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For the Post Office Department of ten denominations, to wit, the one, two, three, six, ten, twelve, fifteen, twenty-four, thirty, and ninety cents stamp.
For the Treasury Department of eleven denominations, to wit, the one, two, three, six, seven, ten, twelve, fifteen, twenty-four, thirty, and ninety cents stamp.
For the Far Department of eleven denominations, to wit, the one, two, three, six, seven, ten, twelve, fifteen, twenty-four, thirty, and ninety cents stamp.
For the Navy Department of eleven denominations, to wit, the one, two, three, six, seren, ten, twelve, fifteen, twenty-four, thirty, and ninety cents stamp
For the State Department of fifteen denominations, to wit, the one, two, three, six, seven, ten, twelve, fifteen, twenty-four, thirty, and ninety cents stamp; and also of the two, tive, ten, and twenty dollars stamp, with one face-plate common to the two, five, ten, and twenty dollars stamp.
In the Interior Department of ten denominations, to wit, the one, two, three, sis, ten, twelve, fifteen, twenty-four, thirty, and ninety cents stamp
For the Department of Justice of ten denominations, to wit, the one, two, three, six, ten, twelve, fifteen, twenty-four, thirty, and ninety cents stamp.
And for the Department of Agriculture of pine denominations, to wit, the one, two, three, six, ten, twelve, fifteen, twenty-four, and thirty cents stamp.
The special stamps, therefore, as now in use, consist of nine series and ninety-two denominations. They require for their manufacture ninety-three dies, and ninety-three rolls, and one hundred plates. Some of said stamps being double-tinted, require two plates instead of one, and two printings instead of one, thus more than doubling the expense of printing, the second printing being more costly than the first.
Let it be remembered that the law authorizing the special stamps was approved on the 3d of March, 1873. The stamps were required for use by the first day of the folling July. The order for their manufacture was given about the 4th of April, 1873. Less than pinety working days were allowed for engraving the plates, preparing the dies and rolls, printing the stamps and delivering them for use throughout the country. When this order was received your petitioner regarded its execution, within the time prescribed, as an impossibility. The engraving for one single plate, ordered for the use of the State Department, required the exclusive skill and labor of one of the best steelengravers in the country for some three or four weeks. To fill this order for the special stamps, it becamo necessary for your petitioner to set aside all other engagements, (which are well known to be extensive in the city of New York,) and to concentrate its entire force on that particular work. Its employés were worked on double time, and of course at double the ordinary rates of compensation. Only in this way could the order of your Department be complied with. The stamps were furnished within the time appointed, but at great expense, loss, and inconvenience to your petitioner.
No arrangement has yet been made with your Department as to the compensation for this extra work, and your petitioner is advised that, until some arrangement be made, it can be paid only at the rate specified in its contract for furnishing the general stamps, to wit, fourteen cents and ninety-nine hundredths of a cent per thousand.
The object of this petition is to present the case fully and fairly to the consideration of the Postmaster-General, with the view of having it adjusted on principles of eqnity, justice, and law,
Your petitioner admits that the language of the contract entered into between your petitioner and your Department in January, 1873, is broad and comprehensive in its terms. It binds your petitioner to furnish all the adhesive postage-stamps required by your Department during the term of four years, conimencing on the 1st day of May, 1373.
Under that contract your petitioner recognizes its obligation to keep in repair the dies, plates, and rolls intrusted to its care by your Department, and to renew the same whenever required. Also to engrave and furnish new designs for stamps, should new designs be ordered ; and for new denominations of stamps, should new denominations be required to take the place of the series of stamps in general use by the public at the date of the contract.
But your petitioner respectfully suggests that all these obligations have reference to the general stanips in use in the Department on the 12th of December, 1872, when you advertised for proposals, and on the 25th of January, 1873, when the contract was signed, sealed, and delivered.
The special stamps, which were rendered necessary by act of Congress passed and approved after the execution of the aforesaid contract, were not designed to take the place of the general stamps in use when the contract was made; they have not taken their place in any sense of the term. The general stamps are still in use, and the obligations resting on your petitioner to furnish new designs and new denominations of stamps, to take the place of the general stamps in use when the contract was executed, are as binding on your petitioner to-day as they were on the 25th day of last January.
It may be argued, and probably will be argued, that the Postmaster-General, under the contract of January, 1873, has full power and authority to order rew denomina
tions of stamps to an unlimited extent, and that he might require a hundred or more additional denominations.
But it is not reasonable to suppose that the exigencies of the Post-Office Department will require such an increase of the general stamps during the contract term. Nor is there any reason whatever to believe that an arbitrary order for such increase would be given when the stamps were not actually needed ; nevertheless, if your Department should require your petitioner to prepare dies, plates, and rolls for a hundred or more new denominations of the general stamp, the order would come within the strict provisions of the contract, and your petitioner would yield willing obedience to the demand. Even in a case of that kind, however, unless the new stamps were ordered in numbers sufficient to defray the increased expense, and to allow a reasonable profit to the contractor, there would be great equity and justice in an application for increased compensation.
But the special stamps do not come within the spirit, intent, meaning, or purview of the contract. They were unknown to the law when the contract was inade; they had no existence at that time; they were not in use, and never had been in use, and there was no reason to believe that their use would be required during the existence of the contract. Until the franking privilege was abolished there was no occasion for their use, and until the law of March 3, 1873, was passed and approved, the PostmasterGeneral had no authority to order the said special stamps for the Executive Departments. That they are of great utility and value to the Government in preventing a complication of accounts, and in frustrating frauds which might be perpetrated in
nd regulations, cannot be questioned; otherwise, why were they provided for by special act of Congress ? And why were not the general stamps then in use throughout the country for the accommodation of the public, also used instead of the special stamps for the Departments ?
Your petitioner is very certain that in its proposal under your invitation for furnishing your Department with the general stamps no estimate was made for furnishing the special stamps; that expense did not enter into the calculation; there was nothing
ertisement to call it forth: it was not mentioned or contemplated by either party to the contract, even at the time the contract was signed, sealed, and delivered.
Your petitioner, therefore, believes, and, so believing, assumes, that the expense of furnishing the special stamps cannot be regarded as coming within the provisions of the contract.
If this assumption be correct, your petitioner is clearly entitled to a fair and just remuneration for the materials used and for the work performed in furnishing your Departwent with the special stamps. Its claim rests upon a quantum meruit ; and as to the value of the work and the amount of compensation deserved, your petitioner begs permission to present a few suggestions.
Allusion has already been made to the circumstances under which the special stamps were ordered, and to the unavoidable expense incident to having the dies, plates, aud rolls for a bundred different denominations of stamps engraved and furnished, and the stamps ready for use, within the period of ninety days.
Your petitioner may further add that, under its contract to furnish the general stamps for the use of your Department, it is required to manufacture said stamps in a fire-proof building, and in apartments separate and distinct from those in which any other work is performed, and when finished, they are to be placed in a fire-proof and burglar-proof safe or vault, and each denomination to be kept in a separate apartment. That such safe or vault was furnished with the necessary divisions for keeping the eleven denominations of stamps in use when the contract was made ; and, assuming that your Department would require as much particularity for the safe-keeping of the special as the general stamps, when the order for the special stamps was received, your petitioner remodeled the said safe or vault, and cansed it to be divided into over a hundred apartments, instead of eleven, and thus furuished ample accommodation for the safe-keeping of the special as well as the general stamps. All of which was attended with great additional expense.
And, in general terms, it may be said that every portion of your petitioner's business, connected with furnishing stamps for the Government, has been enlarged and rendered more expensive by the introduction of the special stamps. Some portions of it have been increased as much as nine-fold, and other portions four-fold. The whole has been angmented, rendered more complicated, more cumbersome, and more difficult to systematize and keep in perfect order. Especially may it be urged that the desigos for some of the special stamps are more elaborate and more expensive than the designs for the general stamps. That the engraving of the vignette for one single stamp for the use of the State Department cost your petitioner over $500, this expense being independent of the cost of the plate, and of other work incident to the engraving; and yet, notwithstanding his heavy expenditure, the State Department will probably not require over a thousand stamps of this denomination during the contract term of four years, for which your petitioner will be entitled, if allowed according to the contractrates for furnishing the general stamps, to fourteen cents and ninety-nine one-hundredths of a cent, and no more.
At the close of the fiscal year, on the 30th of last June, there were thirty-three thousånd two hundred and forty-four post-offices in the United States. Of this number, about twenty-three thousand are known as offices of the fifth class, which, on an average, require not over a hundred of the special stamps per quarter. By order of your Department, these stamps are forwarded to the different post-offices in an envelope separate froin the general stamps. Each envelope costs your petitioner a fraction less than two cents; whereas, at the rate established for furnishing the general stamps, the whole amount your petitioner can receive for the stamps inclosed in that envelope is about a cent and a half. As applicable to a single package of a hundred stamps, this deficiency is insignificant, but when it is remembered that at least four packages are forwarded every year to each of the 23,000 post-offices of the fifth class, the item of loss becomes one of considerable magnitude.
In tbe contract between your Department and the National Bank-Note Company, wbich expired only a few months ago, there was a proviso that never less than two hundred stamps should be inclosed in a package. This is a judicious provision, which, however, for some cause unknown to your petitioner, was omitted in its contract with your Department.
Your petitioner would further suggest that there is no profit to a contractor in furnishing postage-stamps for the Government at the rate of fourteen cents and ninetynine ode-hundredths of a cent per thousand, unless the stamps are required in immense numbers. A large issue is necessary to defray actual expenses. The proposal of your petitioner to furnish the general stamps for your Department, on your invitation of December 12, 1872, was based on the assumption that seven hundred and twenty million seven hundred and fifty thousand of said stamps would be used each and every year, and that the number required during the contract-term of four years would aggregate tico billion eight hundred and eighty-three million, and on the further as sumption that the dies, plates, and rolls for furuishing these stamps belouged to the Government, and wonld be placed in the custody of your petitioner, to be used, free of expense, in the manufacture of said stamps. With all these advantages, it must be admitted that the offer to furnish the said tamps at the rate of tourteen cents and ninety-nine one hundredtbs of a cent per thousand was exceedingly low, and very favorable to the Government-only a little more than one-half the rate at which stamps of the same series had been furuished under the contract then about to expire. This will more fully appear by reference to the following statements, taken from the records of your Department:
Postage-stamps issued to postmasters under contract with the National Bank- Vote Company.
Postage-stamps furnished by the Continental Bank-Note Company for the quarter ending September 30, 1873, this being the only full quarter for which stamps hare been issued by this company, (special stamps excluded.) . Number of stamps issued........
......... 140, 820, 835 Amount paid for them, at the contract-price of $14.99 per 1,000.......... $21, 109 04
Taking this quarter as the average, and allowing for the remaining quarters of the Fear at the same rate, and the annual cost of furnishing the general stainps under the present contract will amount to $84,436.16, as against $162,145.43 under the former contract. It is true tbat the dies, plates, and rolls now in use were furnished by the former contractors, but all other expenses remain about the same, and, of course, there must be & corresponding diminution of profits to the present contractors. This is stated, not in the spirit of complaint, but by way of illustration.
The number or special stamps which will be required annually or during a term of four years cannot now be determined with accuracy. Having so recently been
brought into use, there are no data on which to base the calculation. When the order was given for their manufacture, your Departinent computed the number required at about twenty-five million per annum. But this estimate has already been exceeded, and it is probable that at least fifty million will be needed each and every year.
The Postmaster-General will readily understand that the proposals made for furnishing the general stamps, in January, 1873, would have been very different had the invitation from his Departinent for said proposals stated that the number of stamps required was estimated at fifty million instead of seren hundred and twenty million seren hundred and fifty thousand per annum or at two hundred million instead of two billion eight hundred and eighty-three million, during a period of four years. And this difference would have been still greater had the advertisement for proposals set forth that the contractor, instead of having the dies, plates, and rolls for a single series of stamps, consisting of eleven denominations, furnished at the expense of the Government, would be required to furnish, at his own expense, nine series of stamps, each series consisting of eleven denominations, and each denomination requiring more printing and more elaborate work than the stamps then in use; or, in other words, that the contractor would be required to furnish, at his own expense, nine times the amount of engraving which the Government proposed to furnish, without erpense to the said contractor.
The dies, plates, and rolls furnished for the manufacture of the special stamps, at the regular rates charged for such work by all first-class steel-engravers, are worth $50,000. They could not bo duplicated, within the time prescribed by your Department, by any bank-note company or first-class steel-engraver, for less money, allowing, of course, the regular and reasonable profit on such work furnished under like circumstances. Annexed to this petition is an account made ont in the usual form, according to the regular rates of charge for such work.
Valuing these dies, plates, and rolls, therefore, at $30,000, and estimating the number of special stamps required at fifty million per annum, if your petitioner is to be allowed for them only at the rate of fourteen cents and ninety-nine one-hundredths of a cent per thousand, it will readily appear that the sum realized to your petitioner in one year would amount to $7,495, and in four years to $29,980.
Op this basis of compensation, your petitioner, during its contract-term of four years, would receive for the special stamps very little inore than one-half the cost of the dies, plates, and rolls used in their manufacture. No other item of expense whatever is embraced in tbis calculation, and it must be evident, therefore, that such rates as are allowed for the general stamps would, when applied to the special stamps, prove financially disastrous to your petitioner. In the settlement of accounts, at the end of each and every quarter, for the special stamps, the amount received would fall far short of defraying actual expenses, and all, if not more than all, the profit your petitioner expected to realize for furnishing the general stamps would be swept away. And your petitioner, though aiming to serve your Department to the best of its ability, would be embarrassed, if not financially ruined, rather than benefited by its transactions with the Government.
Before ciosing this petition, your petitioner will probably be expected to present some proposition for the adjustment of this question of compensation.
It would prefer a modification of the coutract entered into on the 25th January, 1873, extending its provisions over all the stamps, special as well as general, furnished or to be furnished during the contract-term of four years, the Government yielding and paying therefor at the rate of twenty-five cents per thousand. But if such modification of the existing contract be not feasible, your petitioner proposes to furnish the special stamps at the rate of $1 per thousand.
Under either proposition, all dies, plates, and rolls, furnished, or to be furnished, for both series of stamps, to become the absolute property of the United States, subject to the order and control of the Postmaster-General, or his authorized agent.
Should either of these propositions be adopted, your petitioner believes that the amount paid for all the stamps, general and special, will still be less by at least twenty thousand dollars per annum than was paid under the late contract for furnishing your Department with the general stamps alone.
In proof that these proposals are reasonable and just, your petitioner respectfully refers to an affidavit of Charles F. Steel, a bank-note engraver of long experience in the city of New York, which is hereto appended. All of which is respectfully submitted.
THE CONTINENTAL BANK-NOTE COMPANY, By HOMER H. STUART, its President.
New YORK, July 1, 1872. THE UNITED STATES Post-OFFICE DEPARTMENT
TO THE CONTINENTAL BANK-NOTE COMPANY, DR. To engraving and making steel plates for printing the various special postage-stamps
required for nse by the several Departments of the United States Government, pursuiant to the act of Congress on the subject approved 3d March, 1873: Sixteen (16) plates for the postage-stamps of the Post-Office Department, at $500 each ........
...... ............. $8,000 Twelve (12) plates for the postage-stamps of the Treasury Department, at $500 each ................................................................
6,000 Eleven (11) plates for the postage-stamps of the War Departinent, at $500 each ........
5,500 Eleven (11) plates for the postage-stamps of the Navy Department, at $500 each ....................................................................
5,500 Sixteen (16) plates for the postage-stamps of the State Department, at $300 each ........
....... 8,000 Five (5) plates for the postage-stainps of the Executive Department, at $500 each ....... ............................. .........................
2,500 Ten (10) plates for the postage-stamps of the Interior Department, at $500 each ....................................................................
5,000 Ten (10) plates for the postage-stamps of the Department of Justice, at $500 each ............................................... .............
5,000 Nine (9) plates for the postage-stamps of the Department of Agriculture, at $500 each. ....................................................
50,000 STATE OF NEW YORK,
City and County of New York, 88 : Charles F. Steel, of said city, being duly sworn, says that while the Natiogal BankNote Company, of the city of New York, manufactured the postage-stamps for the PostOffice Department of the United States, he was the general superintendent of said work, and bad charge of the same, and continned in charge of the same until the Continental Bank-Note Company of said city commenced the inanufacture of said stamps. That he is now in the employment of the Continental Bank-Note Company, and is superintendent of the department in which the said Continental Bauk-Note Company are now manufacturing said postage-stamps, and has been such superintendent ever since the said Continental Bank-Note Company began the manufacture of said stamps. That this deponent fully and accurately knows the entire process and detail of making, counting, keeping, delivering, and book-keeping, necessary and indispensable in that business.
The deponent further says that after the Continental Bank-Note Company commenced the manufacture of the general postage-stamps, the Post-Office Department applied to the Continental Bank-Note Company to makespecial postage-stamps for the various Departments of the United States Government, and to have the same completed so that they conld be delivered before the 1st day of July, 1873. That the said company, in order to make said special stamps, were obliged to make one hundred plates in addition to the plates used in making the general stamps. That there are tleven denominations of the general stamps and ninety-two denominations of the special stamps. That both of these kinds of postage-stamps are manufactured and kept in the same establishment, and that by increasing the number of separate denominations of said stamps the whole process of manufacturing, counting, keeping, delivering, and book-keeping is complicated and made more expensive to the company.
That it requires a large increase of clerical work and almost doubles the quantity of envelopes, printed slips, and bills and stationery, made necessary in the delivery of postage-stamps since the Post Office Department required the special postage-tamps above mentioned. That over twenty-one thousand postmasters in the United States receive, each of them, at one time, only one sheet of official stamps, containing one hundred stamps. That this sheet has to be sent in an envelope by itself, and that the envelope alone, saying nothing of the printed bill, label, and book-keeping work, costs two cents.
That one dollar per thousand for those special stamps would not pay the company for the increased cost of making both kinds of stamps, which has been occasioned by adding to the general stamps the above-mentioned special stamps.
This deponent further says, that when the honorable Postmaster-General published bis advertisement in December, 1872, inviting proposals for making postage-stamps, tbis deponent submitted bis written proposal offering to do the work, in the manner specified in the said advertisement, for fifteen cents and one-half a cent per thousand stamps. That this bid was the next bid above that of the Continental Bank-Note Company. That this deponent, in making his said proposal, founded his estimates mpor the then existing system of makiug and delivering postage.stamps for use in the United States, which had been in operation for several years, and with which this deponent was well acquainted.
That if the honorable Postmaster-General, in said call for proposals, had stated that