September 30, 1885; of $798,623.68, or 7.8 per cent., for the quarter ended December 31, 1885; of $704,731.51, or 6.6 per cent., for the quarter ended March 31, 1886; and of $679,082.62, or 6.8 per cent., for the quarter ended June 30, 1886.

Following the line of comparisons in the review of last year, to which reference has been made, out of the total of $42,498,245.19 of ordinary revenue, $16,153,174.80, or 38 per cent., was collected at thirty of the principal post-offices, and $26,345,070.39, or 62 per cent., at the remaining offices. At the thirty principal offices $3,646,009.94, or 22.6 per cent., was collected during the quarter ended September 30, 1885; 84,293,049.92, or 26.5 per cent., during the quarter ended December 31, 1885; $4,191,191.73, or 25.9 per cent., during the quarter ended March 31, 1886; and $4,022,923.21, or 24.9 per cent., during the quarter ended June 30, 1886. At the remaining offices $6,054,453.11, or 22.9 per cent., of the. total of $26,345,070.39, was collected during the quarter ended September 30, 1885; $6,701,276.24, or 25.5 per cent., was collected during the quarter ended December 31, 1885; $6,987,855.99, or 26.5 per cent., during the quarter ended March 31, 1886; and $6,601,485.05, or 25.1 per cent., during the quarter ended June 30, 1886.

There was an increase for the quarter ended September 30, 1885, of $152,563.84, or 4.3 per cent., at the thirty principal offices, and of $32,492.27, or .05 per cent., at the remaining offices; for the quarter ended December 31, 1885, of $413,925, or 10.6 per cent., at the thirty principal offices, and of $384,698.68, or 6 per cent., at the remaining offices; for the quarter ended March 31, 1886, of $415,306.48, or 10.9 per cent., at the thirty principal offices, and of $289,425.03, or 4.3 per cent., at the remaining offices; and for the quarter ended June 30, 1886, of $281,197.84, or 7.5 per cent., at the thirty principal offices, and of $397,884.78, or 6.4 per cent., at the remaining offices.

The amounts and rates of increase will be more strikingly exhibited in tabular form, as follows, viz:

Table showing increase, by quarterly periods, in ordinary postal revenue (excluding receipts from second-class matter and from money-order business) for the fiscal year ended June 30, 1886, as compared to corresponding periods of the previous year.

It will be observed how correctly the figures represent the different conditions of the business of the country prevailing during the past year.

A revival from the extreme depression of the previous year was fairly in progress before the 1st of October, 1885; and though the increase in the unit of weight of first-class matter had tended to lessen the postal revenue, there was a better showing by nearly 2 per cent. for the quarter ended September 30 than for the same quarter of the previous year. The thirty larger offices had responded with an increase of 4.3 per cent.,

and the smaller ones barely escaped a decrease. This was in confirmation of previous experience, the large offices being the first to realize the benefits of a recovery from an era of commercial depression.

The improvement in business continued almost without check until the spring of 1886. The ordinary postal revenue for the six mouths ended March 31 showed an increase of $1,503,355.19, or 7.2 per cent., as compared to the corresponding six months of the previous year. The increase at the thirty larger offices was at the rate of 10.8 per cent., and at the remaining offices it was 5.1 per cent. The influences of the better condition of business had been extended beyond the conimercial centers, and the gain at the smaller post-offices was a noticeable result. The labor troubles had now been inaugurated, and they were des tined to continue far into the summer of the year. Their effects upon the 'postal revenue are easily traceable.

At the thirty large offices, which had shown an increase of 10.8 per cent. for the six months ended March 31, there was an increase of only 7.5 per cent. for the quarter ended June 30. The direct connection between cause and effect is emphasized by the fact that the smaller offices, which were not affected by the labor troubles to the same extent as the larger ones, exhibited a better gain for the quarter ended June 30 than for either of the two preceding quarters. In further corroboration, the issue of special-request envelopes (which are used almost exclusively for business purposes) showed an increase of only 11 per cent. for the quarter ended June 30, as against an average quarterly increase of 13.7 per cent. for the six months ended March 31.

It is evident that except for the disturbances caused by the labor question the revenue for the last year would have been very cousiderably in excess of the estimates. Still the exhibit is a very encouraging one, and it gives promise of a still better future. Notwithstanding that the first quarter of the year showed only a trifling increase, and that the last quarter of the year was affected adversely by the labor troubles, the revenue for the year, as a whole, came out $1,387,579.12 ahead of that of the previous year; and this in spite of the loss on second-class matter and of the change of the unit of weight of first-class matter. As previously stated, the six months ended March 31 showed an increase in ordinary postal revenue (excluding revenue from second-class matter and money-order business) of $1,503,355.19, or 7.2 per cent., making no allowance for the loss through the change in the unit of weight. Such an increase cannot be attributed wholly to a natural reaction from the extreme depression of the previous year. It furnishes indisputable evidence of the great improvement that had taken place in the business affairs of the people.

FISCAL YEAR ENDING JUNE 30, 1887.

From what has been said with respect to the past year, there is scarcely a doubt that the current year will realize a still greater improvement in the postal revenue. The labor troubles were settled early in the year; a fair degree of prosperity has attended the business of the country during the past few months, and all the indications at the present time look to its continuance, if not to a still further improvement. None of the sources of the postal revenue bave been injuriously affected by changes during the present year. The reduction in the rate of postage on second-class matter and the increase of the unit of weight of first-class matter have been in effect since the 1st July, 1885, and accordingly the revenue will not suffer from these sources in the

comparison of the present with the past fiscal year. On the contrary, the tendency of the ounce unit to encourage the substitution of sealed for unsealed matter, to which reference has been made, will be to increase the revenue for the present year. A count of matter mailed at 20 of the principal post-offices showed an increase for the last week of June, 1886, over the last week of June, 1885, of 59.3 per cent. in the number of wrapped parcels sent under seal at letter rates, as against an increase of 40.6 per cent. in the number of wrapped parcels sent unsealed at third and fourth-class rates of postage. A similar count at the same offices showed an increase for the last week in September of the present over the last week of September of the previous year of nearly 167 per cent. in the number of sealed parcels and 43.3 per cent. in the number of unsealed parcels. The number of sealed parcels mailed at the 20 offices during the last week in September, 1885, was 22,751, and during the last week in September, 1886, it was 60,723. The average weight of the sealed parcels was 3.52 ounces for the last week of September, 1885, and 4.17 ounces for the last week of September, 1886. The total weight of the sealed parcels mailed during the former period was 5,017 pounds, and during the latter period it was 15,839 pounds.

At 2 cents per ounce, the rate charged on sealed matter, the postage on the sealed parcels, making no allowance for fractional weights, would amount to $1,605.62 for the former period, and $5,068.52 for the latter period. This was a gain of $3,462.90, or 215 per cent., for one week at 20 post-offices alone; and while an increase at the same rate throughout the entire year and at all the post-offices is not to be expected, yet it is evident that there will be a considerable augmentation of the revenue from the substitution of sealed for unsealed parcels. As the unsealed parcels outnumbered the sealed parcels more than twenty-eight times in the count for September, 1886, there is a large field in which the substitution of the latter for the former may operate to the advantage of the revenue. The postage on the unsealed parcels (consisting of both third and fourth class matter) mailed in September, 1886, would amount, at third-class rates of postage, to $34,563.95; at fourth-class rates it would amount to $69,127.91; and at first-class or sealed rates it would amount to $138,255.82, making no allowance for fractional units of weights. It is a significant fact also, as serving to show the effects of the increase of the unit of weight of first-class matter, that while the average weight of the sealed parcels increased from 3.52 to 4.17 ounces, the average weight of the unsealed parcels decreased from 4.87 to 4.11 ounces, as between September, 1885, and September, 1886.

The better showing of revenue for the present year to be expected from the change in the unit of weight will not be confined to parcels alone, but it will be favorably influenced to a much greater extent by the substitution of the seal for open circulars and postal cards. The tendencies in this direction will be disclosed in the presentation hereinafter given of the statistics of the count of mail matter, to which reference has been made. The records of the stamp division bear testimony in the same direction. In the issues of stamped envelopes for sealed inclosures there was an increase for the past as compared to the previous seal year of 28,979,950, or 11.5 per cent., and in stamped envelopes (ungummed on flap) for unsealed circulars there was a decrease of 12,750, the issue of the latter having numbered 28,862,000 for 1885 and 28,842,250 for 1886. Thus the year's increase in envelopes for sealed inclosures slightly outnumbered the entire issue of the envelopes for open cireulars. For the year ended June 30, 1852, prior to the reduction in the letter rate of postage to 2 cents, the ungummed envelopes

for circulars represented 12.5 per cent. of all the stamped envelopes issued; in 1885, under a continuation of the half-ounce unit, the proportion of circular envelopes had fallen to 10.3 per cent., and in 1886, under the ounce unit, it fell to 9.3 per cent. As compared to the year ended June 30, 1882, the issues for the year ended June 30, 1886, showed an increase of 90,829,650, or 48.2 per cent., in envelopes for sealed inclosures, and of only 1,827,500, or 6.7 per cent., in envelopes for unsealed circulars.

With respect to postal cards the issues during the fiscal year ended June 30, 1886, showed an increase over the previous year of only 16,231,500, or 4.7 per cent., as against an increase of 183,454,481, or 11.6 per cent., in the issue of postage stamps and stamped envelopes. The number of postal cards issued during the last year was only 4,150,000, or 1.1 per cent., in excess of the number issued during the year ended June 30, 1882. The increase in number of postage-stamps and stamped envelopes of all kinds for the same period was 602,000,SSS, or 43.4 per cent. These figures manifest the public appreciation of the induce ments to sealed inclosures offered by the reduction in the letter rate of postage and the increase of the unit of weight. The statistics of secondclass matter show that the reduction in the rate of postage did not have the effect of unduly increasing the use of the mails for matter of that kind, but the revenue from this source will show an increase for the present over the past year in keeping with the general augmentation of business.

A new source of revenue, to which reference has been made, is through the special-delivery system. The system was in effect for nine months only of the past fiscal year, and then under such conditions as not to be productive of a comparatively large revenue. Under the extension of the system, on the 1st of October last, to all post offices, and to all classes of mailable matter, the receipts from this source for the present year should be largely in excess of those for the past year.

Some additional revenue will also be gained from the admission of liquids in the mails under your order of July 17, 1886.

It has been seen that all the elements entering into the revenue favor an increase. Only partial results since the 1st of July are ascertainable at the present time. The Auditor is now engaged on the accounts for the quarter ended September 30; and the results of that quarter from all the post-offices will not be known until in January. Special returns have, however, been obtained by this office from 30 of the principal post-offices for the quarter ended September 30, these 30 offices collecting, as previously stated, nearly 40 per cent. of the entire postal receipts. The returns show an increase at the 30 offices in question of $367,124.59, or 9.5 per cent., for the quarter ended September 30, as compared to the corresponding quarter of the previous year. There would have been a larger increase except for the fact that there was a reduction in the price of stamped envelopes, announced to take effect on the 1st of October, under a new and more favorable contract. While the announcement probably led to some curtailment in the purchases by the public of ordinary stamped-envelopes, its effects were felt chiefly in the sale of envelopes printed with special return requests. These envelopes are furnished only in quantities of not less than 500 in any case, and payment for them is required in advance of their supply. To a large extent purchases were delayed to await the expected reduction of prices, and small supplies of adhesive stamps or ordinary stamped-envelopes were bought as a temporary expedient. Thus, while there had been an increase of 11.6 per cent. in number of special-request envelopes for the

year ended June 30, 1886, as compared to the issue of the previous year, the quarter ended September 30, 1836, exhibited a decrease of 2.4 per cent. as compared to the corresponding quarter of the previous year. The sales of these envelopes for the quarter ended September 30 were affected to the probable extent of at least $100,000, by far the greater share of which amount concerned the 30 principal post-offices under discussion.

In second-class matter, separately considered, the returns from the thirty principal offices for the quarter ended September 30 showed an increase of $21,860.54, or 12.2 per cent., over the receipts for the quarter ended September 30, 1885. Nearly 75 per cent. of the total revenue from second-class matter is collected at these 30 offices.

In the light of past experience the smaller offices should exhibit a better gain for the past quarter than for the two preceding ones, and the gross revenue for the quarter ended September 30 will probably show an increase of nearly 9 per cent. over the revenue for the corresponding quarter of the previous year.

These results and the manifestations of growing improvement at the smaller offices justify the expectation of a large increase of revenue for the present over the last fiscal year.

The expenditures of the postal service are borne in largest part out of its receipts, the deficiency being supplied out of the general Treasury. It is best, on all accounts, that the estimates of postal revenue should be very conservative, and that the burden on the Treasury should not be underestimated. In this view of the case, in estimating for the present fiscal year, allowance will be made for an increase over the past year of only 7 per cent. in the ordinary postal revenue, exclusive of the receipts from second-class matter for both years. For second-class matter allowance will be made for an increase of only 10 per cent. on the receipts for the last fiscal year. The amounts to be yielded at these rates are $45,473,122.35 of ordinary postal revenue, exclusive of secondclass matter, and $1,209,588,48 for second-class matter. For the next fiscal year allowance will be made for an increase on these sums of only 7 per cent. for ordinary revenue, exclusive of second-class matter, and of 8 per cent. for second-class matter. The estimates for the next year amount, therefore, to $48,656,240.91 from the former, and $1,306,355.55 from the latter source.

The receipts from money-order business are now estimated by the Superintendent of the Money-Order System at $630,000 for the present, and $650,000 for the next fiscal year. The total estimated gross receipts amount, therefore, to $47,312,710.83 for the year ending June 30, 1887, and $50,612,596.46 for the year ending June 30, 1888. With a fairly prosperous condition of the business of the country, these estimated amounts are much more likely to be exceeded than diminished by actual results.

With regard to the expenditures of the current fiscal year, the appropriations authorize a total outlay of $54,365,863.25, exclusive of an indefinite amount allowed for fees to compensate the performance of specialdelivery service.

A careful revision of the subject just made by the several departmental officers charged with supervising the expenditures, places the total outlay for the year at $53,523,968.59, not including the fees for special delivery service and the amount certified to the Secretary of the Treas. ury for mail transportation of the Pacific railroads and not chargeable to the appropriations for the postal service. The account for the current