Fully aware of the delicacy, not to say the danger of the subject,
I commend to your careful consideration whether this power of making
judgments final may not properly be given to the court, reserving the
right of appeal on questions of law to the Supreme Court, with such other
provisions as experience may have shown to be necessary.

I ask attention to the report of the Postmaster general, the following
being a summary statement of the condition of the department:

The revenue from all sources during the fiscal year ending June 30,
1861, including the annual permanent appropriation of $700,000 for the
transportation of "free mail matter," was $9,049,296.40, being about 2 per
cent. less than the revenue for 1860.

The expenditures were $13,606,759.11, showing a decrease of more than
8 per cent. as compared with those of the previous year and leaving
an excess of expenditure over the revenue for the last fiscal year of
$4,557,462.71.

The gross revenue for the year ending June 30, 1863, is estimated at
an increase of 4 per cent. on that of 1861, making $8,683,000, to which
should be added the earnings of the department in carrying free matter,
viz., $700,000, making $9,383,000.

The total expenditures for 1863 are estimated at $12,528,000, leaving an
estimated deficiency of $3,145,000 to be supplied from the treasury in
addition to the permanent appropriation.

The present insurrection shows, I think, that the extension of this
District across the Potomac River at the time of establishing the capital
here was eminently wise, and consequently that the relinquishment of
that portion of it which lies within the State of Virginia was unwise and
dangerous. I submit for your consideration the expediency of regaining
that part of the District and the restoration of the original boundaries
thereof through negotiations with the State of Virginia.

The report of the Secretary of the Interior, with the accompanying
documents, exhibits the condition of the several branches of the public
business pertaining to that department. The depressing influences of the
insurrection have been specially felt in the operations of the Patent and
General Land Offices. The cash receipts from the sales of public lands
during the past year have exceeded the expenses of our land system only
about $200,000. The sales have been entirely suspended in the Southern
States, while the interruptions to the business of the country and the
diversion of