In a "report on foreign and domestic postal accounting," made January 22, 1884, to the [Sixth] Auditor of the Treasury for the PostOffice Department, by James T. Smith, chief of a division in that office, there is much valuable information. The report states that: "In the German service the district account is rendered directly to the court of account at Potsdam, near the Emperor. This body, I was informed, finally adjusts all Government accounts, and is independent of all other executive departments. In the Swiss service the account is audited by the Post-Office Department and reviewed by an independ ent finance officer. In the French administration the district account is also audited, in the first instance, by the department, and finally reviewed by a court account. This body is composed of a first president, four presidents, a procurer-general, and eighteen first councilors, with a clerical staff and corps of clerks. In the English service all accounts are rendered to and adjusted by the receiver and accountant-general, an officer of the Post-Office Department. They are afterwards scanned by the auditor and comptroller-general, sometimes styled in official papers the parliamentary critic, who may review and criticise an account, but cannot reverse a departmental decision. Failing to adjust difference, he submits the correspondence to Parliament with the annual exhibit of revenues and expenditures. "It will be observed that in each system of accounting it is a settled principle that no department should finally review its own accounts. Necessarily, the office accounts of the body making the final review must be audited by itself. The second officer of the English audit and comptrol office, who is not, therefore, responsible for the disbursements, is charged with this duty, but this exception to the rule is not overlooked, as a special and rigid scrutiny is given to these accounts by the parliamentary committee on accounts. "The somewhat novel position in which your office stands to two great Executive Departments may be here referred to. "The Auditor of the Treasury for the Post-Office Department [in the United States] exercises the functions of both Auditor and Comptroller, his decisions being final, unless an appeal is taken therefrom to the First Comptroller by the Postmaster General or a person dissatisfied with the settlement of an account, within twelve months. The Auditor is to receive all accounts arising in the Post Office Department, or relating thereto, with the vouchers necessary to the correct adjustment thereof, and audit and settle the same, and certify the balances to the Postmaster-General, keeping and preserving all accounts after settlement. He shall collect all debts due the Department, and may compromise, remit, &c., fines, penalties, &c., with the written consent of the Postmaster-General. He shall make a quarterly report of the receipts and expenditures of the Post-Office Department to the Secretary of the Treasury, and shall make to him or the Postmaster-General such additional reports as either may require. He shall report to the PostmasterGeneral, when required, the manner and form of keeping and stating the accounts of the Department, and perform such other duties in relation to the financial concerns of the [Post-Office] Department as may be assigned to him by the Secretary.' Says Attorney-General Cushing in the Colmesnil case (Opinions, vol. vii, page 444): 'Is he [the Auditor] not the officer in many respects both of the Postmaster-General and of the Secretary of the Treasury? Surely, as it seems to me by the general tenor and by provision after provision of the act to change organization of the Post-Office Department;' and, on page 445, 'the Auditor is, there fore, the officer of both the Treasury and the Post-Office Department, having privity of official relation with both.' "As an officer of the Post-Office Department, in the performance of the duties devolved upon him by law and by the Postmaster-General, the Auditor takes equal rank in the Post-Office Department with the heads of other Bureaus thereof, subordinate to none. The duty of auditing accounts cannot be shared with other officers of the Department. It must remain with the Auditor as a whole until it is transferred as a whole. To enable him to perform this duty faithfully and certify bal. ances, and notify the Postmaster-General of delinquencies as early as the interests of the service require, all accounts and vouchers should reach his office by the most direct channel, and all correspondence thereon up to the date of his final action should be under his direction. The condition of the accounts of the Department and the reasons for the creation of this office are fully set forth by Postmaster-General Kendall, in his annual report for 1835." On the subject of the present system of postal accounting the report says: "Forty-eight thousand postmasters now render accounts current quarterly to this office. These accounts embrace ordinary revenues and all disbursements for office expenses proper. Each account is examined by the examining division, and reviewed and registered by the registering division. From the registers the balance is carried to a general account kept on the ledgers of the bookkeeping division, and also, more in detail, on the stating division. The surplus quarterly revenue is sent long distances, at the postmasters' risk, to a postal depository, there being but ninety-six for the whole country. On the receipt of the certificate of deposit the postmaster mails it to the Third Assistant PostmasterGeneral, in whose office it is examined and registered. When it finally reaches this office it is compared with the weekly account rendered by postal depositories, and, if found to agree therewith is posted to the general account. Quarterly accounts of disbursements to letter-carriers, postal railway clerks, mail-messengers, special carriers, and for weighing the mails, and for temporary mail service are also rendered, these being audited on separate desks of the pay division. From the regis ters made up on these desks the items are posted and stated to the general account. Miscellaneous payments, not included in the account current, may be audited on either the examining, registering, stating, pay, or collecting divisions, this last division having charge of the general correspondence for the collection of debts and the final closing of postmasters' and contractors' accounts. Miscellaneous items reach the general account through the journals of the bookkeeping division. In the adjustment of a quarterly account, correspondence may arise on each desk dealing with an item thereof, the result being confusing to a postmaster, who regards his account as a unit. To obtain a supply of stamps, a postmaster makes requisition on the Third Assistaut Postmaster-General. If approved, after comparison with the record of sales, the stamp agency at the place of manufacture is ordered to issue. When the stamps reach the postmaster, who may be thousands of miles from the agency, he returns a receipt to the Third Assistant Postmaster-General. This is checked with the record of orders and sent to this office, where it is again checked with a duplicate record made up from the voluminous records of the Third Assistant's stamp division. The examining clerk is then prepared to receive and examine the postmaster's quarterly account current." The report then discusses "proposed changes in the method of supply and accounting," and, among other things, says: "A collector of internal-revenue renders two accounts, each complete in itself—a revenue account, the total of which must be deposited, and disbursing account, in which warrants received are charged and disbursements credited, each account being settled independently of the other. There are so many items to the postal appropriation, a separate account being kept with each, that with the internal-revenue system of separate accounts I estimate there would be required over 1,000,000 postal warrants annually. The total number of warrants passed by the First Comptroller last year did not exceed 80,000. "If a Seventh Anditor, for the money-order business, and a Comptroller of the Treasury for the Post-Office Department, to finally review all postal accounts, should be created, or the control of all Government accounts be cut out of the Treasury Department and devolved upon an independent court of account, as in the French and German service, or a Congressional critic or auditor and comptroller-general be created, such as is found in the English administration, the method of accounting I propose would easily adjust itself to such change. This office. would have its auditing and reviewing divisions for all classes of postal accounts. If the comptrolling should go elsewhere, the reviewing divisions could be transferred without confusion or serious delay in adjustments-an important consideration when so many current accounts are involved. In such an event the account would necessarily be consolidated, with all vouchers attached-the form I propose. If your jurisdiction remains as now, the proposed organization will be more efficient and economical than the present one."* *The following letter of the able and efficient [Sixth] Auditor of the Treasury for the Post-Office Department is deemed appropriate here: OFFICE OF THE AUDITOR OF THE TREASURY FOR THE POST-OFFICE DEPARTMENT, SIR: In answer to your inquiry as to "whether it is advisable to apply the Treasury system of adjusting accounts to the accounts of the Post-Office Department," I have the honor to inform you that I favor the policy of having all accounts reviewed by a Comptroller after passing an Auditor, whenever they shall be reduced to the lowest practicable number. At the present time four-fifths of the accounts of postmasters are such that they could be dispensed with, by causing the money-order offices to disburse such payments as become necessary and furnish such stamps as may be required at the smaller offices. This office now follows the Treasury system, so far as its limited clerical force will allow. All postmasters' accounts are passed upon by two separate divisions, and other accounts which pass but one division, are overlooked a second time by different clerks. The aim is to review every account as a check against fraud and to correct errors. The above statement in regard to postmasters' accounts applies with equal force to accounts for the transportation of the mails. Mail and special mail messengers could be paid by the postmasters at money-order offices, and their receipts handled as vouchers in the quarterly returns of such postmasters, instead of as at present, being settled by statement of account and paid by warrant. There is legislation to effect this change pending at this time. Whenever these changes, with a few others, are made, it will become more practicable and necessary that all accounts should pass the review of a Comptroller. Hon. WILLIAM LAWRENCE, Respectfully, First Comptroller, Treasury Department. J. II. ELA, Auditor. The necessity of establishing a system of revision of the audit of postal accounts, in accordance with the laws and regulations which control the adjustment of all other accounts, is conceded. It does not follow, however, that an additional or Third Comptroller is needed; and it is very evident that the creation of one is neither necessary nor advisable. Whatever increase of clerical force will be required can be made as well in the office of First Comptroller, already established, as in one especially created for this work; and all questions of law which may arise in the adjustment of postal accounts can be decided by the First Comptroller, who is already charged with a duty of revision on appeal. An increase of Comptrollers is very objectionable, because, if made, there would then be no uniformity in the construction of statutes or in the principles of law which the several Comptrollers might adopt. A single Comptroller-General, having the final determination of all questions of law which can arise in all branches of the accounting system, is the only agency by which entire uniformity in the adjustment of public accounts can be secured. Besides discussing the proposed scheme of revision, Mr. Smith, in his report, refers to the necessity of making such changes in the method of accounting to the Auditor by postmasters as will reduce the number of accounts to be separately adjusted; and, in connection with this subject, he estimates that, if the system which regulates the accounting of internal-revenue officers were adopted for postmasters, there would be required "over one million postal warrants annually." This proves that the accounting by postmasters must be different from the accounting by collectors of internal-revenue, but does not prove that there can be no change from the present system; indeed, the report shows that a change is possible, and suggests a plan which is worthy of mature consideration. However, under any system, whatever number of warrauts are required can be granted, and be countersigned by the First Comptroller as readily as by any other officer; and hence this point has no direct bearing on the question whether a Third Comptroller should be createdat least none in favor of the creation of such office. Inquiry has occasionally been made concerning (1) the extent of the jurisdiction exercised by the Comptroller, and (2) the value of his printed decisions as authority. The extent of the jurisdiction exercised by the Comptrollers, and the amounts of money involved therein, may be learned from the operations of the Treasury Department. A single decision of the First Comptroller has determined liabilities, past and prospective, amounting to many millions of dollars (Pacific Railroad case, post, 214).* * In the annual report of the First Comptroller of November 15, 1883, it is said that "The accounts of the several [Pacific] railroad companies have not been kept in the Treasury Department in a form to show separately by years, or in the aggregate, In this connection it may be stated that accounts were examined and adjusted by the accounting officers of the Treasury Department, and suits were instituted in the Court of Claims on claims rejected, as follow: Term of 1880-'81. (16 Ct. Cl., pp.74.88,335,515),4. Term of 1881-82. Term of 1882-'83. (18 Ct. Cl., pp. 448, 458, 706), 3. (18 Ct. Cl., pp. 83, 111, 138, 382, 470, 546, 618, 625, 706), 9. Customs, 0.* *This table was prepared by Theophilus J. Minton, a clerk in the Treasury Department. It does not include the accounts settled by the [Sixth] Auditor of the Treasury for the Post-Office Department. the gross amount of each of the three distinct classes of claims for payment above mentioned, but this can be ascertained by the necessary research and examination. There is appended to this report a tabular statement (Appendix A) prepared by the Auditor of the Treasury for the Post-Office Department, and showing by years the compensation for mail transportation on the bond-subsidized portions of the Pacific railroads, and the compensation on the non-bond-subsidized portions, including all roads owned, leased, controlled, or operated by the said bond-subsidized Pacific roads, withheld from January 1, 1873, to June 30, 1883, and, in separate columns, showing the amount of one-half of the compensation withheld on the bond-subsidized, and the amount of the whole compensation withheld on the non-bond-subsidized.' From this has been condensed another tabular statement (Appendix B), showing an approximate estimate of the compensation earned for mail transportation, the payment of which has been withheld in the three classes of cases mentioned, as follows: 1. One-half compensation earned on bond-subsidized roads from January 1, 1873, to June 30, 1878..... 2. Total compensation earned on non-bond-subsidized roads owned, leased, or operated by subsidized companies from January 1, 1873, to June 30, 1882 ....... 3. One-half compensation earned from July 1, 1878, to June 30, 1883, on bond-subsidized roads not covered by the act of May 7, 1878.... Total...... ....... $1,753, 554 79 1,418, 110 84 221,572 01 $3,393, 237 64 "It has not been practicable to obtain data with sufficient accuracy to give even approximate estimates as to the amount of compensation earned by the bond-subsidized railroad companies for services other than mail transportation of the three several classes, and for the separate periods mentioned. But the gross amount will probably equal, if it does not exceed, that for mail transportation. Some idea may thus be obtained of the amounts claimed by the railroad companies, and of the increase necessary in the appropriations hereafter required, if the claims of the companies are to be paid. It will, of course, become necessary to obtain exact statements of the compensation earned, if further legislative action be taken upon the subject." The Hon. Charles J. Folger, Secretary of the Treasury, in his annual report of De cember 3, 1883, says: "The report of the First Comptroller of the Treasury for this year, beginning at page 8, presents an elaborate statement of the existing relations of the Government and these corporations, and to that report I crave leave to refer. In the mean time it has become apparent that the sinking-fund provided for by the act of May 7, 1878, will be inadequate to meet the objects of that statute." The first movement in Congress to secure to the United States indemnity against loss by reason of the issue of subsidy bonds to the Pacific Railway Companies was made by Mr. Lawrence in the House of Representatives, January 5, 1876. (See Railway Compensation case, post 211, note.) |