To avoid the great expense of bringing up the arrears, and to insure the extinction of unknown liabilities, it was found necessary to obtain an Act of Parliament calling in the outstanding Money Orders. Concurrent efforts were made to bring up the more recent arrears, and to prevent the possibility of new ones arising. And eventually the liabilities of the department were ascertained, and a general balance was struck, which has since been repeated quarterly. On a full investigation of the accounts I found that the Department was not only, as I had anticipated, unprofitable, but involved an annual loss of no less than £10,000. I, however, found it practicable to introduce, by successive improvements, such simplification in the arrangements as, with increased convenience to the public, and increased accuracy in the accounts, with better pay and more relaxation to the clerks, to convert this loss into a gain, which amounted for the year 1850 to £3,236, and which, under my brother, Mr. Frederic Hill, who has subsequently carried on the Department in the same spirit of improvement, amounted last year to £11,664, making an effective saving within five years of upwards of £21,000 per annum. As regards the Post Office generally, the amount of saving which may still be effected is a matter of so much uncertainty, that I hesitate to offer any estimate. I can only say that it may be assumed, as I think it may, that every Department of the service can be gradually improved to the same extent as the Money Order Office (the only one which has been confided entirely to my care), it follows that in the course of a few years, not only may the public be better served, and the men, if necessary, better paid, but savings may be effected to an extent of about £200,000 a year, in addition to the saving of £100,000 a year, which, if required, I should be prepared to show has already been made. But of late a new motive has arisen for the proposed change. The augmentation of letters is not only in constant progress, but has for some time moved forward with increasing celerity. Without some change, no doubt is entertained in the office, that the present building will soon be not only too small for the transaction of the business, but so much too small, as that no increase of its limits by practicable additions will answer the requirements of the service; and consequently that a most expensive outlay--probably not less than half a million--will be required for a new Post Office. If placed, however, in the position contemplated, I shall be enabled, as I confidently expect, to make, under your Lordship's sanction, such improvements as will avert this impending necessity for years, if not remove it altogether. The result of my experiments in the Money Order Office has been to show the great power which the simplification of arrangements has in lessening the quantity of labour, and, as a consequence, the quantity of space required for its performance.