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No. 12. Statement showing the amount of dead mail matter treated in the division of dead letters during the fiscal year ended June 30, 1885. No. 13. Statement showing the disposition of mail matter opened in the division of dead letters during the fiscal year ended June 30, 1885. No. 14. Statement showing the number of pieces, classification, and disposition of unmailable matter received at the dead-letter office during the fiscal year ended June 30, 1885.

No. 15. Statement showing the number of foreign dead letters received and disposed of during the fiscal year ended June 30, 1885.

No. 16. Statement showing the number of letters originating in the United States and returned by foreign countries as undeliverable during the fiscal year ended June 30, 1885.

No. 17. Statement showing the amount of dead mail matter returned to and received from foreign countries during the fiscal year ended June 30, 1885.

No. 18. Statement showing the number, classification, and disposition of dead registered letters during the fiscal year ended June 30, 1885. No. 19. Record of the number and weight of letters, parcels, and circulars mailed during the six days from June 22 to June 27, 1885, in clusive, at twenty of the leading post-offices in the United States.

No. 20. Record of the number and weight of letters, parcels, and circulars mailed during the six days from September 21 to September 26, 1885, inclusive, at twenty of the leading post offices in the United States. No. 21. List of post offices at which the special delivery system authorized by act of Congress of March 3, 1885, has been established. No. 22. Statement showing the operations of the special-delivery system during the month of October, 1885.

DIVISION OF FILES, RECORDS, AND MAILS.

The total number of letters and other inclosures received, opened, and examined during the year (exclusive of matter for the division of dead letters, opened in that division) was 1,172,860, an increase of 7,276 over the number for the previous year. Among them were 756 inclosures of money, and 7,128 contained postage-stamps, stamped envelopes, and postal cards returned for redemption. The number of registered letters received was 13,312.

Of the letters received, 41,207 were briefed and recorded, and filed after final action had been taken upou them. The number of letters written in the office, copied, enveloped, and mailed, was 16,381, exclusive of circulars.

DIVISION OF FINANCE.

There were 5,246 contracts for mail service received during the year from the Second Assistant Postmaster-General, and 27,667 orders of the Postmaster-General (of which 13,500 were double) recognizing mail service not under contract, curtailing or extending service, or modifying previous orders. These contracts and orders were entered upon the books of the finance division for reference when acting upon certificates of the Auditor for the payment of mail contractors and other creditors of the Department. The number of Auditor's certificates received and acted upon was 74,659, an increase of 4,251 over the number for the previous year.

In addition to the above, 5,395 certificates were received from the Auditor of the Treasury for the Post-Office Department, upon which 5,395 transfer drafts, covering the sum of 8861,980.33, were drawn

against postmasters having a surplus of postal revenue, in favor of other postmasters the revenues of whose offices were insufficient to meet the demands upon them for payment of railway postal clerks, mail messengers, letter carriers, &c.

The following table shows the number of warrants and transfer drafts drawn in the finance division, and the number of certificates of deposit received, entered, and passed to the Auditor, during the last fiscal year in comparison with the number for the previous year:

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The amount represented by the 74,659 warrants drawn upon the Treasurer and Assistant Treasurers during the year is $24,641,848.22. Accounts were kept with the Treasury, nine sub-treasuries, and thirty-five designated national bank depositories.

In connection with this subject I beg leave to urge the propriety of increasing the compensation of the chief of the finance division of this office from $2,000 to $2,250, as contemplated by the estimates of appropriations already submitted to the Secretary of the Treasury for transmission to Congress. The position is one of great responsibility and trust, involving the exercise of the utmost care, fidelity, and vigilance to adequately protect the interests of the Government in connection with the collection and disbursement of the postal revenue. The requirements of the position abundantly justify the compensation I have asked for it, to say nothing of the merits of the present incumbent, and in the interests of the public service I sincerely hope that the increase solicited will be allowed. The proposed increase would equalize the salary of this officer with that of the chief of the stamp division and of the chief of the division of dead letters, all three positions being of great importance. This is the only increase of expenditure contemplated for this office in the legislative, executive, and judicial appropriation bill, and, as will appear hereafter, there is a large decrease for the service of the office in the estimates for the post-office appropriation bill.

I also beg leave to call your attention to the necessity for a uniform and better system of accounts in a large number of the principal postoffices. At present there is great diversity in the methods of keeping the accounts in these offices. A few books of standard form are now furnished by the Department to the first and second class offices only, no other offices being supplied with books of record. Those devised and furnished for the use of the first and second class offices are generally found unsuitable in form; and in some cases books of special form, devised by the postmaster and not uniform among the different offices, are either furnished by the Public Printer upon requisition of the Department, or are purchased by the postmaster and their cost reimbursed to him. The use of approved standard forms should not only be extended to all the Presidential offices, but to such of the fourth

class (money-order) offices as are authorized to disburse postal funds to pay railway postal clerks or mail messengers.

The use of proper forms teuds to insure accuracy in accounts, to expedite the deposit of balances due the Government, and to aid postoffice inspectors in their investigations.

The proposed measure is worthy of serious consideration, and I would accordingly recommend that the necessary steps be taken to carry it into effect.

As a matter pertaining incidentally to the postal revenues, I suggest a change in the system of dealing with what is known as the key-deposit fund. Under the present system the renter of a post-office box is required to make a deposit to insure the return of the key. This deposit is not taken up by the postmaster in his account with the Government, but is held in trust to be restored upon the surrender of the key. The holder of the key has no recourse against the postmaster in case of default except by suit at law, and experience has shown that many postmasters, especially those who have gone out of office, have profited from this fund. It would seem proper that the postmaster should be required to account for the key deposits as postal revenue, and that the Government should be liable for the return of the money upon demand, accompanied with a surrender of the key, and by a proper voucher showing the amount paid upon deposit for the same. This course would seem to be only just to the public, and it would inure to the benefit of the Government, since the postal revenue rather than the postmaster would be the beneficiary by the failures to request the return of the deposit. But, as a matter of paramount importance, the faith of the Government should be pledged to fair dealing with the patrons of the postal service, who ought not to be left to the caprices of postmasters or other public servants, and rendered liable to suffer by the changes in official tenure. EXPENDITURES, APPROPRIATIONS, AND ESTIMATES FOR THE SERVICE OF THIS OFFICE.

The expenditures for the service of this office for the last fiscal year amounted to $1,072,138.75, a decrease of $16,074.33, or 1.4 per cent., as compared to the expenditures of the year ended June 30, 1884. The sev eral amounts, by objects, will be found in table No. 3, attached to this report.

The appropriations for the service of the year amounted to $1,198,400, of which $126,261.25, or 10.5 per cent., was left unexpended. The appropriations for the year ending June 30, 1887, are estimated at $992,400, a decrease of $342,000, or 25.6 per cent., as compared to the appropriations for the current year, and of $206,000, or 17.1 per cent., as compared to the appropriations for the last fiscal year. The esti mates for the year ending June 30, 1887, are $79,738.75, or 7.4 per cent., less than the expenditures for the year ending June 30, 1885.

The estimates in detail, with the explanations thereof, will be found in paper No. 1 appended hereto.

The appropriations for the current year, in the aggregate, will be fully adequate to meet all the various objects of expenditure and leave a large unexpended balance besides. In one item only, that of ship, steamboat, and way letters, was there a deficiency during the last year, the appropriation having been $1,500 and the expenditure $1,801.11. The appropriation for the current year is $2,000, and as the accounts for the quarter ended September 30 from postmasters by whom the expenditure is made have not yet been adjusted by the Auditor, there is nothing at

present to indicate the amount that will be required for the present year. It is believed, however, that the appropriation will be sufficient. These matters are treated more in detail in the letter of estimates hereto appended.

GENERAL FINANCIAL EXHIBITS FOR 1885.

The gross receipts of the postal service for the fiscal year ended June 30, 1885, amounted to $42,560,843.83, as follows:

Ordinary postal revenue..

Net revenue from money-order business..

Total...

The expenditures made to September 30 on account of the service of the year ended June 30, 1885, amounted to...

Add amount of liabilities outstanding on the 30th of September for the service of the year ended June 30, 1885, as estimated by the Auditor....

$49,317, 188 41

285,000 00

Gives total expenditures, actual and estimated, for the service of the year.....

Leaves estimated deficiency to be supplied out of the general treasury
on account of the year..

Total estimated expenditures, as previously shown..
Add amount certified to the Secretary of the Treasury by the Auditor
for transportation of the mails on the Pacific railroads, and by law
not charged to the appropriations for the postal service...

Gives total estimated cost of the postal service for the year
Deduct from this latter amount the gross postal receipts, previously

shown

$42, 151, 910 53 408,933 30 42,560,843 83

49, 602, 188 41

7,041,344 58

49, 602, 188 41

1,340, 226 83

50,942, 415 24

42,560, 843 83

Leaves excess of estimated total cost of service over gross receipts.. 8,381, 571 41

The gross receipts fell 13.7 per cent. short of the expenditures made to September 30, 14.1 per cent. short of the expenditures, actual and estimated, and 16.4 per cent. short of the estimated cost of the service for the year. The gross receipts were also $765,114.98, or 1.7 per cent., less than those of the year ended June 30, 1884. Exclusive of the net revenue from money order business in both years, the decrease was $666,724.47, or 1.5 per cent. Excluding also the sum of $154,270.26, realized from official postage-stamps and stamped envelopes during the year ended June 30, 1884 (the issue of which stamps was discontinued on that date), leaves the decrease of ordinary postal revenue at $512,454.21, or 1.2 per cent. A part of the decrease may be attributed to the act of June 9, 1884, increasing the unit of weight on secondclass matter, when sent by other than the publishers or news agents, from 2 ounces to 4 ounces or fraction thereof, without any change in the rate (1 cent) of postage. A greater cause in bringing about a decrease was the stagnation of business throughout the country, of which more will be said hereafter.

In addition to the expenditures shown on account of the service of the year ended June 30, 1885, the sum of $729,046.80 was disbursed on account of previous years, making a total disbursement of $50,046,235.21 during the year. Of the disbursement for previous years, $479,491.30 was for 1884; $51.927.17 was for 1883; $15,625.18 was for 1882 and prior years (claims); $57.34 was for 1881 and prior years (claims); and

$181,945.81 was for salaries of postmasters readjusted under act of March 3, 1883.

The amount stil remaining unpaid on account of the service of the year ended June 30, 1884, is $148,753.12, and the amount certified to the Secretary of the Treasury since that time on account of the Pacific railroads (and not included in the expenditures) is $283,238.09. The cost of the service for 1884 may be summarized as follows: Amount expended to September 30, 1884, as shown in last annual report.....

Amount expended during 1885 on account of 1884
Amount remaining unpaid September 30, 1885, on account of 1884.

Total paid and to be paid out of appropriation....

Amount certified on account of Pacific railroads in 1884. $1,260, 179 51
Amount certified in 1885 for 1884....

Total certified

$46, 404, 960 65 479,491 30 148,753 12

47,033, 205 07

283,238 09

1,543, 417 60

Total cost of service for 1884....

48,576, 622 67

As compared to 1884, there is an increase for 1885 of $2,568,983.34, or 5.4 per cent., in the expenditures and liabilities payable out of the appropriations, and of $2,365,792.57, or 4.8 per cent., in the total estimated cost of the service, including amounts certified to Pacific railroads.

DETAILS OF RECEIPTS AND EXPENDITURES.

The following statement shows the sources and amounts of the several items of the gross revenue for the last fiscal year, viz:

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Sales of postage-stamps, stamped envelopes, newspaper wrappers, and postal cards

Dead letters for which no claimants could be found

Net revenue from money-order business
Miscellaneous.

Total.......

$67,527 86 1,958, 237 05 13,511 90

40,056, 226 69 12,097 93 408,933 30

44,309 10

42, 560, 843 83

As compared to the year ended June 30, 1884, there was an increase of $54,184.48, or 2.8 per cent., in the receipts from box rents; of $2,478.74, or 25.7 per cent., in the revenue from dead letters; and of $17,204.66, or 63.4 per cent., in miscellaneous receipts. There was a decrease of $43,347.16, or 39 per cent., in letter postage paid in money; of $7,618.22, or 36 per cent., in the amount derived from fines and penalties; of $689,626.97, or 1.6 per cent., in the proceeds of the sale of postagestamps, stamped envelopes, newspaper wrappers, and postal cards; and of $98,390.51, or 19.3 per cent., in the net revenue from money-order business. The three items of increase amounted to $73,867.88, and the four items of decrease to $838,982.86, leaving the net decrease $765,114.98, as previously stated. Excluding the official stamps from the sales for the year ended June 30, 1884, leaves a decrease of $535,356.71, or 1.3 per cent., in the item of postage-stamps, stamped envelopes, newspaper wrappers, and postal cards sold for the year ended June 30, 1885.

By reference to the Postmaster-General's report and appendix for the year ended June 30, 1884, it will be noticed that the net receipts from money-order business are placed in the exhibits of the PostmasterGeneral and of this office at $519,492.08, while they appear in the report of the Auditor at $507,323.81, a discrepancy of $12,168.27. This is ex

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