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 neve, 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 furnish 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 between 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 widow'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 4698 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 unjustly in all these cases, and I respectfully recommend that it be so amended as to extend to them the exception made in "specific-disability" cases.

CHANGE IN SYSTEM OF SETTLING CLAIMS.

In my annual report for each of the two last years, I took occasion to recommend that the system of settling pension claims be so changed as to bring claimants and their witnesses face to face with officers of the government, by dividing the country into districts, and assigning one learned surgeon and one competent clerk to each district, who should go from place to place in the district and collect the testimony offered in support of the claims. Another year's observation and experience has only tended to confirm my opinion that such a change is necessary, and that it is both feasible and economical.

I respectfully renew my recommendation upon this subject, and invite attention to the considerations set forth at length in my former reports in support of the recommendation.

BIENNIAL EXAMINATIONS.

The law now provides for a very sweeping examination of the invalid pensioners every odd-numbered year. So general and frequent an examination of these pensioners is, in my judgment, no longer necessary. The necessity for these examinations rested upon the presumption that the degree of disability for which the invalid pensions were allowed would, from year to year, become less.

The average age of the soldiers of the war of the rebellion, from whose ranks the invalid pensioners mainly come, at the time of their enlistment, was 25.8 years, and taking 1863 as the mean year their average age is 41 years; few of them all are less than 36 years, while a very great number are 40 years and upward.

The disabilities for which pensions are now paid, or will hereafter be allowed, are of 13 to 17 years' standing, and it needs no argument to prove that there will be very few cases in which the disability of so long standing, in men of such advanced years as have now been reached by the survivors of the late war, will become of less degree than it now is. It seems, therefore, only necessary to secure a thorough examination of the invalid pensioners upon the present pension-list, and a fair rating or their present disabilities, and a just rating of such cases as shall hereafter be allowed, in order to dispense with nearly all periodical examinations of the pensioners, and I respectfully recommend that the biennial examinations of the invalid pensioners be dispensed with. The repeal of sections 4771, 4772, and 4773 Revised Statutes, and the enactment in their place of a provision authorizing the Commissioner of Pensions to cause any pensioner to be examined by a surgeon whenever he shall deem such examination necessary, and to reduce or increase the rate of pension as justice may require, will be the only legislation necessary to effect this object.

INCREASE OF SALARIES.

Your attention is invited to the duties and salaries of the chief clerk, the chiefs of the five principal divisions of the office, and of the law clerk. The duties of the chief clerk of this bureau not only extend to the general supervision of the entire force of the office, but to the examination

and decision of many intricate questions of law and fact which are involved in the cases, during the temporary absence of the Commissioner, or in case of a temporary vacancy in that office he is Acting Commissioner, and performs the duties of that officer; and since February, 1877, there has been no Deputy Commissioner, and the chief clerk has divided with the Commissioner the duties theretofore performed by that officer. It will be seen that the office of chief clerk of the bureau is not only a very important one, but that the duties are exceedingly arduous and delicate. The salary is $2,000 per annum, while the salary of the chief clerks of several other bureaus in the government ranges much higher. It is no detraction from the importance of the duties of the chief clerks of the Supervising Architect of the Treasury, United States Treasurer, Light-House Board, and Patent Office, to say that the duties of the chiefTM clerk of this bureau are as important and arduous as are theirs. The salaries of these range from $2,250 to $2,500.

The law clerk of the bureau is a fourth-class clerk. His duties are both responsible and arduous; they require both learning and experience in the law. A similar position in the General Land Office is paid $2,000 per annum.

The force of the office engaged in the work of examining and settling the claims, making the records, and supervising the agencies for paying the pensions is divided into five principal divisions, each under the charge of a clerk of class four, denominated a chief of division. Each of these divisions has attached to it a large number of persons, to wit: Invalid Division, 101; Widows Division, 62; Old War, Navy, and Bounty Land Division, 95; Special Service Division, 41; Division of Records and Accounts, 37. The duties of all the chiefs are not only very laborious but very responsible, in each case not inferior to some of the smaller bureaus, and equal to the largest and most important divisions in any of the departments or bureaus, and require the best talent and ability. The chiefs of important divisions elsewhere are paid from $2,100 to $2,500 per annum. In a few cases still larger salaries are paid.

Both justice and the interests of the service will, in my opinion, be subserved by increasing the salary of the chief clerk to $2,250 per annum, and by providing an additional allowance at the rate of $200 per annum to the law clerk, and $300 per annum to the chiefs of the five principal divisions; all of which I respectfully recommend.

CLAIM-AGENTS.

By an act passed June 20, 1878, Congress reduced the fee which claimagents may charge for their services in the prosecution of a pensionclaim from $25 to $10; prohibited the filing of fee-contracts with the Commissioner of Pensions; repealed the provisions for the collection of their fees through the agent for paying pensions, leaving them to make their own collections from their clients, and withdrew from the Commissioner of Pensions all discretion in relation to the amount of the claimagent's fee, both in cases which had been filed and in those which should thereafter be filed.

The principal features of this act were suggested and recommended by me in a letter addressed to Hon. A. V. Rice, chairman of the Committee on Invalid Pensions, House of Representatives, January 21, 1878, from which I quote the portion directly bearing upon this subject:

There is another feature of the present system which is very objectionable, to wit, the provision relating to the fees of attorneys. In one class of cases it is unlawful for an attorney to receive any fee whatsoever for his services (see last clause, sec. 4711 Re