The report of the Secretary of the Navy exhibits the successful and satisfactory management of that Department during the last fiscal year.  The total expenditures for the year were $12,916,639.45, leaving unexpended at the close of the year $2,141,682.23 of the amount of available appropriations.  The appropriations for the present fiscal year, ending June 30, 1881, are $15,095,061.45, and the total estimates for the next fiscal year, ending June 30, 1882, are $15,953,751.61.  The amount drawn by warrant from July 1, 1880, to November 1, 1880, is $5,041,570.45.

The recommendation of the Secretary of the Navy that provision be made for the establishment of some form of civil government for the people of Alaska is approved.  At present there is no protection of persons or property in that Territory except such as is afforded by the officers of the United States ship Jamestown.  This vessel was dispatched to Sitka because of the fear that without the immediate presence of the national authority there was impending danger of anarchy.  The steps taken to restore order have been accepted in good faith by both white and Indian inhabitants, and the necessity for this method of restraint does not, in my opinion, now exist.  If, however, the Jamestown should be withdrawn, leaving the people, as at present, without the ordinary judicial and administrative authority of organized local government, serious consequences might ensue.

The laws provide only for the collection of revenue, the protection of public property, and the transmission of the mails.  The problem is to supply a local rule for a population so scattered and so peculiar in its origin and condition.  The natives are reported to be teachable and self-supporting, and if properly instructed doubtless would advance rapidly in civilization, and a new factor of prosperity would be added to the national life.  I therefore recommend the requisite legislation upon this subject.

The Secretary of the Navy has taken steps toward the establishment of naval coaling stations at the Isthmus of Panama, to meet the requirements of our commercial relations with Central and South America, which are rapidly growing in importance.  Locations eminently suitable, both as regards our naval purposes and the uses of commerce, have been selected, one on the east side of the Isthmus, at Chiriqui Lagoon, in the Caribbean Sea, and the other on the Pacific coast, at the Bay of Golfito.  The only safe harbors, sufficiently commodious, on the Isthmus are at these points, and the distance between them is less than 100 miles.  The report of the Secretary of the Navy concludes with valuable suggestions with respect to the building up of our merchant marine service, which deserve the favorable consideration of Congress.