postmaster-General, showing the improving economy of the star serv. ice. He states the average appual number of miles during the six years before the last, 76,818,222, against an increase of 8.08 per cent., giving 83,027,321 miles in the last year, while the previous average annual cost was at the average rate of 7.86 cents per mile, $6,010,658, and during the past year at but 6.52 cents the average mile the cost was only $5,414,804, a reduction of nearly 10 per cent on the total annual expense, and of above 17 per cent. in the rate per mile. The improvement has manifestly repaid the trouble.

The Mail Messenger Service—by which transportation between post offices and railroads and steamboats is effected-stood, on the 30th of June, at an annual rate of cost of $879,217 for the supply of 5,335 offices; an increase during the year of 40 offices, and of $15,904 in annual cost.

From the nature of this service, no very considerable reduction in its cost could be anticipated as probable; while the necessity for its extension, as more offices come to be supplied by railroad routes, must gradually raise the total expenditure. The table of changes shows, however, a total net decrease in the annual rate of expense, effected between the first of April and October, of $30,102.

Fines and Deductions were imposed during the year on con. tractors and others to a gross amount of $216,853.96; of which remis. sions were made of $21,080.10. Other fines and reductions, on postal clerks of $3,344.55, and on mail messengers of $2,081.84, make a total net sum of fines and deductions for the year, $200,200.10. The details of these will be reported to Congress, as required by law.

The Railway Mail Service, as the term is employed in the Department, does not embrace the care of arrangements with railroad companies for the transportation of the mail in general, but designates the service performed by postal clerks, whether upon railway or steam. boat lines; their appointment, examination and government, and the management of the methods of carrying and distributing railway mail. matter, and to some extent, as incidental thereto, the care of railway post-offices and of provisions made to specially facilitate the transportation of the mails. The report of the Superintendent, with accompany.

ing tables, presents the affairs of this branch of the postal business during the past year in extensive detail, and he contrasts the statistics of its proportions and performances in the last with former years of its history in such a manner as not only to exhibit its present aspect, but to illustrate its development from the beginning. It furnishes explanation, in part, of the increase of the expenditures of the service already commented on, that the additional equipment of the past year has been-of railway post office lines 13, of postal cars or apartments in cars 155, and of clerks of all classes 424, with an increased annual mileage of 3,761,701 miles. The employment of one steamboat line was discontinued, the clerks on steamboats were diminished in number by 5, and the annual mileage of clerks upon them fell off 57,329.

The total length of clerks' routes attained in the year was 121,167 miles, and the entire number of miles actually run gives a daily average to each clerk of 120.94 miles. The gross number of pieces handled, exclusive of registered matter, increased by 9.48 per cent. This fact tends to prove an increased employment of the mail, notwithstanding the unfavorable business condition during a part of the year, and gives support to the observations previously made upon the revenues of the service. Altogether about five thousand million pieces were handled by these clerks during the year.

The record of errors in distribution by clerks shows some improve. ment in the average results over former years, and indicates by the reported average percentage of 99.98 of correct distribution a good state of discipline. There is reason to think, however, that this percentage is higher than the facts warrant, because of failure in some cases to report errors. Clerks have been dismissed for this fault, and the consequence will be rigidly imposed when the fact is shown.

The casualties to the clerks were, it is pleasing to say, less than in some former years, although it is necessary to record the death of two and the serious injury of thirty-five, besides slight hurts to sixty-five, from accidents occurring in the course of their duties.

Some improvement of the service has been effected by extension of the use of through registered pouches and by increasing the separations of letters for city delivery while in transit. Results in the latter direction have been so satisfactory as to give hope of increasing benefits from extending the method as far as practicable.

The appropriation for special facilities was expended chiefly on the general north and south coastwise line from the New England States to Florida, $25,000 being also employed for the use of the early morning train from New York on the New York Central and Hudson River

Railroad.

The fast mail service has been rendered in substantially the same manner as during the previous year, a few minor changes in the schedule of trains only having taken place.

6755 PMG-2

In February last, Postmaster-General Hatton renewed the contract with the Chicago, Burlington and Quincy Railroad Company, and the Chicago, Saint Paul and Milwaukee Railroad Company, for fast mail service from Chicago to Council Bluffs and to Saint Paul, respectively, for three years from the 10th day of March, the service having proved beneficial and satisfactory. Copies of these contracts will be found annexed to the report of the Second Assistant Postmaster General. The expenditure for the railway post office car service

for the year, as reported by the Auditor, was $1, 709, 236 47 For special facilities....

249, 999 72 For compensation of clerks

4, 246, 209 51

Total

6, 205, 445 70

Foreign Mail Service. The report of the Superintendent of the Office of Foreign Mails gives, in convenient tabulated form, detailed information of the exteut of the business of this branch of the service.

The dispatches of our mails to other countries having necessarily been by sea, except such as were interchanged with the Dominion of Canada on the north and the Republic of Mexico on the south, the Postal Union Conventiou has relieved the Department from further care, and extraterritorial land carriage—save only across the Isthmus of Panama-has not required the direct employment of any carrier, but was effected through foreign postal administrations.

No special contract for the transportation of any foreign mail was made or in force during the past year with either foreign or domestic carriers; but the policy, satisfactorily pursued during many years, of sending the mails by whatever vessel could most expeditiously and properly transport them at such times and to such ports as its business required it to sail, continued to be observed with good results.

The gross weight of our sea-borne mails of all kinds (except such as were dispatched to Canada) during the year was 1,226,929,130 grams, or 2,705,378 pounds; of which the weight of letter and post-card mail was 222,267,094 grams, or 490,099 pounds, and of printed and other matter 1,004,662,036 grams, or 2,215,280 pounds. Of letter mail, 91.63 per cent. was trans-Atlantic, and but 8.37 per cent. was transmitted to the countries and adjacent islands of this continent and across the Pacific seas; of the paper mails, these percentages were 80.84 and 19.16 respectively. There was a slight decrease in the weight of letter mail, as contrasted with the preceding year, of 7,790 pounds actual weight, or 1.56 per centum; due, probably, in part to diminished immigration and business, and in part to the fact that Mexicau mails came to be transported more by rail during the last year. There was, however, some increase in the weight of paper mails; of 25,527 pounds in actual weight, but less in percentage than one-tenth of one per cent.

The total cost of the service by carriers directly employed was $331,903.24, of which $270,908.72 were paid for trans-Atlantic, $22,124.44 for trans-Pacific, and $38,870.08 for the American-continental carriage. So far as can be stated from adjustments made, the charges of foreign postal administrations for carrying our mails during the year amount to $104,797.80. The Department earned credits with other countries for the transportation of their mails amounting to $140,302.46, of which $81,681.36 was for our transcontinental carriage of British and Aus. tralian closed mails. The tables annexed to the superintendent's report exbibit the weight of mail sent to each country, its relative proportion to the whole, the service performed by all the different carriers, and the amounts paid them.

The net revenue, if any, derived from our foreign mail service cannot be stated with certainty, because of the impossibility of securing accurate information either of receipts or cost. Letters do not often reach exactly the full unit of weight, and therefore an estimate of receipts based upon weights would be probably less than the actual postages received; nor do the counts furnish very reliable means; and, upon the other hand, data for estimating the cost of the inland service bestowed on foreign correspondence are difficult of satisfactory ascertainment. It is fairly certain this cost must have exceeded the domestic rates of postage, because those rates have proved insufficient to pay the cost of domestic mails carried in the same manner during the year.

Attention is called to the tabulated estimate of this business in the Superintendent's report, in which he has stated the revenue upon the basis of a single rate of postage per single unit of weight, assuming that the weight of matter carried free equals the total difference between actual weights and the single-rate weights of paid matter; and on the other side has debited the account for inland transportation by the same rule, at the inland postage rates of this country, by which computation a pet revenue is shown of $132,220.48 for the year. But this table entirely onnits from view one of the heaviest charges upon the Department in the foreign-mails service, which is our inland carriage and delivery of letters dispatched from other countries to persons bere-a duty we must perform, under the Postal Union Convention, without reclamation of charges, in return for their similar carriage of our mails. Had this item been estimated in the table, the apparent net revenue would have disappeared, since by the same estimation applied to the outgoing mails (domestic postage at a single rate for each 15 grams), it will be seen, without computation, this item of cost must have largely exceeded the sum stated as net revenue. That estimate of cost more likely produces an inadequate than an excessive result, because much of the incoming foreign mail matter is carried over long distances to our Western States and Territories, where our immigrant settlers reside, upon distributing routes and to remote post-offices, whose maintenance much outweighs their pecuniary return in postages.

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