It is a source of great satisfaction that we are always enabled to recur to the conduct of our Navy with price and commendation.  As a means of national defense it enjoys the public confidence, and is steadily assuming additional importance.  It is submitted whether a more efficient and equally economical organization of it might not in several respects be effected.  It is supposed that higher grades than now exist by law would be useful.  They would afford well-merited rewards to those who have long and faithfully served their country, present the best incentives to good conduct, and the best means of insuring a proper discipline; destroy the inequality in that respect between military and naval services, and relieve our officers from many inconveniences and mortifications which occur when our vessels meet those of other nations, ours being the only service in which such grades do not exist.

A report of the Post Master-General, which accompanies this communication, will shew the present state of the Post-Office Department and its general operations for some years past.

There is established by law 88,600 miles of post roads, on which the mail is now transported 85,700 miles, and contracts have been made for its transportation on all the established routes, with one or two exceptions.  There are 5,240 post offices in the Union, and as many post masters.  The gross amount of postage which accrued from July 1st, 1822 to July 1st, 1823 was $1,114,345.12.  During the same period the expenditures of the Post-Office Department amounted to $1,169,885.51 and consisted of the following items, viz:  Compensation to post masters, $353,995.98; incidental expenses, $30,866.37; transportation of the mail, $784,600.08; payments into the Treasury, $423.08.  On the first of July last there was due to the Department from post masters $135,245.28; from late post masters and contractors, $256,749.31; making a total amount of balances due to the Department of $391,994.59.

These balances embrace all delinquencies of post masters and contractors which have taken place since the organization of the Department.  There was due by the Department to contractors on the first of July last $26,548.64.

The transportation of the mail within five years past has been greatly extended, and the expenditures of the Department proportionably increased.  Although the postage which has accrued within the last three years has fallen short of the expenditures $262,821.46, it appears that collections have been made from the outstanding balances to meet the principal part of the current demands.

It is estimated that not more than $250,000 of the above balances can be collected, and that a considerable part of this sum can only be realized by a resort to legal process.  Some improvements in the receipts for postage is expected.  A prompt attention to the collection of moneys received by post masters, it is believed, will enable the Department to continue its operations without aid from the Treasury, unless the expenditures shall be increased by the establishment of new mail routes.