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an irregular manner and when found such correspondence is handed over to the Postal Authorities, and double the deficient postage levied, in accordance with the rules of the Postal Union, on delivery to the addressees; or it is returned to the Post Office through which it should have passed in the first instance. Under the Convention of Vienna the deficient postage and fine on returned correspondence is recoverable from the sender, and when possible it is recovered, but it does not often happen that the sender can be discovered in such cases. In the event of such correspondence being found to have been sent through the Agency of one of these illicit Post Offices perhaps a prosecution might have some good effect. The law having been explained to them they cannot now plead ignorance of it.

15. The need of more suitable accommodation for carrying on the work of the Department is every year becoming more urgent. The simultaneous despatch of heavy mails such as the English and American, the French and the Canadian is becoming more frequent, and, at such times, not only is the work of closing the mails considerably hampered for want of sufficient room in which to deal with them, but the inconvenience to the public is very great owing to the impossibility from the same cause of providing extra facilities for the sale of Stamps. And when, as often happens in the summer, the inward French Mail arrives while the outward French Mail is being despatched, the want of room renders it impossible to deal with the arrival as expeditiously as we desire. And not only is the accommodation inadequate for the work that has to be got through, but the Office is so dark that much of the work has to be done by gas light, which is not only a source of much discomfort to the Staff, but is also very detrimental to health. Strangers passing through the Colony who are acquainted with the commodious Post Offices in other towns to which the City of Victoria does not hold second rank have often remarked upon the darkness and incommodiousness of this Office. It is to be hoped that measures will be soon taken to provide lighter and more roomy Offices in which the ever-growing work of the Department can be carried on, not only with less detriment to the health of the Staff, but also to the greater satisfaction of the community at large. The present building may have sufficed in the early days of the Colony when mails were less frequent than they are now, but no unprejudiced person will I think deny that it is not sufficient for the requirements of the present day.

16. Mainly from the necessity of having to perform so much of the work of the Office in an atmosphere overheated by gas and laden with dust stirred up by handling the large number of Mail Bags that are almost constantly being received and despatched, the health of the Staff has, as in former years, been very unsatisfactory and hardly a week has passed without the absence through sickness of one or another of the Staff at a time when he could ill be spared. This could be remedied by lighting the Office with the Electric Light, as was shown by the Postmaster General in his Report last year.

17. Table F shews the Revenue and Expenditure for the year as compared with that of 1891 :-

The Revenue in 1891 was,

11

$142,770.03 $157,699.03

in 1892

"7

Increase,

$ 14,929.00

The Expenditure in 1891 was,

.$ 140,165.01

in 1892

$ 154,248.30

**

"3

27

Increase,

...$ 14,083.29

If we deduct this from the Increase of Revenue,...$ 14,929.00

The nett increase of Revenue is,

.$ 845.71

The increase of Expenditure is due to the low rate of Exchange, and the change in the system of accounting referred to below. During the year a sum of $1,171.66 on account of transit charges due to this Colony for the year 1891 was collected. This amount as well as a sum of $171.18 interest on Money Order transactions has been passed to the credit of 'Miscellaneous Receipts' instead of being credited to Postal Revenue as in former years. If these sums had been credited to Postal Revenue, the total amount of Revenue for last year would have been $159,041.87, and there would have been a nett increase to the Revenue of $469.78.*

E Revenue 1891,

Refund of Postage..... Interest on Money Order Fund,..........

.$142,770.03 1,568.42

Revenue 1892, Refund of Postage,

.$157,699.03

1,171.66

150.35

Interest on Money Order Fund,..

171.18

$144,488.80

$159,041.87

Deduct Revenue 1891,

144,488.80

Increase,

Deduct Increase Expenditure,

14,553.07 14,088.29

Nett Increase Revenue,

Formerly included in Postal Revenue, since 1891 carried to "Miscellaneous Receipts."

469.78