pensation under this section is subject to compliance with certain conditions outlined in the contract-such as the furnishing of a certified public accountant's report, definite proof of the increase in wage costs, the filing of a claim within 60 days from the date of the increase in wage costs, etc. These claims for labor cost increases are handled in the claims division as claims against the United States. The receipt of such cases did not reach voluminous proportions until 1932 or 1933, but since that time they have rapidly increased in number, due largely to the Government's increased coal consumption.

The spread of the Government pay-roll roster to recipients of Federal relief has naturally resulted in a multiplication of the number of deceased cases, final pay claims, forgery, and similar cases. With the increase in Federal employment, the number of Government personnel in a travel status has also soared sharply upward, and in its wake have followed numerous claims arising from such travel. The number of claims in this latter group has been accentuated by the fact that new and inexperienced employees, unschooled in the requirements of Government travel regulations, have paid little heed to correct procedure.

In addition to this influx of claims attributable to expanded Federal operations, certain special acts of Congress have been responsible for an appreciable work increase. Thus, on August 29, 1935, there was enacted into law a statute (Private, No. 348, 74th Cong., 1st sess., 49 Stat. 2200) providing payment for overtime services performed by employees of the various navy yards and shore stations during the period from 1878 to 1882. These payments were to be made to persons "found by the Court of Claims to have been underpaid," or, in case of death, to their legal representatives if alive and holding office, and, if not, then to their successors in office as established to the satisfaction of the Comptroller General; and if payment be less than $1,000 and no administration was had or to be had, then to the decedent's widow or legal heirs, etc. Inasmuch as the findings of the Court of Claims were approximately 25 years old and the services were performed more than 50 years before passage of the act, the development and settlement of these cases entailed painstaking care and effort, especially in the matter of determining the proper persons entitled to the benefits of the actthe heirs, in many cases, having multiplied with the years.

Another large group of claims resulted from the enactment into law on August 27, 1935, of an act (Private, No. 336, 74th Cong., 1st sess., 49 Stat. 2194) that provided for payment to claimants, their heirs, representatives, administrators, executors, successors, or assigns, of the amount of loss found by a court or by the Director General of Railroads to have been sustained on account of fire originating from the operation of railroads by the United States in the State of Minnesota on or about October 12, 1918-less the amount of any previous adjustments made by the United States or by any fire-insurance company. More than 10,000 claims have been received under this act, and the large majority thereof have been examined and settled.

The effect of the Government's readjustment of the value of the gold dollar was generally to increase the value of foreign money in its relation to the American dollar. This, of course, decreased the purchasing power of the salary and other allowances received by officers

and employees of the United States stationed abroad. As a result. Congress enacted into law on March 26, 1934, an act (48 Stat. 4565 authorizing payment to officers, enlisted men, and employees on foreign soil for losses incurred due to this foreign-currency appreciation. These claims have involved computation of the percentage of difference between currency exchange rates in effect when the loss arose and the fixed "basic rate" of exchange prescribed by Executive order. called loss-in-exchange payments are currently made by disbursing officers, and necessarily only the uncurrent or otherwise doubtful and involved cases are received for direct settlement as claims.

The trend in volume of transportation work continues to be in the direction of increase rather than decrease. This is aptly illustrated by the following comparative tabulations of the number of freight cases handled during the fiscal years 1931 to 1937, inclusive:

Estimating six shipments to each unit of work indicates that there were handled 2,247,216 shipments during the last fiscal year. The overcharges found in carrier's claims during this year totaled $1,076,371.99.

As a result of changes in commercial passenger fares, complicated changes were incorporated by the railroads in the land-grant equalization agreement entered into by the carriers and the military branches of the Government for the transportation of officers and enlisted men of the Army, Navy, and Marine Corps, and as a result the net fare formulas, which were the result of years of laborious computations by the land-grant rate men, were rendered worthless, and new formulas are in the process of computation.

The auditing of transportation charges covering movements of Civilian Conservation Corps enrollees has provided a major task. Special rates were given these movements, depending upon the number of enrollees and whether they traveled in coaches or sleeping cars. Then, too, the carriers east of the Mississippi River charged higher rates on these movements than did the western carriers, and effective July 1, 1936, all the carriers increased the Civilian Conservation Corps rates but maintained the same relative difference between eastern and western territory rates.

POSTAL MATTERS

The work of the Post Office Department division of the General Accounting Office has increased considerably as is shown by the following comparative tabulation of the value of accounts audited in the fiscal year 1937 over the fiscal year 1923, as reported on page 15 of the Annual Report for that year.

Revenue stamps and United States savings bonds. It will be noted that since 1923, additional duties have been imposed on postmasters and the Post Office Department, viz-the sale of internal revenue stamps, migratory bird hunting stamps and United States savings bonds, and that the values of the other items have greatly increased.

The 50-odd central accounting postmasters control the distribution to other offices on a fixed credit basis of both kinds of stamps; bonds, however, are furnished on a fixed credit basis to the smaller offices (third and fourth class). This plan decentralizes the work of shipping, storing, and accounting for stock, and concentrates the accounting for sales in a limited number of accounts.

The total accountability of the Postmaster General to the Treasury is summarized in quarterly accounts for stamps received and sold, etc., and in monthly accounts for bond transactions.

Decentralization of activities and consolidation of accounts are necessary if the Postal Service is to function efficiently and economically; and where accounting is involved savings in personnel are effected in the Post Office Department division of the General Accounting Office. In 1917 all third- and fourth-class post offices were placed on the fixed credit basis as to stamp stock, and required to render accounts to the Auditor through certain designated post offices. In 1922 the Comptroller General approved the consolidation of the postal and money order accounts of postmasters of third- and fourth-class. post offices. Since the establishment in 1912 of the audit of money orders by means of electrical accounting machines, extensions of the work of punching cards to the field have been approved as savings to the Government warranted, until now, cards are punched in 17 post offices for money orders paid at 111 offices, the total number so prepared in the fiscal year 1937, representing 80 percent of all paid orders.

The total number of post offices rendering accounts to the General Accounting Office on July 1, 1923, was 51,613; on July 1, 1937, that number has been reduced to approximately 45,000.

Such changes to operate successfully require full cooperation on the part of the administrative and accounting officers and the fact that the changes in accounting procedures mentioned have been satisfactorily maintained over so many years is evidence of cooperation.

Further evidence of what can be accomplished along modern accounting lines is afforded in the exchange with the postal administration of Canada of punched cards for money orders paid by each administration. The Post Office Department division of this Office punches cards for all Canadian money orders paid in the United States, prepares lists thereof and the Canadian administration does likewise for United States money orders paid in Canada. On the basis of said lists accounts between the two countries are settled. This arrangement has been in operation since January 1, 1932, and has proven mutually satisfactory.

The Post Office Department division of the General Accounting Office is successor to the office of Auditor of the Treasury for the Post Office Department, created by the organic act of July 2, 1836. That act was repealed by the act of June 8, 1872 (17 Stat. 283) which revised, consolidated and amended the statutes relating to the Post Office Department, and increased the duties of the Auditor. The placing of the audit of accounts, the accounting for Postal Service funds, and the collecting of amounts due the Post Office Department in the hands of an officer independent of the Department was deliberate and based on the sound principle expressed by a former Postmaster General, the Honorable Amos Kendall, in 1835, that public officers who have an agency in originating accounts, should have none in their settlement.

The said act required (1) that all payments on account of the Postal Service shall be made to persons to whom the same shall be certified to be due by the Auditor, and (2) vouchers for all deductions made by a postmaster out of the receipts of his office, on account of the expenses of the Postal Service, shall be submitted for examination and settlement by the Auditor for the Post Office Department (General Accounting Office), and no such deduction shall be valid unless found to be in conformity with law.

Under these provisions of law disbursements by postmasters from the revenues of their offices have been post audited and other disbursments of the Postal Service preaudited for over 100 years. In the annual report of the Comptroller General for 1927, page 47, it was said that approximately 16% percent of postal expenditures were preaudited. In the fiscal year 1936, the percentage had increased to 22 percent; and in 1937, it was 20 percent.

In addition to the disbursements made by postmasters for expenses of their offices that are post audited, there are also post audited the huge volume of money order, postal saving and other transactions, which are of course not possible of preaudit, but for which postmasters are held to strict accountability under their bonds.

The accounts of the Postal Service are kept in such manner as to show the amount of revenues received under the classes designated in the act of June 8, 1872 (17 Stat. 290), as amended.

Post office buildings.-Beginning July 1, 1937, the same method will be followed in the certification of allowances for the operation and maintenance of public buildings under the jurisdiction of the Post Office Department. These changes of procedure result in a saving of time and unnecessary work in each instance without affecting the departmental control over field expenditures.

When the maintenance and operation of public buildings occupied wholly or in the main by post office personnel were transferred from the jurisdiction of the Treasury Department to the Post Office Depart

ment by Executive Order No. 6166, dated June 10, 1933, effective October 1, 1933, the total number of such buildings was 1,560, while the number on April 30, 1937, was approximately 2,305, and new buildings are still being completed and turned over for occupancy by the Post Office Department.

The total number of custodial employees added to the rolls of the Post Office Department at the time of this transfer was 7,201, while the aggregate number on April 30, 1937, was 13,230, which number will be continually augmented due to employment of additional persons required to operate the new buildings as completed.

Contracts. All services of a public utility nature and supplies furnished for operation of public buildings, as well as the furnishing of gasoline, fuel oil, parts of motor vehicles, and hire and storage of vehicles in the motor vehicle service are under contracts.

Hundreds of contracts for hire of vehicles, transportation of employees, automobile parts, etc., gasoline, and oil are received annually; and in addition about 10,000 contracts for services in operation of post office buildings. These latter contracts have been a source of perplexity for the reason that the Post Office Department failed to adopt a uniform practice, particularly in the matter of acceptance of the proposals. The Postmaster General was informed of the objections to the contracts which had been submitted and the correct procedure was explained.

Ocean mail.-By the act of June 29, 1936 (49 Stat. 1985), the payment of subsidies to steamship companies transporting mails under the Merchant Marine Act, 1928, was transferred from the Post Office Department to the United States Maritime Commission, the transfer being effected October 26, 1936. The contracts with the Post Office Department under the Merchant Marine Act, 1928, of the several steamship companies were terminated June 30, 1937, under provisions of section 401 of said act. Beginning with the fiscal year 1938, the postal revenues will therefore be charged with the cost of transporting mails by steamships at the "poundage" rates only.

Air mail. The volume of mails carried over the domestic air-mail routes showed an increase during the year. At the beginning of the fiscal year, there were 3 routes which received additional compensation for carrying an average weight of over 300 pounds of mail per airplane mile, while there are now 13 routes receiving such additional compensation.

The foreign air-mail routes also show an increase in volume and new routes created by other countries are furnishing rapid transit for United States mails so that the volume of outgoing air-mail is becoming larger.

Postal service with foreign countries.-The Postal Service with foreign countries is carried on under provisions of Conventions of the Universal Postal Union and the Pan-American Union. Statistics are taken once every 3 years under the first-named convention, which are accepted by the countries concerned and are used as a basis for remunerating the transporting countries. The last statistics under the Universal Postal Union Convention were taken in May 1936, and covered the accounts for the years 1935, 1936, and 1937. The process of assembling these statistics is naturally slow, due to distances. Practically one-half of the statistics for 1936 has been assembled. There are no transit charges under the Pan-American Convention of the Americas and Spain.