of the Navy Department of every description,
including the cost of the immense squadrons that have been called into
existence from the fourth of March, 1861, to the first of November, 1864,
is $238,647,262.35.

Your favorable consideration is invited to the various recommendations
of the Secretary of the Navy, especially in regard to a navy-yard and
suitable establishment for the construction and repair of iron vessels and
the machinery and armature for our ships, to which reference was made in
my last annual message.

Your attention is also invited to the views expressed in the report in
relation to the legislation of Congress at its last session in respect to
prize on our inland waters.

I cordially concur in the recommendation of the Secretary as to the
propriety of creating the new rank of vice-admiral in our naval service.

Your attention is invited to the report of the Postmaster-General for
a detailed account of the operations and financial condition of the
Post-Office Department.

The postal revenues for the year ending June 30, 1864, amounted to
$12,438,253.78, and the expenditures to $12,644,786.20, the excess of
expenditures over receipts being $206,532.42.

The views presented by the Postmaster-General on the subject of special
grants by the Government in aid of the establishment of new lines of
ocean mail steamships and the policy he recommends for the development of
increased commercial intercourse with adjacent and neighboring countries
should receive the careful consideration of Congress.

It is of noteworthy interest that the steady expansion of population,
improvement, and governmental institutions over the new and unoccupied
portions of our country have scarcely been checked, much less impeded or
destroyed, by our great civil war, which at first glance would seem to
have absorbed almost the entire energies of the nation.

The organization and admission of the State of Nevada has been completed
in conformity with law, and thus our excellent system is firmly
established in the mountains, which once seemed a barren and uninhabitable
waste between the Atlantic States and those which have grown up on the
coast of the Pacific Ocean.

The Territories of the Union are generally in a condition of prosperity
and rapid growth. Idaho and Montana, by reason of their great distance and
the interruption of communication with them by Indian hostilities,
have been only partially organized; but it is understo