It gives me great pain to announce to you the loss of the steamship the Missouri by fire in the Bay of Gibraltar, where she had stopped to renew her supplies of coal on her voyage to Alexandria, with Mr. Cushing, the American minister to China, on board.  There is ground for high commendation of the officers and men for the coolness and intrepidity and perfect submission to discipline evinced under the most trying circumstances.  Surrounded by a raging fire, which the utmost exertions could not subdue, and which threatened momentarily the explosion of her well-supplied magazines, the officers exhibited no signs of fear and the men obeyed every order with alacrity.  Nor was she abandoned until the last gleam of hope of saving her had expired.  It is well worthy of your consideration whether the losses sustained by the officers and crew in this unfortunate affair should not be reimbursed to them.

I can not take leave of this painful subject without adverting to the aid rendered upon the occasion by the British authorities at Gibraltar and the commander, officers, and crew of the British ship of the line the Malabar, which was lying at the time in the bay.  Everything that generosity or humanity could dictate was promptly performed.  It is by such acts of good will by one to another of the family of nations that fraternal feelings are nourished and the blessings of permanent peace secured.

The report of the Postmaster-General will bring you acquainted with the operations of that Department during the past year, and will suggest to you such modifications of the existing laws as in your opinion the exigencies of the public service may require.  The change which the country has undergone of late years in the mode of travel and transportation has afforded so many facilities for the transmission of mail matter out of the regular mail as to require the greatest vigilance and circumspection in order to enable the officer at the head of the Department to restrain the expenditures within the income.  There is also too much reason to fear that the franking privilege has run into great abuse.  The Department, nevertheless, has been conducted with the greatest vigor, and has attained at the least possible expense all the useful objects for which it was established.

In regard to all the Departments, I am quite happy in the belief that nothing has been left undone which was called for by a true spirit of economy or by a system of accountability rigidly enforced.  This is in some degree apparent from the fact that the Government has sustained no loss by the default of any of its agents.  In the complex, but at the same time beautiful, machinery of our system of government, it is not a matter of surprise that some remote agency may have failed for an instant to fulfill its desired office; but I feel confident in the assertion that nothing has occurred to interrupt the harmonious action of the Government itself, and that, while the laws have been executed with efficiency and vigor, the rights neither of States nor individuals have been trampled on or disregarded.