of clerks, American and foreign. The Division of Railway Adjustment has charge of the arrangements for the railway transportation of mails-expending over $35,000,000 annually for this purpose. The national territory is divided into districts and in each district contracts are made with the railways for the transportation required. These contracts are based on the weight of the mails which is determined once every four years in each district. The powers of the other divisions are sufficiently explained by their names. The Third Assistant Postmaster-General has charge of the general finances of the Department, including: Post Office Treasuries. Stamp Supplies. Postmasters' Accounts. Registry. Redemption. Files and Records. Stamped Envelope Agent. Stamp Agent. The Fourth Assistant Postmaster-General directs matters relating to the personnel of the service and to the free delivery of mails; these are grouped as follows: Division of Appointments. Division of Bonds and Commissions. Division of Inspectors and Mail Depredations. Free Delivery Division, including city, rural and special delivery branches. The first three divisions are the most important, having charge of the personnel and the maintenance of its efficiency and honesty. In the Division of Appointments all papers referring to the appointment of the 74,000 postmasters in the United States are briefed and filed for the consideration of the Fourth Assistant, the Postmaster-General and the President. The establishment and discontinuance of post offices and the complaints against postmasters are also referred to this Division. The Division of Inspectors and Mail Depredations maintains a highly skilled corps of inspectors distributed through fifteen inspection districts which cover the United States and its dependencies. Their duties are to examine on the spot the accounts of postmasters, investigate all complaints, accidents to the mails, robbery and other interference with the business of the Department. In the course of this work they are obliged to vary their activities through a wide range of occupations from accountant to detective. It is largely through the efforts of this Division that all the more important irregularities in recent years were unearthed. These irregularities show not only the need of a larger force of inspectors, but also the necessity of a more thorough and careful utilization of their reports. The Division of Free Delivery is under the direction of a General Superintendent, who retains immediate control of the subject of special delivery, but delegates to two subordinate superintendents the branches of city delivery and rural delivery respectively. The city free delivery service was established on July 1, 1863, in 66 cities with 685 carriers. It has now been extended to 1,032 cities with 20,000 carriers. The rural free delivery system which was established on 44 routes in 1897 and has since grown to include 2,200 routes, marks the greatest advance of our postal system since the Civil War. It has been opposed in some sections because it tends to reduce the number of fourth-class post offices and thereby also the number of political appointments open to party workers, but to the masses of the farming population it has proved a great boon and the demand for the establishment of new routes far exceeds the available appropriations. Newer Problems.-1. The Magazine Rates.-All magazines and periodical publications are carried in the mails as second-class matter on which the charge is one cent per pound. The government pays the railways much more than this to carry such matter. One-half or more of the weight of a magazine, and all the profit, are in the advertising pages. It is the advertising which causes the unusual cost of carriage. This expense has been sharply criticized by many who contend that the post office should pay its own way and should be run as a business enterprise. But by means of this second-class rate the low-priced magazines representing many million copies weekly and monthly have been enabled to reach out through the country until the people are provided in this way with a cheap weekly review of current events, fiction, popular science, etc. It has been calculated that although we buy fewer books proportionately than any civilized people except Russia, we read many times more magazines than any other nation. So small is the margin of profit on each copy of these magazines than an increase of a cent or two per pound in the postage rates would put most of them out of business. Such a charge would be a serious loss to the public and would be a step backward in our national progress. An increase in the rate has been resisted thus far, but a compromise by which the advertising pages will pay more, seems probable. 2. One-Cent Letter Postage.-An influential section of the business world is now discussing the possibility of a one-cent rate for letters. The contention is that if the magazines were charged the higher rate which in justice they should pay, there would be such a large surplus in the postal department as to allow of a reduction to one cent in the rate on letters. This would be a great boon to the business community. It is claimed that the two-cent letter rate now yields an actual surplus which is eaten up by the deficit on magazine postage. The magazine publishers however contend that their advertising pages originate a large number of inquiries and correspondence at the letter rate and that no real economy would be effected by the change in rates. 3. The Post Telegraph.-A government ownership and operation of the telegraph has been frequently proposed with a view to cheapening the cost to the public. Strong arguments are adduced on each side, the chief grounds in favor being lower rates and the success of foreign governments in this field; while against the plan, the alleged lower efficiency and slowness of transmission in foreign systems are urged together with the general danger of Socialism. A committee appointed by the Postmaster to investigate the subject, reported in 1913 in favor of government management of both telegraph and telephone and urged that the post offices be used for this purpose in order to effect economies in management. Bankruptcy. The protection of business men against fraudulent bankrupts and debtors is one of the difficult problems confronting the National Government. Section 8, Article I, gives Congress the power to pass "Uniform Laws on the subject of Bankruptcies throughout the United States." Trade between the States has grown to such a point that it is difficult, if not impossible, for the creditors of a firm doing business in several commonwealths to protect their interests under all the varying State laws. For this reason the power to establish a uniform law was wisely given to Congress. For many years this power was not exercised, and as some regulation was necessary the States themselves passed bankruptcy acts. In 1867, a Federal law was enacted by Congress which superseded the State rules. But in 1878, the Federal law was repealed and the former State laws once more became valid. Finally in 1898, in response to the general demand of business interests, Congress again passed a law regulating bankruptcy, which was amended in 1901, 1903 and 1910, and the State laws were once more superseded by a uniform national rule. These changes in the law are interesting, not only as they affect bankruptcy, but as they show the supremacy of and the need for national legislation on those subjects which are given to the control of Congress. They illustrate the rule that where the Constitution has granted to Congress a power which, however, Congress does not see fit to exercise, the State governments may generally issue regulative acts of their own on the subject; these acts are valid and binding until Congress exerts its power to regulate, when the State laws are superseded by the Federal Act. Should Congress at any time repeal its laws, the State regulations again become valid. The United States Bankruptcy Act, as amended in 1910 provides that the Federal District and Territorial courts of the United States shall have jurisdiction over bankruptcy. Upon a petition being filed by creditors in a Federal court asking that a debtor be declared bankrupt, the court summons the defendant, and invites his creditors to prove their claims under the usual legal forms; a jury trial may be granted if the court so decides. An application or petition for involuntary bankruptcy is granted against a debtor when he commits any of the following acts of bankruptcy:-if he conveys, transfers, removes any part of his property with intent to hinder, delay or defraud his creditors; Transfers while insolvent any portion of his property to certain creditors with the intent to grant them a preference over other creditors; Allows, while insolvent, any creditor to secure preference by legal proceedings; Makes a general assignment for the benefit of his creditors or applies for a receiver or trustee in insolvency, or where such a receiver or trustee has been appointed under the law; Admits in writing his inability to pay his debts and his willingness to be adjudged a bankrupt; a person or corporation may also be adjudged an involuntary bankrupt upon default of payment after an impartial trial. After the court has considered the applicacation of the creditors and the debtor's rejoinder, it either rejects the application and allows the debtor to continue, as before, in control of his own affairs, or it finds him to be bankrupt and appoints a referee and a trustee to manage his property. The work of the referee is to find and recommend to the court a solution of the whole problem so as to incur as little loss as possible for both sides. He takes charge of the proceedings, receives the claims, makes up a list of the assets, and in general administers the estate of the bankrupt. The trustee receives the property under the direction of the referee and of the Court, collects and reduces to money the assets of the estate and disburses them, making a final account or report, and pays the dividends as declared by the referee. Both referee and trustee are paid partly in a fixed sum and partly in a percentage of the bankrupt's estate. The Court calls meetings of the creditors when necessary for the presentation and proof of their claims and for the approval of any compromise or composition which may be offered. The Act also fixes an order of priority of claims against the estate and provides that any bankrupt who conceals his assets or makes a fraudulent statement concerning them may be punished. After the proceedings have been closed a motion may be made for the discharge of the bankrupt. If the Court decides favorably on this motion, the bankrupt may then be legally freed from further responsibility for his debts, except:-taxes, claims for property which he has secured by false pretences, debts for willful or malicious injuries or alimony for the support of his wife or child or other criminal penalties, those debts which have not been duly listed in time for proof during the proceedings of bankruptcy, unless the creditor had notice of the proceedings, and finally those debts which were created by fraud, embezzlement or defalcation while acting in a position of trust. These provisions of the law have had a strong, helpful influence in the protection of both creditors and debtors, but further government supervision is needed to shield the creditor from certain notorious abuses. It has become customary for fraudulent debtors to set up as wholesale or retail merchants, usually in the form of a partnership or trading company, to pay promptly for their goods until they have established a commercial rating, and then suddenly to buy large consignments on credit from many different firms, to ship their goods from their stores to distant points where they are sold at auction, while the firm suddenly declares itself insolvent and either "loses" its books or burns them. The members profess complete ignorance of the causes of their failure, and are usually found to have no personal assets when bankruptcy proceedings commence. Hitherto this practice has been combatted by the National Association of Credit Men, but most creditors prefer not to "throw good money after bad," and will often refuse to prosecute or to pay the expense of a thorough investigation unless the loss is a heavy one and the proof of fraud is clear. As long as the initiative and the cost of detecting fraudulent debtors and restoring stolen property depends entirely upon the private creditor, there must always be a standing invitation to dishonesty in such a system. The only remedy is a complete control of fraudulent bankruptcies by the Federal Government, and a sufficiently large national appropriation to cover the detection of such crimes and the recovery of the sums involved. Such a plan would effectively discourage the systematic bankruptcy frauds now practiced, and would offer to all creditors a much-needed protection. One of the difficulties yet to be overcome is in the administration of the bankruptcy act. The law itself is excellent in purpose and scope but it has been hampered by the appointment of incapable referees. In the event of a fraudulent bankruptcy, all the chances of escape favor the bankrupt; he may plan for months, or in some cases years ahead, to defeat the law and in such cases it is difficult if not impossible to detect the well-laid plans for concealment of assets or their transfer to other members of the conspiracy. The 1 The following is a typical case reported in the Bulletin of National Association of Credit Men, November, 1913. Sam. L- and Sarah L, his wife, operate separate stores in a western city. Sarah L fails with total liabilities of $35,000 widely distributed among various creditors in the northwest. One of the creditors, with a claim of $700 suspects fraud and communicates with the others, asking that an investigation be made and that the consent of the creditors be not given to any discharge or settlement until the claims of all are satisfied in full. The other creditors answer that undoubtedly the case is fraudulent but that there is no proof whatever obtainable and that it would be useless to spend further funds; they advise that a settlement of 25c on the dollar be accepted. This the $700 creditor refuses. He employs an attorney of ability who puts detectives on the case and the following facts are soon discovered: Sarah Lhas been conducting a series of cut-price sales in many instances at figures below what the goods could be purchased for; shortly before her failure she sends a large part of her stock to her husband's store, where it is packed in |