ANNUAL REPORT OF THE DIRECTOR OF POSTS, FOR THE BUREAU OF POSTS, FOR THE FISCAL YEAR ENDING JUNE 30, 1903. THE BUREAU OF POSTS OF THE PHILIPPINE ISLANDS, The Honorable the SECRETARY OF COMMERCE AND POLICE. SIR: I have the honor to submit the following report of the bureau of posts for the fiscal year ending June 30, 1903, with accompanying statistical tables. The information relative to revenues is given as received from the auditor. PERSONNEL OF THE SERVICE. On July 1, 1902, the employees of this bureau numbered 217, of which 141 were Americans, 75 Filpinos, and 1 Chinaman. During the year, 249 Americans and 101 Filipinos were given appointments, and 3 Americans were reinstated. One hundred and fifty-eight Americans and 39 Filipinos were separated from the bureau by resignation; 10 Americans and 9 Filipinos were separated by removal; 8 Americans and 3 Filipinos by transfer to other bureaus, and 5 Americans by death. On June 30, 1903, the employees of this bureau numbered 234 Americans, 137 Filipinos, and 1 Chinaman. This is an increase during the fiscal year of 93 Americans and 62 Filipinos. With the exception of 2 Americans, transferred from the United States postal service, all appointments during the year were made from the Philippine civil service register, or under the provisions of sections 3 and 4 of Act 181, authorizing the appointment of postmasters at the smaller offices without regard to the civil-service act. REVENUES AND EXPENDITURES. The revenues for this fiscal year, as shown by Table E, amount to $145,702.53, which is an increase of about 54 per cent over the previous year. On the other hand, the expenditures for the year, amounting to $231,431.08, show an increase of 25 per cent; and to this amount must be added printing and binding received from the public printer during the year, amounting to $8,748.95. There is an increase of $39,549.77 in the item of salaries and wages, practically all of which represents compensation of postmasters at new offices established during the year. The increase in the cost of mail transportation is $9,903.90, nearly all of which is for land transportation between established post-offices throughout the islands, where heretofore mails were carried without expense to this bureau. Last year the payments to steamships carrying mails to foreign ports amounted to $5,071.32, while this year the payments for this purpose amounted to $6,910.36. DEAD-LETTER OFFICE. In the dead-letter office of this bureau there was received during the year 43,112 pieces of mail, which, for various reasons, could not be delivered to addressees. This is a decrease of over 22,500 for the preceding year. During the year 12,159 letters and other articles of mail matter which could not be delivered to addressees were returned to the senders, and 4,971 pieces, the senders of which could not be ascertained, were destroyed. Twenty-two thousand six hundred and fiftyseven letters and packages of undelivered matter were returned to the United States and 3,130 pieces were returned to foreign countries. These figures show a decrease compared to the preceding fiscal year of 11,850 pieces returned to the United States and 2,466 to foreign countries. In 70 of the letters opened and returned to senders there were found drafts, checks, and money, amounting to $1,784.28. During the year money amounting to $82.50, taken from letters the senders of which could not be ascertained, was turned into the postal revenue after being held one year. Postage stamps to the amount of $9, found in letters remaining unclaimed for the same period of time, were destroyed under proper supervision. At the close of the year 18 valuable letters remained in the dead-letter office, containing drafts, money orders, and cash, amounting to $7,827.12. MONEY-ORDER BUSINESS. The money-order business was in operation at 33 offices. This branch of the service was extended during the year to two offices only. Further extensions, requiring the Government to assume larger responsibilities, were not made because of the fact that irregular transportation of the mails makes the accumulation of large amounts of money-order funds in out-of-the-way post-offices possible and unavoidable. However, matters in these respects have improved to such an extent that the money-order service has been established since June 30 at seven additional offices, and other extensions will be made during the present fiscal year. At the Manila post-office, 10,156 less orders were issued than during the preceding year; but, on the other hand, there was an increase of 3,856 in the number issued at money-order offices in the provinces. The money-order system continues to be used largely for remittances of money to the United States. During the year orders to the amount of $1,396,848.20, issued in the Philippines, were paid in the United States; while orders to the amount of only $136,440.61, issued in the United States, were paid in the Philippines. To settle the difference between these amounts, remittances were made during the year to the postmasters at New York City and San Francisco, Cal., amounting to $994,132.94. During this year the Manila post-office paid orders aggregating $1,445,706.96, and received deposits of surplus moneyorder funds from provincial offices in the amount of $1,439,394.59. These figures are good evidence of the extent to which the moneyorder system is patronized in the provinces. Further evidence of this fact appears in the demands for the establishment of money-order business at other offices. The handling of Mexican and Spanish-Filipino currency in the money-order business during the last fiscal year has been most difficult. The ratio of exchange between this money and United States currency was changed so frequently that it was not always possible to convert the local currency received into United States currency before another drop in the value of the former took place. It is gratifying to state, however, that notwithstanding all the difficulties encountered, we managed to handle this local currency in the money-order business not only without loss to the Government, but at a profit. On June 30 all of the surplus local currency not required to pay outstanding orders payable in this kind of money was exchanged with the treasurer of the Archipelago for United States currency at the existing legal ratio of exchange. The value of this exchange in United States currency is $2,545.77, which amount has been taken up in our money-order accounts as profit on exchange. Now that Mexican and Spanish-Filipino currency will soon be eliminated from the question, negotiations have been reopened for moneyorder exchanges between the Philippines and Singapore, Hongkong, and Japan. These negotiations were started more than a year ago, but were suspended temporarily on account of the rapid fluctuations in the value of local currency. REGISTRY BUSINESS. The total number of letters and other articles of mail matter registered during the year is 164,742. This is an increase of more than 23 per cent over the previous year. There is an increase of more than 10 per cent in the total number of registered articles received from the United States, and of more than 12 per cent in the number received from foreign countries. The increase in the number of pieces of registered mail sent to the United States is more than 9 per cent, while to foreign countries it is 11 per cent. Last year 10,161 pieces of official mail were registered free, while this year the official free registration amounted to 27,245, which is an increase of over 168 per cent. INTERISLAND TRANSPORTATION. This fiscal year has seen considerable improvement in interisland mail communication. A number of commercial steamers are now being operated upon practically regular schedules between Manila and other important points. Interisland army transports have been run much nearer regular schedules than heretofore. On the first of each month the army transport service publishes a schedule of its interisland transports for the next thirty days, and these schedules are, as a rule, maintained. Some months since I endeavored to arrange for the placing of postal clerks on the interisland army transports, but was unsuccessful, owing to the lack of space for their accommodation and the distribution of the mails. Toward the close of the year, nine coast-guard routes were established. With this amount of regular transportation, all of the more important points in the Philippine Islands receive a fairly regular mail service. To further improve the postal facilities throughout the islands, postal clerks are being assigned to the coast-guard steamers, which will be operated on regular schedules. These clerks, in addition to their duties toward the mail service, are also acting as pursers and freight clerks. During the fiscal year, postal clerks on trains of the Manila and Dagupan Railway and on steamers of the coast-guard service distributed 651,840 letters and 561,148 papers, and handled 11,420 pieces of registered mail. In the matter of land transportation, this bureau is gradually taking up the carrier system provided by municipalities under paragraph (gg), section 39, of the Municipal Code, and substituting in lieu thereof paid carrier service. This action is not taken, however, unless the municipal carrier service appears to be unsatisfactory; and neither is a paid carrier service established at points between army posts where regular army transportation is in operation. MAIL COMMUNICATION WITH THE UNITED STATES AND FOREIGN COUNTRIES. During the year 69 mails were dispatched to the United States, 18 of which were by army transports and 51 by commercial liners via Hongkong and Yokohama; and 77 mails were received from the United States, 18 of which were by transports from San Francisco, 33 by commercial liners from the same port, and 26 from other United States ports. Thus it will be seen that in the whole year we received a total of 51 mails from San Francisco, being one less than an average of one mail per week; also that mails were sent to the United States on an average of one every five days. The amount of mail received from and dispatched to the United States is, however, slightly less than for the preceding year. During the year 337 mails were dispatched to foreign countries, 197 of which were to Hongkong direct. There was an increase over the preceding year of more than 1,000,000 grams in the weight of letters and 1,500,000 grams in the weight of other mail matter sent to foreign countries during the year. EXTENSIONS AND IMPROVEMENTS. The free-delivery service for the city of Manila mentioned in my last report is growing steadily in favor. During the last fiscal year these letter carriers delivered 651,736 pieces of mail at business houses and residences in Manila. The amount of mail delivered by these carriers has increased more than 60 per cent within the last twelve months. This service is highly satisfactory, as this increase in the amount of mail so delivered indicates. A station of the Manila post-office will soon be established in the Manila custom-house. This station is intended especially for the handling of packages received from the United States and foreign countries containing articles subject to customs duties. When in operation, it will be possible for persons receiving packages to at once pay the duties and take delivery, thus avoiding a second trip to the customhouse, which is now required. The records show a material increase during the year in the bulk of newspapers and regular publications printed in the Philippines and sent to subscribers in the provinces. This is especially true regarding Manila publications printed in Spanish and Filipino dialects, which are subscribed for principally by the Filipinos. During the year there were 55 newspapers and regular publications published in the Philippines, whose publishers were permitted to send their publications through the mails at newspaper rates of postage-1 cent per pound. There were also five firms which had permission to use the mails at the same rates of postage under the "Rights of news agents." The total weight of reading matter sent in the mails of the Philippines under these conditions was approximately 300,000 pounds. On July 1, 1902, there were 90 post-offices throughout the islands. During the year 149 offices were established and 30 discontinued. At the close of the fiscal year we had 209 post-offices, being an increase of 119 during the year. A new and complete postal code for the Philippine Islands is being prepared, which, upon completion, will be submitted to you with recommendation for its enactment into law. The code recommended will follow the United States postal laws as closely as possible, varying therefrom only when necessary to meet our peculiar conditions. It will be recommended that post-offices be classified into four classes, viz: First class, Manila; second class, the larger post-offices, such as Iloilo, Cebu, and Cavite; third class, all other provincial capitals and other offices of sufficient importance to justify a postmaster's salary of $20 or more per month; fourth class, all offices where the postmaster's salary is less than $20 per month. It will be further recommended that one of the municipal officials, either the secretary or treasurer, be required by virtue of his office to act as postmaster, except where other provision is made at compensation fixed by the director of posts. It is believed that either of these officials in the small municipalities is in a position to serve as postmaster better than any other person. This legislation is suggested by the fact that in our efforts to establish new post-offices we are frequently unable to find any one who will accept appointment as postmaster, and therefore for the time being, under present legislation, the municipality must go without an office. I will also recommend that the presidente of the municipality, where other provision is not made by the director of posts, be required to furnish the necessary transportation for the mails to the next municipality. This legislation is likewise suggested by the fact that in many places without the assistance of the presidente we have great difficulty in securing persons who will carry the mails, and, in fact, in a few cases have been absolutely unsuccessful. Recommendation is also made for legislation defining specifically the duties of all steamships and small craft authorized to engage in the coastwise trade with reference to the handling of the mails. DEFALCATIONS. This bureau, like others, has suffered during the year from defaulting postmasters and dishonest officials. In April, 1902, the postmaster at Aparri, Cagayan Province, put up a money-order remittance containing $1,575 United States currency. Subsequently, and before the package was dispatched from his office, a soldier of the Sixteenth Infantry, detailed for special duty in the post-office, got possession of the package and abstracted the money contents. While it was believed from the beginning that this soldier was guilty of the crime, more than a year elapsed before sufficient |