IMAGE EVALUATION TEST TARGET (MT-3) 1.0 I.I I 1.25 |jo "^~ III^H It? m liO 2.0 •^ V] O ^ 'iW ' / n.^^ i '/. ^ ^ CIHM/ICMH Microfiche Series. CIHIVI/ICIVIH Collection de microfiches. Canadian Institute for Historical Microreproductions / Institut Canadian de microreproductions historiques Technical and Bibliographic Notes/Notes techniques et bibliographiques The Institute has attempted to obtain the best original copy available for filming. Features of this copy which may be bibliographically unique, which may alter any of the images in the reproduction, or which may significantly change the usual method of filming, are checked below. n n D D n D Coloured covers/ Couverture de couleur I I Covers damaged/ Couverture endommag^e Covers restored and/or laminated/ Couverture restaurie et/ou pellicul6e I I Cover title missing/ Le titre de couverture manque □ Coloured maps/ Cartes g6ographiques en couleur Coloured init (i.e. other than blue or black)/ Encre de couleur (i.e. autre que bleue ou noire) I I Coloured plates and/or illustrations/ Planches et/ou illustrations en couleur Bound with other material/ Relii avec d'autres documents Tight binding may cause shadows or distortion along interior margin/ La re liure serr6e peut causer de I'ombre ou de la distortion le long de la marge int6rieure Blank leaves added during restoration may appear within the text. Whenever possible, these have been omitted from filming/ II se peut que certaines pages blanches ajouties lors d'une restauration apparaissent dans le texte, mais, lorsque cela Atait possible, ces pages n'ont pas 6t6 fiimies. Additional comments:/ Commentaires supplimentaires; L'Institut a microfilm^ le meilleur exemplaire qu'il lui a 6t6 possible de se procurer. Les details de cet exemplaire qui sont peut-Atre uniques du point de vue bibliographique, qui peuvent modifier une image reproduite, ou qui peuvent exiger une modification dans la m^thode normaie de filmage sont indiquto ci-dessous. □ Coloured pages/ Pages de couleur □ Pages damaged/ Pages endommagdes I I Pages restored and/or laminated/ D This item is filmed at the reduction ratio checked below/ Ce document ett film* au taux de reduction indiquA ci-dessous. The CO to the Pages restaurdes et/ou peiiicuiies Pages discoloured, stained or foxed/ Pages d6color6es, tachetdes ou piqu^es Pages detached/ Pages ddtachdes Showthrough/ Transparence Quality of print varies/ Qualiti inigaie de I'impression Includes supplementary material/ Comprend du materiel supplimentaire Only edition available/ Seule Mition disponible The in possib of the fiimint Origin! beginn the las sion, ( other first pi sion. or illus Pages wholly or partially obscured by errata slips, tissues, etc., have been ref limed to ensure the best possible image/ Les pages totalement ou partiellement obscurcies par un feuillet d'errata. une pelure. etc., ont M filmAes A nouveau de fapon A obtenir la meilleure image possible. The lai shall c TINUE whiuht Maps. differei entirely beginni right ai require metho( 10X 14X 18X 22X 26X 30X ,.j1 12X 16X 20X 24X 28X 32X aire I details |ues du t modifier iger une i filmage The copy filmed here has been reproduced thanks to the generosity of: Library of the Pubiic Archives of Canada The images appearing here are the best quality possible considering the condition and legibility of the original copy and in keeping with the filming contract specifications. Vexemplaire film6 fut reproduit grAce A la gtnArositA de: La bibliothdque des Archives publiques du Canada Les images suivantes ont 6tA reproduites avec ie plus grand soin, compte tenu de la condition at de la nettet* de rexemplaire film*, et en conformity avec les conditions du contrat de filmage. / i6es Original copies in printed paper covers are filmed beginning with the front cover and ending on the last page with a printed or illustrated impres- sion, or the back cover when appropriate. All other original copies are filmed beginning on the first page with a printed or illustrated impres- sion, and ending on the last page with a printed or illustrated impression. Les exemplaires originaux dont la couverture en papier est imprimte sont filmAs en commen^ant par Ie premier plat et en terminant soit par la dernlAre page qui comporte une empreinte d'Impression ou d'illustration, soit par Ie second plat, s' ^on Ie cas. Tous les autres exemplaires originaux sont filmAs en commenpant par la premiAre page qui comporte une empreinte d'Impression ou d'illustration et en terminant par la de'nlAre page qui comporte une telle empreinte. The last recorded frame on each microfiche shall contain the symbol ^^> (meaning "CON- TINUED"), or the symbol y (meaning "END"), whichever applies. Un des symboles suivants apparaftra sur la dernlAre image de cheque microfiche, seion Ie cas: Ie symbols — ^ signifie "A SUIVRE". Ie symbols ▼ signifie "FIN". re Maps, plates, cha-'t*::. ate, may be filmed at different reduction retios. Those too large to be entirely included in one exposure are filmed beginning in the upper left hand corner, left to right and top to bottom, as many frames as required. The following diagrams illustrate the method: ! ^s cartes, planches, tableaux, etc.. peuvent Atre fiimis A des taux de reduction diffirents. Lorsque Ie document est trop grand pour fttre reproduit en un seul cliche, 11 est film* A partir de Tangle supArieur geuche. de gauche A droite. et de haut en bas. en prenant Ie nombre d'images nAcessaire. Les diagrammes suivants illustrent la m^thode. y errata )d to It 16 pelure, pon d 1 2 3 32X 1 2 3 4 5 6 / V / (Confic / {Confidential) I'lisi' Okmck IM:p.vi!tmknt, OTTA\v.^, 12ih Dc .-luhor, 1SH7. Sii.',--Iii lii'' i'|)<)-i w lii'li 1 now have till' ho, or lo snhiint. ii> the I'i'suli ol till' i).'rson;r: riMiiiirii's \\ hu Ji I wn'; ilcsind h\ you to niakt' luio lln' workiiii; oi' till' iiriiish I'ovi OlHi'c, I ii,-i in •oiilonaiiy with yoiir iii.s'rui tion.> in ■oiilminif my i''ii;uks to ilic liu.iiicial ailiuiiiistraiion ol' tli!it Di'partini'iii Wi'li till' «'X« ■■pfiou ol'.i ri'\v iVoiii I''rany ni a'l^ "i Mon.-j Order, I di vofd tlireo nionllis to a liosc. aiid, ,i^ lar as rii-(a,iistan''('s i>iTmiltc sp.'u' 111 London, a small ;iortion was devoted lo a vi^ii lo I'.iIimIiui L;li lor the jiurpose ol ■ xamininu Uv- niaiiau'i'Uiiiit wi tin- I'lo- xiii'iai ('o-ial isialiiislinieni-. Tlie liish e-taliiishniejit Iteine on llio -•line i'o.Miii: ,i> iliat in S,-ot lainK i visit to l'',Min wa'; uniii'irssary. I 1 oiisnli'i ii my lust duty lo pui on r^vonl iherourle>y and ashisiaui v ( \i.iided i!i ni- l»y ail l!ie oliicers ol'lh' UvitisU Deiuirlnii'Ul wliain I had oeeaisinn to nn' t A »nl).->'iiU''ni ' i>i' to \\ :ishiim-!on niay your dii^'i tion, jiave nn a'l op;>ori iini! V ol cxainmini:' tli' ineili'ids of linan>iai aeiounliug, employed in III' I niied r>^ai.s i'ostal Ueparliueiil What I ol).ser\'ed thi'v • c oiiliriiied, i;. n"rallv. i!ir -oiii'Iusion' 1 had i oiiir lo al'iiv a slvulv ol the rin:;'li!i (»(liie i.s rnnniML; iii tuueh tile siiiii'' lines as 111 til.' vear I ■>M , * when r-d'ased I'roin liapiTiaJ and pliu 'd under i'ro\ iin ial •■oiitnd, whilst the British 1\».| • )|tiee, duriiif: the lliirty-six years wlmh have elapsed, has made iinporiaiit ( li.ingi's ju tin.' maimer of keepiiiLr its a' '■oimts. nr essit.iied not iin!\ iiy t \\f ra[)id expan- sion ol th" jxisUil serviee iiseii. Ii!|i jiy lli.' vast iiildilioiis. priiieipaih in rei eiil V. .u's, lo tin ranL;e oT ii8 alliliatod s.'n ii es. now i nibrai u^- Monoy (h'ders. Savinus HaiiKs, \nnuitii.s. IJi'e Iiisuraiiee. (ioverament .Ntoek luvusiiueiits. Pele^niphs, I'areel Tosl, I'oslal Ordrrs, ihe I'olloilioii of • Tli.Ti' Wi-rt', iniiir ii lliiU vi'ii;, in Hrill^li .V.ii-lli .\iii' iril. livi- ^liaiiiol ltii|ii riiil I'lwt Otllci- I'^tni'i. -ill"!' 'IN- '•'•• S'liVii ."><•, aiie .Nvw llriiiHnu k I'l-'iiCf ll.|«aril l,-l.ui.| liif 1 niU >! I'r.ivim ,.< ot fpiM V anl l,iiWi'r Oiimel.. .111 1 llritish C0I11111I..H. i'licsi' miv iiuw (,!'"*•) nbsioi'lu'i! lu niu jy«U'm, I'UibiM' iii; 'li* w ii-*!.' DniMi'io!! The lloiiorabh^, A VV Mi-Lklan, I'ohtimihter Cii'inral, ^0. &o,, dUtO. / cortiun brnin'hos of Inland Revenue, and paymeni of Army Pensions, I rondmU'd my oxaininatiou of the British system with the object of see- ing- in what ie8])e(ts the ('anadiau Post Office eould advantageously adopt present British methods. My examination extended to the linaniial relations of the Post OlFiec towards i'arliaraent and the Treasury in respeet of both revenue and expenditure, and to the manner of k-epiug the financial iurouuts both general and of the prineipiil Branches named al)ove, for puri)o>«'K of audit In what lollows J cunline myself strictly to points Avhich have a practical V>t'aring on Canadian usage. The fact that my report, to be intelligible, or useful hereafter (as I hope it may be) to other otficers of the Depariment, and if, espei'ially, to be the framework for any moaturi' of r.'conKtru''tion. must go very mu( h into detail. .';upplies vsullicicut reason lor not burdening it with matters which, however interesting, would be merely descriptive and not susceptible of any iiractical ap]iliia- tioii iu Canada. 1 exchule also all references to the internal administra- tion of the Money Order and Savings Bank Branches of the Department, although my enr|uirie8 in those directions occupied several weeks with results which, while valuable, concern mere details of mauagemcni and can be applied without being specially reported on It will be well perhaps that my report should deal as far iis po.ssible with general principles, and, if necessary, in api>endix form, with sui h matters of dotnil as may require fuller illustration. It will also be conve- nient to treat the two qui'stions of receipts and expenditure as much as possi bib apart, although there are between the two, as will be perceived later, jjoints of contact in Knglish i)ractice which render them iu a measure inseparable. It may be as well to exidain iit the outset the diHtrence between the two terms. Post Office "Receipts" and Post Office Reve- nue." '• Revenue " is what the Post Office service earns for the Treasury. " Receipts " iire what Postmasters have to account for to the I'ostmaFter-Oeneral, embrai ing not only the revenue which they are the agents for (ollectintr, but Money Order and Savings liunk moneys in transit through their hands, also such further sum^ as may be supplied them by the Department to enable them to carry on these hist mentioned services For example, in Canada i lie IVst Office /?ere«wr is only !|2,.' 00,000, while the llereifih amuniit to ^;i5, 830,000, and it is tins last sum for which the Departnu'nt has to see that Postmasters account. The inui^hinery for doing this has to go far h«>yond what would h«' necessary were the collection of mere revenue the Bole object. Again there is a difference between " Kevenuc " and "Net produce of the Revenue," a dili'ereuce respected in Kimland, although no fix'd principle obtains in Canada on the subject. I'his will be illustrated hereafter. To make clear wherein lies the diflerencc lietwem Canadian and British management of IN.stjil Keceipts, it becomes necessary to give au outline of Canadian practice, and in so doing to refer !,> (vrtaiu of it» imperfootir.ns, thus forcshadowiug the dil'lM•^ion^ in which improved m<>thodN may be expected to Biisjgest themselves. RECBIPTtt IN CANADA are- 1st. The proceedH of tlie sale ol' pcstiiii'e stainp^s, and receipts i'rom postages preuerally, say ^i.oOO.OOO per suiiium. Accounts, confiued to this source of roveime, are sent by all rostmasters in Canada, say 7,500 in number, direct to the Accountant's i^iuut h oi' the Dejiartmeut at Ottawa, a few monthly, but the uiiijority quarterly. These receipts (less compensation and allowances, whii ]i an' dedurted by those othces not on the establishment) are remitted at the same intervals {i.e.. monthly or qxiarterly) by these l/iOi) ]if)8lmasters to the nearest Bank agency transacting Government business, — Drafts for tlie amounts in favor of the Finance Department (Treasury) being therctipon sent by the Bank where drpu.sited to tiie IWt Utfice Depaitment. Drafts, on receipt at the Department, are re- orded for purpose of cduiparison later on with the pos (masters' returns, and are then transmitted to the Finance Depart- ment. Receipts from sale of i)o»t;)ge stamps pass, it will be seen, into the Treasury and out of the control of the Post master-Creueral from the moment when deposited in the various Banks by [wstmasters. 2nd. The receipts by HSO of the same oHices (being Money Order Offices) for issue of Money Orders and for < ommission thereon, together amounting to #10,8.'{0,000 per aniium^ - 8rd. Moneys sujjplied to the same '.iSO postma.sters (through credits on Banks) to meet the requirements of Money Order and iSavings Bank business, araountinir to $14,000,000 per iinnum 4th. The receipts by those oihces that are Savings Banks (nuuiljvr- ing 450) frcun deposits in the I'ost Office Savings Bank, amounting to |8,0(t0,000 per annua-. The receipts from sources 2, ;^and 4, in all !j-!2,«3O,0()0 (less payments of Money Orders and of Savings Bank withdrawals, principally by those postmasters who, havinsr no bank credits, necessarily use a portion of ^eceipl^ are reniitti'd by them '/ail// to the nearest Bank agency, and thence to the Money Order Bramh by draft in favor of the Finance Department on Money Order account. Cfish Ac ( ounts, showing receipts, l>ayments and reraittan.cs under heads 2, Maud 4, are sent iTomall>roney Order (►fficc>8 in the Dominion direct to the Money Ovier Branch, Ottawa. The larger offices (about l!0) send daily accounts, the remainder (H!lO) weekly. The latest measure' taken by the Dcq)artnient, and the only one then needed to complete the c-entralizution at Ottawa of linauc^ial responsibil- ity and book-keeping, took place two years ago, when the control of British Columbia Money Ordi'v business was transferred from the In- spector at Victoria to the De]>artment at Ottawa. This measure seemed to commend itself at the time, in that it tended to imiformily andi)liiced the financial mauagement of Money Order business in all the Provinces on the same footing, but 1 may here say that 1 soon afterwards learned to regard the change ati not in the direction of satisfactory control. Then- aii> thus, it will i jotsn, in tho Cauudiaii Dopartmcut two !«iparate sydtoms of fiuaujial account with postmabti^rs, one in reepet'tof sale of Postagf stamps and of Postal revenue, and the other in riMspert of Money Order and Savings l?iink busiiu>t<.s. These two systems have to be rcciittuized by postninsters and the IJanks as entirely c'istinct from each other, separate forms of account, of bank draft, and indeed of every form ill use, being necessary Tlie postmasters themselves K)f those ollices that are Money (Jrder Oltiees are, in u sense, and in effect, the accounliug oHiceis of two distinct nepartments. The treat.nent of the accounts rendered by postmasters under these two separate systems diHVrs in the two Branches, the Accountant's and the Money Order. Whilst in the Money Order liruiich is kept a ledger account with each ()ostmasier, exliibitmg in Dr. and C'r. shape the busi- ne.xs at his olhce, aiul the balance in hand (if any) dav by day or week by week, for a year, in the Aceonntant's Office the practice of keeping ledger accounts with postmasters was abandoned about thirty years a^o — about 1857 — the po.- be made of balances overdue or in default. The practice has been to transfer such balances to a " Suspense Account " 1.: 1 he oeneral ledger, there to remain subject to inspection from time to time by t,he heatl of the Branch and l)ronght to ihe uoti.e of the I'ostmHster-Geuoral iiiilil either paid up. or wiju'd out as losses. TJie use of a Suspense A. vouut lor the al>sori)tiou of overdue balances I I„ive always felt to •> objectionable, and F am glad to say that British practice suggests a more sati.-,iactory nuithod of dealing with such item.^. Another deteci in ihe system of .'olUvting Postal revawue, and one of which the Depaitniem has been iii. reiwingly conscious with the growth, year by year, in tlie volume of business, exists in the length of the intervals at which I'oimiisters- lieturiis and remittances are made, formerly fiiuirteriy from all offices, now monthly as reffards 2!»0 offices' and quarterly in respe. t of 7,210, the remainder. Not only do public money, to an excessive amount thus lie in I'ostraasters' hands, but such '•'•" 'li«' l.ic,|,i,..H, i„,..par«b)e from a ' in the Canadian Post Office, as vhe jiroceeds of the sale of postajre stamps Whilst this is in a measure true, it obscures whai, in a postmaster's Monthly or Quarterly Revenue IJeturn reiilly has to be checked or verifie \ by the Accountant's Office, as the principal chiirg<' agaiuht the postmaster. A postmaster's " Receipts," for whii-h It ■ is primarily responsible, are thr. postage stamps su/iplied to liim hi/ the Le/iartment, and whilst he is called upon to remit the value only of what he sells, the Dr. charge iti his account ought to be the value of the stamps suppli(;d to him , at pre- sent this is not so. it is true that the Accountant's Office is furnished by the Stamp Branch with stiiteineiit.'; of po.stnge stamps supplied to post- masters, and that against these, postmasters' own statements are checked, but the cheek is a mere visuiil one, and, owing to the fact that the Dr. entry in postimvsters' returns is, not the stamps received from the Department, but the stamps sold, there is an absence ol that direct proof which the quarterly summaries ought to alford, that postmasters in the aggregate charge themselves witli all the stamps issued by the Stamp Branch, and that counterchc( k on the* Stamp Hranch itself which otight to be found in the final summaries in the Accountant's Ihancli is arrived at by iucoui lusive methods. This seems to be the proper place for inviting aitcnliou to what, in Canada, makes the duty uf checkiug postmasters' remittances to the Department most difficult to deal with. 1 speak with particular know- ledge of remittau(;e8 to the Money Order Uranch, but what 1 say applies equally to all past office remittances. This dilliculty lies in the fact that postmasters' returns are unaccompanied by any deposit receipt from the l]ank, or other voucher establishing that the alleged deposits or remit- tances had been made. The Department depends on the Banks to send the recessary drafts. Occasionally a Bank is dilatory ; it may happen again that the remittance, consisting in part of an unendorsed cheque, is in a shape which the Bank cannot accept; very frequently it . transpires, on eucpiiry, that the remittances have not btH'n made on the day named, owing (it may be alleged) to forgetfulness, and too"often it happens that a postinaslci makes a deliberately false statement : this is criminal under the Audit Act, but the intention is exceedingly difficult to prove, and what is known to have been falsely alleged for tiie pur- pose of cloaking default, has often to be condoiujd. The present method uuqtiestiouhbly lends itself to and promotes irregularities. In this absence of close relation between the accoituts under treatment day by day and the bank drafts representing the remittances claimed in the ♦ Ills obvious, moroovor, timl to lir complete, ii yorilionllon of tlir iiiiLssuimI s1hiii|].., in Hiock in tlie ,St«iiiM Bmnrli, aiich ns in now nindi- once a i|U»rt(M-, atioulil iiiclmli' >i iiul)jec|iii'iit conipHiisoti hi'lwOTii tlip Sttt'.ciiii'iit olSaraps is.Hucil iis per .StHiii|' ctliei" reconl.s, iiiul iIm' Siatenifiil ut Stamps Mk.nowk'ii|j^il by I'osliiiBBlcrs, ai taken from tlif .XoDtnilaiitH Quuitir!) .~>aiiiiiiftilca. .Siicb a coiu- pariioii ia liuw impassible. i« t-^J! ^ accouii's, lies tho most troublt'somo featurf in llic iwlmiuistrutioii (»1" the Money Ord»?r Bnuu'h, and lh»' ditli]iall conline myself to the same I'oui heads used in illusiratiug the Canadian system, viz. : 1. Sale of ^Stamps , 2. Money Order luceipts ; :'., Casn l:'om Department ; 4. Crav- ings liauk Deposits. It may be well lo. say ihat m llie llniish Department, all cash responsibility as betvvoi ii inistmasteis and the Department, rests with the " l\ecciver aid Ai.ountani Ueiieial " of the Department, under whom aic united the duties of tlie Accountant (as in Canada) in a ineasu.'e the functions of the Ivcifiver CJenerai (as in Canada) and the greater part ol' the responsibili'ie.: of the Superintendent of the Money Order Branch, the Money ( )rde • Braudi itself falling into the same posi- U'di th;it liie .s.iviiius Bank ("I upies in Knsfland and Canada alike, in having iiu asli responsil)ility for ihe lollertion of receipts from post- masters. There are in tlie I uited Kingdom 17,41:) post olKces, distributed ae I'ollows ; — >I.U. an.l .-»v. U. \ul M.n. ur Sttv. Ii. offices. UOicBi. In Kinrland a.87o 6,040 1" '■^'"tliiid 87ti 1,02.5 111 Iri'Iaud 822 1,'(75 *H,57:{ _8,840 "iiiri 1 ' iln'sc nil lieiiil (.fhcc- ..II tlif vuteii «(7/y Cash Aciounl and remit laucc from every j)08t olhce being a Money Order Ollice, the account being ar.compuuied by its remit- tance in coin or bank receipt. It may be as well to say briefly, and then dismiss the subject for the present, how the Postmasters of the ><,840 post offices not being Money Order Offices — j.«. more than one-half thv total number of post ollices — account for their reoipis. Not being Money Order or Savings Himk officers their receipts are for sale of postage stamps only, and they buy their stamps as they require them, paying for them in e;ish, at their reepective heatl offices, or post towns. The postmasters at these 8,>'40 places are thus, as far as colkntion of postal revenue goes, mere stamp vendors. They are paid by salary, as will appear in the proper pla< e. On the es- tablishment of an office of this olass.the postmaster is given a limited supi . of stamps without payment. This constitutes his "'stock in trade," andvhet' renewals are necessary he has to send the money to his nearest' head and pay for the stamps So long as he remains i)i office he is ii ' upon to pay for his original stock ; jigaiust it the Depart- ment hoiu- his bond, and loss from an office of this class is unknown. For purposes of account, as well as of inspection m respect of accounts, these 8,840 offices are virtually extinguished. In reply to my inquiries regarding what I have described as "De- centralization," also lis to the specinl reasons for the maintenance of ihief olhces at lidinburgh and Dublin, and whether concession to local senti- ment, or jealonsj' in matters of appointments, had anything to dp with it, I was assured that while some such arguments would doubtless be used against the discontinuance of the Edinburgh and Dublin establish- ments were the post office to attempt a measure of iib.snhite centralization at London, it was just as certain on the other hand that were the abolition of the S<'otch and Irish head offices sugtrested from any other soiirce, the Post Office authorities would be the first to oppose a change, as under no other method of administration could the system ot *lt IB iR'1'o..'jiiiry t(i etuplmsi?.,' tli.it it is llic briiigiiij? i)f Scotrh iiU'l lii.sli postiimsUTS iindi-r tlie ininiodialc contiolnml supi ivision of tlir liiinl offietH at Ediiibuipli mid Diiblin, in ivjip'iH of Ihiir eruA r millaiir *, wtjicli cniitilidilfs :i tniirlieil fi'iiliiio ot British prai^ii c. Tlu' .Sontili or Irish Mnncy onlpr Rccoimtd Hi-e liliPWMc dialt with ut liilinbiuirh iind riiilpliii. whih' the fS.ivintr:' H:inl< iMiDiiut.s, lp|i'({raph u'lounts. pontiil oniira urid nil iithir jiili..iiiliiiry iicrDieil'' tVoin iill llinn kiiijfilniii? nrediiilt with at London. It is coiiviMiictui'. nuhii ilnin ilu' ri-ioRnition of uny principle, whiili lends to the I'rovinciiil .Money Order nicouiils heinn tims evecplioimllv treated, the relatlre eheapnm nf otHco neeoiiiniodfttion in Kdiiiburj.'h iihii Diildin 11.- eoiiipiired with London, huvitii: protmhly miuh to do Willi it, and it might be shoHii ihai, (o .-uiiie extent, cone,! principjeu in this mutter are aairiliccd to ezpedieniy. daily lash aoconuts with {wstm asters, inul »ll'.'.'tu:il .oiitrol u.-norally. t»f maintiiiiifd. 01' th.' f^J>'-'> oili>fs in tho Uiiiu-d tvuiii'doiii, uliidi i.-ndcr art nuilb, l)einp tht> only ones which do so,— 6,875 ht'ud a daily cash accornt to I^udon, 878 do do Ediuburirh, K22 du do Dublin. The procchscs l)i"iiiti' aliko, it will ho sullicii'Ut, for jnirposos ol' illuistra- tion, to liviil of the li."??") oliicfs in i'luuhmd only Only owe Cash aimt (not two as in Canada) is r.'iidi'n'd l>y the po^stmast.-rs ol' thf-jo otU«Ts. It is a daily iv.-turn. and i'nibras as chuv<,'es :— Tlio postai^c stamps (il' any) it'ccivcd that day Irom l^ondon, cash rciiiittan>fs Irom London, and lh<' total Money Order and SaviiiEfs Bank rfCfipts ol'lho day, as i>er separate iind d'etniled lieturns I'urnished iudepeiideiitly to those two Branches. The t'r. Items are the totals ol' Money Order and Savings Hank payments (as per dk-iaiied lieturns and vouehev.s scut to those Branches) aud remittaiiceh on that day to the Department. Then follows the "Balance in hand, " and .Ids, it must be noted, is made to embrace not only the cash in hand, but uusjld postage stamps as well, thus empha- sizinir every day the 'ush liability of the"i'o8lma.ster in respect of stamps in bis possession This lorm of account, and the shape which the Department ledger Hikes, m following it, supplies that direct check as between I'of t luusters and ilie Branch or Depavimeut issuing the stamps, which has been reuiarked up(Hi as wanting in Canada. Postmasters remittances take two shapes : — Ist. If thi're is in the place the agency of any Bank having an oif.ce in London, tiu' postmaster lodges the amount in the Bank to the credit of the I'ostnuister-Gleueral, aud receives in return either an Accountable Receipt in- a Draft nl seven, fourteen or twenty-one days. If there are two lianks in the place, competition enables the Postmaster to deposit to better advantage at one than the other Bills at twenty-one days are now being discouraged, and no new arrangements are uow permitted on those terms, so that seven or fourteen days' interest may bt^ said to be the compensation to the Banks for services rendered. The Receipt or Draft is sent l)y tlie Postmaster with his daily Cash Account. 2iid. From other places the remittances to I^ondon are in cash, j. p. gold (silver and copper are not remitted) checjues, or Receiver and Account- ant General's warrants*, and there seems to be a tacit em-ouragemeut to I'ostmasters to send checiues rather than coin, on account of the loss on light gold. The lofss from this source nevertheless amounts to about £:''JAU) yearly. The practice of allowing Postmasters to substitute cheques fertile actual money received from the public is not produttive of the excessive friction which .ompels the adopiK.n of the very opposite rule in Canada, In both countries the Postmaster is responsible for such paper if forming ■Wliat tlRii>' «arr»nl.< iirr, Hiul how llioy cnliT into the iimoiirit ili'positcd in the Bank o( (vnt'liuiO ''.ail,v, wilt be ezpl&iiitij later 9 ? part of a rcmittaiiro. but in Kmrland wh.-ii a r-r. Haiic' or part of it has to be rctunicd, th.' larts arn patom lo the olIir.M on^'aged iu checkinjf the Postmast.M-'b lictum in wliiither case. Hence the anxieties inseparable from i)re8eut Canadian practice, already dwelt upon, — pa^e 5. The licmiltauces received at the l>ondon olftce each day are deposited by the lieceivor and Accountant Creuiiral's iJepartment in the Uank of England the same afternoon, to the C'r. of the Postmasler-Cxeneral. in addition lo ihe matter of the channel through which liauk Drafts reach the Department, two important ditlerences will have betu seen to exist between English and Canadian methods in collection of " Receipts'." 1. In England all lieceipls, i'ostal, Money Order and Savings iJank, are treated in one. Gash Aciount, not two as in Canada, 2. In England Receipts are deposited to the Or. of the Poslnuisler General and not (as in Cauiida) to the Cr. of the Treasury direct. The argument in favor of exacting daily ai;couut8 from all accounting oilices is that, in view of the lontracted area of the iviugdom, and of the I'ai'l that accounts from all ollit es can rea( h Ler accotiu; with each postmaster, much in the same shape as the ledj?er accounts kept in thi' Money Order Branch at Ottawa, iu rcgjii'ct ol' Caii.idian Money Order and Savini^s Bank business, and framed so as to contain the Imsinessof on.M(Uiirtcr. In n-uard to the life of the ledi,'er, I may her.' say that the duration of the Canadian Ledi^er, ior one year, is accompanied by advantages which, except for sufficient reusou, it Were better n'>t to forego. in the Ledger in use in London, the piinci])al Dr, item is (as it is ill the form of Daily Account itsell) the value of the Sfam/is rerrined Irom l..(mdou, not, as iu the Canadian summaries ba.sed on Dost masters' revenue acounts. the stamps sold. The advaiitaa-e of exhibitin^f this Item 111 the shape in which it appears in ilie British accounts 1 liave already spoken of. ill refcniiiji: lo what the present Cauadiau method fails, cxeejit indirectly, to substantiate. The eonlinuous record, day by day. of a postmaster's transactions, which his ledp-r account prese-nts to thf r^e, reveals the stealthy growth of uiiaulhorized l>alanre>. Th(^ absen.e ofsttch a record has been mentioned in connection with t;>e present treatment of Postal h'cvenue .Vcconntsin (.'anada. The trealmeut in Loiivlon, of balances due by postmasteis goinj? out of olliee is at once sunple and elleeiivc. The hnal avicouul of sueh a p(>stmasti'i i> Inuisferred lo a .^pe ■jal |;,lio. or spaee, in a supple- mentary led^ei. Thi- ledirer is not treated as "dormant ' hut takes its plat e amcii;^' the .>tfier ledgers for reuular ((uarterly summarizing, thi,'? system ati'ording sudicient uuaranlee of balaiu es under this head not being lost sight of Further, this i> niie.,fthe records which the otticers of the .'\udilor Geiu'ial's Dejmrtment examine w lien applying their test audit in the Postal Ueveuue A. counts, so thai no uncollected balance eun either I'mHin in this ledger, or on the other hand he wiped out as a h)8s, wilh'Mit the .Auditor Oeneral's knowledge, beciin.',e. in tiie lirst pla< e the suppleiiieiiiarj ledger i.s iis already >ta!ed, examined 1)7 his olHcers, and, Bucondly. anticipated losses beiuo' pn,vi(|..d for by Parliamentary {vote, 11 the fnnds to (^over any loss have to nnav. ont ol' • Expoudil'ire," tho cir- cniustaimt' thus roining bclbvc the Auditor Gonerid in a riticoad shape. To proceed Irom thf postmaster's individual accounts to the. General Accountg of the Department in respect of receipts and revenue, these are necessarily bnilt iipoii the iwstniaster's lt. the question suggests itself, — liow does the Department analyze the results at the end of the month or quarter, and establish what portion of receipts is applicable to " Revenue," (and as suih to be paid over to the Treasury), what to Money Order and what to Savings Bank ? Nothing is more simple ; The same operation is done in Canada every month in respect of the separation of Savings Hank from Moucy Order receipts in the Money Order ledgers. As for any attempt in Caiiada to pronoujKc how ranch of the Balances retained by postmasters are Savings Bank moneys ajid how mu< h Money Order, it would be impracticable. The balances are simply regarded ah HO much li<'ld by postmasters on ac<'ount of the Money Order liraiich. In liKe manner, in Eii'jlaiid, the |)ostal revenue is arrived at l)y dTOUcl- ing from the total stamps supplied to rostmasters, the stamps remaining iu their hands, the differene,' being the stamps sold This amount, plus the Money Ord<^r commission and casual revenue, is paid over to the Treasury every four or live days in even sums of 4^100,000, and a geiieral account of each mouths revenue is furnished to the Treasury so soon as the exact booked r, viiiue of the Departmeul is ascerto.ined, i. e., about two months afterwards. Whether posuaawlers pay in all then " revenue " or whether any part of the balances they retain arises f'om sale of stamps or not, is loft out of the qii •^tion, the b.'ilances iti ])ost masters' hands at th-' end of the month are "so much," li'ld to meet Post Otlice requirements, no matter what, and are regarded in that general souse, as accountable balances iu the hands of the Poslmaxter-Oeneral. 1 go into this point here, because, in considering alike amalgamation of cash accounts in regard to Canada, a diflii uUy presen'.s itsell in tiie Canadian I'l'^t Olhce Art, .section 78, j)a.ragra))h '2, under which the roslniasler-Oeneral's Iveport to Parlia- ment is lequired to exhibit the balance of Rtreime remaining due bi/ Postmogters at the end of thi' lineal year. This clausi- would hav.' to be amtJided. Ilemittanc.es from postmasters, in the various shajies in which made as already explained, ari' deposidd in the Hank of Ivigland eai h alter- noon to the credit nf the I'DXlmunter GetiernI There is atwolute agreement* between the morning's receipts and the a,t'ternoon's deposits. Portion of tho 80-ealled cash receipts beiiiL"- in "Receiver and Accoun- • Dutiirbfil mly liy itic iUsin ol' " iicPouatiit)lr fcci'ipij ' luut 7 hihI U ilayd' ilmfls. Imt that la iiiaUci'ur dutAil and of ready ailjuitmcnt.atiddova nut ctmoi-rii ilio iiniin-iltate ol)jiii'iioa. 11 ■! taut apncral's warrants," t. e , warrants for salaries, piail servi<-o, &o., • ashed by postmasttn's and sent in as i)art of their ri'inittauocs, th« total ol'su.-h warrants is arrived at by suitable Ibrm of schedulo, and a single choqno on the Bank of England against "Expenditure' is substituted for purposes of deposit. These warrants will be referred lo again under the head of " Expenditure.' so that the only point to be noticed here is that Post Odiee receipts instead of pissing into th > Treasury at onee, a:» hi Canada, are deposited in the Bank of England to t ho credit of the Tostmaster tieneral, temporarily used for purposes of postal expenditure, and so soon as the balance in the bank reaches J>100,000, transferred to the Treasury. In explanation of the expression " temporarily i-^ed lor expenditure' I niav here say that advances for expenditure are rei overed from tlie Treasury out of rarliameutary vote, once a month, thus replac- inj: the post otfice moneys and restoring them to the original Jiguri^s at which they would have stood, had the cheques referred to not been drawn. 4 In considering the applicability of English methods to Canada, there would be no gain in stibsiitutiiig for the present direct deposit to the credit of the Treasury (Finamc Department), a system ol deposit to the credit of the Postmaster-General. In fact the Canadian system, Itesides being perhaps preferable as a matter of principle, happens to lend itself very couvenioitly to certain features in the English mode of " Expenditure." to which I shall have to draw special attention under that head, as suggesting desiral)le alterations in Canadian practice. l""<>r purposes of illustrating a general principle, I have stated that the i-ntire Post Office revenue is paid over to the Treasury. This is not strictly the ca,s(v Before transfer to the Treasury certain payments are made out of lieveuue, and thus ari-ses the dilference, mentioned at the bcu-inning of this Report, between "lieveuue" and "Net produce of the Kevenue." These i)ayments iive not on voted service or expendi- tur count, and are treated and logically so it would seem, as " deduc- tions from revenue." The principal payments are : — 1. J'aymeni to Bank of England for losses on light ffold. 2. Tlie proportion nl' reciipts on Parcel Post business accruing to the Iviulway Compauie.N ;?. The \alne 111 I'ostage Stamps sold by ihe Post Office l>iil used for Inland Revenue purposes, and refnuded to Inland Revenue l.)epartineiit. 4. The biilanee.s due to other countries lor ocean and transit i)ostajre. .'i. Proportion ol fees on Money l 14 Auditor Generiil's Department are appoiuted to visit the Gi'iu'ral Post Office, and they, selecting a certain day's " Receipts ' a« the basis, then require to be exhibited to them i-very account, dociimeul and ledger item entering into that day's work, and going to make up those figures. I may here quote the lew bricl' words in which the Auditor Creneral disposes of this subject in the latest report to Parliament : " The Account in respect of Postal Revenue has been subjected io a test examination with generally satisfactory results, and the Lords of the Treasury and the Postmaster- General have been informed accordingly." Funds are supplied to Postmasters in England generally for the same reasons as in Canada, via., to enable them to meet payments on Money Order and Savings Hank account. Funds are further supplied, when nece.s.xary, to the 630 head oliices for payment of the 8alarie« of the stall's at those places, of postmasters of the neighbouring sub-offices, and of rural postmen. Postmasters' requirements become known to the Re- ceiver and Accountant Ueneral's Department by advice each forenoon from the Savings Bank Department, oi' Savings Bank warrants about to issue, by written requisitions from postmasters themseh'es and by tele- graph. This is the proper place for saying that all postmasters are allowed to retain a " Reserve Balance." This varies, according to the business of the office, from illO to t;3,(IO0, and its object is that the pub- lic may not sutler unduly from delay in cashing Money Orders. In the language of the instructions, the " Vo tmaster is allowed to hold an olh- "cial balance on hand solely to enable him to meet the requirements of " the public service, and he must on no account apply any portion of it, " for however short a period to his own private use." The use made of the Banks in Canada in the payment of Money Orders iortunately ren- ders any such provision unnecessary there, at any rate as regards the principal and more active paying offices. In any case the plan would not suit the methods of Canadian [KiNtmasters, nor indeed the ordinary business customs of the country. The " Reserve Balance " might appear regulaily on paper but it would rnrely be found in the official till. To proceed with the subject ot Rtmittancesto postmasters: When it is satisfa<'torily established i)y examination, if necessary, of the jwst- master's Cash Account of the previous day, that over and above his " OiUcial Reserve," the postmaster is in need of money, one of various methods is adopted to supply his riMiuirements : — He maybe instructed by telegniph to retain "so much" of the present day's cash (the telegraph is freely used, free of cost of course). The postmaster ol the nearest head ollice may be instructed by telegraph to send the cash. The cash may be .sent direct from the Receiver and Accountant (Jeueral's Ollice ; or if there is in the place a Bank having an offi((' in London, a cheque on the Bank of Kngland for the amount (or total amount if remittanoi-s have to b,. .mmU to a number of pl'\ces) is sent to the London Itank, with a request that the country age"* be in- structed to place the lunoiint at the disposal of tlu' postmaster. The last-mentioned practice is much the .sinn' as that ..iigixested by myself 15 to the Auditor General iu Canada somo time ago as a substitute for the present unsatifslactory method of supplying certain classes of postmasters with funds, a method involving the intervention of the Finance Depart- ment and Auditor Creneial, a duplication of work, and, generally speak- ing, a most circuitous process, and one having at times results anything but creditable to Departmental administration. The issue of Postage Stamps is managed entirely by the oflicers of the Inland Revenue Department on requisitions from postraasterK The Inland Revenue Department has means of knowing what stock of stamps each office is allowed to carry. Daily statements are sent by the Inland Revenue Department to the Receiver and Accountant General'.s Department of the post office, of stamps supplied, and from these statements are checked the Dr. entries in the postmaster's accounts of the following day. Check and counter- check thus exist between tht; I'ost Office and the Inland Revenue Depart- ment as regards the total issue of stamps for which postmasters have to account. Ordinary stamp vendors are appointed by the Inland Revenue Department, on nomination by the Post Office, on the grounds of public convenience, Just as in Canada. These vendors are supplied directly from the Inland Rereuue Department on payment for the stamps in advan( I', without discount. Vendors get no compensation whatever beyond such indirect benelit as may accrue from customers being attracted to their places of business. The manner of securing correct returns of the postage on unpaid and Insufflcientiy prepaid matter is so linked with the mode in which the gcueriil mail service is carried on that anything said about it cannot l)e taken as m> c than merely suggestive. It is just possible that there might be found bume advantage in applying a like measure, within certain limits, in Canada. In England, as in Canada, the proper accounting for postage on unpaid matter posted at an office or received from abroad, for immediate local delivery, depends entirely on the intij^iity of the post- master of that ollice. The jilan by which charges under this item raised against oilier offices are brought to iiicount, turns on the fact that all mail matter passes through, or is billed on, one or another of 6 iO head offices* which become the (-enlres for divtributiou in their districts. A W unpaid or insufficiently prepaid matter is charged in letter bills against head offices. These head offices send to the Department at London all the letter bills received by them daily, with postage stamps affixed to the value ol the unpaid postage charged against them. Chargcis raised by Head I'ost- masters against sul)-olhces in mailing or re-.nailing such matter, are met by a remittam^e of the amount in cash from the sub-office to the dospatch- ijig head office. There is in the London Department a stalf of four dcrks whose duty it is to see that every Head I'ostma.slcr sends daily to London the letter Till' iV'vr I'xot'iUiona »liicb txiataie roaUily uiadu tu lull uuilui' the Kcutiral truktiueat. 18 bills received at his office— ii is known how many bills should come IVom each office,— and thepostajje stamps affixed to the letter bills are checked against the unpaid charges. These tour clerks are suflicieui U estal)iish that the postageouinsufficiently prepaid matter in the whole of iinghiud, is duly accounted for. There are, it will be seen, no iiccoiints whatever. The amount enters into the revi'uuc in tlie shape of the money paid for the stiimps. The simplicity and int'xpeusiveuess of the process, with the otiectual way in which it accomplishes its obj.'cts. ar • striking merits. Having thus described the leading features of the British sysLom ot Postal Accounts, in respect of receipts and revenue, it may be ri .j'lt that 1 should make some observations as to what Canada has to leuru from liritish huancial practice. One thing i.o en(]uivies in Kngland were ueided to demonstrate, and that is tae waste of force in Canada in main- taining two separate cash accounts, and two separate systems of iinaucial .supervision in respect of the postmasters of the 950 Money Order offices. Four ledi-er clerks keep the ledger accounts of these 950 offices in the Canadian Money Ord^-r Branch, and with six or seven others engaged in general matters of account with tlie Banks, &,c., form the staff employed ii'. account duties. With very little assistance, perhaps one additional clerk (for the issue of stamps to these offices would have to pass through the same ledgers), the revenue accov nts of the same 950 olUccs could be kei)t in the Money Order Branch witi out trouble The postal revenue of these 950 offices is $1,957,000 out of a total of $2,500,000, or nearly I'our-lifths of the whole. The practical question becomes : What is the most economical and eticctual mode of collecting the remaining $543,000 from the other 0,55(J offices f Three courses seem open : Either preserve the present seemingly imperfect system of account in the Accountant's Branch, which would be rehuively more expensive than at present, in viev of the much smaller n-venue to l)e collected, improve it by reverting to the plan discontinued 30 years ago, of keeping a ledger account with each postmaster, which would make it far more costly than at present in clerical force and books ; or lake the step suggested by English example and " degrade " the li,550 non-Money Order olhces from their position as accountihg offices altogether. This last measure would so revolutio]iize the Department that the proposition seems, when ilrst stated, almost too sweeping for acceptans for use of the public. [)• iuiglaud no office of this class (.an be more than a very few miles from the nearest Money Order office, /. e., its base of supplies. In Ciniada, on the other hand, there ure many large and thriving places, many mib s from the nearest Money Order othce, to which, for various reasons, the Money Order system h.-.s not })een extended, where serious iiicoineiiience to the public would result from the poMtinasti«r allowing his stock ol'stami)s to hecome I'xhausled, This rea.souing, however, does 1*7 not take into account that a post inastor, unable, or not choosing, to send money lor stamps, would ipso facto detlarc himself a public defaulter, for the mont^y he would be expected to send would be, not his own, but the proceeds of the sale of his " Stock in trade," previously supplied him on credit by the Department. I am inclined to think that there would be few difficulties in i arryiug out the scheme ; that, whereas now, if post masters of country offices fail to remit their balances, their indebtedness to the Department and the public in the abstract is only " so mu