When we reflect upon our position in relation to other nations, it must be apparent that in the event of conflicts with them we must look chiefly to our Navy for the protection of our national rights.  The wide seas which separate us from other Governments must of necessity be the theater on which an enemy will aim to assail us, and unless we are prepared to meet him on this element we can not be said to possess the power requisite to repel or prevent aggressions.  We can not, therefore, watch with too much attention this arm of our defense, or cherish with too much care the means by which it can possess the necessary efficiency and extension.  To this end our policy has been heretofore wisely directed to the constant employment of a force sufficient to guard our commerce, and to the rapid accumulation of the materials which are necessary to repair our vessels and construct with ease such new ones as may be required in a state of war.

In accordance with this policy, I recommend to your consideration the erection of the additional dry dock described by the Secretary of the Navy, and also the construction of the steam batteries to which he has referred, for the purpose of testing their efficacy as auxiliaries to the system of defense now in use.

The report of the Post Master General herewith submitted exhibits the condition and prospects of that Department.  From that document it appears that there was a deficit in the funds of the Department at the commencement of the present year beyond its available means of $315,599.98, which on the first of July last had been reduced to $268,092.74.  It appears also that the revenues for the coming year will exceed the expenditures about $270,000, which, with the excess of revenue which will result from the operations of the current half year, may be expected, independently of any increase in the gross amount of postages, to supply the entire deficit before the end of 1835.  But as this calculation is based on the gross amount of postages which had accrued within the period embraced by the times of striking the balances, it is obvious that without a progressive increase in the amount of postages the existing retrenchments must be persevered in through the year 1836 that the Department may accumulate a surplus fund sufficient to place it in a condition of perfect ease.

It will be observed that the revenues of the Post Office Department, though they have increased, and their amount is above that of any former year, have yet fallen short of the estimates more than $100,000.  This is attributed in a great degree to the increase of free letters growing out of the extension and abuse of the franking privilege.  There has been a gradual increase in the number of executive offices to which it has been granted, and by an act passed in March, 1833, it was extended to members of Congress throughout the whole year.  It is believed that a revision of the laws relative to the franking privilege, with some enactments to enforce more rigidly the restrictions under which it is granted, would operate beneficially to the country, by enabling the Department at an earlier period to restore the mail facilities that have been withdrawn, and to extend them more widely, as the growing settlements of the country may require.