Detailed regulations for the execution of the convention of October 12, 1867, for an exchange of postal orders between the United States and Switzerland, were finally agreed upon and signed at Washington July 2, 1869, by the Postmaster General, under the authority given by the act of July 27, 1868, and at Berne on the 26th July, 1869, by the chief of the federal post department of Switzerland. This first attempt to establish an international money-order system by this department was put into operation, by mutual agreement, on the 1st September, 1869, and, notwithstanding frequent and considerable fluctuations in the value of currency, it has been conducted without difficulty, and thus far has worked satisfactorily in all its details. The number of offices at present authorized to issue orders for sums to be remitted to Switzerland, and to pay orders for sums remitted from that country, is 150. The amount of orders remitted from this country to Switzerland from the 1st September to the 16th October was $2,619 63, gold value, equivalent to $3,515 97 in our currency at the time of transmission; and the amount of orders sent during the same time to the United States was $3,191 in gold, or $4,200 20 in currency. A copy of the convention, with the detailed regulations, and of the "instructions relative to the international system" issued to postmasters by this department, will be found in the appendix.

MISCELLANEOUS.

When I accepted at your hands the position of Postmaster General, I propounded to myself two questions: How can the postal service of the country be made most efficient? and, How can it be relieved from the heavy deficiencies annually charged against it? Knowing it to be your desire that the department should be restored to a self-sustaining condition as rapidly as a faithful discharge of its duties would permit, I have diligently sought the true answers to the above questions. As far as lay in my power, during my short administration, I have reduced the expenditures and increased the revenues of the department; but, notwithstanding my efforts, I found myself, at the end of the fiscal year, confronted with a deficit of $5,353,620 80. Though this amount is less than the deficit provided for by appropriations, it is yet large enough to stimulate me to inquire carefully into the causes of such enormous

arrears.

The principal causes operating to prevent the department from becoming self-sustaining are three, to-wit:

1st. The depreciation of the paper currency.

2d. Unpaid postages on printed matter.

3d. The franking privilege.

The first of these is temporary, and will, in a short time, it is hoped, cease to operate. While it continues, however, it greatly affects the proportion between the receipts and expenditures of the department. The

truth of this will be admitted when it is stated that the postages are fixed by law, and remain the same nominally, no matter what may be the fluctuations in the value of the currency; while, on the other hand, all contracts made by the department, except those for railroad transportation, are based on current rates, whatever they may be. Hence, when paper currency is depreciated, the postages are reduced in effect by the exact amount of the depreciation; so that, when gold is quoted at 1334, the single rate of letter postage is no longer three cents, but, in reality, only two-and-a-quarter cents.

Again, the department is defrauded out of a large amount of postage on newspapers by parties who, while professing to be sending out papers from known offices of publication to regular and bona fide subscribers, are, in fact, loading the mails with "specimen" papers and mere business circulars, disguised in the form of newspapers. The act of March 3, 1863, and the regulations made in pursuance thereof, require that all such matter, if sworn through the mailing office, shall be sent to the office of delivery, and that the postages, whether charged at newspaper rates or at letter rates by way of fine for fraud, shall be collected by the office of delivery. If not paid for and delivered, it often happens that no other disposition of this matter can be made than to return it to the mailing office for the prosecution of the offender. The double transit thus encouraged is frequently attended with no result, except that the matter is left in the office and ultimately sold for waste paper. For this mischief there is but one adequate remedy, and that is, to require prepayment on all printed matter. A due regard to the convenience of the publishers of newspapers would require that postage on newspapers should be charged according to the weight of packages. To accomplish this reform, a considerable reduction on present rates might be conceded by the department. To make the remedy of prepayment complete, it would be necessary, furthermore, to confer ample power on postmasters at mailing offices to open and inspect suspected packages of newspapers, and to impose upon them, if found to be vitiated by fraud, full letter postage, to be paid invariably in advance. This summary proceeding should not relieve the offender from liability to prosecution and punishment by the imposition of the fine already provided by law.

The foregoing are evils which, doubtless, ought to be corrected. It is possible, however, for the department to endure them, and yet retain a fair degree of efficiency. But the remaining cause of complaint has become intolerable, and must be removed, if the department is to be saved from utter demoralization. The franking privilege has grown to be an abuse so monstrous that it now threatens the very life of the service.

The post office was established in Great Britain to promote "trade and commerce." If its purpose is so comprehensive under a monarchy, how much more should it be made to contribute to the general good in a republic! Our early legislation on this subject breathes the most generous spirit throughout. The convention of 1787, seeing the impotency of the

post office establishment under the confederation, and anxious to provide for the future necessities of the people, enlarged the power of Congress so as to authorize that body to establish "post routes" as well as "post offices," and thus granted to the national legislature full and absolute control over the whole subject of the mails. The United States, having assumed the exercise of the exclusive power thus conferred, designated the Post Office Department as the sole agent of government in postal matters, and, to make its authority more complete, prohibited all private individuals, under heavy penalties, from interfering with its duties. Government has thus become the trustee of the people, and has placed the Post Office Department in direct contact with the people. Under the laws establishing the department, its revenues are not drawn from the public treasury, but are collected directly from all alike, whether high or low, rich or poor, who claim its assistance. Congress having excluded all competition by law, every principle of fair dealing requires that government shall give to the people the most ample and satisfactory recompense for the postage they are obliged to pay. The people expect, as of right they may, that the department will provide for an exchange of correspondence, and for the general dissemination of news, by the most speedy, certain, and secure means that the best and most skillful use of its revenues can procure; and when it fails to fully meet so just an expectation, it falls short of its high duty. The people should be content with no less than the best and cheapest service; and government, having undertaken the duty of providing for their wants in this respect, and prevented all others from attempting to do so, is bound to see that its agent is provided with every reasonable facility, and that no obstacle susceptible of removal shall continue to stand in the way. Government may, and should, aid the operations of its agent, but it cannot rightfully fetter or burden them. It is clear, therefore, that all special privileges, to whomsoever granted, at the expense of the postal system, are hostile to the established theory upon which that system was founded and has ever since been conducted, and that government itself cannot justly claim such privileges, unless they can be shown to be essential to the discharge of other obligations which are paramount to the duty of providing a cheap and efficient mail service. On the contrary, the enlightened opinion of the age demands that the postal service shall be administered in a spirit of the broadest beneficence, and for the equal advantage of all the people. Holding these views as to the respective duties of government and the department, I approach the discussion of the franking privilege.

The first objection that presents itself is, that it is a special privilege granted to a favored class at the expense of the many. To this it is no sufficient answer to say that it is exercised solely in the interest of government. If the views already presented are correct, government has no right to appropriate to itself, in part or in whole, the benefits of a trust the administration of which has been committed to it for the advantage of others; and, to show that I am not singular in this opinion,

I introduce the following from the admirable report, dated December 3, 1859, of my distinguished predecessor, Hon. Joseph Holt:

"There is no more reason why the Post Office Department, through its contractors, should perform this service (the conveyance of government correspondence) gratuitously for the government, than there is that the steamboats and railroad companies of the country should transport its troops, munitions of war, and stores without compensation. What shall be the character and amount of written or printed documents forwarded on behalf of the government, and under what safeguards against abuse, are questions whose solution belongs exclusively to Congress, and which it is not my purpose at present to discuss. I desire to maintain only the general proposition that whether the written and printed matter be great or small, if it be dispatched in the name and in the interest of the government and by its agents accredited for the purpose, it should be charged with precisely the same rates of postage to which it would have been subjected had it been forwarded by private citizens. The franking privilege, as accorded to various officers of the government, was from the beginning, and still is, an anomaly in the postal system, and in direct conflict with the true theory of its creation. Had this department, like the others, been placed as a charge upon the treasury, and were it essentially a political instrumentality and the property of the nation, it would be as incongruous for it to demand remuneration for its services to the government as it would be for the army and navy to do so; but this is not and never has been its actual or theoretical status. Beyond its political authority in establishing the department and its revisory power over its administration, the relations of the government to it are precisely those of the private citizen. This has been distinctly recognized in the several acts permanently appropriating $700,000 per annum for the transportation of 'free matter.' This is not, in the language or spirit of the act of 1836, a provision made for the support of the department from its own revenues, but is an appropriation from the public treasury, and is, in its terms, a specific compensation for the transmission of the correspondence and documents connected with the administration of the government."

At this point it may be asked, is it not better for the department that government should make good all deficiencies, rather than simply pay its own postages? To this question the answer should be an emphatic negative. It is not better that government should continue to blindly pay all deficiencies. No policy could be more unwise, both for itself and the department. It is unjust to government, because it thereby assumes to pay postages not only on its own matter, but also on all fraudulent matter that may in its name and under cover of the counterfeit franks of its officials be foisted into the mails-thus doubling the necessary expenditure. It is unjust to the department, because in so dealing with it government does not respond to its call as to the claim of a creditor who has rendered important services, and who, in consid

eration thereof, is entitled to demand a just compensation, but rather as to an imbecile at its gates appealing in his helplessness for charity. This is a great moral and political wrong. It reduces the department to a state of hopeless dependence, and destroys to a great extent its usefulness. It makes it the packhorse of every other branch of the public service, and compels it to assume, without a question, whatever burdens may be laid upon its back. Work as steadily and as skillfully as they may, the managers of the department know that at the end of the year their accounts must show the inevitable deficiency. Is this just? Will this encourage activity and vigilance? Will this promote economy and efficiency? When the department, with its forty thousand or more employés, has labored to discharge every duty faithfully, has carried its mails ninety-one millions of miles and distributed them according to order among forty millions of people, and, to accomplish this, has fought every inch of its way against frauds which government itself has licensed, it is at least entitled to a respectful recognition of its services, instead of being consigned to everlasting insolvency.

Turning from a subject the consideration of which discourages every man connected with the service, it may be added that there can never be an intelligent administration of the department until an accurate knowledge can be obtained of its resources and liabilities, its revenues and expenditures. This is impossible so long as the franking privilege shall be allowed to obstruct so many of the important avenues to information.

So much for the "special privilege" claimed for government.

But much more can be said in favor of extirpating this evil. The cost of "free matter" has been increasing from year to year, until at last it weighs down the department into continuous insolvency. The additional expense to which it subjects the service is counted by millions, whilst there is provided to meet it only the standing annual appropriation of $700,000. It was stated ten years ago that the department actually expended, at that time, in the performance of the duties which the franking privilege imposed, little, if anything, short of $3,000,000. Since that time the expense has largely increased; and I am convinced that it now exceeds the enormous sum of $5,000,000, of which about one-half is paid on fraudulent matter. That this is not an exagge ration will appear from an examination of the weight of mail matter sent and received at the Washington City post office from the 11th to the 31st January, 1869, as officially reported to the department. By this return it appears that the weight of free letters sent was 15,385 pounds, and of free letters received 16,995 pounds, making for twenty days 32,380 pounds. Hence an estimate for one month is 48,570 pounds, and an aggregate for one year 582,840 pounds. It appears, further, that the weight of public documents for twenty days was 207,891 pounds, making for one month 311,837 pounds, and an aggregate for one year of 3,742,044 pounds. If, therefore, the postage value of this free matter