You are referred to the report of the Secretary of the Navy for a satisfactory view of the operations of the Department under his charge during the present year. In the construction of vessels at the different navy-yards and in the employment of our ships and squadrons at sea that branch of the service has been actively and usefully employed. While the situation of our commercial interests in the West Indies required a greater number than usual of armed vessels to be kept on that station, it is gratifying to perceive that the protection due to our commerce in other quarters of the world has not proved insufficient. Every effort has been made to facilitate the equipment of the exploring expedition authorized by the act of the last session, but all the preparation necessary to enable it to sail has not yet been completed. No means will be spared by the Government to fit out the expedition on a scale corresponding with the liberal appropriations for the purpose and with the elevated character of the objects which are to be effected by it.

I beg leave to renew the recommendation made in my last annual message respecting the enlistment of boys in our naval service, and to urge upon your attention the necessity of further appropriations to increase the number of ships afloat and to enlarge generally the capacity and force of the Navy. The increase of our commerce and our position in regard to the other powers of the world will always make it our policy and interest to cherish the great naval resources of our country.

The report of the Postmaster-General presents a gratifying picture of the condition of the Post-Office Department. Its revenues for the year ending the 30th June last were $3,398,455.19, showing an increase of revenue over that of the preceding year of $404,878.53, or more than 13 per cent. The expenditures for the same year were $2,755,623.76, exhibiting a surplus of $642,831.43. The Department has been redeemed from embarrassment and debt, has accumulated a surplus exceeding half a million of dollars, has largely extended and is preparing still further to extend the mail service, and recommends a reduction of postages equal to about 20 per cent. It is practicing upon the great principle which should control every branch of our Government of rendering to the public the greatest good possible with the least possible taxation to the people.

The scale of postages suggested by the Postmaster-General recommends itself, not only by the reduction it proposes, but by the simplicity of its arrangement, its conformity with the Federal currency, and the improvement it will introduce into the accounts of the Department and its agents.

Your particular attention is invited to the subject of mail contracts with railroad companies. The present laws providing for the making of contracts are based upon the presumption that competition among bidders will secure the service at a fair price; but on most of the railroad lines there is no competition in that kind of transportation, and advertising is therefore useless. No contract can now be made with them except such as shall be negotiated before the time of offering or afterwards, and the power of the Postmaster-General to pay them high prices is practically without limitation. It would be a relief to him and no doubt would conduce to the public interest to prescribe by law some equitable basis upon which such contracts shall rest, and restrict him by a fixed rule of allowance. Under a liberal act of that sort he would undoubtedly be able to secure the services of most of the railroad companies, and the interest of the Department would be thus advanced.

The correspondence between the people of the United States and the European nations, and particularly with the British Islands, has become very extensive, and requires the interposition of Congress to give it security. No obstacle is perceived to an interchange of mails between New York and Liverpool or other foreign ports, as proposed by the Postmaster-General. On the contrary, it promises, by the security it will afford, to facilitate commercial transactions and give rise to an enlarged intercourse among the people of different nations, which can not but have a happy effect. Through the city of New York most of the correspondence between the Canadas and Europe is now carried on, and urgent representations have been received from the head of the provincial post-office asking the interposition of the United States to guard it from the accidents and losses to which it is now subjected. Some legislation appears to be called for as well by our own interest as by comity to the adjoining British provinces.

The expediency of providing a fireproof building for the important books and papers of the Post-Office Department is worthy of consideration. In the present condition of our Treasury it is neither necessary nor wise to leave essential public interests exposed to so much danger when they can so readily be made secure. There are weighty considerations in the location of a new building for that Department in favor of placing it near the other executive buildings.

The important subjects of a survey of the coast and the manufacture of a standard of weights and measures for the different custom-houses have been in progress for some years under the general direction of the Executive and the immediate superintendence of a gentleman possessing high scientific attainments. At the last session of Congress the making of a set of weights and measures for each State in the Union was added to the others by a joint resolution.

The care and correspondence as to all these subjects have been devolved on the Treasury Department during the last year. A special report from the Secretary of the Treasury will soon be communicated to Congress, which will show what has been accomplished as to the whole, the number and compensation of the persons now employed in these duties, and the progress expected to be made during the ensuing year, with a copy of the various correspondence deemed necessary to throw light on the subjects which seem to require additional legislation. Claims have been made for retrospective allowances in behalf of the superintendent and some of his assistants, which I did not feel justified in granting. Other claims have been made for large increases in compensation, which, under all the circumstances of the several cases, I declined making without the express sanction of Congress. In order to obtain that sanction the subject was at the last session, on my suggestion and by request of the immediate superintendent, submitted by the Treasury Department to the Committee on Commerce of the House of Representatives. But no legislative action having taken place, the early attention of Congress is now invited to the enactment of some express and detailed provisions in relation to the various claims made for the past, and to the compensation and allowances deemed proper for the future.

It is further respectfully recommended that, such being the inconvenience of attention to these duties by the Chief Magistrate, and such the great pressure of business on the Treasury Department, the general supervision of the coast survey and the completion of the weights and measures, if the works are kept united, should be devolved on a board of officers organized specially for that purpose, or on the Navy Board attached to the Navy Department.