(10) In examining the accounts of the contractors for letter balances and scales, our attention was attracted by the great variation between the prices paid during 1883-84 and the contract prices for 1884-85. The differences will appear from the following comparative statement: It was then observed that an order for a considerable number of the larger scales had been given to the contractors, Fairbanks & Co., near the close of the fiscal year ended June 30, 1884, to wit, May 27: One hundred 62-pound, seventy-five 240-pound, and thirty 600-pound; while during the current year no large scales have been bought at the reduced prices. The total number of 8 ounce balances supplied to postmasters during the year 1883-84 was 4,024. The total number supplied thus far during the current fiscal year (more than ten months) is 2,525, and there are now on hand 1,660 of these balances, or sufficient to last at this rate for the next six months at least; yet, we find that on February 21, 1885, 4,000 8-ounce balances were ordered from the contractors at the increased contract price of the current year. The 4,000 already ordered (none of which have been received) added to the 1.660 will probably be a sufficient supply for the next year and a half. The last order given was worse than injudicious. In the account of contractors for scales we found certain entries of 600-pound scales sent to post-offices during the current fiscal year, the number of such scales being twelve. These did not appear from the books to have been paid for. Upon inquiry of the superintendent we were advised that the thirty 600-pound scales ordered May 27, 1884, had never been received by him, although he had certified to their receipt and the bill therefor had been paid. He represents that he had no space for storing them, and for this reason allowed the contractors to retain them, and, as occasion required, would direct the contractors to forward single scales to post-offices as they might be called for upon requisitions. The twelve scales above mentioned were thus forwarded. The remainder had not been received at the date when we commenced our inspection, but seventeen of them were shortly afterward ordered by the superintendent to be shipped to Washington, and are now stored in this Department. The other scale has not yet been received; and until his attention had been called to it by us, Mr. Rhodes was not aware that one more was due to the Department. He had mistaken an entry in his book of a scale of different kind for one of the 600-pound scales and ingenuously admitted that he wrote to the contractors to find out 'how he stood." (11) When in the course of taking account of the stock for first and second class post-offices the item of blotting paper was reached, we found that while the contract required the delivery of blotting-paper weighing 100 pounds to the ream, there were on hand quantities weighing 80, 90, and over, 100, and 120 pounds to the ream, respectively. The stationery clerk advised us that of the stock on hand 32 bundles (16 reams) of 80 pound blotting paper should not be counted, inasmuch Sub as it had been rejected and better paper furnished in its stead. sequently we closely interrogated Mr. Baldwin, a laborer, whose duty it is to pack and prepare supplies of stationery for shipment, and were informed by him that both 80 pound and 100 pound blotting-paper had been regularly received and issued during the year past, and that only one lot of 120-pound paper had been received, and that very recently. There were on hand in all 503 reams of blotting paper, not counting the 16 reams said to have been rejected. The respective weights of the 50 full reams we found to be as follows: 100 pounds..... From 0 to 90 pounds and more, but less than 100 pounds. 120 pounds Reams. 14 30 6 (12) About the 27th of February last there were received from the contractor, J. R. Michael, 50 dozen bottles of Thomas' carmine ink, part of which, on its arrival at this Department, was found to be frozen, as we are informed. Mr. Baldwin states that of 26 dozen bottles received in one shipment, 18 dozen were frozen, and consequently worthless, and that they were afterwards thrown away. Mr. Yantis, the stationery clerk, states that the frozen ink was immediately rejected and the contractor notified, and that the latter forthwith furnished other and good ink in its place. We find, however, that the original order of the 50 dozen bottles of ink was dated February 25, 1885, which date corresponds with the entry in the record of orders upon the contractors; that the contractors' bill was dated on the next day, February 26, that the bill was passed to the Auditor on the 27th, and by the latter passed for payment on the 28th of February. It is obvious, therefore, that if the order and bill bear true dates, the frozen ink was hastily paid for, because sufficient time did not elapse between the date of the bill and the date on which it was passed to the Auditor for a letter to reach New York City and a supply of ink to be shipped from that city to Washington. We found the stock of Thomas's carmine ink deficient by over 30 dozen bottles, but we also found in stock 36 dozen bottles of David's scarlet ink, which we were at first advised had been on hand "a long time." Mr. Baldwin informed us, however, with a manner which convinced us of his truthfulness, that it had been received quite recently, perhaps in the latter part of March. Mr. Yautis afterwards stated that he was positive that David's ink had been received in lieu of the frozen Thomas' ink. He was unable to account for the discrepancy between the quantity of the former on hand (36 dozen) and the quantity of the latter stated by Mr. Baldwin to have been frozen (18 dozen). (13) According to the books of the stationery division there were on hand June 30, 1883, 123 dozen (1,476) Eagle black lead pencils. None were ordered during the year 1883-84, and from July 1, 1883, to the date of our inspection, a period of one year and nine months, only 225 of these pencils had been issued to Bureaus of the Department. Yet in August, 1884, there were purchased from the contractor, J. R. Michael, 240 dozen (2,880) of these pencils. (14) On the 25th September, 1884, 100,000 envelopes, costing $205, were ordered from E. Morrison for use in returning dead letters, and paid for from the appropriation for stationery for the Department. At that time, we are informed, the contract under which these envelopes had theretofore been procured was annulled by Postmaster General Gresham, so that if an exigency of the service existed, as it probably did, which required these envelopes for immediate use, their purchase in open market is not subject to criticism; but whatever the exigency might have been, the envelopes should have been paid for not out of the appropriation for stationery for the Department, but out of the appropriation for post-office registered package and dead-letter envelopes, a specific appropriation having been made by Congress for such envelopes. We afforded to the superintendent and the stationery clerk opportu nity to explain their reasons for making the above mentioned exigency purchases and to exhibit their authority for such purchases. As to most of the transactions they had no explanation to offer, and admitted that the purchases were made without authority from a superior officer. As to the exigency purchase of blotting paper, it was stated that complaint had been made of the paper furnished under contract, whereupon Mr. Rhodes assumed the responsibility of buying a different kind. AS to the purchase of the "Michael" black lead-pencils, Mr. Rhodes says he brought the matter at the time to the notice of the then PostmasterGeneral, Mr. Hatton, who verbally authorized him to buy the "Michael" pencils, if he was sure they were as good as Faber's. From the numerous and extensive purchases (of articles not embraced in contracts) constantly made of certain persons, we are of opinion that due effort has not been made to lessen the cost of such articles by competition. The following statement, we think, will be found to be sufficient evidence of this: Amount. Per cent. Total amount of "exigency" purchases by division of post-office supplies, 1883-84, for first and second class post-offices. $10,694 86 Amount paid to J. R. Michael 5,454 00 50.9 Amount paid to J. B. Adams Amount paid to E. Morrison Total amount of "exigency" purchases by division of post-office supplies, 1884-'85, to May 7, for first and second class post-offices 10,073 75 Amount paid to J. R. Michael. Amount paid to J. B. Adams Amount paid to E. Morrison Total amount of "exigency" purchases by division of post-office supplies, 1883-'84, for departmental use. 1,369 30 Amount paid to J. B. Adams Amount paid to E. Morrison. 144 68 10.5 Total amount of "exigency" purchases by division of post-office supplies, 1884-'85, to May 7, for departmental use It is not remarkable that, as we have been informed, complaint of favoritism has been made by other dealers, who allege, so we are given to understand, that they have not been given a chance to compete for furnishing the Department with such articles. STOCK, AND THE ACCOUNT THEREOF. In making up the account of stock of all kinds we started with the balances shown by the records of the division to have been on hand June 30. 1883. To these balances we added all the stock received from July 1, 1883, to the date of our examination, and the total constitutes the debit side of each account. On the other hand, we aggregated the issues of stock from July 1, 1883, to the date of our inspection, and added to these the stock which we found on hand by actual count. The total constitutes the credit side of each account. No difficulty was encountered in making up the debit side of each account. To summarize the credits, however, was a work of many days, and in order not to delay the inspection we called to our aid, for certain routine work, the services of three competent and reliable clerks in this Department, Messrs. Marsh, Miller, and Bourne. To arrive at the total quantities of twine and wrapping paper, it was necessary to handle all the requisitions for these articles received from postmasters, because the books contained entries, as before stated, only of quantities from one ream of paper and ten pounds of twine upwards. An account could be made on these items for the current year only, because the requisitions for the greater portion of the previous year had been destroyed. The issues of letter balances were obtained by aggregating all the requisitions received; the issues of marking and rating stamps by adding the entries in the records of stamps fuuished to postmasters. "Slips" were found in many cases instead of requisitions. It has been customary for Mr. Payn, a clerk in the stationery branch, to make up an abstract each quarter, of the staionery issued to each Bureau of the Department. We did not accept these abstracts as correct, but checked every requisition with the abstract upon which it was supposed to have been entered. We found that heretofore the method of issuing departmental stationery has been exceedingly lax and careless. Supplies have been given out without requisitions; changes have been made in requisitions; articles other than those called for have been furnished, and the requisitions have not been altered; articles called for upon requisitions have not been furnished, but the entries have been allowed to remain; and articles have been added to requisitions after they have been signed by the proper officer. It was a difficult task, with the inaccurate data at hand, to make a summary of the issues that would be approximately accurate, and in many cases we could only guess at the description of the article supplied. "One ream of paper," "one dozen pencils," &c., are specimens of entries upon requisitions which were not properly charged at the time by the person who issued the supplies so that they would describe accurately the articles furnished. We found the abstracts made up in the stationery branch to contain very numerous errors. With the exception of the first six months, from July 1 to December 31, 1883, no abstract or account had been made of the issues of stationery for first and second class post-offices. With the valuable assistance of two clerks there were transcribed and aggregated upon large sheets, at much expense of time, all the items of stationery issued to postoffices from the 1st of July, 1883, to the date of our investigation. Herewith are submitted (Exhibits C, D, and E) detailed balance sheets of stock of (1) wrapping-paper, twine, letter balances, and stamps; (2) stationery for the Post-Office Department; (3) stationery for first and second class post-offices, showing debits, credits, and the resulting balance of shortage or surplus for every one of the three hundred and eightyfour articles embraced in the contracts for supplies; also a statement in which the shortage and surplus items of stationery on the schedules of the Department and of first and second class offices, respectively, are compared, so far as such items appear in both schedules, and the resulting final balances, whether they be shortages or surplus items, are shown. In view of the careless manner in which stationery supplies have been distributed, and the accounts thereof kept, it has not been thought important to reduce to a money value the shortages and surplus quantities. However that may be, the necessary calculation has been made and the information herein embodied for such use as it may be thought proper to make of it. Total value of shortages at present contract prices.. $21,746 60 16,294 82 Of the goods bought in open market for the use of the Department, articles to the value of $215.90 were not covered by requisitions, and of the goods so bought for post-offices articles amounting in value to $2,419.76 were not covered by requisitions. ORGANIZATION OF THE DIVISION, CLERICAL FORCE, DUTIES, ETC. Submitted herewith (Exhibit F) are tabular statements showing in detail the actual working force of the division of post-office supplies as we found it, and the force allowed by law (act making appropriations for the legislative, executive, and judicial expenses of the Government for the fiscal year ending June 30, 1885). The actual working force consists of 19 employés; the number allowed by law is 23. Of the actual working force, five employés are appropriated for under other divisions or bureaus of the Department, to wit: S. A. Gorgas, railway mail service; Alex Powell, railway mail service; Charles McKenney, office superintendent and disbursing clerk; Arnold S. Yantis, office First Assistant Postmaster-General (appointment division); P. J. Payn, office First Assistant Postmaster-General (appointment division); while of the force allowed by law to the division nine employés are assigned to duty elsewhere, to wit: W. B. Holtzclaw, office First Assistant Postmaster-General (appointment division); R. H. Neal, office of First Assistant Postmaster-General (salary and allowance division); H. A. Stevenson, James Thomas, messengers, office First Assistant Postmaster-General; James Ross, office Third Assistant PostmasterGeneral (dead-letter division); Henry Lightfoot, office superintendent and disbursing clerk, Post-Office Department; Jacob B. Shiley, office First Assistant Postmaster-General (bond division); M. A. Turner, office First Assistant Postmaster-General (bond division); Mrs. Pauline A. Gordon, office First Assistant Postmaster-General (appointment division). We are strongly of the opinion, and so recommend, that this division be given the full force allowed to it by law, and we will base certain suggestions hereinafter to be made upon the assumption that four additional employés, appropriated for, but not now performing duty in this division, be assigned to it. We submit herewith (Exhibit G) a letter addressed to you, at our instance, by each clerk in the division, setting forth briefly his or her name, previous occupation, length of service, and character and extent of duties. We personally inspected the work of each and familiarized ourselves therewith. The laborers we believe to be expert and capable. The following comments and recommendations are respectfully submitted for your consideration and such action as you may deem proper: D. W. Rhodes, superintendent.—As will appear from former statements herein, Mr. Rhodes has permitted himself to engage in questionable transactions with contractors and supply men; has been negligent of the interests of the Government; has failed to strictly enforce contract requirements; has been lax in methods; has not exercised prudence in |
