rative by results of the inferences of that investigation. Notwithstanding an addition, required by the growth of the service, of over 35,000 record books, over 55,000 facing-slips, over 3,500 reams of wrapping paper, and of 11,100 pounds of ink and 5,475 ink-pads in the purchases and issues of the year, the total expenditures under the five items of appropriation in the postal-service act-for paper, twine, balances and scales, stamps and ink, and stationery-which embrace all the charges of the division except printing at the Government Printing Office, amounted to but $153,465 during the last fiscal year, as against $189,097.40 in the previous year, or a saving in expenditure of nearly 19 per centum, while there was almost an equal percentage of increase in the quantities of goods supplied.

In the comparison of the quantities of twine issued during the two past years, the value of the change in methods is very manifest. It was discovered by the investigation mentioned that the twine which had been accepted was deficient in yardage to the pound, but the extent of loss inflicted on the Government was only to be conjectured. It transpires that owing to the care taken to secure the stipulated article during the past year, the amount required for use was many thousand pounds less than the quantity paid for the year before, notwithstanding the increased necessities of the service; and the division superintendent estimates the actual saving accomplished at 140,000 pounds, which would have cost $11,600.

There remains a balance of these appropriations unexpended of nearly 32 per cent., and the experience of the year will justify some reduction in the appropriations for these articles of supply, even beyond the reductions already made in those for the current year.

The economy of supplying post-offices from the Department with arti cles the cost of which constitutes a proper charge upon the Government, instead of leaving them to be purchased by postmasters and charged to their accounts, as was formerly done, has become so obvious that the system deserves extension to embrace every sort of such supply. It affords the opportunity for judicious purchase in large quantities from competing manufacturers, as well as of careful inspection, and secures both prices and goods much better than postmasters could be expected individually to obtain.

Since the 1st day of July, 1885, under the legislation of 1878 and subsequent appropriation acts, postmasters of the third and fourth classes have been considered entitled to supplies of ink, stamping-pads and stamps, but have made few requisitions for such articles, either because their previously procured supplies have served or from ignorance of the extended privileges provided. The statute on this subject is not free from uncertainty, and a more definitive expression of the legislative purpose is desirable.

Allowances to Postmasters in money-for rent of offices, for furniture in them, for fuel and light, for clerks, and for miscellaneous

and incidental expenses-are made for offices of the first and second classes only; with the two exceptions that when any of the third or fourth class are designated as separating or distributing offices, the additional clerical service so caused is a Department charge, and that authority exists to allow specially for clerical service "whenever unusual business accrues at any post-office." These allowances are made through the Division of Salaries and Allowances, and are to be distinguished from "supplies" furnished in kind.

There has been much complaint, not, it seems to me, without some reason, that these limitations in the statute operate an unfair discrimination against some postmasters below the second class, and I shall submit some observations on the subject, before the close of this report, for your consideration. Reference is made to the tabulated statements of the operations of the Salary and Allowance Division, presented in the report of the First Assistant, for a summary of the work performed, without particular recapitulation.

The rent, fuel and light of first and second class offices not in buildings belonging to the Government (in which case the Treasury Department makes provision for them) cost during the last fiscal year altogether $468,932.57. The appropriation was $490,000.

In some cases the office is rented by the postmaster, and the allowance is made to him for the amount. In general, however, it has been the policy to effect leases for a term of years, and require the owner of the property to provide all the furniture and fixtures necessary, with an engagement to make such repairs and further provision as increase of service may require. Whenever it has appeared advantageous, the additional stipulation has been inserted that heat and light shall be provided by the lessor. It sometimes lies in his power to furnish both at less cost than the Department can independently supply them.

Proposals for such leases are solicited by inspectors, who report the circumstances affecting choice, and the cases are prepared by the law clerk, leaving final decision and consummation of the contract, often at the end of much contention among competing owners or local parties, to the head of the Department.

Appended hereto is a statement of the leases of post-offices and postal stations as they existed on the 25th of September last, arranged by states, and showing their date, duration, and annual rental, together with the character and business status of the respective offices. The entire number of such leases at that date was 266 for post-offices and 38 for postal stations, at an annual rental of $319,671.50. The highest rent paid is for the Brooklyn office, $7,500; while many are leased for $1, where competition between different sites has induced such propositions. No proportionable uniformity in rentals is even approximately possible, being dependent upon local conditions exceedingly variant.

The act of March 3, 1885, authorized leases to be made for a period of five years, but its terms limited the power to those negotiated during

the late fiscal year. Such authority is desirable, because no owner can be reasonably asked to fit up a post-office for a single year's use, and although the practice of leasing for five years, subject to appropriations, is continued, the legislation would add to confidence and tend to better the terms.

The act last mentioned also gave discretionary power to lease thirdclass offices, but inasmuch as no increased appropriation was given, the authority could only be exerted where leases were offered at a nominal rental with a view to securing a fixed location. Six such cases will be found embraced in the appended statement. That authority also lapsed with the expiration of the year.

Clerical Service in post-offices requires the largest allowances, and the ascertainment and defense of their proper limits impose much labor and trouble. The gross expenditure authorized on this account during the past year, in 3,412 cases favorably considered, was $5,029,448.06, and 1,727 applications were declined.

Of this sum the first and second class offices took $4,536,877.06, and the residue was allowed to certain of those in the third and fourth classes which had been designated as separating or distributing of fices, for the additional clerical labor imposed by that service. The number of such third-class offices is 1,175, and their aggregate allowance $355,109, the maximum being $1,710 (to the office at Suspension Bridge, N. Y., an important international exchange office) and the minimum $45, the average $302.22. The number of such fourth-class offices is 1,078, their aggregate allowances $137,462, the maximum $720, minimum $20, and average $127.50.

The allowances to first and second class offices have been made upon the reports of inspectors and such information as has been presented. Undoubtedly differences must exist between different offices, which will affect the measure of allowances. But, generally, it is believed a graduated scale can be established by which the expenses for clerk-hire might be apportioned upon the business done, subject to special provis ion in exceptional cases, with economy to the Government and equity between postmasters.

The actual expenditure, as shown by the Auditor, was but $4,977,663.47, being somewhat less in fact than the total authorized during the year. Postmasters' Claims for Losses "of money-order funds, postage-stamps, stamped envelopes, newspaper wrappers, and postal cards," resulting from burglary, fire, or other unavoidable casualty, including remittances of money-order funds lost or stolen while in transit, were authorized by the act of March 17, 1882, to be allowed by the Postmaster-General upon his determination of the facts, and that "such loss resulted from no fault or negligence on the part of such postmasters," with a limitation that claims thereafter accruing must be presented within three months of the loss.

The Assistant Attorney-General of the Department, under whose direction all such claims are investigated, and by whose opinion, in submitting them, their determination is mainly guided, reports fully upon the claims adjudged during the year. His report, with accompanying tables, will be found in the appendix.

The number of claims decided during the year was 602, and of these 458 were allowed in whole or in part, and 144 denied. His tables show the general features of each case, the post-office, postmaster, date, amounts claimed and allowed, character of funds, and the reasons for disallowance where that was the event.

The gross amount allowed was $28,387.21, of which $5,123.98 were for money-order funds and $23,263.23 for stamps and stamped paper. These losses were caused, respectively, by fire, $11,460.54; by burglary, $14,924.80; by storm and flood, $17.15; and by thefts and otherwise of funds in transit, $1,984.72.

The total amount of the claims made upon the Department in these cases was $29,900.53, of which $1,513.32 were disallowed, leaving the total losses to be as stated. To the extent, of course, that these resulted from destruction of stamps or stamped paper, at least $11,258.34, the Government suffered only the insignificant injury of the cost of manufacture; and the net actual loss was doubtless somewhat below the remaining $17,128.87 of the allowances.

The gross sum of the claims denied entirely was $8,443.51, of which 84,823.74 were for money-order funds and $3,619.77 for stamps and stamped paper. The disproportionate disallowance of claims for lost money-order funds arose from the too frequent breach of section 1081 of the Postal Laws and Regulations of 1879. This requires a daily remittance of "surplus" money-order funds, and losses of such funds retained in a post-office contrary to this requirement are deemed to be sustained by the postmaster's fault. His detention of the money beyond the prescribed time is at his own risk, as well as otherwise reprehensible. Another not infrequent disregard of that regulation has imposed occasional loss on postmasters. Certain formalities in recording the character of money remitted and in providing proof of its dispatch are prescribed, the omission of which imposes the loss on the sender. Some instances of severe misfortune have been published as a monition to pursue the steps required by the regulation.

Summarizing the reasons for denial of the 144 claims mentioned, 31 were not presented in time, 39 were due in part to the postmasters' neglect, 37 were not satisfactorily proven, 18 were not within the provisions of the statute, and in 19 cases the lost money or property was recovered by the inspectors of the Department.

Safes were opened by burglars in 110 cases, and the money, stamps, &c., abstracted.

A comparison between the two last fiscal years shows the total amounts allowed to be, respectively, in 1885, $28,377.79, in 1886,

$28,387.21; and of claims disallowed, in 1885, $12,092.97, in 1886 $8,443.51. The general statement of the sums awarded to claimants during the several years since the passage of the act, which the Assistant Attorney-General presents, would indicate a diminution in the extent of these casualties; but the greater amounts of the first two years are rather due to the fact that many claims had accumulated in Congress before the statute was enacted for the relief of claimants, which, on its passage, were granted.

The present limitation of three months works occasional injustice; and although but a short period should be afforded, it is believed six months would be more consonant with justice.

The Free-Delivery Service by carriers was, during the last year, extended to three cities, Aurora, Ill., Duluth, Minn., and Newport, Ky., making on the 30th of June, 1886, 181 free-delivery offices in all. The limits imposed by law on the discretion of the Department in extending the system have nearly been reached, and unless they be expanded the addition of other communities to the enjoyment of the privileges of the system will be few, as, from year to year, they gradu. ally attain to the population or volume of business now required.

The statistics show the continued enlargement of the machinery, performances, and cost of the service, but only in the general ratio of postal progress in recent years. Of carriers, there was an increase of 483, giv. ing a total number of 4,841. The cost rose by the amount of $326,354.15, or 8.18 per cent., to a total sum of $4,312,306.70. This, however, was over $220,000 less than the estimates of the Department, and within the appropriation of $4,485,000 by $172,693.30. Considerable part of this unexpended balance results from the changes made in carriers at various offices, the newly-appointed being required to enter at a lower grade of salary than was often paid to those displaced, while the estimates were based upon the rates of pay of those in the service when they were made.

The number of pieces of mail matter, counting collections and deliveries, handled by the carriers during the year, was 1,949,520,599, an increase over the previous year of 204,983,186, or 11.75 per cent., while the carriers increased but 11.08 per cent. in number.

The average number of pieces handled by each carrier was 402,710, a gain of 2,403, or of 1 per cent. The average cost per piece was 2.2 mills, as against 2.3 the year before, a gain of one-tenth of a mill; and the average cost per carrier was but $889.15, as against $912.90, a diminishment of $23.75, or 2.6 per cent. This was due in part to the increased number of carriers in the lower grades, already mentioned, and in part to the increased efficiency in work shown by the greater average number handled by the individual carrier.

The amount of postage on local matter is reported at $5,839,242.97, an increase of $558,519.87, or 10.57 per cent., on the previous year; while