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III 1JzS, bCStutS q Siettt uitI2aSe III exDe- dition between the principal commercial cities. and much greater proportion of the whole performed ii stages.

 "I'he method in which the accounts of the expenses of transporting the fil;iill il have always been kept n this department, has led to q misapprehension of the means os extending improvements ID mail facilities. 1 Ii appears, from the earliest records ef sle ss!se Idepartment, to have been rule not to en- l ter to the credit of contractor. nor to eharge to the account of transportation, the expense of carrying the mail On his route, til after he had signed his contract and bond, and returned them 10 the depart ment with proper authority, though the ser vice may have been regularly performed, and, in many instances, the moneys actu- l. ally paid. It has sometimes happened that contracts of the greatest magnitude have, l from various causes, remained for more than year unreturned. In such cases, though the expenses have been incurred, they do not appear Ill the transportation ac- count, and though the moneys may have been paid to the contractors, they stand on the books as balances to that amount due from them to the department, constituting a part of the surplus fund; when, III fact, they constitute part of the actual expense incurred for the transportation of the mail. The consequence has been, that the expen- ses for transporting the mail within any given period of time, as shown in the &C., counts, and reported annually through the Executive, have been always calculated to exhibit an amount considerably less than what has actually been incurred. This is an lmperfection not of recent origin, but one which appears to have been co-exlst- ent with the department When the num- Der oi contracts was few, and the surplus reYen4e bore large ratio to it's whole an Inual amount, the effect was unimportant; i1ii in the increased number of mail ilfoutes, and the dlminution of the surplus revenue, Ii was calculated 10 produce serious incon- yenience. From the statements growing out of this system, thus iIlusory in their re- suits, together with the great expense Of carrying into effect the law of the last Con- gross establishing new mail routes, and disposition te ssfasiiy tiis wishes of 5ise pulp lie n the Improvement of mail facilities, 1 was led to carry those improvements to an extent winch It was found the resources of the department would not wei sustain When the inconvenience was felt, inc cause was carefully investigated, and ihe follow ing result was discovered Prompt direc- lions were given for the correction of the error i'll future. 1t Is not possible to de- ternnne, to an exact certainty, the whole expense incurred fer transportation within any recent period: because 1t will often happen that improvements will become ne- eessary, even for the fulhlment of existing laws, the expenses of which, fer want of proper evidence, must be reserved for sish- seguent adjustment, and so come into the account for later period than that s.t which which the services were performed. But these YanatIons are of an ineonsiderable amount compared with the differences resulting from the system heretofore observed. On the 3Gth of June, 1929, which vas the close of the first quarter in which hal assumed the functions of tine department, the expenses which had been incurred for transporting the mail were $64,24Ss 76 more than the amount stated in my report to that day.

 l On the list day of July, 1882, the day to which my last report reaches, there was stated to be surplus of available funds, after defraying all the expenses of the de- partment up to that day, of S202,9iI 40 ltls now however ascertain

 ed, that the expenses in-

 cured for transportation 1 which had actually been performed pror to the list

 July, 1882, beyond the

 amount stated i'll that re- port, were $2o5,65e TO So that, instead of surplus on that day, the depart

 ment was actually indebt-

 ed on the lst July, 1892,

 beyond the whole amount

 of it's available funds, ad-

 hitting that no losses of

 postages should be sus- tained, e44 ST

 The receipts and expenditures of the de- partment for the year ending the 30th June, 1853, are as follows:

 Gross amount of postage

 for the year, $2,77llss,5533s 27 Expenditures, 2,s03,673 3l Leaving deficit of l92,l35 o4 Add this sum paid into the Treasury by irregular de-

 Posites, having been pla-

 ced by the receiving offi-

 cer to the credit of that

 departmentinstead ofthis, 22s se The balance due by the de-