military force.

The report of the Secretary of the Navy presents a comprehensive and
satisfactory exhibit of the affairs of that Department and of the naval
service. It is a subject of congratulation and laudable pride to our
countrymen that a Navy of such vast proportions has been organized in so
brief a period and conducted with so much efficiency and success.

The general exhibit of the Navy, including vessels under construction on
the 1st of December, 1864, shows a total of 671 vessels, carrying 4,610
guns, and of 510,396 tons, being an actual increase during the year,
over and above all losses by shipwreck or in battle, of 83 vessels, 167
guns, and 42,427 tons.

The total number of men at this time in the naval service, including
officers, is about 51,000.

There have been captured by the Navy during the year 324 vessels, and
the whole number of naval captures since hostilities commenced is 1,379,
of which 267 are steamers.

The gross proceeds arising from the sale of condemned prize property
thus far reported amount to $14,396,250.51. A large amount of such
proceeds is still under adjudication and yet to be reported.

The total expenditure of the Navy Department of every description,
including the cost of the immense squadrons that have been called into
existence from the 4th of March, 1861, to the 1st 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 $206,652.42.

The views presented by the Postmaster-General on the subject of special
grants by the Government in