office will be paid until authority for the same has been granted by Congress. I also respectfully call attention to the fact that no action was taken by Congress during the past session relative to rent for the branch of the Washington post-office known as "Station C," which is now located on F street northwest, between Fourteenth and Fifteenth streets. This is an important branch of the Washington office, and provision for paying rent for suitable premises to accommodate the postal business of the station should be made without delay. (See Report of the PostmasterGeneral for the fiscal year ended June 30, 1885, page 227.) STATIONERY. In conclusion, I beg to state that the recommendation of this office (see Report of the Postmaster-General for the fiscal year ended June 30, 1885, page 227) relative to certain claims for amounts expended by postmasters for stationery for the fiscal year ended June 30, 1883, was favorably considered by Congress and provision made for the payment of the same in the "deficiency act" approved August 4, 1886. The amounts, as stated in the list transmitted to Congress by the Postmaster-General, under date of May 21, 1886, aggregating $1,476.31, have been credited in the accounts of the postmasters named in the said list and the said accounts closed. MONEY ORDER CLERK-HIRE. I also beg to state that the recommendation of this office (See Report of the Postmaster-General for the fiscal year ended June 30, 1885, page 226) relative to money-order clerk-hire was favorably considered by Congress; but in the act approved June 29, 1886, to take effect July 1, 1886, provision was not made for the payment of money-order clerk-hire. This, in my judgment, should receive the favorable consideration of Congress. THE FREE-DELIVERY SYSTEM. There were 181 free-delivery offices at the close of the fiscal year ended June 30, 1886, an increase of three over the preceding year, the new offices being Aurora, Ill.; Duluth, Minn.; and Newport, Ky. The number of carriers was 4,841, an increase of 483. The appropriation for the service was $4,485,000, of which $45,000 was provided for the establishment of the system at post-offices entitled thereto. The total cost of the service was $4,312,306.70, leaving a balance unexpended of $172,693.30. The surplus was caused by the retirement from the service of a large number of carriers receiving the maximum rate of pay, and the appointment of others to fill the vacancies at the minimum rate, as required by act of Congress of August 2, 1882, and the fact that the service was established in but three of the offices entitled thereto, which could not be foreseen at the time the estimates were made. The following table will show the aggregate results of the free-delivery service for the fiscal year, and a comparison with the results of the preceding year: Aggregate result of the free-delivery service for the fiscal year ended June 30, 1886. *Based on the aggregate $4,303,479.99 paid carriers and for incidental expenses, and not including $8,826.71 paid post-office inspectors. † Decrease. Of the 181 offices the receipts from local postage exceeded the cost of service in 19, while 23 others realized over four-fifths, 22 over threefifths, 29 more than one-half, 35 more than two-fifths, 51 more than onefifth, and 2 less than one-fifth of the cost. The following table will show the cost of service and the local postage at each of the 19 offices above referred to: Post-offices at which the local postage exceeded the cost of the service. Additional information concerning the operations of this service, and showing its growth from its inauguration, July 1, 1863, will be found in the tabulated statements marked C and D appended to this report, In concluding, I desire earnestly to commend the chiefs of division and the clerks of this Bureau for faithful and efficient service. Very respectfully, Hon. Wм. F. VILAS, Postmaster-General. A. E. STEVENSON, First Assistant Postmaster-General. REPORT OF THE SECOND ASSISTANT POSTMASTER GENERAL. POST-OFFICE DEPARTMENT, OFFICE OF SECOND ASSISTANT POSTMASTER-GENERAL, Washington, D. C., October 19, 1886. SIR: At the close of the last fiscal year, ended June 30, 1886, there were in operation throughout the United States 22,799 routes of all classes on which mail service was maintained by the Department at an annual rate of expenditure on that day of $29,026,658. This is a very large sum, but when it is considered that these routes aggregate in the star, steamboat, mail-messenger, special and railway service 387,586 miles in length, on which there was an annual travel of 258,788,065 miles, more than 10,000 times the circuit of the globe, penetrating to the remotest sections of the country, and on which the mails were carried to every city, town, and hamlet, to every home and mining camp, and by every means of conveyance from a railroad train speeding at the rate of forty miles an hour to the Indian carrier on his snow shoes picking his cautious way among the avalanches of the Sierras, and with an average frequency of 6.42 trips per week, the magnitude of this sum will not appear out of proportion to the magnitude of the service. But more than this. While these figures give an adequate conception of the range and extent of the service, to those unfamiliar with the operations of that service the word "mail" conveys but an imperfect idea of the weight and volume of the matter carried. This weight and volume are to be equally regarded with the distance in judging of the relation of the cost to the service. There are no means available at present of ascertaining the weight of the mail matter carried on steamboats and on the star routes, as contracts are made in these two branches of the service without regard to weight or volume of mail; but on the 30th of last June the records in this office show that on that day there were carried on all the railroads in the United States 3,246,431 pounds, or 1,623 tons, of mail matter. It is true that a very large part of this weight passes over more than one route, and is therefore counted more than once; but un. der the act of 1873 weight constitutes the gauge of payment of railroad transportation, and these figures, therefore, enable us to form an estimate sufficiently approximate of the enormous amount of matter daily transported over all the mail routes in the United States. I do not mean to be understood as saying that we have reached the point in the relation of expenditure to service, beyond which in the reduction of the former a wise economy cannot safely go. On the contrary, as will hereafter be shown, the cost in one branch of the service that of railroad transportation-has attained such proportions as to invite, if not to demand, a revision of the law on which it is based. The distribution of this vast service among the several States and Territories is stated in detail in Table B, herewith appended. The following statement furnishes a succinct view of the inland mail transportation on June 30, 1886, and the annual rate of expenditure therefor. The annual rate of expenditure for inland mail transportation on the 30th of June, 1886, was For 13,245 star routes, aggregating 233,915 miles in length For 1,702 railroad routes, aggregating 123,933 miles in length. For railway post-office clerks..... $5,352, 181 834,860 446, 419 15, 520, 191 1,816, 321 4,516, 826 For mail equipments... For necessary and special facilities on trunk lines.. Total....... $233, 134 251,726 29,026, 658 Comparison of the above figures with those of the report for June 30, 1885, shows for star service an increase of 874 routes, of 1,693 miles in length, and a decrease of $62,623 in annual rate of cost. For mail-messenger service, an increase of 20 routes, and a decrease of $44,357 in annual rate of cost. For steamboat service, an increase of 1 route, and a decrease of 1,135 miles in length, and of $116,583 in annual rate of cost. For railroad service, an increase of 81 routes of 2,901 miles in length, and of $761,696 in annual rate of cost for transportation. The sums actually disbursed appear in the Auditor's report. The number of contracts drawn in duplicate during the year ended June 30, 1886, was 4,479. Comparison of the star and steamboat service for the year ended June 30, 1886, with an annual average of said service for seven years next preceding, develops the following results: PERCENTAGE OF INCREASE AND DECREASE IN ESTIMATES FOR INLAND TRANSPORTATION, Statement showing the percentage of increase or decrease in the estimates of cost for inland mail service for the years 1881, 1882, 1883, 1884, 1885, 1886, 1887, 1885, as compared with the appropriation for the year preceding each of the above. This table shows a gratifying reduction in annual rate of expenditure achieved, notwithstanding an increase in number of routes, in mileage (except in the steamboat service), in annual travel, and also in weight of mails. The decrease of 2.20 per cent. in the year 1884 was owing to the exceptional and extraordinary reductions made in the star serv ice in 1883, in consequence of the frauds then recently discovered. STAR SERVICE. The annual rate of expenditure for this class of service on June 30, 1886, was $5,352,181. The number of routes was 13,245, of an average length of 233,915 miles and annual travel of 83,227,721 miles. The cost per mile traveled was 6.43 cents. A comparison with the last annual report shows for the fiscal year ended June 30, 1886, an increase of 874 routes, of 200,400 miles traveled per annum, and a decrease of $62,623, in annual rate of expenditure. During the last fiscal year a careful inspection of the service and a readjustment thereof on a basis of the postal business transacted at the offices supplied, has resulted in a very large reduction in the cost. The appropriation for the last fiscal year was $5,900,000. The sum actually expended was $5,443,296.89, leaving an unexpended balance of $456,703.11. The reduction in annual cost of star service effected by orders from July 1, 1885, to June 30, 1886, was $301,479. The contracts made during the last fiscal year for the performance of star service from July 1, 1886, to June 30, 1890, in the fourth section, embracing the States of Arkansas, Louisiana, Texas, Kansas, Nebraska, Colorado, Oregon, Nevada, and California, the Indian Territory, and the Territories of Dakota, Montana, Wyoming, New Mexico, Arizona, Utah, Idaho, and Washington, effected a saving of $238,175.10 in the annual rate of expenditure, being 12 per cent. on the rate of annual expenditure in that section during the previous contract term, and represents a saving of $952,700.40 for the ensuing 4 years. The annual rate of expenditure for all the star service in operation on July 1, 1886, was $5,091,225.28, being $260,955.72 less than on June 30, 1886. The number of routes in operation on June 30, 1886, was 13,245; on July 1, 1886, 13,961. Attention is again called to the laws authorizing expenditures for expedition (section 3961, Revised Statutes, and the act of April 7, 1880), and it is suggested that the law be modified so as to read as follows: Whenever it shall become necessary to increase the speed upon which mail is carried on any post route, the service shall be readvertised for the reduced running time required: Provided, That the contractor, with the consent of his sureties, shall have the option of continuing service upon the expedited running time, without additional compensation therefor. The foregoing is now the rule of the Department. It is subject to modification or revocation at any time. The appropriation for the current year is $5,850,000; the sum estimated as necessary for the current fiscal year is $5,200,000; leaving an unexpended balance at the close of the fiscal year of $650,000. Estimated as necessary for the fiscal year ending June 30, 1888, $5,500,000; being 5.98 per cent. less than the appropriation for the current year. REGULATION WAGON MAIL SERVICE. The regulation mail-wagon service is an outgrowth of the railway mail transportation-the extension of railroads, the increase in frequency of trips thereon, and the necessities of trade and commerce, requiring the Department to relieve the railroads of the performance of what is called terminal service in the great cities, the centers of trade and commerce. The requirement by the Department of the railroads to perform the service-that is, service between the post-offices and rail |