urning to the United States and 4 are used
as storeslips, leaving the actual cruising force 35 vessels, carrying
356 guns. The total number of vessels in the Navy is 206, mounting 1,743
guns. Eighty-one vessels of every description are in use, armed with 696
guns. The number of enlisted men in the service, including apprentices,
has been reduced to 8,500. An increase of navy-yard facilities is
recommended as a measure which will in the event of war be promotive
of economy and security. A more thorough and systematic survey of the
North Pacific Ocean is advised in view of our recent acquisitions, our
expanding commerce, and the increasing intercourse between the Pacific
States and Asia. The naval pension fund, which consists of a moiety of
the avails of prizes captured during the war, amounts to $14,000,000.
Exception is taken to the act of 23d July last, which reduces the
interest on the fund loaned to the Government by the Secretary, as
trustee, to 3 per cent instead of 6 per cent, which was originally
stipulated when the investment was made. An amendment of the pension
laws is suggested to remedy omissions and defects in existing
enactments. The expenditures of the Department during the last fiscal
year were $20,120,394, and the estimates for the coming year amount
to $20,993,414.

The Postmaster-General's report furnishes a full and clear exhibit of
the operations and condition of the postal service. The ordinary postal
revenue for the fiscal year ending June 30, 1868, was $16,292,600,
the total expenditures, embracing all the service for which special
appropriations have been made by Congress, amounted to $22,730,592,
showing an excess of expenditures of $6,437,991. Deducting from the
expenditures the sum of $1,896,525, the amount of appropriations for
ocean-steamship and other special service, the excess of expenditures
was $4,541,466. By using an unexpended balance in the Treasury of
$3,800,000 the actual sum for which a special appropriation is required
to meet the deficiency is $741,466. The causes which produced this large
excess of expenditure over revenue were the restoration of service in
the late insurgent States and the putting into operation of new service
established by acts of Congress, which amounted within the last two
years and a half to about 48,700 miles--equal to more than one-third
of the whole amount of the service at the close of the war. New postal
conventions with Great Britain, North Germany