The Postmaster-General’s report furnishes a full and clear exhibit of the operations and condition of the postal service.  The ordinary postal revenue for the fiscal year ending June 30, 1868, was $16,292,600, the total expenditures, embracing all the service for which special appropriations have been made by Congress, amounted to $22,730,592, showing an excess of expenditures of $6,437,991.  Deducting from the expenditures the sum of $1,896,525, the amount of appropriations for ocean-steamship and other special service, the excess of expenditures was $4,541,466.  By using an unexpended balance in the Treasury of $3,800,000 the actual sum for which a special appropriation is required to meet the deficiency is $741,466.  The causes which produced this large excess of expenditure over revenue were the restoration of service in the late insurgent States and the putting into operation of new service established by acts of Congress, which amounted within the last two years and a half to about 48,700 miles—­equal to more than one-third of the whole amount of the service at the close of the war.  New postal conventions with Great Britain, North Germany, Belgium, the Netherlands, Switzerland, and Italy, respectively, have been carried into effect.  Under their provisions important improvements have resulted in reduced rates of international postage and enlarged mail facilities with European countries.  The cost of the United States transatlantic ocean mail service since January 1, 1868, has been largely lessened under the operation of these new conventions, a reduction of over one-half having been effected under the new arrangements for ocean mail steamship service which went into effect on that date.  The attention of Congress is invited to the practical suggestions and recommendations made in his report by the Postmaster-General.

No important question has occurred during the last year in our accustomed cordial and friendly intercourse with Costa Rica, Guatemala, Honduras, San Salvador, France, Austria, Belgium, Switzerland, Portugal, the Netherlands, Denmark, Sweden and Norway, Rome, Greece, Turkey, Persia, Egypt, Liberia, Morocco, Tripoli, Tunis, Muscat, Siam, Borneo, and Madagascar.

Cordial relations have also been maintained with the Argentine and the Oriental Republics.  The expressed wish of Congress that our national good offices might be tendered to those Republics, and also to Brazil and Paraguay, for bringing to an end the calamitous war which has so long been raging in the valley of the La Plata, has been assiduously complied with and kindly acknowledged by all the belligerents.  That important negotiation, however, has thus far been without result.