Though Puerto Rico and the Philippines hold a different relation to the United States, yet, for convenience of administration, the same principle of an autonomous system has been extended to them.  The development of the service in all of the islands has been rapid and successful.  It has moved forward on American lines, with free delivery, money order, and registry systems, and has given the people mail facilities far greater and more reliable than any they have ever before enjoyed.  It is thus not only a vital agency of industrial, social, and business progress, but an important influence in diffusing a just understanding of the true spirit and character of American administration.

The domestic postal service continues to grow with extraordinary rapidity.  The expenditures and the revenues will each exceed $100,000,000 during the current year.  Fortunately, since the revival of prosperous times the revenues have grown much faster than the expenditures, and there is every indication that a short period will witness the obliteration of the annual deficit.  In this connection the report of the Postmaster-General embodies a statement of some evils which have grown up outside of the contemplation of law in the treatment of some classes of mail matter which wrongly exercise the privilege of the pound rate, and shows that if this matter had been properly classified and had paid the rate which it should have paid, instead of a postal deficit for the last fiscal year of $6,610,000, there would have been on one basis a surplus of $17,637,570, and on another Of $5,733,836.  The reform thus suggested, in the opinion of the Postmaster-General, would not only put the postal service at once on a self-sustaining basis, but would permit great and valuable improvements, and I commend the subject to the consideration of the Congress.

The Navy has maintained the spirit and high efficiency which have always characterized that service, and has lost none of the gallantry in heroic action which has signalized its brilliant and glorious past.  The Nation has equal pride in its early and later achievements.  Its habitual readiness for every emergency has won the confidence and admiration of the country.  The people are interested in the continued preparation and prestige of the Navy and will justify liberal appropriations for its maintenance and improvement.  The officers have shown peculiar adaptation for the performance of new and delicate duties which our recent war has imposed.

It cannot be doubted that Congress will at once make necessary provision for the armor plate for the vessels now under contract and building.  Its attention is respectfully called to the report of the Secretary of the Navy, in which the subject is fully presented.  I unite in his recommendation that the Congress enact such special legislation as may be necessary to enable the Department to make contracts early in the coming year for armor of the best quality that can be obtained in this country for the Maine, Ohio, and Missouri, and that the provision of the act of March 3, 1899, limiting the price of armor to $300 per ton be removed.