The number of pensioners still continues to decrease, the highest number having been reached during the year ending June 30, 1873.  During the last year 11,557 names were added to the rolls, and 12,977 were dropped therefrom, showing a net decrease of 1,420.  But while the number of pensioners has decreased, the annual amount due on the pension rolls has increased $44,733.13.  This is caused by the greatly increased average rate of pensions, which, by the liberal legislation of Congress, has increased from $90.26 in 1872 to $103.91 in 1875 to each invalid pensioner, an increase in the average rate of 15 per cent in the three years.  During the year ending June 30, 1875, there was paid on account of pensions, including the expenses of disbursement, $29,683,116, being $910,632 less than was paid the preceding year.  This reduction in amount of expenditures was produced by the decrease in the amount of arrearages due on allowed claims and on pensions the rate of which was increased by the legislation of the preceding session of Congress.  At the close of the last fiscal year there were on the pension rolls 234,821 persons, of whom 210,363 were army pensioners, 105,478 being invalids and 104,885 widows and dependent relatives; 3,420 were navy pensioners, of whom 1,636 were invalids and 1,784 widows and dependent relatives; 21,038 were pensioners of the War of 1812, 15,875 of whom were survivors and 5,163 were widows.

It is estimated that $29,535,000 will be required for the payment of pensions for the next fiscal year, an amount $965,000 less than the estimate for the present year.

The geological explorations have been prosecuted with energy during the year, covering an area of about 40,000 square miles in the Territories of Colorado, Utah, and New Mexico, developing the agricultural and mineral resources and furnishing interesting scientific and topographical details of that region.

The method for the treatment of the Indians adopted at the beginning of my first term has been steadily pursued, and with satisfactory and encouraging results.  It has been productive of evident improvement in the condition of that race, and will be continued, with only such modifications as further experience may indicate to be necessary.

The board heretofore appointed to take charge of the articles and materials pertaining to the War, the Navy, the Treasury, the Interior, and the Post-Office Departments, and the Department of Agriculture, the Smithsonian Institution, and the Commission of Food Fishes, to be contributed, under the legislation of last session, to the international exhibition to be held at Philadelphia during the centennial year 1876, has been diligent in the discharge of the duties which have devolved upon it; and the preparations so far made with the means at command give assurance that the governmental contribution will be made one of the marked characteristics of the exhibition.  The board has observed commendable economy in the matter