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stamps. Al 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 wbich, while occasioned by such conDection 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 estimatiog 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 Departinent 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 otticial stamps, cannot be less than 14 cents per thousand ordinary stamps. The proposi. tions of the Continental Bank-Note Company that either their contract for furnishing the ordinary stamps be so modified as to include all stampa, (official as well as ordinary.) and that they be paid 25 cents per thousand for all stamps furnished, or that thes 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 be 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 mannfacture 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 bare $16.000. To this 1} cents per thousand on 632,733,420 ordinary stamps (the number issued during the fiscal year 18733-'74) should be added, which gives $9,491, making a total of 345,191 as the cost of the 32,000,000 official stamps, or 79100 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 postage-tamps ; for repairing and renewing the same when needed, so long as the official tamps 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 Coited States.

Second. That the Continental Bank-Not: Company be paid 20 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 comertion with manufacturing and distributing the otficial stamps, and for the increased cost of manufacturing and stributing the ordinary stamps.

!u cobelusion, we bey leave to remark that to make a contract for the future print ily and distribution of official stamps, pursuant to advertisement, might involve the litcessity of a new stamp-agency, the renting of additional fire-proof apartments, and viber necessary expenditures, that, in the aggregate, would exceed the cost of furnishing them under the present arrangement. If, therefore, the Continental Bank-Note.

mapany will contract to supply snch stamps hereafter during the full contract-term lor sipplying the ordinary stiumps, at about the price herein named, your committee are of the opinion that such an arrangement would be as wise and economical as any lat can be made. The papers referred for our consiileration are herewith returned. Very respectfully,

JAS. N. TYVER.

E. W. BARBER,
Third Assistant Postmaster-beneral.

C. F. MACDONALD,

Superintendent Joney-Order System. Thy POSTM LOTER-GENERAL.

[Cops of indorsement.)

POST-OFFICE DEPARTMENT,

Iashington, D. (., July 17, 1874. Tre within report is approved an 1 payment according to its terms ordered.

J. W. MARSHALL,

Portmaster-General. II. Vis. 13_2

OFFICE OF THE ASSISTANT ATTORNEY-GENERAL

OF THE Post-OFFICE DEPARTMENT,

Washington, D. C., December 8, 1873. SIR: I herewith return tbe petition addressed to you, of the Continental Bank-Note Company of the city and State of New York, iu regard to the contract inade by that company ou 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 aud 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 sball be supplied by the proper ofiicer 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, 18733, the Continental Bank-Note Company, a corporation duly organized under the laws of the State of New York, submitted their proposal to the Post-Oltice 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 furnislı and deliver all the adbesive 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 thie 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 denominationused 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 reqnire, and which were not authorized by existing legislation. At the time of enter; ing into this contract, the Postmaster-General was authorized, by the one hundred and sixty-eighth section of the act of June 8, 1872, to bave 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-tirst section of ihe same act he is authorized “to adopt such improvements in postage-stamps and

stamped envelopes as he may deem ailvisable ;” by the one hundred and seventy-second section of the same act he is directed aud requireil “ to furnish postage-stamps and stamped envelopes to all postmasters, and to be kept for sale at all post-offices;." and the one hundred and seventy-third section of the same act provides for their sale at a discount to certain designated agents. It is important to consider the provisions of these several sections, to show the authority of the Postmaster-General to contract for the furnishing of stamps, the uses and purposes of the stamps so provided, and how these uses and purposes were to be subserved, all tending to determine the character of the stamps intended in the contract now under consideration.

Under the act of June he was authorized to provide postage-stamps of suitable depouinations, wbich, when attached to mail-matter, should be evidence of the payment of the postage thereon. The stamps that he was authorized to provide were stamps wbich, when attached to mail-matter of airy and every class or character, should be evidence of the payment of postage; they were to be such as could be delivered to postmasters, kept in post-offices for general sale, and under certain circumstances sold at a discount; tbey were most general in their character, proper to be attached to all mail-matter, to be used by all persons, and for that use to be placed for sale within the reasonable convenience of the whole people.

The Postmaster-General could not, under the provisions of this act, provide a stamp for special purposes or special persons. Congress so understood the character of the stanip which tbe Postmaster-General was anthorized to provide, and to enlarge his power gave bim further authority, requiring him to canse to be prepared special stamps or stamped envelopes, to be used only for official mail-matter for each of the Executive Departments; and to that end, and for that purpose, passed the law of March 3, 1873, before referred to, and the necessity for this authority grew out of a new and theretofore untried policy of the Goverument, namely, the abolition altogether of the franking privilege, an exigency which had not arisen, and was not contemplated when the contract under consideration was made or proposals for the same published. If the legislation conferring authority on the Postmaster-General at the time this contract was made did not authorize him to contract for the special stamps which he was author. ized to have prepared by the act of March 3, 1873, then the proper construction of the terms of the contract would be that which would be within the limits of legal authority. Lord Lyndhurst, in Shore vs. Wilson, 9th Clark and F., laid down the rule" as a fair and proper rule, that where a construction consistent with lawful conduct and lawfol intention can be placed upon the words and acts of parties, you are to do so.” The same rule is substantially laid down in different terms: “When certain things are to be done by the contract, which the law has regulated in whole or in part, the contract will be held to mean that they should be so done as wonld be either required or indicated by the law;" and the ruling in the case of Clark vs. Pinney, 7 Cowen, 681, is given as authority for the rule. Io that case there was a contract to deliver Salina salt in barrels ; yet, notwithstanding the comprehensiveness of the term barrels, it was held that the word barrels was used in a restricted sense, and such barrels as were directed by the statute were to be understood as intended.

There is another cardinal rule of construction which must be observed in order to ascertain the meaning and intention of the contracting parties in the use of the term * adhesive postage-stamps ;" in this case, we must consider the whole instrument in which the contract is embodied; and from the whole ascertain, if we can do so, whether the contracting parties in the use of that term intended to use it in its most broal and comprehensive sepse, or intended and meant only stamps of that class and character which were used by the Department at the dates of the advertisement and contract. In observing this rule, we shall properly examine the advertisement of the PostmasterGeneral for proposals to furnish the postage-stamps, which we find embodied in the contract and made part of it by way of recital.

In this part of the contract we find frequent reference to “the stamps now in use;" in the tirst place as a standard of quality in execution and then of quality generally, by which the stamps to be furnished under the contract were to be measured. We find also a reference to the uses of the stamps to be furnished in the requirement therein that they should be furnished with all reasonable dispatch, in such quantities as may be ordered by the Department, to fill the separate daily requisitions of postmasters and postal agents. We find in that part of the advertisement which makes an estimate of the quantity of stamps that will be required, more to indicate the meaning and intention of the contracting parties, as to the character of the stamps to be furnished, than in any other separate part of it. That estimate is advertised as a matter desired to be known by those who would offer proposals, and on which their respective otters would be based, as the cost of the stamps to the contractor and the profits on the contract would depend very largely on the number he would be required to supply. As such an estimate conld not be made except upon the past requirements of the Department for the stamps used by it, we must conclude that, in the estimate advertised, the Department would require two billion eight hundred and eighty-three million during tbe period of the contract-term ; that the Department intended stamps of that class and character which were then used by the Department, adapted to the use of, and used by, the whole people in the prepayment of postage on all matter carried in the mails; and the reservation, in the same part of the advertisement, “ that proposals made under this advertisement shall inelude all the stamps needed by the Department during the contract term, without reference to the above estimates, which are here given only for the information and guidance of bidders,” would not vary the impression made and intended to be made on the minds of the bidders, that the stamps needed by the Department, whether in greater or less quantities than the estimate, would be of the general character, as to use, as those then used; and the information thus given of the past and probable future needs of the Department, instead of being a safe and reliable guide to bidders, would be a deception and a snare, it stamps of a liniited and special and not general use were intended in the advertisement. It is true, in another part of the advertisement, express provision is made for a change in the designs and an exteusion of the denominations, but that change of design, so far from contemplating a change in the character of use, provides that such new desigus are only to take the place of the series of stamps then in use. This reserved power to change the design would be, to one offering proposals, a proper matter for consideration, but not controlling when it wonle not affect the general uso by the public of the stamps to be furnished, nor diminish the estimated requirements of the Department, as on that use and thos: requirements the profits of the contract would most largely depend.

This advertisement of the Postmaster-General was the inducement to the contractor, and the basis of the contract, and, when we consider it in all its parts, we cannot doubt that the postage-stamps therein intended were such as the Postmaster-General was, by the laws then in force, authorized to provide for the use of the whole people, and not such as by subsequent legislation (abolishing the franking privilege) made a necessity, to meet which becessity he was by a later act, the act of March 3, 1873, clothed with authority and directed to provide postage-stamps of a special character and for a special and limited use.

In ascertainivg the meaning and intention of the contracting parties in the use of the term “ adhesive postage-stamps," if we properly consider the legal authority of the Post master-General, under which this contract was made, the character and ettect of subseqnent legislation on the same subject, and the whole instrument, we are unavoidably brought to the conclusion that the term as used in the contract did not enbrace the special stamps or stamped envelopes to be used only for otticial mail-matter by each of the Executive Departments," which the Postmaster-General was authorized and directed to have prepared, by the act of March 3, 1873. Very respectfully, yours, &c.,

T. A. SPENCE, Assistant Attorney-General for Post-Office Department. Hon. Jois A. J. CRESWELL,

Postmaster-General.

(Copy)

POST-OFFICE DEPARTMENT,

Washington, D. C., January 9, 1874. GENTLEMEN: You are requested to act as a committee to examine the papers, submitted herewith, constituting the claim of the Continental Bank-Note Company, of New York, for compensation for manufacturing the dies, rolls, and plates required in printing the official postage-stamps ordered in compliance with the act of Congress approved March 3, 1873, and for printing and distributing said stamps.

After considering their claim, in connection with the opinion of the Assistant Attorney-General for this Department, (also submitted herewith,) please determine what sum, in your judgment, will be a fair, just, and reasonable compensation to be paid that company for the work performed, and embody your conclusions in a written report to me, stating separately the amount for the manufacture of the dies, rolls, and plates, and the price to be paid for each one thonsand stamps that have heretofore been, or way hereafter be, printed avá distributed. Very respectfully,

JSO. A. J. CRESWELL,

Postmaster-General.
To Hop. JAMES N. TYNER, U. C.
Hon. E. W. BARBER,

Third Assistant Postmaster-General.
Dr. CHARLES F. MACDONALD,
Superintendent Woney-Order System.

[Inclosures.]
Bill of Continental Bank-Note Company.
Brief of claim of Coutinental Bank-Note Company.
Affidavit of Charles F. Steel,
Opinion of Assistant Attorney-General.

(Copy.)

Vemorandum of bed-pieces and rolls for Cnited States postage-stamps made by the Conti

mental Bank- Vote Company.

BED-PIECES.

Treasury Department, lc., 2, 3, 6, 7, 10, 12, 15, 24, 30,90.
State Department, lc., 2, 3,6,7, 10, 12, 15, 24, 30, 90.
War Department, lc., 2, 3, 6, 7, 10, 12, 15, 24, 30,90.
Navy Department, lc., 2, 3, 6, 7, 10, 12, 15, 24, 30, 90.
Post-Office Department, lc., 2, 3, 6, 10, 12, 15, 24, 30, 90.
Justice, Department of, lc., 2, 3, 6, 10, 12, 15, 24, 30,90.
Agriculture, Department of, lc., 2, 3, 6, 10, 12, 15, 24, 30.
Interior Department, lc., 2, 3, 6, 10, 12, 13, 24, 30, 90.
Esecutive Department, lc., 2, 3, 6, 10.
State Department, for dollar-stamps, two bed-pieces, ninety in all.

ROLLS.

From numbers one to forty-five, inclusive.
JOSE 11, 1874.

DR.

(Copy) The I'NITED STATES,

To the CONTINENTAL BANK-XOTE COMPANY,
For engraving and making steel-plates for printing official postage-stamps

for the Post-Office Department, as per voucher herewith...
For printing and furnishing official postage-stamps up to, and including,
June 30, 1874, as per voucher her with

$50,000 00

23, 856 07

75,836 07

Chargeable to P. S. and S. E.
Adjusted and stated by-

CHES. ROBB, Clerk.

AUDITOR'S OFFICE, POST-OFFICE DEPARTMENT, No. 4003.)

July 18, 1874. I certify that there is payable to The Continental Bank-Note Company, New York, 1. Y., the amount due on the above account, agreeably to the books, contracts, or other vouchers in this Oitice, and which are herewith, as far as may be, exhibited.

J. J. MARTIN, Auditor. The POSTMASTER-GENERAL.

(Copy)

NEW YORK, July 17, 1571. Tbe L'NITED STATES POST-OFFICE DEPARTMENT,

To the CONTINENTAL BANK-NOTE CO., Dr. To engraving and making steel-plates for printing the various special postage-stamps

required for use by the several Departments of the United States Goverument, pursuant to tlie act of Congress on the subject, approved March 3, 1873: Sixteen (16) plates for the postage-stamps of the Post-Office Department, at $300 each..

$3,000 00 Twelv. (12) plates for the postage-stamps of the Treasury Department, at $500 each

6, 000 00 Eleven (11) plates for the postage-stamps of the War Department, at $500 cach

5, 500 00 Eleven (11) plates for the postage-stamps of the Navy Department, at $500 each...

5,500 CO Siveren (16) plates for the postage-stamps of the State Department, at $500 pach....

8,000 00 Five (5) plates for the postage-stainps of the Executive Department, at $300 pach...

2, 500 00 Ten (10) plates for the postage-stamps of the Interior Department, at $500 each.

5, 000 00

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