The accompanying report of the Secretary of the Navy presents a full and satisfactory account of the condition and operations of the naval service during the past year.  Our citizens engaged in the legitimate pursuits of commerce have enjoyed its benefits.  Wherever our national vessels have gone they have been received with respect, our officers have been treated with kindness and courtesy, and they have on all occasions pursued a course of strict neutrality, in accordance with the policy of our Government.

The naval force at present in commission is as large as is admissible with the number of men authorized by Congress to be employed.

I invite your attention to the recommendation of the Secretary of the Navy on the subject of a reorganization of the Navy in its various grades of officers, and the establishing of a retired list for such of the officers as are disqualified for active and effective service.  Should Congress adopt some such measure as is recommended, it will greatly increase the efficiency of the Navy and reduce its expenditures.

I also ask your attention to the views expressed by him in reference to the employment of war steamers and in regard to the contracts for the transportation of the United States mails and the operation of the system upon the prosperity of the Navy.

By an act of Congress passed August 14, 1848, provision was made for extending post-office and mail accommodations to California and Oregon.  Exertions have been made to execute that law, but the limited provisions of the act, the inadequacy of the means it authorizes, the ill adaptation of our post-office laws to the situation of that country, and the measure of compensation for services allowed by those laws, compared with the prices of labor and rents in California, render those exertions in a great degree ineffectual.  More particular and efficient provision by law is required on this subject.

The act of 1845 reducing postage has now, by its operation during four years, produced results fully showing that the income from such reduced postage is sufficient to sustain the whole expense of the service of the Post-Office Department, not including the cost of transportation in mail steamers on the lines from New York to Chagres and from Panama to Astoria, which have not been considered by Congress as properly belonging to the mail service.

It is submitted to the wisdom of Congress whether a further reduction of postage should not now be made, more particularly on the letter correspondence.  This should be relieved from the unjust burden of transporting and delivering the franked matter of Congress, for which public service provision should be made from the Treasury.  I confidently believe that a change may safely be made reducing all single letter postage to the uniform rate of 5 cents, regardless of distance, without thereby imposing any greater tax on the Treasury than would constitute a very moderate