Notwithstanding the salary-fund for the year 1876 exceeded that for the year 1877 by $33,550, and that for the year 1878 by $35,800, the work of 1877 exceeded that of 1876 by 221 per cent., and the work of 1878 exceeded that of 1876 by 56 per cent.

The average cost of settling the claims in the three several years named fell from $17.11 in 1876 to $12.81 in 1877, and to $10.15 in 1878. The work of 1877, performed at the average cost of 1876, would have required an expenditure in salaries of $596,180-$149,500 more than was actually expended; while the work of 1878, at the same average cost, would have required the expenditure in salaries of $748,802, being $304,372 in excess of the actual expenditure; which sum added to $35,800, the excess of the salary appropriation for 1876 over that for 1878, and we have a clear saving to the government, on account of the increased efficiency of the clerical force, for the year 1878 over the year 1876, of $340,172.

The saving in the same direction in 1877 over 1876 was $183,050.

The cost of settling the cases in 1873, 74, 75 appears to have averaged less than for the years 1877 and 1878, it being for the respective years, $8.69, $10.47, and $11.76; but an analysis of the work of those years shows that, in addition to the fact that the cases were by so much nearer the war period, which circumstance of itself greatly simplified the settlement of all classes of claims, there were settled in each of those years many thousands of claims of so simple a character that any comparison between the work of those years and the three following years will be unreliable. Of the 133,563 cases settled in 1873, 74, 75, 25,685 were invalid-increase claims under the acts of June 8, 1872, March 3, 1873, and June 18, 1874; 19,088 were widows' increase under the ninth section of the act of March 3, 1873, and 18,180 were 1812 pension-claims and bounty-land claims.

PENSION AGENCIES.

On the 7th of May, 1877, an order was issued by the President, which was afterwards modified, as to the location of 2 of the agencies, by which the number of agencies for paying pensions was reduced from 58 to 18, by consolidating 7 agencies in Maine, New Hampshire, and Vermont into 1 agency at Concord, N. II.; 4 in Massachusetts, Connecticut, and Rhode Island into 1 agency at Boston, Mass.; 4 in New York into 2 agencies, 1 at the city of New York and 1 at Canandaigua; 3 in Pennsylvania into 2 agencies, 1 at Philadelphia and 1 at Pittsburgh; 4 in New Jersey, Delaware, Maryland, and District of Columbia, into 1 agency at Washington, D. C.; 5 in Virginia, West Virginia, Tennessee, and North Carolina, into 1 agency at Knoxville, Tenn.; 2 in Kentucky into 1 agency at Louisville; 3 in Arkansas, Mississippi, and Louisiana, into 1 agency at New Orleans; 3 in Ohio into 1 at Columbus; 3 in Indiana into 1 agency at Indianapolis; 2 in Michigan into 1 at Detroit; 4 in Illinois into 1 agency at Chicago; 4 in Wisconsin and Minnesota into 1 agency at Milwaukee, Wis.; 4 in Iowa and Nebraska into 1 agency at Des Moines; 4 in Missouri, Kansas, and New Mexico, into 1 agency at Saint Louis; and 2

agencies in California and Oregon into 1 agency at San Francisco, the consolidation to take effect July 1, 1877.

Under instructions issued by me, the consolidation was effected promptly and without confusion. Taking place at the end of the paymonth, the pensioners were more than usually prompt in applying for their pensions, which were due on the 4th of June, and comparatively few payments remained to be made in July and August, and the pay. ments being taken up at the consolidated agencies in most cases as early as July 20, and at all the agencies before the end of the month, but little inconvenience was experienced by the pensioners.

The quarterly payment which was due September 4, of 1877, involved the biennial examination of the invalid pensioners, and the agents were compelled to pay upon the rolls of the agencies which had been consolidated with their own, many of which had been imperfectly kept. This payment was watched with some degree of anxiety as the severest test which the plan of consolidation would ever be subjected to, but, notwithstanding the unfavorable circumstances under which the agents labored, that payment was made quite as promptly as the quarterly payments had been made prior to the consolidation.

I received a daily report from each agency during that month, beginning with the fourth day, showing the number of vouchers received by mail for payment, the number of pensioners paid by mailing their checks, and the number paid in person at the agency, and this report has been rendered to me during the pay month at each subsequent payment.

Of the 226,643 pensioners on the rolls on the 30th of June, 1877 (which number had not materially changed in September), 187,403 were paid in that month; 6,040 more would have been paid had the surgeon's certificates of biennial examination been received. Of these, 158,361 were paid by mail and 29,042 in person at the agencies. Those paid, augmented by the 6,040 which awaited the surgeons' certificates, aggregate 85 per cent. of all the pensioners upon the rolls. Each of the three subsequent payments within the year was more promptly and satisfactorily made than the September payment; so satisfactorily, indeed, to the pensioners that comparatively few complaints were heard in any quarter, except at the time of the temporary suspension of the payments in the New Orleans and New York agencies upon a change of agents. The following table is a compilation of the payments during the paymonth of each quarter since the consolidation; showing the number paid in each quarter during the first six days, during the first nine days, and during the month. The daily reports were continued through the whole March quarter, and the payments for each month are shown for that quarter; the total number of pensioners paid during the quarter being 212;871.

I think it may well be doubted whether there is any branch of the public service which is more efficiently administered than in the agencies for paying pensions.

The consolidation brought together at each of the consolidated agencies a large number of roll-books, which rendered the rolls very unwieldy. The rolls have since been consolidated and rewritten in new books.

The consolidation saved to the government in salaries of agents $142,000 during the year, and this reduction in expense is a permanent reduction. This sum added to the $340,172 saved by the increased efficiency of the clerical force makes a total saving in the operations of the Pension Bureau for the year ending June 30, 1878, upon the two items named, of $482,172.

By the act of Congress making appropriations for pensions for the current year, the compensation of the agents was fixed as follows: 1. A salary at the rate of $4,000 per annum.

2. Fifteen dollars for each 100 vouchers, or at that rate for a fraction of 100, prepared and paid by the agent, in excess of 4,000 vouchers per

annum.

3. Actual and necessary expenses for rent, fuel, and light, and for postage on official matter directed to the departments and bureaus at Washington.

The agents complain that their compensation, after paying the expenses of their agencies, is so greatly reduced by this act as to materially cripple the efficiency of their offices. I have inquired into the matter as fully as possible under the circumstances, and am of the opinion that they should have some further allowances made to them for the expenses of their agencies, but I have not full data upon which to base a recommendation, and will make the point the subject of a special communication at a later day.

It will be observed by the foregoing table of payments that the agents have not permitted the inadequacy of their compensation to interfere in any material degree with the promptness of the September payments of the current year, which fact should be set down to their greater credit.

ANNUAL REPORTS OF AGENTS FOR PAYING PENSIONS.

The Commissioner of Pensions has heretofore made up for his annual report a statement of the condition of the pension-rolls, from lists of pensions granted kept in his office, as they have from time to time been corrected by transferring to them information of deaths, remarriages, &c., furnished to him piecemeal by the several agents; and of the disbursements made on account of pensions by the agents, from their monthly accounts-current.

This method has never furnished exact information as to the number of pensioners of the several classes upon the rolls, nor a sufficiently particular account of the moneys disbursed.

In order to procure correct information upon these and other subjects, peculiarly within the knowledge of the agents, I required them to furnishi a report of their respective agencies, covering the last fiscal year. Upon these reports is based much of the statistical matter herein.

The whole number of pensioners on the rolls on the 30th of June last was 223,998. The whole number on the rolls at the beginning of the year, as shown by my report for 1877, was 232,104, but as now shown by the reports of the agents, the result of an actual count, the whole number on the rolls at that time was 226,643, showing a reduction in the number of pensioners, from all causes, of 2,645. The discrepancy be

tween the report of last year and this, in the number of pensioners upon the roll at the commencement of the year, is an aggregation of many years. No instance is remembered of a general comparison of the records in the agencies with the lists kept in this office, or of a count made by the agents of the pensioners on the agency rolls, and the result embodied in the Commissioner's annual report.

In view of the large number of agencies existing previous to July 1, 1877, and the great number of changes which occur to the roll each year from deaths, remarriages, and failure to draw pension, the difference in the figures is much less than might have been expected.

The reduction in the number of pensioners is to be charged to the large number of minors' pensions which have expired during the year, and not to deaths and remarriages, as will be observed upon comparing Tables II and III which show the additions and losses to the roll.

Owing to the large number of 1812 claims which will probably be settled during the current year, it is believed that the number of pensioners will be considerably increased by the end of the present year.

The entire amount appropriated for the payment of pensions during the year, exclusive of surgeons' fees and the salaries and fees of the agents, was $27,850,000, of which $26,530,792.10 was paid out for pensions; the balance of $1,319,207.90 will be returned to the Treasury. There was paid out during the year, on account of first payments to new pensioners, and such as once having been upon the rolls and dropped were restored, the sum of $2,992,352.17.

During the year $240,901.36 was retained from the pensioners and paid directly to the claim-agents who had assisted in the prosecution of the claims.

SUNDRY RECOMMENDATIONS.

1. In my last report I recommended that section 4702 Revised Statutes should be amended by adding a proviso that the pension to children should commence at the date of the last payment to the mother who had remarried, for the reason that a considerable number of widows who remarry conceal the fact from the government and continue to draw their pensions, and after the discovery of the remarriage and the wid ow's name dropped from the roll the children come in and claim the pension again from the date of the remarriage of the widow, notwithstanding the fact that they have lived with and been supported by her, thus compelling the government to pay the pension twice over the same period.

2. I also recommended that section 4717 Revised Statutes should be repealed for the reason that, under the rule of action adopted by the War Department, it worked a great hardship to many claimants, in whose cases the records are alleged to be incomplete or not in accordance with the facts. I respectfully renew both these recommendations.

3. The application of section 46984 Revised Statutes is attended by considerable confusion and often by palpable injustice. It prescribes that no increase of an invalid pension, except in cases of specific disabilities," shall commence prior to the date of the medical examination upon which the claim is adjusted.

There are many cases, such as the loss or permanent destruction of some material part of the body or limbs, in which the disability has been permanent in a degree in excess of that represented by the pension, from the time the injury was received; and others where the pension has been reduced through the mistaken opinion of an examining-surgeon or a misapprehension of the case by the Commissioner of Pensions at the time of the allowance of the original pension. The statute operates