in case Congress should thereafter require him to issue a large number of special stamps, he would require the contractor to do the additional engraving, whether more or less, and to make, keep, and deliver these special stamps in the same place with the general stamps, but in separate packages, and increase the cost of the work in proportion as such special stamps added to the number of the different denominations of stamps, this deponent would have declined to offer a proposal for doing the work, unless he could have ascertained what number of new plates would be needed, and what amount of additional clerical work, envelopes, and stationery would be made necessary by this new series of postage-stamps. That if the honorable Postmaster-General, in said call for proposals, had stated that such new denominations might be one hundred in number, and must be delivered in packages by themselves, and that the contractor must name one uniform price for making all the postage-stamps, whether said stamps were general stamps for use by the public, or these special stamps for use by the officers of the various Departments, this deponent would not have offered to do the work for less than twenty-five cents per thousand stamps, and this deponent verily believes that, with such a call for proposals, no responsible bank-note engraving company would have offered a lower price than twenty-five cents per thousand stamps. Affirmed to before me this 21st day of October, 1873. STATE OF NEW YORK, City and County of New York, ss: CHAS. F. STEEL. FRANCIS B. ANTZ, Notary Public, New York County. Charles F. Steel, of said city, being duly sworn, says, that while the National BankNote Company of the city of New York manufactured the postage-stamps for the Post-Office Department of the United States he was the general superintendent of said work, and had charge of the same, and continued in charge of the same until the Continental Bank-Note Company, of said city, commenced the manufacture 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 Bank-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. This 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 make special postage-stamps for the various Departments of the United States Government, and to have the same completed so that they could 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 eleven 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 double 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-stamps 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 100 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 these special stamps would not pay the company for the increased cost of making both kind 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 his advertisement, in December, 1872, inviting proposals for making postage-stamps, this deponent submitted his written proposal, offering to do the work in the manner specified in 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 upon the then existing system of making and delivering postage-stamps for use in the United States which had been in operation for several years, and with which this deponent was will acquainted. That if the honorable Postmaster-General, in said call for proposals, had stated that in case Congress should thereafter require him to issue a large number of special stamps he would require the contractor to do the additional engraving, whether more or less, and to make, keep, and deliver these special stamps in the same place with the general stamps, but in separate packages, and increase the cost of the work in proportion as such special stamps added to the number of the different denominations of stamps, this deponent would have declined to offer a proposal for doing the work unless he could have ascertained what number of new plates would be needed and what mount of additional clerical work, envelopes, and stationery would be made necesfact by this new series of postage-stamps. That if the honorable Postmaster-General, in said call for proposals, had stated that such new denominations might be one hundred in number, and must be delivered in packages by themselves, and that the contractor must name one uniform price for making all the postage-stamps, whether said stamps were general stamps for use by the public, or these special stamps for use by the officers of the various Departments, this depotent would not have offered to do the work for less than twenty-five cents per thousand stamps. And this deponent verily believes that with such a call for proposals no responsible bank-note engraving company would have offered a lower price than twenty-five cents per thousand stamps. (Signed) Affirmed to before me this 21st day of October, 1873. [NOTARIAL SEAL.] (Signed) [Indorsement.] CHAS. F. STEEL. FRANCIS B. ANTZ, Notary Public, New York County. Affidavit of Chas. F. Steel: This case is referred to the assistant attorney-general of the Post-Office Department for his opinion, in writing, as to whether the Department may compel the contractor to do this work, under the provisions of his general contract, upon the terms and at the price therein mentioned. (Signed) NOVEMBER 21, 1973. CRESWELL, Postmaster-General. POST-OFFICE DEPARTMENT, Washington, D. C., July 6, 1874. SIR: In compliance with instructions from the Department, the undersigned have examined the claim of the Continental Bank-Note Company of New York for a just and equitable recompense for manufacturing the dies, rolls, and plates from which the official postage-stamps required by act of Congress approved March 3, 1873, have been printed, and for printing and furnishing the said official postage-stamps. The opinion of the assistant attorney-general for this Department, recognizing the fact that such work was not embraced or contemplated by the terms of the contract entered into with the Continental Bank Note Company for furnishing the ordinary adhesive postage-stamps used by the public, confined our labors entirely to ascertaining the usual price paid bank-note companies for manufacturing plates of that character, and to investigating into the actual expense imposed upon the Continental Company in printing and distributing the official stamps. The first problem was of comparatively easy solution. From the fact that heretofore the Post-Office Department has never paid anything specifically for the dies, rolls, and plates from which the ordinary stamps have been or are now printed, (the expenses of such dies, &c., having been borne by the contractors, in accordance with the stipulations of their various agreements,) the records of the Department could afford no information as to the cost of such dies, &c., and we were therefore compelled to confer with the various bank-note companies on the subject. By the representatives of each we were cordially received, and such information as was desired was freely given." Selecting as the leading exponents of their guild the two large bank-note companies of New York City, the American and National Companies, we ascertained from each the sum which they considered a fair and equitable compensation for manufacturing, renewing, keeping in repair, and transferring absolutely to the United States the dies, rolls, and plates for official stamps. Although their opinions were given separately, and, so far as we can judge, without conference with each other or with the Continental Company, each unhesitatingly stated that, under the circumstances of the case, the sum claimed by the Continental Company was only a fair and reasonable compensation. Upon considering the question of the compensation proper to be made for furnishing the official stamps, we found it a problem full of intricate details. The principal points as presented by the claim of the Continental Company related so exclusively to the workings of the stamp-manufactory that the opinions of other bank-note companies could not be obtained. We were, therefore, compelled to rely entirely upon our own judgment in regard to the facts which were developed during the examination. The grounds upon which this part of the claim is based are as follows: 1. That the great numbers of series and denominations of official stamps-nine + series and ninety-two denominations-as compared with the number of stamps furnished necessarily enhance the cost of manufacturing the stamps, inasmuch as frequent changes of plates, considerable waste of paper and ink, and loss of time in changing the plates and preparing for printing, are unavoidable. 2. That the colors of inks used in printing a portion of the official stamps are more costly than those used in manufacturing the ordinary stamps, and that in some in-, stances the $2, $5, $10, and $20 stamps of the State Department series-two colors and used and two printings executed. aden 3. That, as plate-printers do not dampen their paper alike, the sheets upon whic the stamps are printed do not shrink uniformly, and in order to perforate the stamps properly the perforating-machine has to be reset for each batch of stamps printed by each printer. With the ordinary stamps, when the denominations are few and printers work steadily with one plate for quite a length of time, this difficulty is hardly appreciable, as the quantity of work executed by each man is large and the cost and trouble of keeping it by itself is not apparent to any great degree. This, however, when increased ninefold, with a decrease of ninety-five per cent. in the number of stamps manufactured, causes a great advance in the cost of the official stamps. 4. That the cost of gumming the official stamps is increased over that of the ordinary, because of the great number of series and denominations, as each has to be kept separate in the gumming and drying rooms. To this is added the further necessity of keeping each printer's work separate, for the reason stated above. 5. That the cost of storing and keeping accounts of the official stamps is increased ninefold over that of the ordinary stamps, that being the increase in the number of denominations and series. 6. That the cost of distributing the official stamps is considerably greater than that of the ordinary issues, for the reason that at least 45,000 packages, as issued to postmasters, contained only 100 stamps each, and the envelopes, in which they were so distributed, cost 1 cents each; that the amount of labor and the number of blanks, as well as all book-entries, is as great in dispatching a package containing 100 stamps as one containing 100,000; and that the proportion of such small packages to large is vastly greater with the official stamps than with the ordinary. 7. In connection with the points specifically bearing on the manufacture of official stamps, it is further claimed by the Continental Bank-Note Company, that in consequence of the state of facts shown above to exist, coupled with the requirement of the Department that all postage-stamps shall be manufactured and stored in a fireproof building, &c., separate and distinct from any other work performed by the banknote company, the manufacture of the official stamps in the same building and rooms with the ordinary stamps has so complicated the working of the machinery and increased the printing, gumming, perforating, storing, distributing, and clerical force of the establishment, as to materially enhance the cost of manufacturing and distributing the ordinary stamps. This enhanced cost is claimed to be from one and a half to two cents per thousand on the ordinary stamps. Upon entering into a discussion as to the merits of the claim set forth above, it is proper for us to state at the outset that we consider the averments made in the first six specifications as fully borne out by the facts. There can be no question whatever as to the greatly-increased cost of manufacturing and distributing the official stamps; and, after full investigation, your committee are disposed to believe that the statements made by the Continental Bank-Note Company, setting forth that such stamps have cost not less than fifty cents per thousand to manufacture and distribute, are as nearly exact as possible. These conclusions were arrived at after careful examination into the entire process of manufacture and distribution. The records of this Department show that during the fiscal ended June 30, 1873, 601,931,250 ordinary stamps were issued in 78,221 packages, making an average of 7.695 stamps to each package. During the period from May 24, 1873, to June 30, 1874, 32,324,085 official stanips were issued in 56,423 packages, an average of only 573 stamps to each package. This alone gives an idea of the great difference in the cost of manufacture and distribution between the ordinary and official stamps. When, further than this, the fact is borne in mind that the leading competitors for the present contract for furnishing the ordinary stamps bid at figures ranging from 8 to 10 cents per thousand higher than the Continental Company, and that at least one of the New York bank-note companies is now receiving from a foreign government 40 cents per thousand in gold, equal to 45 cents currency, for about the same number of postage-stamps, of few denominations, which are delivered in bulk; and, in addition, receive compensation for the plates from which the stamps are printed; claiming also that this price only affords a fair profit, it will be seen that extraneous circumstances alone bear out the claim that the official stamps, with their many numbers and changes, manufactured with the aid of the facilities furnished by the stamp-manufactory already established, cannot cost less than 50 cents per thousand to the Continental Company. We devoted a great portion of the time occupied in our investigations to endeavoring to ascertain the merits of the claim made in the seventh specification-that the manufacture of the official stamps considerably increased the cost of the ordinary stamps. At first we were disposed to doubt this statement, but, after thoroughly examining into the matter, witnessing the processes of manufacture and distribution, and ascertaining the delays and expenditures which were unavoidable from the connection of the two branches-delays and expenditures which, while occasioned by such connection and justly chargeable thereto, were, in point of fact, a source of economy in the manufacture of the official stamps by saving great outlays for room-rent, vault facilities, hydraulic power, drying, gumming, and perforating apparatus, clerical force, &c., and were not charged in estimating the cost of the official stamps, because they were apparently inseparably interwoven with the cost of manufacturing the ordinary stamps-we concluded the claim was based on just and sufficient grounds. Were the official stamps manufactured in a building or apartments separate from the ordinary stamps, the expenses of rent, machinery, printing, and clerical force would be much greater than is the case now, where both are made and handled together. This is apparent upon consideration, and your committee, therefore, deem it no more than just to the Continental Company that advantage of their facilities should not be taken by the Department without fair compensation being made therefor. As nearly as we can ascertain, the increased expense entailed upon that company in the manufacture of ordinary stamps, consequent upon their connection with the official stamps, cannot be less than 14 cents per thousand ordinary stamps. The propositions of the Continental Bank-Note Company that either their contract for furnishing the ordinary stamps be so modified as to include all stamps, (official as well as ordinary.) and that they be paid 25 cents per thousand for all stamps furnished, or that they be paid one dollar per thousand for the official stamps, have both been considered. While admitting the increased cost of manufacturing the ordinary stamps occasioned by their connection with the official stamps, we think any change of the existing contract unadvisable, even if lawful, and cannot recommend such change. We believe the Continental Company should be fairly compensated for the official stamps, and also be paid for the increased cost of printing the ordinary stamps imposed by the manufacture of the official stamps. Taking, therefore, as a basis for calculation, 32,000,000 as the issue of official stamps, at a cost of 50 cents per thousand, we have $16.000. To this 14 cents per thousand on 632,733,420 ordinary stamps (the number issued during the fiscal year 1873–74) should be added, which gives $9,491, making a total of $25,491 as the cost of the 32,000,000 official stamps, or 79 cents per thousand. The recommendations of your committee may, therefore, be summarized as follows: First. That the Continental Bank-Note Company be paid the sum of $50,000 as full compensation for the dies, rolls, and plates used in manufacturing the official postagestamps; for repairing and renewing the same when needed, so long as the official stamps shall be furnished by the Continental Bank-Note Company, and for transferring the same to the Post-Office Department, whenever required, as the absolute property of the United States. Second. That the Continental Bank-Note Company be paid 80 cents for each one thousand official postage-stamps furnished by that company, such compensation to be in fall of every demand against the United States in connection with manufacturing and distributing the official stamps, and for the increased cost of manufacturing and distributing the ordinary stamps. In conclusion, we beg leave to remark that to make a contract for the future int ing and distribution of official stamps, pursuant to advertisement, might involve the necessity of a new stamp-agency, the renting of additional fire-proof apartments, and other necessary expenditures, that, in the aggregate, would exceed the cost of furnishing them under the present arrangement. If, therefore, the Continental Bank-Note. apany will contract to supply such stamps hereafter during the full contract-term for supplying the ordinary stamps, at about the price herein named, your committee are of the opinion that such an arrangement would be as wise and economical as any that can be made. The papers referred for our consideration are herewith returned. JAS. N. TYNER. The POSTMASTER-GENERAL. [Copy of indorsement.] POST-OFFICE DEPARTMENT, Washington, D. C., July 17, 1874. The within report is approved an ́l payment according to its terms ordered. J. W. MARSHALL, H. Mis. 43. -2 OFFICE OF THE ASSISTANT ATTORNEY-GENERAL OF THE POST-OFFICE DEPARTMENT, SIR: I herewith return the petition addressed to you, of the Continental Bank-Note Company of the city and State of New York, in regard to the contract made by that company on the 25th day of January, 1873, with the United States to furnish the Post-Office Department with adhesive postage-stamps for four years, together with the contract and accompanying papers and my views of the extent and scope of the contract. By the act of Congress of March 3, 1873, entitled "An act making appropriations to supply deficiencies in the appropriations for the service of the Government for the fiscal year ending June thirtieth, eighteen hundred and seventy-three, and for other purposes," it was provided that the Postmaster-General shall cause to be prepared a special stamp or stamped envelope, to be used only for official mail-matter, for each of the Executive Departments; and said stamps and stamped envelopes shall be supplied by the proper officer of said Departments to all persons under its direction requiring the same for official use, and all appropriations for postage heretofore made shall no longer be available for said purpose; and all said stamps and stamped envelopes shall be sold or furnished to said several Departments or clerks only at the price for which stamps or stamped envelopes of like value are sold at the several post-offices. (17 Stat. at L., sec. 4, p. 542.) Antecedent to the enactment of this statute, on the 12th day of December, 1872, the Postmaster-General advertised that "sealed proposals are invited from steel-plate engravers and plate-printers, and will be received at this (Post-Office) Department until 12 o'clock m. on Friday, the 10th day of January, 1873, for furnishing postage-stamps for a term of four years, commencing on the 1st day of May, 1873." On the 10th day of January, 1873, the Continental Bank-Note Company, a corporation duly organized under the laws of the State of New York, submitted their proposal to the Post-Office Department for furnishing adhesive postage-stamps according to the terms and conditions of the advertisement referred to. The said proposals were accepted, and, in pursuance thereof, on the 25th day of January, 1873, a contract was entered into between the United States of America, by John A. J. Creswell, PostmasterGeneral, and the said The Continental Bank-Note Company, in which contract the said The Continental Bank-Note Company bound themselves and covenanted and agreed “to furnish and deliver all the adhesive postage-stamps which may be required by the Post-Office Department for the term of four years, commencing on the 1st day of May, one thousand eight hundred and seventy-three, (1873.)" The language here used is most broad and comprehensive, and, unless restrained by other parts of the contract or by extrinsic evidence, properly admissible in the construction of the contract, will embrace the stamps which the Postmaster-General was directed to have prepared by the act of March 3, 1873, herein before referred to. As a general rule of interpretation and construction, it is true that the presumption is in favor of the comprehensive over the restricted sense of the terms of a contract, (2 Parsons, 501,) unless the context evidently points out that the terms used must, in the particular instance and in order to effectuate the intention of the parties to the contract, be understood in some other special and peculiar sense. In determining the meaning of the terms used as intended by the contracting parties, we must not only consider the whole contract, but all other instruments, even if not made at the same time, if connected with it by proper reference, (2 Parsons, 503, note x,) as, in the present case, in determining the meaning of the terms used in the contract, we are permitted not only to consider the whole contract, but can also consider the advertisement and proposals to which reference is directly made in the contract. We may also, further, for the same purpose, consider the condition of the parties and the circumstances existing at the time the contract was made, and which relate to the subject-matter of the contract, and which will tend to explain and make certain the meaning and intention of the contracting parties. Applying these rules of construction to the contract of the Continental Bank-Note Company, we may inquire whether it was the intention of the parties thereto that the term" adhesive postage-stamps" should embrace all stamps, general or special, then authorized, or which might thereafter be authorized by law, which the Department might require during the contract-term; or was it limited to stamps of the kind or character-varied, it may be, by improvement or change in design or denomination— used by the Department for its purposes within the scope of existing legislation, and not embracing stamps which the uses and purposes of the Department did not then require, and which were not authorized by existing legislation. At the time of entering into this contract, the Postmaster-General was authorized, by the one hundred and sixty-eighth section of the act of June 8, 1872, to have prepared "postage-stamps of suitable denominations, which, when attached to mail-matter, shall be evidence of the payment of the postage thereon;" by the one hundred and seventy-first section of the same act he is authorized "to adopt such improvements in postage-stamps and |