The receipts of the Department during the year amounted to $75,080,479.04 and the expenditures to $84,324,414.15.

The transactions of the postal service indicate with barometric certainty the fluctuations in the business of the country. Inasmuch, therefore, as business complications continued to exist throughout the last year to an unforeseen extent, it is not surprising that the deficiency of revenue to meet the expenditures of the Post-Office Department, which was estimated in advance at about $8,000,000, should be exceeded by nearly $1,225,000. The ascertained revenues of the last year, which were the basis of calculation for the current year, being less than estimated, the deficiency for the current year will be correspondingly greater, though the Postmaster-General states that the latest indications are so favorable that he confidently predicts an increase of at least 8 per cent in the revenues of the current year over those of the last year.

The expenditures increase steadily and necessarily with the growth and needs of the country, so that the deficiency is greater or less in any year, depending upon the volume of receipts.

The Postmaster-General states that this deficiency is unnecessary and might be obviated at once if the law regulating rates upon mail matter of the second class was modified. The rate received for the transmission of this second-class matter is 1 cent per pound, while the cost of such transmission to the Government is eight times that amount. In the general terms of the law this rate covers newspapers and periodicals. The extensions of the meaning of these terms from time to time have admitted to the privileges intended for legitimate newspapers and periodicals a surprising range of publications and created abuses the cost of which amounts in the aggregate to the total deficiency of the Post-Office Department. Pretended newspapers are started by business houses for the mere purpose of advertising goods, complying with the law in form only. and discontinuing the publications as soon as the period of advertising is over. "Sample copies" of pretended newspapers are issued in great numbers for a like purpose only. The result is a great loss of revenue to the Government, besides its humiliating use as an agency to aid in carrying out the scheme of a business house to advertise its goods by means of a trick upon both its rival houses and the regular and legitimate newspapers. Paper-covered literature, consisting mainly of trashy novels, to the extent of many thousands of tons is sent through the mails at I cent per pound, while the publishers of standard works are required to pay eight times that amount in sending their publications. Another abuse consists in the free carriage through the mails of hundreds of tons of seed and grain uselessly distributed through the Department of Agriculture. The Postmaster-General predicts that if the law be so amended as to eradicate these abuses not only will the Post-Office Department show no deficiency, but he believes that in the near future all legitimate newspapers and periodical magazines might be properly transmitted through

the mails to their subscribers free of cost. I invite your prompt consideration of this subject and fully indorse the views of the PostmasterGeneral.

The total number of post-offices in the United States on the 30th day of June, 1894, was 69,805, an increase of 1,403 over the preceding year. Of these, 3,428 were Presidential, an increase in that class of 68 over the preceding year.

Six hundred and ten cities and towns are provided with free delivery. Ninety-three other cities and towns entitled to this service under the law have not been accorded it on account of insufficient funds. The expense of free delivery for the current fiscal year will be more than $12,300,000, and under existing legislation this item of expenditure is subject to constant increase. The estimated cost of rural free delivery generally is so very large that it ought not to be considered in the present condition of affairs.

During the year 830 additional domestic money-order offices were established. The total number of these offices at the close of the year was 19,264. There were 14,304,041 money orders issued during the year, being an increase over the preceding year of 994,306. The value of these orders amounted to $138,793,579.49, an increase of $11,217, 145.84. There were also issued during the year postal notes amounting to $12,649,094.55.

During the year 218 international money-order offices were added to those already established, making a total of 2,625 such offices in operation June 30, 1894. The number of international money orders issued during the year was 917,823, a decrease in number of 138, 176, and their value was $13,792,455.31, a decrease in amount of $2,549,382.55. The num ber of orders paid was 361, 180, an increase over the preceding. year of 60,263, and their value was $6,568,493.78, an increase of $1,285,118.08. From the foregoing statements it appears that the total issue of money orders and postal notes for the year amounted to $165,235,129.35.

The number of letters and packages mailed during the year for special delivery was 3,436,970. The special-delivery stamps used upon these letters and packages amounted to $343,697. The messengers fees paid for their delivery amounted to $261,209.70, leaving a balance in favor of the Government of $82,487.30.

The report shows most gratifying results in the way of economies worked out without affecting the efficiency of the postal service. These consist in the abrogation of steamship subsidy contracts, reletting of mail transportation contracts, and in the cost and amount of supplies used in the service, amounting in all to $16,619,047.42.

This report also contains a valuable contribution to the history of the Universal Postal Union, an arrangement which amounts practically to the establishment of one postal system for the entire civilized world. Special attention is directed to this subject at this time in view of the

fact that the next congress of the union will meet in Washington in 1897, and it is hoped that timely action will be taken in the direction of perfecting preparations for that event.

The Postmaster-General renews the suggestion made in a previous report that the Department organization be increased to the extent of creating a direct district supervision of all postal affairs, and in this suggestion I fully concur.

There are now connected with the Post-Office establishment 32,661 employees who are in the classified service. This includes many who have been classified upon the suggestion of the Postmaster-General. He states that another year's experience at the head of the Department serves only to strengthen the conviction as to the excellent working of the civil-service law in this branch of the public service.

Attention is called to the report of the Secretary of the Navy, which shows very gratifying progress in the construction of ships for our new Navy. All the vessels now building, including the three torpedo boats authorized at the last session of Congress and excepting the first-class battle ship Iowa, will probably be completed during the coming fiscal year. The estimates for the increase of the Navy for the year ending June 30, 1896, are large, but they include practically the entire sum necessary to complete and equip all the new ships not now in commission, so that unless new ships are authorized the appropriations for the naval service for the fiscal year ending June 30, 1897, should fall below the estimates for the coming year by at least $12,000,000.

The Secretary presents with much earnestness a plea for the authorization of three additional battle ships and ten or twelve torpedo boats. While the unarmored vessels heretofore authorized, including those now nearing completion, will constitute a fleet which it is believed is sufficient for ordinary cruising purposes in time of peace, we have now completed and in process of construction but four first-class battle ships and but few torpedo boats. If we are to have a navy for warlike operations, offensive and defensive, we certainly ought to increase both the number of battle ships and torpedo boats.

If no

The manufacture of armor requires expensive plants and the aggregation of many skilled workmen. All the armor necessary to complete the vessels now building will be delivered before the 1st of June next. new contracts are given out, contractors must disband their workmen and their plants must lie idle. Battle ships authorized at this time would not be well under way until late in the coming fiscal year, and at least three years and a half from the date of the contract would be required for their completion. The Secretary states that not more than 15 per cent of the cost of such ships need be included in the appropriations for the coming year. I recommend that provision be made for the construction of additional battle ships and torpedo boats.

The Secretary recommends the manufacture not only of a reserve

supply of ordnance and ordnance material for ships of the Navy, but also a supply for the auxiliary fleet. Guns and their appurtenances should be provided and kept on hand for both these purposes. We have not to-day a single gun that could be put upon the ships Paris or New York of the International Navigation Company or any other ship of our reserve Navy. The manufacture of guns at the Washington Navy-Yard is proceeding satisfactorily, and none of our new ships will be required to wait for their guns or ordnance equipment.

An important order has been issued by the Secretary of the Navy coordinating the duties of the several bureaus concerned in the construction of ships. This order, it is believed, will secure to a greater extent than has heretofore been possible the harmonious action of these several bureaus and make the attainment of the best results more certain.

During the past fiscal year there has been an unusual and pressing demand in many quarters of the world for the presence of vessels to guard American interests.

In January last, during the Brazilian insurrection, a large fleet was concentrated in the harbor of Rio de Janeiro. The vigorous action of RearAdmiral Benham in protecting the personal and commercial rights of our citizens during the disturbed conditions afforded results which will, it is believed, have a far-reaching and wholesome influence whenever in like circumstances it may become necessary for our naval commanders to interfere on behalf of our people in foreign ports.

The war now in progress between China and Japan has rendered it necessary or expedient to dispatch eight vessels to those waters.

Both the Secretary of the Navy and the Secretary of the Treasury recommend the transfer of the work of the Coast Survey proper to the Navy Department. I heartily concur in this recommendation. Excluding Alaska and a very small area besides, all the work of mapping and charting our coasts has been completed. The hydrographic work, which must be done over and over again by reason of the shifting and varying depths of water consequent upon the action of streams and tides, has heretofore been done under the direction of naval officers in subordination to the Superintendent of the Coast Survey. There seems to be no good reason why the Navy should not have entire charge hereafter of such work, especially as the Hydrographic Office of the Navy Department is now and has been for many years engaged in making efficient maps entirely similar to those prepared by the Coast Survey.

I feel it my imperative duty to call attention to the recommendation of the Secretary in regard to the personnel of the line of the Navy. The stagnation of promotion in this the vital branch of the service is so great as to seriously impair its efficiency.

I consider it of the utmost importance that the young and middleaged officers should before the eve of retirement be permitted to reach a grade entitling them to active and important duty.

The system adopted a few years ago regulating the employment of labor at the navy-yards is rigidly upheld and has fully demonstrated its usefulness and expediency. It is within the domain of civil-service reform inasmuch as workmen are employed through a board of labor selected at each navy-yard and are given work without reference to politics and in the order of their application, preference, however, being given to Army and Navy veterans and those having former navy-yard experience.

Amendments suggested by experience have been made to the rules regulating the system. Through its operation the work at our navyyards has been vastly improved in efficiency and the opportunity to work has been honestly and fairly awarded to willing and competent applicants. It is hoped that if this system continues to be strictly adhered to there will soon be as a natural consequence such an equalization of party benefit as will remove all temptation to relax or abandon it.

The report of the Secretary of the Interior exhibits the situation of the numerous and interesting branches of the public service connected with his Department. I commend this report and the valuable recommendations of the Secretary to the careful attention of the Congress.

The public land disposed of during the year amounted to 10,406, 100.77 acres, including 28,876.05 of Indian lands.

It is estimated that the public domain still remaining amounts to a little more than 600,000,000 acres, including, however, about 360,000,000 acres in Alaska, as well as military reservations and railroad and other selections of lands yet unadjudicated.

The total cash receipts from sale of lands amounted to $2,674,285.79, including $91,981.03 received for Indian lands.

Thirty-five thousand patents were issued for agricultural lands, and 3,100 patents were issued to Indians on allotments of their holdings in severalty, the land so allotted being inalienable by the Indian allottees for a period of twenty-five years after patent.

There were certified and patented on account of railroad and wagonroad grants during the year 865,556.45 acres of land, and at the close of the year 29,000,000 acres were embraced in the lists of selections made by railroad and wagon-road companies and awaited settlement.

The selections of swamp lands and that taken as indemnity therefor since the passage of the act providing for the same in 1849 amount to nearly or quite 80,500,000 acres, of which 58,000,000 have been patented to States. About 138,000 acres were patented during the last year. Nearly 820,000 acres of school and education grants were approved during the year, and at its close 1,250,363.81 acres remained unadjusted.

It appears that the appropriation for the current year on account of special service for the protection of the public lands and the timber thereon is much less than those for previous years, and inadequate for an efficient performance of the work. A larger sum of money than has been appropriated during a number of years past on this account has been