The Montgomery advertiser., 1904-01-12
REPORT OF MIR. PAYNE
THE POSTMASTER GENERALS
 ANNUAL STATEMENT.
Says Investigation Into the Scandals in His Department Resulted in the Reorganization of
 Several Bureaus.

Washington, D. C., December 30 1903. The President:
 The annual report of the Postoffice De- pertinent for the fiscal year ended June 90, 1908, shows the following as result of the financial operations of the Depart ment for that year. compared with the previous fiscal year:
 | Ordinary postal revenue, 1902 $119,95S,- 229 40; 1903, $131. .9s4,535.
 Receipts from money order business, 1902. $1.SS9, ,Sl7.s6; 1903. $2,2ss, ,9OS.24. Total receipts from all sources. 1902, $121,- s4S, ,047.26; 1903. $134, ,223, ,44S.24.
 Total expenditures for the year, 1902, SPA, ,7S5, ,697.O7; 1903, $13s, ,7s4, ,4S7.97.
 Excess of expenditures over receipts, 1902, $2,937, ,649.S1; 19J3, $4,560,044.73. An increase in the deficit over the pre- vious year of $1, 622. 394s2, which is. how ever. $1,042,1S3 less than the estimated de- | ficit of the year.
 Congress at it's last session passed an act looking toward the purchase of block 324, which Is located immediately south of | the present department building, for the purpose of erecting thereon an annex to the department building. The phenomenal growth of the postal service and the con- sequent increase in the business of the department makes it more and more im- ] perative that this addition to the present department building should be constructed at an early date. The department is at present at great inconvenience occupying several buildings and parts of buildings located at considerable distances from the main office and paying a large amount of rental therefor, which buildings are not fireproof. I therefore most earn estly urge upon the Congress the enact ment of suitable legislation to acquire the title to the property referred to-
 The number or vacancies existing In the l I.l-- 4nnN elusive evidence that it is not the policy of the department to allow extravagant salaries to clerks in postofflces.
 | The present method of segregating the appropriation into grades involves a large amount of unnecessary bookkeeping both in the salary and allowance division and l in the auditors office.
 I At the close of last fiscal year there were 2O,163 star routes, the length of which was 249.364 miles, the annual travel l27, ,240,152 miles, and the cost $6,614, ,999. .95 per annum. The contracts for the star routes in the third contract section, em- bracing the States of Ohio, Indiana, Illi- nois, Michigan, Wisconsin, Minnesota, Iowa and Missouri. expired June SO 1903, and new contracts were made last year for all the star service in those States for the four-year term beginning July last These new contracts covered 3.340 routes, aggregating 32,724 miles in length, and 19.- S.9S1 miles of annual travel at an annual expenditure of $1276,277.07.
 In Hawaii there were ninety-one routes, aggregating 14,70 miles in length, with an annual travel of 74269 miles, costing $96, 3.3S per annum The closed mails conveyed by local steamboat routes, star routes, and railroad routes within the territory of Hawaii amounted to 50745 pouches and sacks. Between San Fran cisco and Hawaii there were 20,536 pouches and sacks, and between Honolulu and for eign ports there were 3,1H bags. The To- cal steamboat routes cover all navigable waters within and around the several is- lands comprising the Hawaiian group. Every steamer plying between Hawaiian ports carries the mails.
 In Porto Rico at the close of last year there were forty-nine routes of all kinds, the total length of which was 3.49S miles, on which there was an annual travel of 5SS73 miles at cost of $sO.20S.O3.
 The demand for stamps in book form continues very large, the increase fin the number issued last year being 2,735 ,966 books, $5S per cent over the previous year. The 1 cent each at which these books are sold over the value of the stamps contained therein paid the cost of manufacture, and in addition has yielded a profit of $l5l, ,144.93 to the department on the total number of stamp books issued since stamps were first put up in this form in 1900.
 There were 4.462 postoflces discontinued during the year. being 4O0 more than du- ring the preceding year.
 The principal cause for the large in crease in the number of postofi1ces dis continued has been the extension of the rural free delivery service. which result ed in the discontinuance of 2163 postoffices during the year. the salaries of postmast- CTS of said offices aggregating $121 SS2.
 On June 30, 1903 at the close of the fiscal year, there were 741fD postofflces in the United States, divided as follows
 First class 242; second class. 11O7; third class, 3.690: fourth class 69131
 The extension of the rural free delivery service and the consequent increase in the use of the mails by the patrons residing along the rural routes. together with the extension of the telephone service into the farming districts of the country, has sug- fested the prOpriety of extending the priv ilege of the special delivery of such let ters, or the contents thereof. by means of the telephone 1t being proposed that a special stamp be provided covering the cost of such transmission. the use of which stamp would authorize the post master at the office of delivery to open such letter and telephone its contents to the person to whom 1t Is addressed If
  twenty-four hours time will be savei in the transmission of important messages to many people residing along the lines of the rural free delivery routes. I would recommend that a small appropriation he made by Congress for the purpose of en- abling the Postmaster General to inves- tlgate the subject.
 In concluding this report it is nroner +o say that its preparation has been delayed several weeks owing to the demands mon my time by reason of the inyestiration which has been made into the affairs of the department, commencing about the 1st of March. 1903. and which has continued under my direction since that time
 The investigation has resulted in a cor- plete reorganization of some of tho h,- reaus of the department, and it Is hone1 has eradicated all dishonest. irregular and criminal practices. which the investi. ration has developed as having been in 'Xistence for several years.
 can not too strongly commend +bo zeal vsor and fidelity which has heen shown hy the Fourth Assistant Postmas- ter General, who has been in immedieta charge and the inspectors who have been detailed to assist him in the investigation,
 Respectfully submitted. | II. c. Payne. Postmaster General.