Cash deficiency (partly estimated)... 24,612 84 175,000 00 12, 174 25 Add credits and earnings of Pacific Railroad Companies for transportation Total excess of cost over revenue.. 50,839, 340 46 6, 890, 917 51 1,363, 240 01 8, 254, 157 52 If the sums which, under the recent decision of the Supreme Court, are claimed to be payable in money to the Pacific Railroad Companies instead of by application on their indebtedness should be appropriated by Congress and so paid, the totals of cash expenditure would be increased and the credits to the companies diminished, as above given, for 1883, by $217,697.89; for 1884, by $193,800.73; for 1885, by $247,830.44, and for 1886, by $251,101.61, and the cash deficiencies for the last three years swelled accordingly. The Revenues shown by the foregoing statements did not wholly arise from postages, but the effects of the changes in rates as well as of the business condition of the country have been mainly upon that source of income; and to properly estimate these influences the comparative view should be so confined.. The receipts of this kind during the years mentioned as shown by the accounts have been as follows: For the year ended June 30, 1883 For the year ended June 30, 1886...... $43, 014, 043 58 40,745, 853 66 40,056, 226 69 41, 447,095 88 The two earlier years have in this statement the advantage of credits exceeding $150,000 a year for the amount of official stamps and stamped envelopes formerly issued for Government use, which were discontinued at the end of June, 1884, by the substitution of the penalty envel ope; and, in nice reckoning, the allowance should be made. It would naturally be expected that the revenues, unless affected by legislative changes in rates, should rise year by year, from increased employment of the service correspondent with increase of population; and such has been the ordinary rule. It did not obtain, however, in the year 1885. The reduction of first-class postage from 3 to 2 cents took effect October 1, 1883, and operated a reduction of these receipts in 1884 to the amount of $2,268,189.92, notwithstanding the enlarged volume of mail matter. The next year failed to show any increase, but, instead, the diminishment continued by the actual net sum (allowing for the amount of official stamps credited in 1884) of $535,356.71. This must be attributed mainly to the business depression suffered in 1884 and the winter of 1885, whereby the growth of patronage was seriously checked. In the last report the evidences of a restoration already begun were pointed out. The figures of the year are strongly confirmatory. The revenue sustained the loss of about $1,100,000 yielded to newspaper carriage, and probably $800,000 to $900,000 more from the increase of the unit of weight, and yet made the net increase of $1,390,869.19 in the total postages collected, or 3.4+ per cent. Had the rates continned unchanged, there can be little doubt the gross revenue of 1883, the highest in our history, would have been exceeded. The statistics of other branches of the service, given in the appendices, corroborate the inference drawn, and justify the expectation of continued gains of revenue hereafter, unless unforeseen adversity befalls the country or legislative changes abridge the present rates of income. The chief other sources of revenue are the rental of boxes in postoffices of the first, second, and third classes, and the net gains of the money-order business. The former yielded $2,018,048.04 during the year, an increase of nearly $60,000, or 3 per cent., over the preceding year. The money-order revenue fell off over $58,000 from the causes previously explained. Taken together the net increase of entire revenue was 3.2+ per cent., and of the volume of business by which it was gained doubtless over 7 per cent. Upon this exhibit the increase of the revenue for the current year and for the year to come, except in newspaper postage, is estimated at 7 per cent.-an expectation which is the more reasonable because some gains must arise from the special-delivery service and some from extension of the limits of mailable matter. Expenditures.-The increase of population, the rapid development of new country, the constant addition to our railroads, and the sound policy of supplying all our people with good postal facilities whether or not remunerative to the service, necessarily demand a continual expansion of means and cost, year by year. Every new postoffice is established at temporary loss, and nearly every new route of carriage. Since the Government monopolizes the business for the benefit of the people, it is due that the conveniences it affords should be in advance of anything which private enterprise would accomplish. The enterprising spirit which marks our national character and has given our national development is well entitled to and will accept nothing less than the best methods reasonably to be provided for the various wants of all localities. Keeping in steady view this principle, the concurrent obligation to carefully maintain a just economy in providing the means, has been studiously acknowledged by the practice of the Department, and has resulted during the year past in somewhat limiting the ratio of increasing cost with advantage to the service. Of the total appropriations for the year, amounting to $54,183,642.14, the entire outlay actually made and estimated to be made, is but $50,839,340.46, leaving a balance to be eventually covered into the Treasury of $3,344,301.68. The percentage of increase in cost over the year before was 2.6+; a marked decrease in the annual rate of increasing expenditure during a number of years past, as is shown by the following table: In the year 1882 the reduction of star-route extravagance specially affected the contrast. No one of the thirty-six items of appropriation for the year past has been exceeded by the expenditures except that for ship, steamboat, and way letters-a feature of cost wholly beyond departmental controland the excess on this account amounts to but $50.S3, for which sum only will a deficiency appropriation be required to meet the exigencies of the year. The principal items of increase in cost over the year 1885 are, for postmasters' compensation, $104,329.23; for clerks in post-offices, $103,810.28; for free-delivery service, $326,344.15; for railroad transportation, $591,088.07; for railway postal clerks, $221,568.57; for star-route service, $49,197.19; for stamped envelopes and wrappers, $66,269.48 for foreign-mail transportation, $33,466.89; and for special-delivery service, $67,652.14. Of these charges, the statutes regulate the compensation to postmasters and to railways; the increase in the cost of post-office clerks, railway postal clerks, and the free-delivery service was necessitated by the employment of additional clerks and carriers demanded by the growth of the business; the payment of sea and inland postage to American steamships and increased weights of mail, added the enhanced outlay for foreign mail transportation; the specialdelivery service came for the first time into being and more than repaid its cost; and the increase in the disbursement for stamped envelopes and wrappers simply marks the increased sales and revenue gains. In the star-route service, although an actual increase is shown in the total expense, there was in fact a large saving effected. As has been previ ously stated, the annual rate of cost on the 1st day of July, 1885, established by contracts made before your administration began, was $5,653,660.95, which was so reduced by curtailments and new contracts during the year that on the 1st day of July, 1886, this annual rate stood at only $5,091,225.28. Yet inasmuch as these reductions could only be made from time to time during the year as opportunities were afforded by the results of examination, the expenditures continued at the rates fixed until the orders became operative, and some changes only took effect at the beginning of the new year. The actual diminishment of cost during last year was therefore less than the rate of reduction established and operative hereafter. Yet it was considerable, as appears from the fact that the total expenditure was but $5,403,259, being $250,401.95 less than the rate at which the year began, and which, but for the economical changes effected, would not only have caused expenditure of that sum, but an additional amount would have been necessary for the new service actually added during the year. Upon the other hand, in twenty-one of the thirty-six items of appropriation there was an actual decrease in cost, as compared with the previous year, while in supplies furnished there was generally an increase of quantity; and in twelve items there was even decrease from the expenditures of the year 1884. The aggregate of the twenty-one items of diminished cost from 1885 was $284,956.27; and the aggregate of the twelve items of decrease from the expenditures of 1884 was $249,663.76. Upon the whole survey, it appears that the year has afforded a start towards closing the wide gap between revenue and expense. The revenue, surmounting such restraining influences as would, if removed, have allowed twice the actual net increase, has risen by a higher ratio than the expenditures-3.2+ for the former to but 2.6+ per cent. for the latter. Here seems to be promise that the day is attainable when the gain in revenue will overtake the gain in disbursements if a firm economy be steadily imposed, although in the mean time every proper and judicious extension and improvement which the country requires shall go forward. For the Current Fiscal Year no elaborate discussion of the probabilities is necessary, or would be in this place profitable. The appropriations have been made and, so far as can be predetermined, are ample in total amount, being $54,365,863.25, from which the hope is indulged a million or more may be saved. It is, however, probable that the item of $2,000 for ship, steamboat, and way letters will be again exceeded, and that the increased demand for adhesive stamps and stamped paper, excited by the growing business prosperity in the country, will occasion expenditure for such supplies greater than the appropriations which followed the low estimates of the Department; a deficiency, however, devoutly to be desired. There is risk also that the item for registered-package, tag, official, and dead-letter envelopes may be overrun, though to but a moderate amount, by the necessities of the service. The probable revenue for this year, as well as for the year to come, has been carefully considered and estimated in conference with the Third Assistant Postmaster-General, and in his appended report, a discussion of such reasons as governed the estimate are ably given at length, in connection with the detailed estimates. Briefly, the experience of the past year, the apparent indications of general prosperity, and the unchanged rates, give reason to believe more than 7 per cent. increase of receipts will be derived from postages; that in second-class matter where more |
