The act of Congress establishing the money order system limited the amount for which a single order could be issued to a maximum of $30 and a minimum of $1. It was stated by Postmaster-General William Dennison on 2 Nov. 1864, the day following the opening of the service, that °The limit of $30 is believed to be sufficiently large to include all that class of remittances now sent in money through the mails, but in exceptional cases more than one order can be procured? As a basis for this statement it was shown that the average amount contained in "money)) letters received at the dead letter office during the fiscal years 1862, 1863 and 1864 was $4.53, $4.20 and $5.18, respec tively. However, before the service had com pleted its first year of operation, experience showed that so many applicants desired to send larger amounts through the mail that the labor imposed by the necessity of writing several orders to cover the remittances handicapped the economical operation of the system. This condition resulted in a recommendation to Con gress by Postmaster-General Dennison on 15 Nov. 1865 for the increase of the maximum amount of orders to $50, which was accepted in the act approved 12 June 1866. The present restriction on the amount for which an order may be issued is $100. The reasons which led to this amount being fixed as the maximum were substantially the same as those already recited for increasing it from $30 to $50. The desirability of the present maximum was sug gested as early as 1866, but it was not until 3 March 1883 that Congress authorized it.
The growth of the system and the con tinuous simplification of business methods are reflected in the reductions that have been made from time to time in the money-order fees, the principal source of revenue from the business. It is a noteworthy fact that with few excep tions the growing transactions of the system have permitted successive decreases in the charges to the public. These reductions were uniformly recommended to Congress whenever the receipts derived from the operation of the system were substantially greater than the ex penses. The present low schedule is the re sult of the extensive patronage of the system by the public and the progress that has been made in handling the business economically.
It was prophesied by Postmaster-General Dennison on 2 Nov. 1864 that "The establishment of the (money-order) system in this country will no doubt lead to arrangements for the inter change of international money orders with the several foreign countries with which we have direct postal arrangements. ' This prediction was fulfilled on 27 July 1868 when the President signed an act authorizing the Postmaster-General to make conventions for exchange of orders with countries with which the Department had negotiated postal conventions. It was not until over a year later, however, that the first convention was con cluded.
The service was initiated with Switzerland, pursuant to the terms of a convention signed at Washington on 2 July 1869 by the Post master-General, under the authority given by the act of 27 July 1868 and at Berne on 26 July 1869 by the chief of the Federal Post Department of Switzerland. The new service commenced on 1 Sept. 1869, 150 post offices in this country being authorized to issue and pay the international orders.
Service was next established with Great Britain on 2 Oct. 1871. Germany and Canada were the next countries with which conven tions were concluded. The service has gradu ally been extended to other countries until at the present time conventions for the exchange of money orders exist with more than 50 foreign postal administrations.
The year 1880 saw important modifications in the terms of the original conventions with the United Kingdom of Great Britain and Ireland, the German empire and the Dominion of Canada. At the time the original conven tions with these countries were concluded the value of United States currency was below par of gold and was continually fluctuating, which made it impossible for the issuing post master to draw the order for a fixed sum in the money of the country of payment and con fined the actual exchange of orders between the respective countries to certain °international exchange offices? The postmaster at the or dinary international money-order office would draw on the exchange office and the latter would make the conversion from the money of one country to that of the other at the market rate of gold prevailing in New York. When the currency of this country became stable, therefore, a simplification of the mode of pro cedure in the exchange of orders was made possible. Under the new method the post master at the inland international money-order office was able to issue the order for a de terminate amount by the use of conversion tables supplied him. The rate of commission to be paid by each postal administration was lowered and the cost of the interchange of orders between the contracting countries was further reduced by the diminution of the num ber and cost of the blanks and the amount of clerical labor required. These economies per $50 to $100 instead of two orders as theretofore. Following is a table showing the growth of the service from the time of its inauguration in 1864 to the close of the fiscal year which ended 30 June 1918: mitted the United States to lessen materially the fees charged for the issue of orders to the countries concerned.
In line with the increase in the maximum amount of domestic orders to $100, which was authorized on 3 March 1883 the limitation on international orders was raised to a like amount by the act of Congress approved 30 Jan. 1889. Besides the advantage in uniformity between the two services that was gained by this legis lation, the change tended to reduce the expense of the international system because only a single order was then required for sums from International money-orders are of two kinds — those issued on what is known as the ((domestic basis') and the ((international basis' In the former class the orders are drawn on the ordinary domestic form and settlement is made between the two countries involved on the exchange of paid orders. In the latter class the orders issued in each country are recorded on descriptive lists at an exchange office designated for the pur pose and accounts are settled on the basis of such lists, care being taken to give due credit to the country of origin for the amounts of orders not presented for payment within one year from the time of issue.