The accompanying report of the Postmaster-General presents a satisfactory view of the operations and condition of that Department.

At the close of the last fiscal year the length of the inland mail routes in the United States (not embracing the service in Oregon and California) was 178,672 miles, the annual transportation thereon 46,541,423 miles, and the annual cost of such transportation $2,724,426.

The increase of the annual transportation over that of the preceding year was 3,997,354 miles and the increase in cost was $342,440.

The number of post-offices in the United States on the 1st day of July last was 18,417, being an increase of I,670 during the preceding year.

The gross revenues of the Department for the fiscal year ending June 30, 1850, amounted to $5,552,971.48, including the annual appropriation of $200,000 for the franked matter of the Departments and excluding the foreign postages collected for and payable to the British Government.

The expenditures for the same period were $5,212,953.43, leaving a balance of revenue over expenditures of $340,018.05.

I am happy to find that the fiscal condition of the Department is such as to justify the Postmaster-General in recommending the reduction of our inland letter postage to 3 cents the single letter when prepaid and 5 cents when not prepaid. He also recommends that the prepaid rate shall be reduced to 2 cents whenever the revenues of the Department, after the reduction, shall exceed its expenditures by more than 5 per cent for two consecutive years; that the postage upon California and other letters sent by our ocean steamers shall be much reduced, and that the rates of postage on newspapers, pamphlets, periodicals, and other printed matter shall be modified and some reduction thereon made.

It can not be doubted that the proposed reductions will for the present diminish the revenues of the Department. It is believed that the deficiency, after the surplus already accumulated shall be exhausted, may be almost wholly met either by abolishing the existing privileges of sending free matter through the mails or by paying out of the Treasury to the Post-Office Department a sum equivalent to the postage of which it is deprived by such privileges. The last is supposed to be the preferable mode, and will, if not entirely, so nearly supply that deficiency as to make any further appropriation that may be found necessary so inconsiderable as to form no obstacle to the proposed reductions.

I entertain no doubt of the authority of Congress to make appropriations for leading objects in that class of public works comprising what are usually called works of internal improvement. This authority I suppose to be derived chiefly from the power of regulating commerce with foreign nations and among the States and the power of laying and collecting imposts. Where commerce is to be carried on and imposts collected there must be ports and harbors as well as wharves and custom-houses. If ships laden with valuable cargoes approach the shore or sail along the coast, light-houses are necessary at suitable points for the protection of life and property. Other facilities and securities for commerce and navigation are hardly less important; and those clauses of the Constitution, therefore, to which I have referred have received from the origin of the Government a liberal and beneficial construction. Not only have light-houses, buoys, and beacons been established and floating lights maintained, but harbors have been cleared and improved, piers constructed, and even breakwaters for the safety of shipping and sea walls to protect harbors from being filled up and rendered useless by the action of the ocean, have been erected at very great expense. And this construction of the Constitution appears the more reasonable from the consideration that if these works, of such evident importance and utility, are not to be accomplished by Congress they can not be accomplished at all. By the adoption of the Constitution the several States voluntarily parted with the power of collecting duties of imposts in their own ports, and it is not to be expected that they should raise money by internal taxation, direct or indirect, for the benefit of that commerce the revenues derived from which do not, either in whole or in part, go into their own treasuries. Nor do I perceive any difference between the power of Congress to make appropriations for objects of this kind on the ocean and the power to make appropriations for similar objects on lakes and rivers, wherever they are large enough to bear on their waters an extensive traffic. The magnificent Mississippi and its tributaries and the vast lakes of the North and Northwest appear to me to fall within the exercise of the power as justly and as clearly as the ocean and the Gulf of Mexico. It is a mistake to regard expenditures judiciously made for these objects as expenditures for local purposes. The position or sight of the work is necessarily local, but its utility is general. A ship canal around the Falls of St. Mary of less than a mile in length, though local in its construction, would yet be national in its purpose and its benefits, as it would remove the only obstruction to a navigation of more than 1,000 miles, affecting several States, as well as our commercial relations with Canada. So, too, the breakwater at the mouth of the Delaware is erected, not for the exclusive benefit of the States bordering on the bay and river of that name, but for that of the whole coastwise navigation of the United States and, to a considerable extent, also of foreign commerce. If a ship be lost on the bar at the entrance of a Southern port for want of sufficient depth of water, it is very likely to be a Northern ship; and if a steamboat be sunk in any part of the Mississippi on account of its channel not having been properly cleared of obstructions, it may be a boat belonging to either of eight or ten States. I may add, as somewhat remarkable, that among all the thirty-one States there is none that is not to a greater or less extent bounded on the ocean, or the Gulf of Mexico, or one of the Great Lakes, or some navigable river.

In fulfilling our constitutional duties, fellow-citizens, on this subject, as in carrying into effect all other powers conferred by the Constitution, we should consider ourselves as deliberating and acting for one and the same country, and bear constantly in mind that our regard and our duty are due not to a particular part only, but to the whole.