e $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