city, town, village, and other locality shall be deposited in banks located therein (substantially in proportion to the capital and surplus of each such bank) willing to receive such deposits under the terms of this act and the regulations made by authority thereof: Provided, however, if one or more member banks of the Federal Reserve System established by the act approved December twentythird, nineteen hundred and thirteen, exists in the city, town, village, or locality where the postal savings deposits are made, such deposits shall be placed in such qualified member banks substantially in proportion to the capital and surplus of each such bank, but if such member banks fail to qualify to receive such deposits, then any other bank located therein may, as hereinbefore provided, qualify and receive the same. If no such member bank and no other qualified bank exists in any city, town, village, or locality, or if none where such deposits are made will receive such deposits on the terms prescribed, then such funds shall be deposited under the terms of this act in the bank most convenient to such locality. If no such bank in any State or Territory is willing to receive such deposits on the terms prescribed, then such funds shall be deposited with the treasurer of the board of trustees and shall be counted in making up the reserve of five per centum. Such funds may be withdrawn from the treasurer of said board of trustees, and all other postal savings funds, or any part of such funds, may be at any time withdrawn from the banks and savings depository offices for the repayment of postal savings depositors when required for that purpose. If at any time the postal savings deposits in any State or Territory shall exceed the amount which the qualified banks therein are willing to receive under the terms of this act, and such excess amount is not required to make up the reserve fund of five per centum hereinbefore provided for, the board of trustees may invest all or any part of such excess amount in bonds or other securities of the United States. When, in the judgment of the President, the general welfare and interests of the United States so require, the board of trustees may invest all or any part of the postal savings funds, except the reserve fund of five per centum herein provided for, in bonds or other securities of the United States. The board of trustees may in its discretion purchase from the holders thereof bonds which have been or may be issued under the provisions of section ten of the Act of June twenty-fifth, nineteen hundred and ten. Interest and profit accruing from the deposits or investment of postal savings funds shall be applied to the payment of interest due to postal savings depositors, as hereinbefore provided, and the excess thereof, if any, shall be covered into the Treasury of the United States as a part of the postal revenue: Provided further, That postal savings funds in the treasury of said board shall be subject to disposition as provided in this Act, and not otherwise: And provided further, That the board of trustees may at any time dispose of bonds held as postal savings investments and use the proceeds to meet withdrawals of deposits by depositors. For the purposes of this act the word "Territory" as used herein shall be held to include the District of Columbia, the District of Alaska, and Porto Rico, and the word "bank" shall be held to include savings banks and trust companies doing a banking business.

Sec. 3. That the Postmaster General, in cases of emergency, between October first and April first of any year, may hereafter return to

the mails empty mail bags theretofore withdrawn therefrom as required by law, and for such times may pay for their railroad transportation out of the appropriation for inland transportation by railroad routes at not exceeding the rate per pound per mile as shown by the last adjustment for mail service on the route over which they may be carried, and pay for necessary cartage out of the appropriation for freight or expressage.

Sec. 4. That when, during a weighing period, on account of floods or other causes, interruptions in service occur on railroad routes and the weights of mail are decreased below the normal, or where there is un omission to take weights, the Postmaster General, for the purpose of readjusting compensation on such railroad routes as are affected thereby, is hereafter authorized, in his discretion, to add to the weights of mails ascertained on such routes during that part of the weighing period when conditions are shown to have been normal the estimated weights for that part of the weighing period when conditions are shown to have been not normal, or where there has been an omission to take weights, based upon the average of weights taken during that part of the weighing period during which conditions are shown to have been normal, the actual weights and the estimated weights to form the basis for the average weight per day upon which to readjust the compensation according to law on such railroad routes for the transportation of the mails, notwithstanding the provision of the Act of Congress approved March third, nineteen hundred and five, requiring that the average weight shall be ascertained by the actual weighing of the mails for such a number of successive working days, not less than ninety, as the Postmaster General may direct: Provided further, That readjustments from July first, nineteen hundred and thirteen, may be made under this provision on routes in the first section affected by the floods in the Ohio Valley and tributary territories, commencing about March twenty-fifth, nineteen hundred and thirteen.

Sec. 5. That so much of section four of "An Act making appropriations for the service of the Post Office Department for the fiscal year ending June thirtieth, nineteen hundred and thirteen, and for other purposes," approved August twenty-fourth, nineteen hundred and twelve, as provides that no adjustment shall be made unless the diverted mails equal at least ten per centum of the average daily weight on any of the routes affected is hereby repealed.

Sec. 6. That section thirty-nine hundred and forty-nine of the Revised Statutes be amended to read as follows:

"All contracts for carrying the mail shall be in the name of the United States and shall be awarded to the lowest bidder tendering sufficient guaranties for faithful performance in accordance with the terms of the advertisement: Provided, however, That such contracts require due celerity, certainty, and security in the performance of the service; but the Postmaster General shall not be bound to consider the bid of any person who has willfully or negligently failed to perform a former contract."

Sec. 7. That whenever in the judgment of the Postmaster General the bids received for any star route are exorbitant or unreasonable, or whenever he has reason to believe that a combination of bidders has been entered into to fix the rate for star-route service, the Postmaster General be, and he is hereby, authorized, out of the appropriation for

inland transportation by star routes, to employ and use such means or methods to provide the desired service as he may deem expedient, without reference to existing law or laws respecting the employment of personal service or the procurement of conveyances, materials, or supplies.

Sec. 8. That whenever an accepted bidder shall fail to enter into contract, or a contractor on any mail route shall fail or refuse to perform the service on said route according to his contract, or when a new route shall be established or new service required, or when, from any other cause, there shall not be a contractor legally bound or required to perform such service, the Postmaster General may make a temporary contract for carrying the mail on such route, without advertisement, for such period as may be necessary, not in any case exceeding one year, until the service shall have commenced under a contract made according to law: Provided, That the cost of temporary service rendered necessary by reason of the failure of any accepted bidder to enter into contract or a contractor to perform service shall be charged to such bidder or contractor.

Sec. 9. That if any person shall hereafter perform any service for any contractor or subcontractor in carrying the mail, he shall, upon filing in the department his contract for such service and satisfactory evidence of its performance, thereafter have a lien on any money due such contractor or subcontractor for such service to the amount of same; and if such contractor or subcontractor shall fail to pay the party or parties who have performed service as aforesaid the amount due for such service within two months after the expiration of the month in which such service shall have been performed the Postmaster General may cause the amount due to be paid said party or parties and charged to the contractor: Provided, That such payment shall not in any case exceed the rate of pay per annum of the contractor or subcontractor.

Sec. 10. That the Act of March fourth, nineteen hundred and nine (Thirty-fifth Statutes, page eleven hundred and twenty-six), be amended to read as follows:

"That whoever shall willfully or maliciously injure, tear down, or destroy any letter box or other receptacle intended or used for the receipt or delivery of mail on any mail route, or shall break open the same, or shall willfully or maliciously injure, deface, or destroy any mail deposited therein, or shall willfully take or steal such mail from or out of such letter box or other receptacle, or shall willfully aid or assist in any of the aforementioned offenses, shall for every such offense be punished by a fine of not more than $1,000 or by imprisonment for not more than three years."

Sec. 11. That the limit of weight of mail matter of the first class shall be the same as is applicable to mail of the fourth class: Provided, That no article or package exceeding four pounds in weight shall be admitted to the mails under the penalty privilege unless it comes within the exceptions named in the Acts of June eighth, eighteen hundred and ninety-six (chapter three hundred and sev enty, Twenty-ninth Statutes, page two hundred and sixty-two), and June twenty-sixth, nineteen hundred and six (chapter thirty-five hundred and forty-six, Thirty-fourth Statutes, page four hundred and seventy-seven).

Sec. 12. That postage stamps affixed to all mail matter or to stamped envelopes in which the same is inclosed shall, when deposited for mailing or delivery, be defaced by the postmaster at the mailing office: Provided, That when practicable postage stamps may be furnished to postmasters precanceled by printing on them the name of the post office at which they are to be used, under such regulations as the Postmaster General may prescribe.

Sec. 13. That section two of the Act of April twenty-eighth, nineteen hundred and four (chapter seventeen hundred and fifty-nine, Thirty-third Statutes, page four hundred and forty), be amended to read as follows:

"That under such regulations as the Postmaster General may establish for the collection of the lawful revenue and for facilitating the handling of such matter in the mails it shall be lawful to accept for transmission in the mails, without postage stamps affixed, quantities of not less than three hundred identical pieces of third-class matter and of second-class matter and two hundred and fifty identical pieces of fourth-class matter, and packages of money and securities mailed under postage at the first or fourth class rate by the Treasury Department: Provided, That postage shall be fully prepaid thereon at the rate required by law for a single piece of such matter."

Sec. 14. That the Act approved January twenty-first, nineteen hundred and fourteen (Thirty-eighth Statutes, page two hundred and seventy-eight), authorizing the Postmaster General to adjust certain claims of postmasters for loss by burglary, fire, or other unavoidable casualty, be so amended as to include Navy mail clerks and assistant Navy mail clerks.

Sec. 15. That hereafter the Postmaster General may enter into contracts for the conduct of contract stations for a term not exceeding two years.

Sec. 16. That on and after July first, nineteen hundred and sixteen, when the total compensation of any postmaster at a post office of the fourth class for four consecutive quarters shall amount to $1,000, exclusive of commissions on money orders issued, and the receipts of such post office for the same period shall aggregate as much as $1,900,. the Auditor for the Post Office Department shall so report to the Postmaster General, who shall, in pursuance of such report, assign such post office to its proper class, to become effective at the beginning of the next succeeding quarterly period, and fix the salary of the postmaster accordingly.

Sec. 17. That all laws or parts of laws in conflict with the provisions of this Act are hereby repealed. And the Senate agree to the same.

JOHN A. MOON,

D. E. FINLEY,

H. STEENERSON,

Managers on the part of the House.
J. H. BANKHEAD,

E. D. SMITH,

CHARLES E. TOWNSEND,

Managers on the part of the Senate.

STATEMENT OF THE MANAGERS ON THE PART OF THE HOUSE.

The managers on the part of the House make the following written statement in explanation of the action agreed upon by the conference committee submitted in the accompanying conference report:

Page 2, section 2, line 10: The words "a reserve bank created by the Federal Reserve" have been stricken out and in lieu thereof the following inserted: "the Federal Reserve System established by the." This change was made in order to give the Federal Reserve System its accurate title.

Page 3, lines 7 and 8: The words "a reserve bank created by the Federal reserve act" have been stricken out and in lieu thereof the following inserted: "the Federal Reserve System established by the act." This change was made in order to give the Federal Reserve System its accurate title.

Page 4, lines 6 to 12: So much as relates to the investment of postal savings funds is stricken out and in lieu thereof provision is made that when the banks in a State refuse or are unable to accept postal savings deposits originating in that State and the deposits are not needed to make up the 5 per cent reserve fund the board of trustees are empowered to invest such funds. The authority conferred upon the President to direct the investment of postal savings funds when, in his judgment, the general welfare and interests of the United States so require is continued in the exact terms of the original postal savings act.

This section also modifies the present laws in two other important respects. At present only member banks of the Federal Reserve System are eligible to receive postal savings deposits. Postal savings deposits under this section as agreed upon may be made in both member and State banks, but preference is given to member banks. If, however, a member bank in a community is unwilling to accept the deposits, or if there is no member bank in that locality, a State bank may qualify as a postal-savings depository and receive the funds.

Under present laws the board of trustees are authorized to accept only bonds or other securities supported by the taxing power as security for postal-savings deposits. The bill agreed upon goes further by authorizing the board of trustees to accept as security for postal-savings deposits not only bonds or other securities supported by the taxing power, but also bonds or other securities authorized by act of Congress.

Section 3: Entire section stricken out.

Section 4: Entire section stricken out.

Reason: Both sections are embraced in the Post Office appropriation bill (H. R. 10484) which passed the House February 28, 1916. If adopted would require an appropriation to carry out provisions.

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