The report of the Post Master General presents a gratifying picture of the condition of the Post Office Department.  Its revenues for the year ending the 30th June last were $3,398,455.19, showing an increase of revenue over that of the preceding year of $404,878.53, or more than 13%.  The expenditures for the same year were $2,755,623.76, exhibiting a surplus of $642,831.43.  The Department has been redeemed from embarrassment and debt, has accumulated a surplus exceeding half a million dollars, has largely extended and is preparing still further to extend the mail service, and recommends a reduction of postages equal to about 20%.  It is practicing upon the great principle which should control every branch of our Government of rendering to the public the greatest good possible with the least possible taxation to the people.

The scale of postages suggested by the Post Master General recommends itself, not only by the reduction it proposes, but by the simplicity of its arrangement, its conformity with the Federal currency, and the improvement it will introduce into the accounts of the Department and its agents.

Your particular attention is invited to the subject of mail contracts with railroad companies.  The present laws providing for the making of contracts are based upon the presumption that competition among bidders will secure the service at a fair price; but on most of the railroad lines there is no competition in that kind of transportation, and advertising is therefore useless.  No contract can now be made with them except such as shall be negotiated before the time of offering or afterwards, and the power of the Post Master General to pay them high prices is practically without limitation.  It would be a relief to him and no doubt would conduce to the public interest to prescribe by law some equitable basis upon which such contracts shall rest, and restrict him by a fixed rule of allowance.  Under a liberal act of that sort he would undoubtedly be able to secure the services of most of the railroad companies, and the interest of the Department would be thus advanced.

The correspondence between the people of the United States and the European nations, and particularly with the British Islands, has become very extensive, and requires the interposition of Congress to give it security.  No obstacle is perceived to an interchange of mails between New York and Liverpool or other foreign ports, as proposed by the Post Master General.  On the contrary, it promises, by the security it will afford, to facilitate commercial transactions and give rise to an enlarged intercourse among the people of different nations, which can not but have a happy effect.  Through the city of New York most of the correspondence between the Canadas and Europe is now carried on, and urgent representations have been received from the head of the provincial post office asking the interposition of the United States to guard it from the accidents and losses to which it is now subjected.  Some legislation appears to be called for as well by our own interest as by comity to the adjoining British provinces.