Imágenes de páginas
PDF
EPUB

brought into use, there are no data on wbich to base the calculation. When the order was given for their manufacture, your Departinent computed the number required at about twenty-five million per annuin. 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 moderstand that the proposals made for furnishing the general stamps, in January, 1873, would have been very different had the invitation from his Department for said proposals stated that the number of stamps required was estimated at fifty million instead of seven hundred and twenty million seren hundred and fifty thousand per annum or at two hundred million instead of two billion eight bundred and eighty-three million, during a period of four years. And this difference wonld have been still greater bad the avertisement 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 reqniring more printing and more elaborate work than the stamps then in use; or, in other words, that the contractor wonld be required to furnish, at his own erpense, nine times the amount of engraving which the Government proposed to furnish, without expense 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 tirst-class steel-engravers, are worth $50,000. They could not be dnplicated, 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. Aunexed to this petition is an account made out 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 milliou per aupum, 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 57,495, and in four years to $29,980.

On this basis of compensation, your petitioner, during its contract-term of four years, would receive for the special stamps very little more than one-half the cost of the dies, plates, and rolls used in their manufacture. No other item of expense whatever is embraced in this 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 peti. tioner 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 moditication of the contract 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 thonsand.

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 adoptoil, 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-notë 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 II. 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

5,500

required for nse by the several Departments of the United States Government, pursuant 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 $300 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 Department, at $500 each ...

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

each. Sixteen (16) plates for the postage-stamps of the State Department, at $300

each.. Five (5) plates for the postage-stamps of the Executive Department, at $300

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

2,500 each Ten (10) plates for the postage-stamps of the Department of Justice, at $300

5,000 each Nine (9) plates for the postage-stamps of the Department of Agriculture, at

5,000 $500 each

4,500

8,000

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 National 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 Con. tinental 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 enperintendent 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 de ponent fully and accurately knows the entire process and detail of making, counting, keeping, ilelivering, and book-keeping, necessary and indispensable in that bosiness.

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 makospecial 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, deliveriog, and book-keeping is complicated and made more expensive to the company.

That it reqnires 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 postagt-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 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 addling 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 the said advertisement, for tifteen cents and one-half a cent per thousand klamps. That this bid was the next bid above that of the Continental Bank-Note Company. That this deponent, in making bis said proposal, founded liis estimates mpon 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, bad stated that

[ocr errors]

in case Congress should thereafter reqnire 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 nuber, 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 tbat, with such a call for proposals, no responsible bank-note engraving company would have offered a lower price than twenty-five cents per thousaud stamps.

CIAS. F. STEEL. Affirmed to before me this 21st day of October, 18733.

FRANCIS B. ANTZ,

Votary Public, Vew York County. STATE OF NEW York,

City and County of New York, 88 : 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 mannfacture 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 sail 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 tbe general postage-stamps the Post-Oflice 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 como pleted 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 additiou 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 sail 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 keepiug work, costs two cents.

That one dollar per thonsand 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 publisheri his allvertisement, in December, 1872, inviting proposals for making postave-stamps, this deponent subinitted 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 bis estimaies 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 houorable Postmaster-General, in said call for proposals, had stated that in case Congre-s should thereafter require him to issue a large number of special

jaci

stamps he would require the contractor to do the additional engraving, wbether more of 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 ditferent denominations of stamps, ibis deponent would bave declined to offer a proposal for doing the work unless he could have ascertained wbat number of new plates would be needed aud what amount of additional clerical work, envelopes, and stationery would be made neces

; by this new series of postage-stamps.

That if the honorable Postmaster-General, in said call for proposals, had stated that sich new denominations might bo one hundred in number, and must be delivered in packages by themselves, and that the contractor must name one wiform price for inaking 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 depouent verily believes that with such a call for propo. sals no responsible bank-note engraving company would have offered a lower price than twenty-five cents per thousand stamps. Signed)

CHAS. F. STEEL. Attirmed to before me this 21st day of October, 1873. (NOTARIAL SEAL] (Signed)

FRANCIS B. ANTZ, Notary Public, New York County.

(Indorsement.) Afidavit 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, npon the terms and at the price therein mentioned. (Signed)

CRESWELL,

Postmaster-General. NOVEMBER 21, 1873.

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 wbich tho 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 pristage-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 sach 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 eachi 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 sun wbich they considered a fair and equitable compensation for wanufacturing, 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.

l'qon 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 priucipal 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 compaDies could not be obtained. We were, therefore, compelled to rely entirely upon our on 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, 85, $10, and $20 stamps of the State Department series-two colors 2.9d used and two printings executed.

faden 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-inachine has to be reset for each batch of stamps printed by each pripter. 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-tive per cent, in the number of stamps manufactured, causes a great ailvance in the cost of the ofticial stamps.

4. That the cost of gumming the official stamps is increased over that of the ordinary, becanse of the great number of series and denominations, as each has to be kept separate in the gamming and drying rooms. To this is added tbe further necessity of keeping each priuter's work separate, for the reason stated above.

5. That the cost of storing and keeping accounts of the official stamps is increased nivefold 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 19 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, grunming, perforating, storing, distributing, and clerical force of the establishment, as to materially enhance the cost of manufacturing and distributing the ordinary stainps. 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 averinents made in the first six specifications as fully borne ont by the facts. There can be no' question whatever as to the greatly-increased cost of manufacturing and distributing the official stainps; and, after full investigation, your committee are disposed to believe that the statements made loy 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 siaips were issned in 78,221 packages, making an averago of 7.695 stamps to each package. During the period from May 24, 1873, to June 30, 1874, 32,324,085 otticial stamps were issued in 56,423 packages, an average of only 57:3 stamps to eaclı package. This alone gives an idea of the great difference in the cost of mannfacture 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 10 10 cents per thousand bigher 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 tbat estraneous circumstances alone bear out the claim that the oficial 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

« AnteriorContinuar »