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MISCELLANEOUS.

Judgments for plaintiffs in admiralty cases.

701 Judgments for defendants in admiralty cases.

127 Judgments for plaintiffs in other cases to which the United States was not a party-----

2, 615 Judgments for defendants in other cases to which the United States was not a party---

1,171 Total liabilities in bankruptcy cases closed during the year-- $245, 055, 004. 22 Total assets realized in bankruptcy cases disposed of during the year

$52, 412, 269. 99

NUMBER OF CASES PENDING CLOSE OF JUNE 30, 1915.

Civil cases to which the United States was a party-
Criminal prosecutions by the United States..
Admiralty cases.-
Other cases to which the United States was not a party--
Bankruptcy petitions---

26, 440 10, 706

6, 759 44, 682 43, 515

Total

132, 102

T. W. GREGORY,

Attorney General.

REPORT OF THE POSTMASTER GENERAL.

NOVEMBER 15, 1915. To the PRESIDENT:

The Postmaster General has the honor to present his annual report for the fiscal year ended June 30, 1915.

POSTAL FINANCES.

The year ended June 30, 1915, was an abnormal one. Surpluses of $3,800,000 and $3,500,000 were reported and covered into the Treasury for the fiscal years 1913 and 1914, respectively, showing that the Postal Service had been put upon a self-sustaining basis after a long period of annually recurring deficits. Had normal conditions prevailed, a third successive surplus would have been paid into the Treasury for the fiscal year 1915.

The shock to business the world over following the outbreak of the European war caused a large loss of postal revenue. For this reason, and because certain large increases in postal expenditures were mandatory under the law, there is an audited deficit for the fiscal year 1915 of $11,333,308.97. This deficiency has been exceeded under normal conditions within recent postal experience. The following table shows the audited results of postal operations during the 10 years prior to 1915 :

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Accounts subsequently settled reduced this reported surplus to an actual deficit of $732,301.90.

615

As pointed out in former reports, the audited figures do not represent the actual financial results for the year. They do not include obligations incurred but not paid within the year, whereas they do include payments on account of obligations incurred in former years.

The audited surplus of 1911 was not an actual surplus, but an actual deficit, as heretofore shown; and whereas the audited surpluses of 1913 and 1914 were not the actual surpluses, there were, as stated, actual surpluses paid into the Treasury for those years, to the amounts of $3,800,000 and $3,500,000.

Computed on the basis of obligations incurred for the maintenance of the service during the year, and taking into account bills outstanding at the close of the year, the actual deficit for 1915 was $11,337,939.35. The excess of audited expenditures over receipts was $11,297,861.15, to which is added $35,447.82 allowed postmasters for losses of postal funds due to fire, burglary, and other causes. The audited deficit, therefore, is $11,333,308.97.

The revenues for the fiscal year 1915 amounted to $287,248,165.27, a decrease of 0.23 per cent under the preceding year as compared with an increase of 7.99 per cent for 1914 over 1913. There was expended during the year, for the maintenance of the service, $298,546,026.42, an increase of 5.29 per cent over the preceding year, as compared with an increase of 8.19 per cent for 1914 over 1913.

The revenues for the fiscal year 1914 amounted to $287,934,565.67. Therefore the income for 1915 falls but slightly below that of 1914. In the fiscal year 1914 the increase of postal receipts over the preceding year was 7.99 per cent. For the fiscal year 1915 postal receipts remained about stationary, whereas normally at least the average rate of increase, which was 7.21 per cent for the years 1910 to 1914, inclusive, should have been maintained. This would have meant additional receipts of about $21,000,000. This sum approximates the cost of the European war to the American Postal Service.

The revenues of all neutral countries were at once seriously affected by the war in Europe. Our postal receipts fell off immediately after the beginning of the war and the loss continued in varying degree throughout the year until June, 1915, when, as the result of the business revival in this country and steady growth of the parcel post, a slight increase over the receipts for June, 1914, was returned. But for the exercise of the greatest caution in the conduct of the service and strict adherence to the policy early inaugurated by the present administration of rigorously eliminating extravagance, privilege, and favoritism throughout the service, the deficit would have exceeded the loss of revenue.

The accounts of the service are closed quarterly, but monthly revenue reports are received from the 50 largest post offices, which

collect about one-half of our postal income. Their receipts for the month of June, 1914, compared with the same month of 1913, showed an increase of 7.11 per cent. In July, 1914, the first month of the fiscal year 1915, when rumblings of the approaching European conflict were heard, the percentage of increase of receipts at the 50 largest offices fell to 4.7 per cent. In August, 1914, coincident with the actual beginning of hostilities in Europe which plunged business in this country into a state approaching chaos, not only were the previous increases in receipts at these offices lost but a decrease of 1.20 per cent was shown. The decline continued for several months in increasing degree, reaching its lowest point in November with a decrease of 5.71 per cent. Then a gradual improvement began and continued until, as stated, the receipts for June, 1915, showed a gain over the same month of the preceding year, the increase being 2.06 per cent. In September, 1915, the increase over September, 1914, was 4.8 per cent. In October, 1915, the increase over October, 1914, on a comparable basis was 7.57 per cent.

The department has little control over the volume of postal revenues. The principal factor is the condition of business throughout the country. On account of the close relation of the Postal Service to all business and social life, no other activity is more quickly affected.

To adjust the expenditures of the service to the revenues under the abnormal conditions that prevailed was not possible, and to have attempted to do so would have been unwise. Whereas it is the duty of the administrative officers of the Postal Service to conduct the service at the minimum of expenditure, efficiency must always remain the controlling consideration.

With the improvements and economies which were being effected through readjustments of several of the more important branches of the service, there would have been a large decrease in expenditures, with a consequent surplus, as stated, even had normal conditions continued; but with the commencement of the war and all indications pointing to a continued and far-reaching disturbance in economic conditions it was the duty of the Postmaster General to more zealously safeguard postal expenditures and to make retrenchment wherever practicable without impairing facilities or lowering the standard of efficiency. Instructions to this effect were early issued and the policy closely adhered to throughout the year. The officers of the department having supervision of the various branches of the service have been untiring in their efforts to meet these unusual conditions. That the precautionary measures taken have been effective is clearly demonstrable. The increase in expenditures for 1915 was 5.29 per cent, compared with 8.19 per cent for 1914; and there is an unexpended balance of almost $18,000,000 in

the appropriations for maintaining the service during 1915. This unexpended balance results from the policy with respect to expenditures. Ordinarily the unexpended balance is about $6,000,000.

In this connection it is proper to recall certain fundamental facts connected with the system of providing for the maintenance of the postal establishment. Estimates are prepared by the department during October and November for the maintenance of the service during the year beginning the following July. Appropriations are then made by Congress during the winter preceding the year in which they are to become actually available. Hence these estimates and appropriations provide for the demands likely to be made upon the service due to the normal growth and also provide for such extensions and improvements as are deemed advisable and necessary. Frequently mandatory provision is made by law for increases in expenditures and these, of course, must be met regardless of special and unexpected conditions which may subsequently affect revenue.

The largest of these increases of 1915 over those of the fiscal year 1914 were the following: Clerks, first and second class post offices (salaries).

$1,880, 116. 07 City delivery carriers (salaries)-

1, 720, 677. 33 Railway Mail Service (salaries).

1, 844, 886. 13 Rural Delivery Service (salaries).

2, 377, 434. 36

7, 823, 113. 89 3, 200, 506. 92

Railroad transportation..

11, 023, 620. 81 The largest item, that of railroad transportation, is attributable to the readjustment of the rates paid to the railroads for carrying the mail following the quadrennial reweighing in the fourth contract section. This reweighing began in February, 1914, and continued for three months, and hence took place before postal traffic was adversely affected by the European war. It was a matter therefore of legal necessity to assume this increased expenditure for railroad transportation service.

The other large increases are attributable to the requirements of the act of August 24, 1912, reclassifying salaries and introducing automatic promotions in the Railway Mail Service, and to the provisions of the appropriation act of March 9, 1914, increasing the salaries of rural mail carriers and providing for the automatic promotions of post-office clerks and city-delivery carriers.

Thus of the total deficit of $11,333,308.97 all but $309,688.16 was the result of mandatory legislation, $7,823,113.89 having been expended as increased salary to postal employees and $3,200,506.92 as additional pay for railroad transportation.

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