development have meantime increased expenditure, resulting in a deficiency in the revenue to meet the expenses of the Department of five and a quarter million dollars for the year 1884 and eight and a third million in the last fiscal year.  The anticipated and natural revival of the revenue has been oppressed and retarded by the unfavorable business condition of the country, of which the postal service is a faithful indicator.  The gratifying fact is shown, however, by the report that our returning prosperity is marked by a gain of $380,000 in the revenue of the latter half of the last year over the corresponding period of the preceding year.

The change in the weight of first-class matter which may be carried for a single rate of postage from a half ounce to an ounce, and the reduction by one-half of the rate of newspaper postage, which, under recent legislation, began with the current year, will operate to restrain the augmentation of receipts which otherwise might have been expected to such a degree that the scale of expense may gain upon the revenue and cause an increased deficiency to be shown at its close.  Yet, after no long period of reawakened prosperity, by proper economy it is confidently anticipated that even the present low rates, now as favorable as any country affords, will be adequate to sustain the cost of the service.

The operation of the Post-Office Department is for the convenience and benefit of the people, and the method by which they pay the charges of this useful arm of their public service, so that it be just and impartial, is of less importance to them than the economical expenditure of the means they provide for its maintenance and the due improvement of its agencies, so that they may enjoy its highest usefulness.

A proper attention has been directed to the prevention of waste or extravagance, and good results appear from the report to have already been accomplished.

I approve the recommendation of the Postmaster-General to reduce the charges on domestic money orders of $5 and less from 8 to 5 cents.  This change will materially aid those of our people who most of all avail themselves of this instrumentality, but to whom the element of cheapness is of the greatest importance.  With this reduction the system would still remain self-supporting.

The free-delivery system has been extended to 19 additional cities during the year, and 178 now enjoy its conveniences.  Experience has commended it to those who enjoy its benefits, and further enlargement of its facilities is due to other communities to which it is adapted.  In the cities where it has been established, taken together, the local postage exceeds its maintenance by nearly $1,300,000.  The limit to which this system is now confined by law has been nearly reached, and the reasons given justify its extension, which is proposed.