a postmaster or postal employee responsible for the loss of a registered article for the value of the contents. In this we have succeeded except in a few cases of postmasters bonded in the Union Surety and Guaranty Company, which company passed into the hands of a receiver before sufficient evidence of losses to justify demands upon the company could be made.

INTERISLAND MAIL TRANSPORTATION.

Interisland mail communication has been very materially improved during this year. In addition to quite regular service to a number of important points in the islands furnished by commercial steamers, the interisland army transports have been operated on more regular schedules than heretofore. The service of the coast-guard steamers, started just prior to the beginning of the fiscal year, has been very regular. Postal clerks, for the distribution of mail on board, were maintained on steamers of the coast-guard service. These clerks distributed during the year 504,850 letters and 208,500 pieces of other classes of mail matter. They also handled 9,977 pieces of registered mail. The total distance traveled by these clerks during the year was 182,685 miles.

Postal clerks are also operated upon the main line of the Manila and Dagupan Railway. These clerks distributed during the year 1,529,350 letters and 492,600 pieces of other mail. They also handled 15,043 registered articles and traveled 89,149 miles.

With a view to securing more definite information as to the weight of mails carried on the interisland service, all the principal post-offices in the islands were required to take the weight of all mails received or dispatched during the month of June.

These reports show that during this month the Manila post-office dispatched 3,259 pounds to ports on Laguna de Bay and received 738 pounds by means of army transport service boats, and dispatched 7,649 pounds and received 3,897 pounds by means of commercial boats. During the same month 3,207 pounds were dispatched to points on Manila Bay by means of naval boats and 3,286 pounds were received; 1,521 pounds were dispatched by means of the army transport service boats and 534 pounds were received; 3,830 pounds were dispatched by commercial boats and 1,235 pounds were received.

To other interisland points 10,927 pounds were dispatched and 4,738 pounds received by means of army transport service steamers; 17,964 pounds dispatched and 2,407 pounds received on cutters of the coast-guard service; 33,368 pounds were dispatched and 9,573 pounds were received on commercial steamers. Twelve thousand eight hundred and ninety-seven pounds were dispatched on the Manila and Dagupan Railway and 4,489 pounds were received from this line during the month of June.

These figures will show that more mail was received and dispatched at Manila by means of commercial steamers than on all classes of government transportation combined. Table M shows the number of mails received by and dispatched from the Manila post-office during the fiscal year, and Table K furnishes the same information relative to the other offices. .

The inland transportation of mails has been materially extended and improved during the year. Tables E-1 and E-2 give complete

detailed information covering this subject. Prior to the close of the fiscal year this bureau had taken over complete charge of the transportation of mails between post-offices except in seven provinces. The transportation in these provinces will be taken up early in the fiscal year 1905.

MAIL

COMMUNICATION

WITH THE UNITED STATES AND FOREIGN
COUNTRIES.

Table C shows the amount paid to each commercial steamer carrying mails to foreign ports. Table D shows the amount paid to the several foreign countries for the transportation of Philippine mails for the calendar year ending December 31, 1903. Tables N, O, and P give detailed information relative to mails exchanged by the Manila post-office with the United States, Honolulu, Guam, and United States ships in foreign ports, and with foreign countries.

From these tables it will be seen that during the year 59 mails were received from the United States, 17 by army transport and 42 by commercial liner via Hongkong or Nagasaki. They also show that 66 mails were dispatched to the United States, 14 by army transport and 52 by commercial liner via Yokohama, Nagasaki, or Hongkong. This is an average of one mail from the United States every six days and of a mail to the United States every five days.

This was an increase of 215 in the number of pouches of letters received from the United States, of 14 in the number of pouches of registers received, and a decrease of 544 in the number of sacks of paper mail received, and in mails dispatched to the United States there was a decrease of 340 pouches of letters, of 721 pouches of registered mail, and an increase of 1,096 sacks of paper mail over the preceding year.

Statistics relative to mails exchanged with foreign countries show a decrease of 33 mails received and an increase of 41 mails dispatched during the year, while there was an increase of 204,959 grams of letters and 1,620,121 grams of prints in the weight dispatched.

EXTENSIONS AND IMPROVEMENTS.

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On July 1, 1903, there were but 213 established post-offices. During the year 179 new offices were established, 21 discontinued, and 20 reestablished, so that at the close of the year we had 391 postoffices. The intention is to establish a post-office at the seat of ernment in each organized municipality, and at such other places in the islands as may be necessary for the proper handling of the mails. This work was completed during the year in a number of provinces, but there remain other provinces in which as yet only a few postoffices have been established. We have pushed the work of establishing new post-offices and organizing as rapidly as the force of postoffice inspectors permitted. The action of the Philippine Commission in limiting the number of post-offices that may be established during the fiscal year 1905 to 450 will make it impossible to complete this work during the current year, but it will be continued and offices established at the more important places until the maximum number allowed are in operation.

The Manila post-office was moved from the old location on the Escolta to the Fortin Building just before the close of the year. The

new quarters give more than double the working space for the handling and distribution of mails, as well as provide a larger and more convenient lobby for the use of the public. The new location on the south side of the Pasig River, between the Santa Cruz Bridge and the Bridge of Spain, is no doubt highly satisfactory to the public in general. The post-office is now in perhaps the most accessible place in the city, and with very few exceptions more convenient to everybody than it was at the old location.

The incoming mails are now delivered by launch at the back door of the post-office, and many of the outgoing mails are dispatched from the post-office direct to launches. This arrangement not only saves considerable labor, but secures a much quicker delivery of mails to the post-office and enables a later closing of outgoing mails than heretofore.

During the year two automatic postmarking and backstamping machines were installed in the Manila post-office. These machines materially expedite the handling of large mails, and at the same time perform the work of postmarking letters and canceling postage stamps and back stamping the incoming mail in a much more satisfactory manner than it can be done by hand.

The postal station which was established in the Manila customhouse was closed when the post-office was moved to the Fortin Building, and the assessment and collection of duties on mail packages, with the exception of those for regular importers, is now done at the main post-office by officers of the customs service.

The free-delivery service in the city of Manila continues to grow in popularity, notwithstanding the fact that during the month of May two of the carriers were arrested for robbing or tampering with the mails, and have since been convicted for the crimes committed.

The amount of postage collected in Manila from publishers and news agents, on publications admitted to the mails at second-class rates of postage, will amount to about P5,640, which is P395 less than was collected for the same purpose in the preceding year.

On February 21, 1903, the Postmaster-General of the United States issued an order to the effect that the provisions of the parcelspost conventions in force between the United States and other countries and colonies shall be held to apply to parcels for and from the Philippines, as well as to parcels for and from other parts of the United States. This gives the Philippine Islands the benefit of the parcels-post conventions of the United States with Germany, Mexico, and many of the South American countries.

On November 21, 1903, a parcels-post convention was concluded at Washington between the United States and Hongkong, and on July 1, 1904, a similar convention was concluded with Japan. These later conventions enable the postal administration of the Philippine Islands to exchange parcels with Hongkong and Japan up to a limit of 4 pounds 6 ounces in weight, and not exceeding $50 United States currency in value.

CONCLUSION.

The acceptance of the United States postage stamps not overprinted "Philippines," and sold at United States post-offices, when mailed in the Philippines, and the acceptance of "Philippine' postage stamps on matter mailed in the United States, was dis

continued October 1, 1903. This action was taken on protest of the United States Government because of the large amount of Philippine postage stamps used on mail matter deposited in United States post-offices. The discontinuance of this interchangeability worked little, if any, hardship upon any one. United States postage stamps were, by order of the Postmaster-General, acceptable for postage on matter mailed in the Philippines shortly after the American occupation, and at a time when there were but few postoffices in the islands, and little opportunity to purchase postage stamps outside of Manila or the larger military posts. With the establishment of a complete postal service throughout the islands, this arrangement was no longer necessary, and was therefore discontinued.

The plan of appointing Filipinos as postmasters at the smaller offices has continued during the year, even to the extent of making such appointments at the less important provincial capitals where the money-order business is transacted. These postmasters, as a rule, render very satisfactory service after they are given complete instructions. In fact, the Filipino postmasters cause this office less correspondence on the whole than do the American post masters at the smaller offices. Furthermore, the insular auditor has several times informed me that the postal accounts of the Filipino postmasters are rendered in a more satisfactory manner than those of the American postmasters at the same class offices. These facts tend to verify the statement made in my last report, that as a general rule the Americans in the employ of other branches of the Government service sought and accepted appointments as postmasters to advance their personal interests, and not with a view of rendering satisfactory service.

The work of the clerks and employees in the post-office service has on the whole been highly satisfactory, and their duties have been performed with little or no complaint, notwithstanding the fact that by the provisions of Act 1040 their hours of labor were materially increased. This law requires six and one-half hours service each working day, but in the post-office service practically every employee is required to labor Saturday afternoons, Sundays and holidays. The minimum number of hours of labor required of a post-office clerk in the Manila post-office is 2,280 per annum, while in other offices the clerks who enjoy Saturday afternoons, Sundays, and holidays off duty, will perform but 1,892 hours.

At the time this act was under consideration prior to its passage, attention was called to the injustice that it would work on post-office clerks, and special provision for these clerks was requested, but was denied. In my judgment the law should permit the heads of bureaus to fix the hours of labor of clerks and employees required to perform Saturday afternoon, Sunday, and holiday service, so that the aggregate number of hours required in any one week or month will be no greater than for those who are exempt from duty at such times.

Even then a position requiring daily service and at irregular hours will not be as desirable as other positions with Saturday afternoons, Sundays, and holidays off duty.

Respectfully submitted.

C. M. COTTERMAN,
Director of Posts.

CONTENTS OF TABLES.

TABLE A1.-Comparative statement of revenues for the fiscal years ending June 30, 1904; June 30, 1903; June 30, 1902, and June 30, 1901.

TABLE A2.-Comparative statement of expenditures for the fiscal years ending June 30, 1904; June 30, 1903; June 30, 1902; June 30, 1901, and June 30, 1900.

TABLE B. Statement of appropriations and expenditures for the fiscal year ending
June 30, 1904.

TABLE C.-Statement of mails dispatched on commercial steamers to foreign ports during
the fiscal year ending June 30, 1904, and the amount paid for transportation.
TABLE D.-Statement of payments made to foreign countries for the transportation of
Philippine mails during the fiscal year ending June 30, 1904.

TABLE El-Statement of inland mail transportation between post-offices during the fiscal year ending June 30, 1904.

TABLE E2.-Statement of inland mail transportation between post-offices and boats, and between post-offices and railroad stations during the fiscal year ending June 30, 1904. TABLE F.-Statement of articles received and disposed of in the dead-letter office, bureau of posts, during the fiscal year ending June 30, 1904.

TABLE G.-Detailed statement of articles received from foreign countries and offices by the dead-letter office, bureau of posts, during the fiscal year ending June 30, 1904. TABLE H.-Detailed statement of articles returned to foreign countries and offices by the dead-letter office, bureau of posts, during the fiscal year ending June 30, 1904. TABLE I-Statement of money-order business of money-order post-offices during the fiscal year ending June 30, 1904.

TABLE J.-Statement of revenues and expenses of post-offices for the fiscal year ending June 30, 1904.

TABLE K-Statement showing number of letters and parcels registered at each post-office during the fiscal year ending June 30, 1904, and the amount of mail received and dispatched.

TABLE L.-Statement of registered mail handled by the Manila post-office during the fiscal year ending June 30, 1904.

TABLE M.-Statement of mails received from and dispatched to Philippine offices by the Manila post-office during the fiscal year ending June 30, 1904.

TABLE N. Statement of mails received and dispatched to the United States on transports

and on liners by the Manila post-office during the fiscal year ending June 30, 1904. TABLE O. Statement of mails received from and dispatched to Honolulu, Gaum, and

United States ships and troops in foreign ports by the Manila post-office during the fiscal year ending June 30, 1904.

TABLE P.-Statement of mails received from and dispatched to foreign countries by the Manila post-office during the fiscal year ending June 30, 1904.

TABLE A1.-Comparative statement of revenues for the fiscal years ending June 30, 1900