I beg leave to renew the recommendation made in my last annual message respecting the enlistment of boys in our naval service, and to urge upon your attention the necessity of further appropriations to increase the number of ships afloat and to enlarge generally the capacity and force of the Navy.  The increase of our commerce and our position in regard to the other powers of the world will always make it our policy and interest to cherish the great naval resources of our country.

The report of the Postmaster-General presents a gratifying picture of the condition of the Post-Office Department.  Its revenues for the year ending the 30th June last were $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.