You will find in the report of the Secretary of the Treasury, also, abundant proof of the entire adequacy of the present fiscal system to meet all the requirements of the public service, and that, while properly administered, it operates to the advantage of the community in ordinary business relations.

I respectfully ask your attention to sundry suggestions of improvements in the settlement of accounts, especially as regards the large sums of outstanding arrears due to the Government, and of other reforms in the administrative action of his Department which are indicated by the Secretary; as also to the progress made in the construction of marine hospitals, custom-houses, and of a new mint in California and assay office in the city of New York, heretofore provided for by Congress, and also to the eminently successful progress of the Coast Survey and of the Light-House Board.

Among the objects meriting your attention will be important recommendations from the Secretaries of War and Navy.  I am fully satisfied that the Navy of the United States is not in a condition of strength and efficiency commensurate with the magnitude of our commercial and other interests, and commend to your especial attention the suggestions on this subject made by the Secretary of the Navy.  I respectfully submit that the Army, which under our system must always be regarded with the highest interest as a nucleus around which the volunteer forces of the nation gather in the hour of danger, requires augmentation, or modification, to adapt it to the present extended limits and frontier relations of the country and the condition of the Indian tribes in the interior of the continent, the necessity of which will appear in the communications of the Secretaries of War and the Interior.

In the administration of the Post-Office Department for the fiscal year ending June 30, 1853, the gross expenditure was $7,982,756, and the gross receipts during the same period $5,942,734, showing that the current revenue failed to meet the current expenses of the Department by the sum of $2,042,032.  The causes which, under the present postal system and laws, led inevitably to this result are fully explained by the report of the Postmaster-General, one great cause being the enormous rates the Department has been compelled to pay for mail service rendered by railroad companies.

The exhibit in the report of the Postmaster-General of the income and expenditures by mail steamers will be found peculiarly interesting and of a character to demand the immediate action of Congress.

Numerous and flagrant frauds upon the Pension Bureau have been brought to light within the last year, and in some instances merited punishments inflicted; but, unfortunately, in others guilty parties have escaped, not through the want of sufficient evidence to warrant a conviction, but in consequence of the provisions of limitation in the existing laws.

From the nature of these claims, the remoteness of the tribunals to pass upon them, and the mode in which the proof is of necessity furnished, temptations to crime have been greatly stimulated by the obvious difficulties of detection.  The defects in the law upon this subject are so apparent and so fatal to the ends of justice that your early action relating to it is most desirable.