ranititatv Ifrom tit; Fifth paged tzradlents will not exteed thirty to forty feet to the mile and arc of limited extent. Upon the Pacific side the surveys were confined to an ex amination of the Caeca& ranee, with a view to ascertain the relative elevation and practicability of the pastes:. Three were foUnd, the Cowlitz or Packwood, 2,600; the Snoqualmie, 3,030, and Cad,y's. 4,800 teL above the level of the sea. • Tbe :3otthern Pacific Railroad Company report that they have surveyed only - that portion of their line It ing between the town of San Jose and:Gilroy, In the county of .:Santa 'Clara, v. dis tance of thirty males, The grading is rapidly progrt ssing. The iron has been purchased and is tratuito. They expect to complete this thirty malice - 0V road by the ist , of April 1869. Their capital stock • Is -$1,800,000: of which .1172,000 has been actually paid in,and their indebtedness iss4Bo,ooo. - . The following statement exhibits the amount of United States bonds issued to the railroad com panies: 1,793,11 miles, nearly $44,337,000. The net of July 13,1863, authorized the sum of $6,500, appropriated_by_tile net of blareh3, 1860,j to be applied to the completion of the bridge Over the Dakota river, on the line of the wagon road between- Sioux City . and Atte month of the Big. Cheyenne. A superintendent was appointed in August last and the bridge is in process of con struction. One'of my predecessors, on the eve of his re tirement from office. urged the propriety of an aFPr°Priation for erecting and furnishing suite b ft residences for the Vice-President of the United States and the heads .of the executive depart ments. After alluding., to , the vain of ; .-.honey when the government went into Operation, and the salaries of___..those_officene_were originally fixed, as compared with that which it bore in December, 1852, when his report was submitted, ho expressed the opibion that - 46,000, at the latter date, - was not worth much more than $3,000 at the former. The-cost of rent provisions, fuel and other he cessaries of life in this city.had risen to such a degrte that the most rigid economy was required to enable those officers to live within their in comes, and ho declared that as tar as his obser vation extended few of them had been able to do SO. Congress did not accede - to his recommenda tion; ihey,lowever, passed_ the stetot March._3,_ 1853, which increased the salary of the Vice- President from $05.000, prescribed by the act of September 24, 1759, to 58,000, and gave to, the menffiers of tbe Crtbmet the satire - amount. - The addition thus made was estimlited . to be sufficient for house rent. No increase has been voted since, notwithstanding the constant apprecia tion of labor, rent and every article of consumption. My observation and experience enable' me to affirm with unhesita ting confidence that the income of the office will net equal the outlay, if the incumbent lives in a style at all compatible with the pro prieties-of his position and-the--relations which a decent regard to the just claims of society com pel him to maintain. "The high offices of the country should be opened to the poor as well as to the rich; but the piactical effect of the present rate of compensation will soon be to exclude from the Executive councils all Who have not ample resources independently of their official salaries." Several.of the annual reports of this Depart ment refer to the compensation of the Judiciary. One of the most thoughtful writers of the last century remarks that the administration of jus tice seems to be the leading object of institutions of government; that legislatures assemble; that armies are embodiedi - and - both. war and peace made by a sort of reference to the proper ad ministration of laws and the judicial protection of private rights. While this is emphatically true in every free country. the judicial department of the United States - Is charged also with other duties, and, its power extends to all cases arising under the _constitution and the acts of Congress. The guardianship of the fundamental law has been thus confided to It. The Supreme Court decides, in the last resort, questions in volving the constitutional authority of the fede ral government , and its various departments - as well as the reserved powers of the several Stales and the consistency of their legislation with the constitution and laws of Congress: No foreign tribunal possesses so broad a jurisdiction or deali - With issues so vitally affecting national power,' dignity an sovereignty: Its mem bers should eonsist of- jurists who, having gained the highest honors of the bar, bring to the discharge of their exalted trusts mature experience and pre-eminent talents and learning. Their salary, if not equal to their former profes sional income, should at least secure them an in dependent support, and bear a just relation to their arduous employment. One of the most eminent judges of that court resigned on account of a scanty salary, and a venerable Chief Justice whose labors during a long life conferred endur ing benefits upon his country, died a few years since, btqueathing - to his family little beyond the legacy of an illustrious name. Toe salary is far from being proportionate to the weighty responsibilities of the station. It is even lees than is paid to some subordinate offi cers in other branches of the p ublic service. It is a singular and disreputable anomaly that the chiefs of bureaus of the War Department, each, received in pay and, emoluments, during tno last fiscal year, a larger compensation than the Chief Jusilee of he United S tates. Recent legislation recognized the just claims of the judges of the district courts, and of the Supreme Court of this district, but Congress, inadvertently, I presume. omitted to make a becoming pro vision for the justices of the Supreme Court of the United States. The proposition to erect and furnish houses for the Vice President and Cabinet ministers may not meet with more favor now than when it was originally made. I earnestly recommend, there fere, that fifty per centum be added to their present salary and to that of the justices of the, Supreme Court. It will even then be much less than is allowed to officers of a similar grade by any other first class government. The Cabinet ministers will not receive more than is now paid in coin to several of our foreign repre sentatives, who discharge much less laborious duties, in capitals not less expensive than Wash ington. Since the salaries In question were fixed at the present rate, Congress nave, by suc cessive statutes, increased their own by at least 200 per eentum. Their aption met with general apProbation, and I do net doubt that the mem bers of that honorable body will render, in some degree, to others the justice already secured to themsel vie. I baveheretofore alluded to the compensation of the Assistant Secretary and the hearts of bu reaus. The Commissioner of Patents, whose salary is not too large, receives $4.300, being fifty per cent more than that of the other officers of equal grade in this department and exceeds by more than twenty-eight per cent that. of his of ficial superior, the Assistant Secretary, whose duties involve far more labor and responsibility. This glaring and indefensible inequality should be corrected. I recommend that the annual salary of the Assistant Secretary be fixed at 000, and that the Commissioner of Patents. Com - missiOner of the - General Land Office, Commis stoner of , Indian Affairs and Commissioner of Pensions shall each be paid $4,300 per annum. Thcrdutus of a copyist are merely mechanical, and bets liberally paid, more so, indeed, than the same qualifications in any other walk of life com mand: but the higher order of cierical labor, re quiring for its acceptable performance Intelli gence and,spacial knowledge, as well as faithful training and long continued service. Is not ade quately remunerated. It is my Bottled opinion, the result of much reflection and of experience in my present position, that the efficiency of the clerical force would be essentially promoted by thoroughly reorganizlngit t and securing to clerks of experienced and tried ability an enhanced compensation. It is hoped that a subject of so much importance to the successful workings of the executive departments will receive the con, sideration it so well merits. I am, Slr, very respectfully, your obedient ser vant, O. H. BROWNING, Secretary of the Interior. The President ' —The Sultan of Turkey, it seems, is very fend of music. and is especially partial to playing the piano. He has had a most magnificent instru ment made for him, and on this he ex temporizes and romposes. One of his composi tions, entitled "Melancholy," is published with his name in full—Abdul Azlz Khan—by lticordi. Milan. —lt may be worth while to state, as a literary raw dot of - a two-penny reprint, in an English proViielui :town, of the "Girl of the Period," frOin the'Saturday Review, thirty-two thousand ezpies have been sold. Of a vindication entitled "Woman; her. Friends and her Enemies," two thousand copies have not been disposed of. —An apt illustration of the absurdity and in justice,of the custom of obtaining promotion by purchase, which still prcvails in the British army, is afforded by a Loudon military journal, which antioupeea that an ensign, .probably a boy of twenty or thereabouts,.has, heoome Lieutenant- Colpael, Orr in other words, commander of his regiment, by purchase. THE DAILY EVENING BULLETIN---PHILADELPHIN L WED.N EEDAY, DECEMBER 9,1868,-TRIPLE S u,eile4o) - IRir OT TUE SECRETARY OF THE NAVY NAVY DEPAIIThiIIeT, December 7, 1868. SIR: I respectfully 00.41111 t the annual , report of the Navy Department and of that branch of the public service aunng the past year. EXIIIIIIT or- THE NAVAL FORCE The number of vessels in squadron service, as ands. ere; etoreships, and returning, L342,carrying 411 guns; a reduction Curing the year of 14 Vei11010; carrying 66 guns. The number of vessels of all descriptions in use, as cruisers, storeships, receiving ships, tugs, .tc , is bl carrying 6113 guns; a redaction from last year of 32 vessels,l Carrying 206. guns. The total number of veer, is borne upon the navy list is 206, carrying 1,743 a reduction during the year of 32 vessels, carrying 126 guns. The following tables einibit the present em ployment and condition of the naval force: NO. 0 tlllB, - Cruising vessels in squadron 6ervice.... 35 350 Vessels returning from squadrons .. 3 24 atoreships for squadrons .. . .. 4 31 special end-lake service 3 -19 Apprentice ship • ~ 1 11 Practice vessels, and in rise at the Naval • Academy . ' 1(1 115 Receiving ships... 6 " 112 Quarters for officers at League Island and marine barracks, Norfolk 2 27 Togs at invy : yards and stations, powder boats, &c ... 17 . 18 Toial in use .. S 1 69:3 Iron-clad vessels laid tip"— .. .... 46 107 Iron-clod ; weasels rot completed....:..: , 5 IS Steam aloolis not - completed... ... ....., 15 25:3 Lino l or-baltlc ships tint comoleted...... 2 SO Other vesselY laid op, repairing, ilt,ting for aea, and for aa1c.....;........ 57 592 Total number of vessels of nil descrip tions In nee, building—repairing, fit ting for sea, ,tc 206 1,743 Tho vessels ot the navy are ciaa;ified as follows: No. Gans. Vessels of the Bret rate—of 2.400 tone avd ripwaroe3s 062 .. Veesele ot the second-rate—of 1,200 to 2,400 tone... ... ' " 87 983 .. Vessels or the third rate--ot GOU to 1,200 tone 76414 Vessels of the - fourth rate-=under GOO tons 511 184 Total . 206 1,793 The following table indicates the character of tae vtecolk: Iron-clad vessels Screw steamers... Paaele-wheel steamers Sailing vessels TILE bItUADIIONS. The organ' zation of the squadrons remains essen tial 4 the same as Ny44,1=100 my last annual report, borne changes_ of.eommunulng °lacers and of vessels palm taken place, and•the force of each•equadron has. In consequence of the limited number of ecamen su b wed by the act of lith.ot June last, oeen necessarily reduced. zunornati NUMMON. Admiral D. G. Farragm, who was in command of the squadron at the date of my last report, retaraed to New York hi the flag-shlp on th. tenth of No vem ebei, leaving the squadron in temporary charge of Commodore A. .111 Pamock. The Franalln Is to re turn with Rear-Admiral Wihiam Radford, who has been designated to command the squadron, which is composed of the following vessels : Franklin, (flag-ship) 'Frolic - 5 guns. 59 guns. Guard, (storeadpoE guild. Ticonderoga 9 gnus bwtara 10 guns. The Canandaigua is on her way to the United States from this squadron. Admiral Farragnt has visited during the year Hol land, Belgium, England. Scotland, France, Portugal, bpaLn, Italy, Austria, Prussia. Greecd, Turkey, and Morocco. His reception in every place which he has visited was equally flattering with his reception the preceding year in the north of Europe. and cannot ha. lees acceptable to the government, and people of tne United States. While honoring that distinguished officer, the sovereigns and other high officials of these powers have availed themselves of the occasion to compliment, in friendly terms, the neon he repre sents. It is a gratification to remark, while noting the movements of this officer and hletlquitdron, that in no instance has an appeal been made for his inter ference in any manner to relieve or extend aid to oar countrymen scattered along the shores where the ling has been exhibited, nor has any application beat made to him to assert and vinaicate their rights. Throughout Europe the rights of american citizens .re respected, and wherever the flag has been carrier' by the navy the privileges to which they are entitled and which are guaranteed by treaty stipulations and internaqonal law have been asserted and maintained. . ..... The principal points of the west coast of Africa, us far as St. Paul de Loarido and the neighboring groups of islands wh ch lie within the limits of the European squadron, have been visited by the Swatara.. She let Lisbon February 5, and returned to that port April 27, having toucned at Porto Grande, Porto Praya, Uralic( Canary, Teneriffe, Madeira, Monrovia, Cape Palmas, Ei Mina, Fernando Po, Jelin Coffee and Sr.. Thomas. Commander Jeffers reports that the slave trade is entirely suspended. The vessels of this squadron have, during the year, In addition to the porta mentioned, visited Valencia, Tarragona, Barcelona, Malaga, Leghorn, Palermo. Civita Vecchia, Taranto, Ancobit. V'enice, Brindisi, Candle, scio, Marseilles, Havre Cherbourg, Brest, Bordeaux, Pauillac, Basque Boads,Cadlz, Ferrol,Ham. burg, Bremerhaven, Antwerp, Plymouth and various ports on the Irish coast. ASIATIC NUADRO.N.' Rear- Admiral Henry H. Bell, who was in command of this squadron at the date ut my last report. was drowned at Osaka, on the 11th of January. by the up setting of a boat in widen he was crossing the bar. The command devolved upon Commodore John R. tioldsborough, as senior officer, until the arrival of Bear-Admiral S. C. Rowan, who sailed from New York in the Piscataqua on the 16th of DScember, and assumed command at Singapore on the 18th of April The squadron is composed of the following vessels : Piscataqua (flag-ship) lllnadilla ..... . 5 guns. 23 guns, aroostooli.. 5 gang. S Buns. Maumee 8 guns. 6 gins. loaho, (store and 10 guns. ho.:nital ship, lu guns. Oneida.... Jroquois.. Aalinalot. 3!donocacy The Shenandoah is on her way home from this squadron under orders issued in..l WIC last. The Hart lord arrived at New York in august. The United States minister, Mr. Van \'alkenburg, was of opinion that our government should be repre sented by a btrOD:Z naval force on the m casion of the opening of the ports of Osaka and Hiogo Rear-Ad miral Bell concurred in this opinion and assembled us many vessels of the squadron Of Iliogo as were avail able, Including the ilia t turd, Iroquois, Monocacy, Al imetouk, Oneida, and Shenandoah. The latter vet.- eel cenveled the United states minister trout Yoko hama to COll6llll mate the terms of the treaty No serious trouble was apprehended, hut certain discon tented factions were kuown to exist It was thought, therefore, that the dismay of foreign power voted prove a wholesome restraint on the turbulent and die all ected. Agreeably to arrangements, Osaha and lllogo were quietly opened to foreigners on the first of Januar - 1 , . Tie event was celebrated by the American and British ve?sels at those places, their mastheads being dressed with the respective national flags And the Tycoon. d 110 g at the main: Every vessel similltaneoasly fired a salute of 2iguns, which the Japanese promptly re turned at both places Although Ibe Of, cuing of these ports had been har monious, attain) bore an aspect 50 unsettled t.h r. Hoar-Admiral Bell determined to delay his departure, and three days after rending dispatches to the d.,- partment announcing this purpose, he was drowned' by the swamping of his boat oh Osaka. This melan choly event, made the more afflicting by the drownh,g at the same time of Lieatenan; Liesitmander J, 11. Heed and ten of the — crew of the Admiral's barge, o:- curred on the morning or January 11. The harmony which prevailed at tae opening of the new ports was of short duration. Difficulties. orlglui ting in the innovations on ancient customs and od position to intercourse with foreigners, appeared among the Japanese, and soon broke out in hostalitie.. On the frith of January the contending parties came in conflict at Osaka. Tue Tycoon, who favored the extension of commercial intercourse, was defeatet, ; and during the night of January 31, sought taneltir with some at his principal adherents on board the Iro. quoin, winch was in the harbor. Protection was giv,m him until eaylighr, when he was transferred to one of his own vessels of war. (JD the let of February; the several ford= minis-. tens were compelled to abandon Osaka; and were re 'calved and conveyed in the Iroquoi., to Hi •go, whew they established their legations. On the ;th of ?wi ntery an assault was made in the streets of Htogo by a detachment of Japanese troops on the foreign resi dents, during which one of the crew of the Oneida was seriously wounded by a musket ball. In conse quence of these outbreaks, which threatened the safety of the foreign population, the naval present forces made a joint landing and adopted mea.rires to pro tect the toreign settlement. But on the Sth of Fehru , soy an envoy from the Mikado arrived at, the j United States legation with inforniation of a change of government. Assurance was given that foreigners would be protected, whereupon a set- i tlement was made and the forces withdrawn. Toe . Jana, ate Weer who had command of the detachment of troops, ordered them to ilre on, the foreigners at B ego, was subsequently executed in the presence , of a number of the officers of the vessels of war. Hear-Admiral Rowan reached Yokohama on the 24th of June, and found the open ports in possession 01 the Mikado party. The foreign naval forces, fn pursuance of agreement in conference. have jointly ' occupied Yokohama for the defence of the foreign settlement. No scions disturbances had taken place there at the date of the lastuecounts, and Rear-Admi ral Rowan was awalthig the progress of events be tween the contending parties. After the death of Rear-Admiral Bell, Commodore GoldsborOnglitransferred his flag to the Hartford,. and left Nagasaki on the Tat of February for Hong-Kong, on.his wily to Singapore and the United States. The limits of this squadron are extensive and the service required is of a varied character. In Recent-. her the htonocacy examined the track of 'Steamers between Nagasaki and Osaka through the inland sea, - the waters navigated by the, auxiliary steamers-of toe ' . Pacific Mall Steamship Company, for the - purpose - or deteintining on the proper sites for light-houses. During the same month the -Ashirelet went to Taira where the passer° of the United States Minister, air! Burlingame, had'been ohstructed by the rebels. The minister and family were received on board and Con veyed to Shanghai, In June the Unadilla visited liankok. in Siam, -• and ;delivered a pres ent of arms to the nrinui•• minister. Courtiesies were exchanged with the King, the Crown'Prince,the prime =litter, and °thee officials. In April the Shenandoah was sent to Corea . to make another attempt , to rescue tbe•crew of the schooner General Sherman, which had been destroyed by the Coreans 801110 eighteen Months previously, ,it having been stated upon appareatly good authority that some of theinwere still :dive and, in captivity. From all We Intl:lunation - that Commander "Febiger could gather, he concluded that none ot the crew or Passen gers of the 'schooner were. living. .ffe succeeded, however, in obtaining a fair survey of the Pine Yang Piver and WS:approaches, and in, securing other use ful data. The AroostOok, Lieutenant -L'otrimander leardalee, conveyed the consuls for Amoy and Poo-Cho° to For mosa, in April, to enable them to visit' the various ports on that island coming . under this charge. The eaVages Inhabiting the lower part of the island; it wilt be recollected, murdered the shipwrecked oft cent and crew of the = American • bark Hover. Satielled--from--inquiry- that,no --foreigners- were in • captivity, onthe island , Lieutenant-Com mander Beardslee obtained assurances from the natives of kind_treatmerit_to,l and restoration of, any persons may hereafter he shipwrecked upon the usland. Although the squadron has "been ' mainly in Japanese _waters, the principal commercial ports in• China had been, visited, and. all needed protection given to American interests. 2i012111 ATLANTIC SQVADRON. • Rear-Admiral Jamea S. Palmer, who wee in com mand or "this squadron at the - date of my last report, died of -yellcitv ;over at Bt. Thomas, on the 7th of December. The lidgehipßutiquellatina'heing infected with the, disease WO, on her return to blew York, placed cant of commission; and, until the Contoocook was, ready for sea,. the Waunpanoug marl eueed as a nag -ship. Rear Admiral D. IL Hod hoisted his flag on boare the latter vessel on the ilind of irebruary. The squadron,is now composed , of the-- ~ Contoocook, (ffsg-ship) I ytnatic •• ' ' 13 guns. Gettysburg Sdeo • .... 10 guns. Nipsie Penouseot . 9 guns. The fear-admiral commanding him' lit the ftitg-ahlp, visited many of the important points within the limits or his command. During the months of May and June he was at filt.•Thomast.bante Cruz, Point a Pltre.tit: .Plerm,La Gnaythatspinwall,Port au Prince and Hey West. He is novv makbag a secondd cruise thzough the West-India islands.tand- at last- advicea was at Havana. The other vessels of the squadron have been actively emp'oyett, and haire - given assist =CO to our merchantmen and protection to' our citi zens wheneVer needed. A vessel continues to be constantly stationed at Aspinwall for the protection of our citizens and treasure in tranaitu between that'place and Panama. In April, upon application of the agents of the steam ship company, a force was landed from-the Penob scot to guard th passengers and treasure, the streets being idled with excited and lawless individuals, the police and native troops having been sent to, Chiriqui in consequence of the death of the president of the republic. There was no conflict, however. and when the anticipated trouble had passed, the forces re-em barked. . , No. Guns. . 52 129 .. 28 199 ... 31 477 206 1,143 !the disturbed condition of Hayti has called, for more than ordinary attention to American • interests on that island. Instructions have, from time to time, been issued to the admiral in command to watch the progress of events, and he prepared at all timeevto /flora necessary protection to our citizens. In per suance of these directions the Contoocook, De Soto, Shawmnr, Saco, Penobscot, Gettysburg, and Nipsic, have, at different times, been in Haytten waters, and some of them have remained there tor weeks success fully. The naval officers in command have exercised krudence, observed neutrality, and exchanged the cnetonuay courtesies witn the authorities., - Iu March last the De Soto, Commodora Boggs. was Ordered to Venezuela to co-operatln with our minister in securing the release, and indemnity for their de tention, of a part or the crew of the American whal ing sehooner Hannah Grant, who had been captured On the peninsula of Paragaana, and carried as prle nere to Coro. At Caracoa, Commodore Boggs learned of the release of the' crew of the schooner, but he very properly proceeded to La Guayra,and in company with Air. Stillwell, the United States minister, visited Caracas and had an interview, with the Vice-President and other 'authorities or the. republic. The - Saco, Commander Wilson, took on board at St. Thomas the master of the Hannah Grant, and, actor restoring hint to his position, at Kingston, proceeded to Venezuela. The question at that stage became one of indemnitY, subject to adjustment through other channels. No further occasion for naval action—was-therefore no ces.ary, and the force was witridrawn. In dune a display of naval force in the gall was con sidered necessary, in consequence of reports that a hostile expedition against Mexico was concentratin.,. near Now Orleans. No occasion for action, however, 7 manifested itself. SOUTH ATVEVUAI4IIBOX . The South atlantic ' o nyder doilimana of Rear-Admiral Charles 11. Davie, is composed of the following VC:Melt: Guns. Gueniere, (11ggshili: ell Wttep.. Pawnee ...11 Kansas gun:mob:mg . 6 two VeEEOIB were ordered home in consequence of the reduction of the naval force by act of vongreas The Boren arrived at New York In October, and the Shamokin is daily expected at Philadelphia. The continuation of the war between the allied powers and Paraguay has rendered it advisable to keep some portion of the force within as convenient reacu as practicable of military operations. Other points, however, within the limits of the command have not been neglected, but our interests have received atten tion and ample protection. The flag has been shown at Bahia, ltto de Janeiro, Bt. Catharinea. San Carmen, Phis Grande, Falkland Islands, Montevideo, iluencia Ayres, and other points on the coast of South America; at itosarto, Curupaity, Corrientes. and °trier places 13,i the La Plata, Parana, and Paraguay rivers; and at Cape Town, Little Fish Bay. Bermuda, St. Paul d. Lear do, Ambriz, HlnEetptp, liabend. Malemba, Lam - &no, Black Point Bay, and Mayumba, on the south west coact of Africa The presence ot naval vessels has generally been all that was necessary for the security of American cite - zens and their property; but on two occasions it was deemed advisable to land a part of tne force at Mon tevideo. On the 7th of February, in concert with the commanders of other squadrons, and at the request of Governor Flores, fifty seamen and marines were landed for the protection ot foreign residents and the custom- house. On the succeeding day, affairs having quieted, the detachment wait withdrawn. On the igth of the same month another force was landed, and remained on shore until the 26th, in COLLSeqwence ot disturbances occasioned by the assassination of General Mores. Rally in the year, at the request of the Secretary of State, the Wasp was dispatched to the capital of Par aguay for the purpose of toingiag away our minister resident, Mr. Washburn. When she arrived at the Sent of war in the Parana River, the passage of the vessel through the blockading.teet was refused by the ,Brazilian authorities; and after waiting some months, end tailing to couvinde them of the right of a neutral man-ot-ear to ascend the river as fares Asuncion for the purpose stated, that vessel returned to Monte video. in August the Brazilian authorities 11/Ith drew their otjection, aua the Wasp ag in ascended the riser, which is difficult of navigation, owing to its tortuous coarse anti shifting sano-bars. Only the smaller class of naval vessels can ascend to Asuncion, on the Parana River, in the interior of tlotan America, 930 miles from Montevideo. On the 30th of teptember, at Villeta (below Asuncion), the Wasp o.ok on board Mr. Washburn and calmly, nod coni , eyed him to Baenos Ayres. Rear-Admiral Davis, at the date or his latest dispatches, was preparing to accompany the newly-accredited minister of the United Suttee, General McMahon, to Paraguay.., NORTU reetplo SQUADRON. On the sixth of august last Rear-Admiral R. K. Thatcher, who had been in command of this equauron for two yeare, was relieved by Rear- Pkomiral Thomas T. Craven. The squadron com prises: G (r Pensacola (flag-ship) Resaca Mel:tong° u I Oseipee Lackawanna .. 1' 'Jamestown .16 Saginaw... uyane (atoresnip) I 8 These vessels have, during the year, given mace of their attention to the west coast of Mexico and the ports in the Half of California. where their presence hes had a salutary influence. Rear-Admirals Thatcher and Craven have each in hie flag-ship visited that portion of the station; and the following places have been visited, some of them repeatedly, by the several vessels : Idazatlau, Guaymas. Acapulco, Sian Bias, Manzanil.a. La Paz., einalow River, Jicabanma, add Boca Maceptile. The commercial ports of the Central American States of Nioaragua, costa Rica and San Salvador have been visited by the Saranac, Mohican and k lasi pee. Our flag has teen received withftanifeetations. of pleasure by both the anti:terrines and people. They. all respect our rights and those of our countrymen m alt:ling there A yessel of this squadron continues to be stationed at Panama, for the prott ction of our interests op the fothinoe, The Cyanc, now there, answers the eintrtf7e purpose of a guard and store vessel, and is able ordi narily to efferd ample protecttion to American inter ests. lu March last, there were threatened difficulties which rendered the display of additional force desira ble. and the Saranac was accordingly detached to that point, but, happily, the political on that occasion passed without any necessity for Interference. in June last Rear-Admiral Thatcher. in the flag ship. visited the northwestern coast, touching at Port, Townsend and Eoqutnmault. Several veitsela of the sonadron have visited the newly acquired territory of Alaska. The Ossipee conveyed the commis.. donors from San Francisco to Sitka, and was pre sent Attnet participated in the ceremonies incident to the transfer of the flag. Toe Restica and Jamestown, although sent there primarily for the influence of the cold Climate In die intectlng them of yellow fever, afforded such pro tection to our ettiaens as was desired. In April last the Saginaw was dispatched to Alaska, where she re - matfett several months, for the purpose of making ex- P'orutions and surveys. and of determining the most aniu.ble limbers anal, anchorages on the coast and in the adjacent islands . -The Suwanee under orders for the same point wee wrecked on the 9th of July, by running on a hidden rock in Shadowell passage, while in charge of a coast pilot. The °Macre and crew suc ceeded in landing on the nearest beach. Rear_Admi rat Bilstings, commanding her MajeetY'a Pacific Squadron. and'Commander Percher, of her Majesty's 'steamer Sparrowhawk,wero prompt to render vain ible assistance on the occasion..., The wood soon - broke up, but Rear-AdmiratThatcher, who was at the time at Itsquimault, made the btat 'practicable terms' foe lIIIVSLIg the engines and other articles. • The Lackawanna, which had been at the Sandwich 'lslands more than a year, was in 'May relieved by the Alohongo. Our commercial and "whaling "interests rally justify theconstant presence of one or more of ear vessels in that quarter; a feet which will be ap preciated when it hi known that at- one tittle in No -1867, forty-two American flags wore flying from that number of whaling and merchant vessels in the harbor of Honolulu while bat six gaga of another nations could he seen. In July last, his Majesty, the King of sthe Sandwich Islands, attended by a portion of his cabinet and his personal staff, visited the Mo. bongo, and was received , with the boners duo to his - position. - 801.111 i PACIPIC OQITAIDItOI4. • Rear. Admiral Thomas Turner succeeded near-Ad miral Dahlgren in command of ,thls squadron on the 14th of July last. It is composed of the following VeH r eels: GUJI a_ Powhatan, (flag-ship, ..17 Dacotah.. Tuscarora.. ... 10 Nyack .. liearsarge .... ..... 7 Onward , .. Tbo vessels of this r quadren have carried the flag into all the principal commercial ports from Panama to Valparaiso, and have rendered such protection' to American interests as wag---needed,— On the—night of the 10th of January last, General Prado, ex-ptesident of Peru., and other officers, came alongside the Nyack any requested _asylum freird nereonal violence,_which be apprehended from the revolationary partY. He also requested transportation to Chili. His requests were compiled with, Anil be was safely landed at Valparaiso. Australia and the various, groups of islands in the South Pacific have not been visited, the disturbed con dition of political affairs. and the disasters from phya foal convulsione; in South America, having rendered it. advisable that the vessels of the squadron should re main on that coast. , . Two - vessels,. the Wateree and the Fredonia,_ have been lost by earthquake. , I.IOI.TRY 'AND DEWTEUCTION ymilear.s AY .ZARTII• v_ . . A violent earthquake which occurred in the Harbor. of gt. Thomas. and in that, vicinity, on the afternoon of 'November 18, 1867, caused the stranding of the United States steatuer - - Monongahela;- - and two other vessels of the • equadron barely escaped serious injury. The De Soto..in the harbor of St. Thomas, was swept from ber moorings by the force of the waves, both chains snapping, and , was thrown violently upon the iron pike of a new wharf, but fortunately the next wave carried her again into deep water, and he sustained but little injury. • Tho Susquehanna, in the same h.ar bor, succeeded in getting away. from her dangerous position without damage. The lilenongahola, which at the time was anchored off Frederickeradt, island of St. Croix, was carried by a wave over the 'warehouses, and into one of the streets df-tbe town. She came back with the return ing sea. and . was legit on a coral reef at thotvater's edge. Fortunately._ but five of her crew. were...bat, and no very serious in inry was sustainui by the ship. its it was deemed practicable to re-launch her, the officers and crew ;embed by the wastrel. - On learning the facts, the United States bark Purveyor was put in commission at New York, provided with all necessary appliances for launching, and on the 17th of January lett for St. Croix, where she arrived on the 3lat. and the party, under the supervision of Naval Constructor Ddvidson. commenced.preparations tam getting the Monongahela afloat. The ihst attempt failed. but on the 10th of May a successful effort was made. She Was - safely laturthecVand left St: Croix on the Vitti of June. arrive° at New York the 20th,and was put outlet commission July 8. On the 13th of August last, a violent earthquake visited the Western coast of soath America, by which two of the vessels of the South Pacific squadron were lost tn the service. The storeship Fredonia had, in consequence of the prevalence of yellow fever at Cal lao. bean moved up to Arica, and was there with the Wateree quietly riding at anchor. a. short time after the shock of the earthquake was felt the sea receded. leaving the Fredonia on the bottom, and a moment after the waters rolled in with such power as to break her to fragments. Twenty-seven officers and men were drowned—three officers who were on shore, and two seamen who were rescued, being all that were eaved. The Wateree was thrown ashore and left high and dry about dye hundred yards from high water mark. elk, was badly strained, and her wanton was such that the expense of any attempt to launch her would have exceeded the value of the vessel. Grader these circunittatces it was deemed !hi 'the beat ir.tereets of the government to sell her. and the necessary direc tions were accordingly given. Bat a single man - was lost from the ves-el—a seaman in charge of the cap. tam's gie on the beach. who was carried ont to sea by, the waves Rear-admiral Turnermas at Callao, in his flag-ship, the Powhatan, when this calamity occurred, and, as a matter of security, steanviciont of the harbor until the next morning. On learning of the disastrous results of the earthquake at Arlcq, he proceeded to that point. The Poxvhstan, on application of the authori ties of Peru, was permitted to convey surgeons, nurses, for the relief of the thousands of sufferers at Ar Cu The commanding officer of the Wateree also I urniehed such aid as he could to the destitute inhab itants, with provisions from the ship's supply. The senior officer at Valparaiso promptly responded to an application of the Chillan government, by placing the Tuscarora at the service of the authorities to convey viovisions anti other necessaries to the sufferers alony the coast. NAVY-YARD PACIL/TIEB In the event of a war with any - maritime power, our battles are to be fought upon the sea and not upon the land—by our fleets, not by our armies. Nonation 01 Europe can transport any considerable military force to our shores, but should it be attempted, they would be met upon the ocean and there arrested by our navy, if it is maintained in a condition at all com mensurate with our maritime ability, and such as common prudence admonishes us to have always ready to be put In commission. Our floating bul warke, not less than our harbor fortitleationa, should receive attention; for, though peace now prevails, and we hope and expect its continuance, there may be war in the not remote future, for which a wise and prudent government should he always prepared Wo are also admenished by the experience of the peat that among contending belligerents the rights of neutrals are not always respected; and the best guar antee against aggression is a timely exhibition of our ability to maintain the honor and rights of the coan triinfortunate would be our condition should the coun try bo sudoenly involved in hostilities with one of the principal maritime powers were we no better pro paree than when the late rebellion commenced. In none of our navy yards is there more than a sin gle dry-dock, and there are but six in all—three built of stone and three floating docks. In the event of a maritime war this deficiency would be seriously felt— perhaps to a greater extent than any other of our press ing wants- and it is worthy of consideration whether steps should not be taken withoni delay to place our naval establishments in this respect in a condition approaching, at least ' our relative importance with other naval powers. The dock-varde at Cherbourg and Toulon in France, and at Portsmouth in Great Britain, each contain a greater number of dry-docks than all our yards combined: and some of the -other dock-yards of these powers are but slightly inferior to those named. W bile Great Britain, France, and other wartime powers aro increasing their dry-dock facilities, already far greater than oars, we are doing nothting in this direction. These and hindered subjects have been adverted to in preceding reports, and need not be recapitula-. ted in detaii, hut could not be wholly omitted. _DEDUCTION OP THE FORCE IN NEVE-I'6IIEIS. A reduction of the working force in the navy yards was commenced soon after the close of too war. by gradually elsruissing the most inefficient and timet able mechanics and laborers, and; retaining only the experts and most faithful halide for continued perma nent employment. This arrangement, while it re lieved the department of the least profitable employes, secured a bogy of skilful mechanics on whom the gOvernMent could always depend, and who _would toren a nucleus to initiate others in any emergency. Hulls which had been commenced in the navy-yards during the war were in progress of construction and yet unfinished at its cum, tor - which engines were building under contracts. To employ a email force of the best mechanics to complete in due time the work on these vessels was considered true economy, and tor the best interests of the government in all re specie. But the action of Congress bas necessitated a further reduction, so that but a remnant of that body of superior mechanics who were employed during the war remains, and they are engaged almost exclusively in the repair and refitment of vessels. Congress, by reducing the day's laborof those who work for the goverilment. to' eight hours instead of tea, has imposed on the department, as a necessity, the employment of a largernumber of hands to ex ecute the same amount of work; and tt is was intended that tho per diem compensation tor a working day of ten hours in outside establishments should. under the statute, fix the rate of wages in navy yards, 2J per cent. Is added to the cost of labor. TDB NAVAL ACADEMY Vice-Admiral Porter continues in cnarge of the Naval Academy. Thu high standing of the institution con tinues to be maintained, and the officers yearly added to the service possess the advantage of excellent academic culture with professional discipline. The number of graduates at the close of the last academic year was 79; the. number of admissions the present year, -i9; total number of midahlecten now at the academy,-259. Since the passage of the act of March 2, ISO, until the faint:tam of the present class, I have appointed no midshipmen from the States which were excluded om reoresentati on; but the admission of representa tives during the current year, though at a late period has led to the le:commendation and appointment of several midshipmen from those States. NAVAL ANMENTIORN. The act of June 17. 1868, limits the number of per sons authorized to be enlisted into the navy, includ ing apprentices and boys, to eight thousand five hundred, and no more. This limitation, which ie ac tually below the maximum which existed prior to the war, has compelled the Department to reduce the number of naval apprentices A discontinuance of geneital enlistments was ordered immediately on the passage of the act, and discharges have been taking Place to such an extent as to require the Department to put one of the school ships out or comtnlsslon. The necessity for this step is to be regfetted, because, a policy bad been adopted for the future of the navy. which, if properly encouraged and sustained, would have furnished both the naval and commercial ma. rine wlth.a body oc mariners of unsurpassed excel lence. I am unable to perceive reasons for 'minding naval apprentices within the established number of persons employcifin the naval eervlce, and the eat3Ct 'Mud necessarily be to limit their nnajber, and-check a nohow so suspiciously commenced, it it t does • not 'wholly defeat the great object intended, BUR VUI" OF rui 1 , 1011771 rAINFIC. In_view of the rapidly . inereaeing _intertentiwe be 'western America 'anti Asia. of •they-growing commerce ol the Pacific 6tates, and -et the • , important and various interests which are, npringlnt. np In connection ,with our''recent eXtenstve aoduisi • mons, it is important that a more complete andays ' tematic survey should be made of the -North acme Octnn. The naval •vessels =the station continue to perform some useful but necessarily limited and irreg-, War eurvon over that extensive, and partially explored field. but the period has arrived when something more effective should be done.- _ ~ . Attention is especially invited to Brooks or Midway Islands, discOvered a few years ago and recently sur veyed by order of thls department. ,The charts of the slimy represent two Islands enclosed in a lagoon. terming& perfectly secure harbor; accessible to ves• eels drawing less than twetty , _ and affording an abundant supply of pure;freali water. Thes&lidands, which are uninhabited and unoccupied; are situated about midway between California and eastern Asia, on the track of the 'mall steamships,- and furnish the only knoWn refuge forvesselapasslng directly between the two continents.: It is represented by the naval officers who. ade the utilVeY, and also bt , Reg-Admiral Thatcher, lately in command of the NorttiTackle squadron, that the bar at the entrance of the harbor might be &smelled at a very email expense, and a port vastly= superior to Honolulu be thus opened to mariners, where a denet might ,be eetablished for the supply of provisions, water, and fuel to the ocean steara lines, and a refuge aftordett to merchant ships navigating. that ocean. The importance ,of taking posseselcmofthese Wanda, and making thepropos improvements, can scarcely be overestimated and should tbe delayed. . ~.. .... 6 The Department bats continued preilous arrange ments for the custody and preservation of the Iron clad fleet which it hats on hAtid. These vessels can bo serviceable only in time of war, and tho probabilities are-that with a prolonged peace they will, from cm roalon and other causes, greatly .deterlorate, and not unlikely become useless before they will be needed for service. In the meantime their keeping and proper care are, attended with considerable annual expense, and at no very dating period a large. outlay, almost 1 -egnal to-the - aaristructlon - of - netv - 'Nesselsiwillt quird to put them in aallingand (Wmhi conditiOn. • Since the passage of j thojoint restantion.authoriz ine their sale but two have been disposed of—the Ca tawba andtineota, - ots class --- of Wallope similar in all reapects-;at their appraised value. 4)755.000, which has been paid into the general treasury, as dt rected, and not applied to the primes-a or this De partment. Exception was taken to this sale and tranafsr, ano Congress, through a committee. ordered an investigation. Delay and embarrasament followed to the anroyanco of the foreign noverninent which was indirectly the purchaser, and the effect, has been to diner other powers itOM offering to make purchases. and such of our countrymen as interested thee:mein* to effect Bales, as a r business oPeattion, have 'lnns rentiy abandoned their effort's.-- - - It bas been and still is the opinion of the Depart ment that tbe , trua policy of the_ governmeat is, to dispose, if possible, of all the vessels of the classes whose sale has- been authorized-by Congress, --To beep them entails a lame annual expense [wan the government, and ha a few seam if unused they_ will become valueless as vessels-of-war, and will have to be broken up end disposed of as old, material. it is worthy ofsonsideratlon therefore, whether they should not be sold, If opportunity offere, at less than tueir present appralsexuent. - raosiorrox Oir orricens. The act of April 21,1841, provides that ."no line offi cer upon the active list below the grade of cOatalo - nor any other naval officer, moray,; be _promoted to a higher - grade until:l4i Mental, moray. and profess-, biOrull fitness to perform all his duties at sea shall ba established to the satisfaction of a board of examin ing officers, to be appointed by the President of the United States, , 'and. unless be has won, examined by, a boardof naval surgeons and Profibanced physically qualified'to perform all his duties at sea " If not re commended for promotion by both of these boards the act directaihat he "shall be placed upon the retired list" Under the provisions of this act, young oilicera in the early stages of their active proicsalonal career are in some instances placed on the retired Hat and thus become pensionere for life, aftcr having received an education at the public experve. without rendering any equivalent service. No discretionary power la conferred Ql2 the Eecretary or _President: to permit e second examination, even if the efficerahall !um sub sequently overcome the cause of failure. nor can any relief be granted, for the act is mandatary. • It may well be questioned whether any °dicer below the grade, of lieutenant commandershouldhe .placed. on the retired list for mental or professional disquali fication which Molten the remit of indolence or in capacity. ' On the 17th of. April last a protosed form of deed= of this property, with accompanying papers. was re ceived from the city of Ptulaaelphis and transmit-, ted to the Attorney Uenetal for examination, art le quired by statute- The investigation of the various titles involved has necessarily been protracted. and one or two, points sormeaterl by the Attorney eenersl yet rennin to be reported, upon. It is thought that but a short rime will elapse - hefore the title will be per rectal aril the landlucome the property of the United state& - MTN ON TUN THANES NIVEA kVA NAVAL ponroora. In my last annual report it was stated that a tract of land, having a water front of, not less than a aa!e on the Thames river, near New. London, Connecticuk had been selected for the transfer to the United States, under the provisions of a clause in the_act making aproopriations for the naval service, approved' March 2, 1867; The deeds of the:propert7 were offered to the government by the Governor (it Connecticut or} the 22d of May, and after examination by the Attordery General, as movided by law, were formally accepted on the 27th of June, 1841 The second section of "An act relating to pen sions," passed attire last session of Congress, pro vides "that no person dish be entitled to a pension by reason of wounds received or disease contracted in the service of the United States subsequently to the passage of this act, unless the person who was wound ea or contracted the dbease was lithe lino of duty;" and, "It in the naval service, was at the time borne on the books of some ship or other vessel of the United States. at sea or in harbor, actually in com-. mission, or was on his way, by direction of competent authority, to the United Ststee,or to some ottiervistael or naval station." Some of the moat heard ous duty lb which naval officers are called upon to engage is discharged at shore stations, and when their names are not borne upon the books of !I vessel actu ally hi commission. It is manifestly unjust to deprive the family of an officer or. Beaman who may lose his Me while engaged in proving a gun. or firing a salute, or "in the line of duty" in any other way, ot the small pension heretofore allowed in such ewes, because his name happens to be borne upon the books of the station instead of a vessel in the harbor acto. ally in commission. . Within the past month an officer who had been . 42 years in the service, has died of disease "contracted in the lino of duty" on shore, and tinder the provisions of this act his family are deprived of a pension. it is recommended that the law be amended in this particular. The naval pension roll on the let of November, 1868, waa tut follow e: 1,175 invallde t annually receiving $92,574.19 1,515 widpwa and children, receiving 247,152.00 86 invalids, under actblareh 2. 1857. ro- 2,726 persons, receiving a total amount of. $347,031.19 There has been during .the year an increase on the pension list of 248 pereons, calling far s27,2(a.Uti. 11114E8 AND rxxemx rum. In my annual report for 1861. the proceeds of the sale •of prizes captured during the war and adjudicated prior 'to the Ist of November of that year were given. Since thbt date most of the cases then in court have been determined, and upon the ler of November of the present year the gross proceeds of such miles, as far as. returned, amounted to 824,875,- :i+1.91; expenses aster as returned $1,828,000.86; net proccids $23 629,627 -During, the year the naval pc.usion fund has been in creased 81,000,000, making a total at the present • time of sl4,eee, 000. The act of April IEOO. provided "that all moneys accruing, or which have already accrued, to the United States from the sale of prizes,thalt be and remain for ever a fund for the payment of pensions and half-pay, should the same be hereafter granted to the callzere and seamen who may be entitled to receive the same.' In the revision of the prize law in 1862, when the country was engag-d in war. this provision - teas' TO-' - enacted and subsequently, upon the recommendation IthisDepartment, the Secretary of the Navy, as t ustte of the fund, was authorized to invest It in reg.-, istered securities of the United States, which wap done, at the same rate of interest:the government was paying to other creditors, viz., Mx per cent. in gold.' The statute also provides that if the income of the fund is more than sufficient for the payment of pen alone, "the.surphis shall be applied to the making of further provision for the comfort of 'disabled - officers, seamen and marines." I cannot in juetice to•the distinguished navel of ficereoho have rendered invatuable service to the country, and by their gallantry contributed largely to this fund, omit again calling attention to the fact that the present pension laws make no provision for pensions to the families of the admiral, vice-admiral, rear-admirals, cOmmodores, and other, grades of "the line and'etaff, :and again urging that suitable pro vision be Made in each of these cases. ExrrseEp 4ND ESTIMATES., The available resources for the fiscal 3 ear, ending June 80,1868,'were $103,465, 754.69 By request or the Navy,'Departniont there was carried to the surplus fund of the treasury, on the 30th' September, 1867 ' • 65, 000, 000, 00 Leaving subject to draft 38,465,754.09 There remained in the treasury, on the 30th Jane, 1868 18 345 360 07 Sbowine en expenditure during the fiscal year of ' 20,120, 39 L 62 The resources for the current fiscal year are EU3 PA' lowa : Balance in the treasury $18,345,860.07 Appropriations, act Jane 17, 1868 17, 356, 350.09 . - • 85, 701, 710.07 There bas been designirted to be car- • • • • ried to the surplus fund 1,129,651:0.5 Leaving unexpended and available :for the current fiscal year • 84;672,015,12 The'estiruates for the fiscal yeat• ending Juno,Bo, 1670, are as follows: ' Pay of officers anti seamen of the • navy a 7 869;728.07 %pairs at buildings, (locos and in- ;;; ; • cidental expenses navy yards..: 1;285,08(1.00 Pay- of civil establishment in navy ; • 1 - • yards, hospitals, ,1:c • ' '426;885:76 Ordnance, repair cf magazines;,tic' 450, ClOO. tie Conk hemp, and . 1,820,,.000:00 .Navigation and navigation sunplibs.. 257:500.00 avai Academy, 210, 684 .40 LEA(It7E IBLAI4ID. 11= Naval °purgatory and .Nanttcal Ai , tisane - 40,560.011 Repair sun tireservatdon of vessels.. S.166,500;011 Ptetan machinery. tool,. &c I,2ass, 000,09 Provisions and ,clothing 0 1,672,i560.(110 Ilopains of rival boipitala and labor- • stories 46, (I00.01:1 Contingent expenses 1, 6 44,563 OD, support of marine corne t .. .. . ... ......... 1,174.767.7 T . --- Total , $20,998 , 414 51/ , As Congress has for two years declined to make , appropriations for improvements in navy yards, I der remit the several bureaus of the Department, in pre , paring their annual estimates, to accept the policy erophatically indicated of the wishes of Donates& and to limit their estimates to. the' amount necessary for the wants of the service, based upon the, authorized number of men, and want is absolutely required to keep in repair and to preserve the public property. Should it be thought advisable to place the , navy yards in more eillcient condition, befitting the regairements of the country and the service, former reports can bb : referred to for statements of improvements considers:l essential, or should the views of the Department in these respects, or as regards`any branch of the service' be desired, they will be promptly tarnished. Since the close of the war the estimates_ of Departmeot and the appropriations of Congress have -- until the present year, been based on a MAXIMUM Of 15.000 enlisted men. • The , eatimates mow submitted 'are - for 8,503 mho, lit: chiding appreptices. the number established by the , act approved on tho ilth of last June. Should EFOXI ffICPO at eta , present eession enlarge or diatintett the number now authmized, tho appropriations ehould be made necessarily to correspond, and the estimates which follow must conform to existing legislation. repoug • The accompanying rts of the chicle of tho sev eral bereave, and of the> commandant of the merino corps, giVe a suromary of the operations of their sev eral departments during the year, and are referred CO for lull Information, upera polate_whiett_can_herairaty bell ftyaltiitted to. __ . • The Commandant of the Marine Corps reports the force in the best poasible condition of elliciency and elscipline,and the barraeke andpublic propertyin-thelr-- charge well - Cara for and in adinireble order. A. re duction of the force corresponding to tnat of the naval service ban been made, and the entire atreurgth of the corps, officers and men, la now about 2 800. The marine barracks in Wrishington,built of indiffer. exit material nearly seventy yeara ago, are represented as rapidly crrimbliog to decay. and in each a alum.. detect condition that it wilt be impossible for the • troops much longer to occupy theca. The necessity for ;the'erection of new 'barracke, which has been re-. peatedly urgral, Is again respectfully recommended. CUNOLUSION. In this my eighth annual report, it Is aeatisfedlori te state that the 3 ear now drawing to its close has been navvy.f ysf acetal bat active cruising on the part of tho Our corrimace end gapping interwe, If, less extensive than-they were eight Yews ago; are never theleea as vigilantly guarded and pmtected. The waste of warts always great, but much of the expenditure of the Navy Department, which is but a small per cent. of the tuitional war expenses, is In vested In navy yard improvements, which are worth to the gnvernment all they cost, and, in naval-yassels and ordnaece, which have at all times an ititrinein vante. When the fact of this large amount of pro perty on hsnd, of the return of minions to the t•es vorY. of tbe magnitude of the war, of the vast opus.. tions or_the Davy. and of the depreciation of the cur rency. and •the cor , sequently enuanced prim!) won which thrteeoperationa were conducted, are cocustder ed. the economical and faithful administration of the Navy Department will be admitted. My acknowledgements are, doe to the gentlemen who, In their several grades, have been associated with um In the discharge of the laborious and re eporsible duties of tats deetttment, for the able and ethcient service which they have readered. In the choice of my assistants. of the chiefs of the several bureaue, end of others who have participated in the civil administraticm of this department, as also In the sett ction and assitranient to duty in the navy of tae officers whose meritorious conduct and heroic achieve ments have illumined our history and given enduring renown to the navy, lege= myself to have been most fortunate. and I cannot elm this report without ex pressing towards each my sense of grateful °lotto, Lions, and commending them to the gratitude of the government and country. Gmton Wirmata, Secretary of the Navy' To.the.lttaident: F.VEL*Ort'is OF THE POSTMASTER4JENERAL POST OFF - lelt DRTAIiTMEST, Dee. 3, 1868. —Sir: The ordinary postal revenue for the year ending the 30th day of -June last, was $16.291,600, and the expenditures during the same period, includ ing service for which special appropriations were made, $22,730,592, showing an excess of expen ditures of $6,437,991. The receipts from postages, as compared with --the previous year, show an increase of six per c.entute and the expenditures an increase of eigh teen per cuatum. The ordluary expenses, not ineluding mail transportation for wbich special appropriations were made, were 421,555,592, and the receipts, including the amount drawn under the acts mak ing appropriations for carrying "free mall mat ter," were $20,092,600, showing an excess of ex penditures of $1,462,991. The receipt., of the department were :—Frinn posteges, $16,292,600; the amounts drawn from the Treasury under acts making .appropriations for "carrying free matter," $3,800,000, and under the acts making epecial appropriations for "over land mail and marine service between New York and California," $1,1'25000; steamship service be tween San Francisco, Japan, and China, 4125,- 000 . ; between the "United States and Brazil," *JOAO; for "carrying the mail on routes estab lished by acts passed dal ig the first session of the Thirty-ninth Congress," 4486,525, and. "for prOparing and publishing post route maps." $10,000; making the receipts trom all sources 421,989,125. The expenditures of all kinds were as above stated, 422,730,592, showing an excess of expenditures over receipts of 4741,466, for which a special appropriation will be required- The revenue account stated by the Auditor (see appendix) differs from the foregoing because of his adding to the reedipts of the department,from all sources, a balance of $1,494,469, standing to the credit of the revenue account Jply 1. 1867, hut whfch is not immediately available. The estimates for the current fiscal year, as eubmitted to Congress with the last annual re port. showed anticipated deficiency of 43.- 298,000, to meet which there was then la the Trea sury $2,000,000, being the unexpended balances of termer appropriations standing to the credit of the department, leaving the amount to be pro vided by aPpropriation from the general Trea sury 41,296,000. Of this sum Congress appro pi bated 4800,000. '[he expenses during the fiscal year just clesed exceeded the estimated amount, especially in the item of transportation, and thus absorbed the 0 $2,000,000 relied on to assist in meeting the an ticipated deficiency for the current year. The ordinary expenditures for - the current-year were also estimated too low, from the fact that the de partment could not, at the Lime the estimates were made, anticipate the extraordinary increase of service established by, acts of Congress. Tak ing those or the last fiscal year as a basis it is an ticipated that In the current year there:will be a deficiency of $3,60500. There will also be re (eared 497,000 for service on the route from Fort Abercrombie to Helena, Montana, anthorizedhy the act of July. 27, 1868, from January 1,1869,, to , June 30, 1869; and to meet the increased liabili ties of the department for service on the "over land route," $161,000, making $3,862,500 which will be required to meet deficiencies in the re ceipts for the current fiscal year. The accompailyieg report of the Auditor fully' sets forth the details of the financial operatlona of the department. The:ordinary expenditures for the year ending June 30, 1870, (including $645,250 for overland end sea mails to . California) are estimated at ' 424,510,41 a The ordinary revenue is estimated at an increase ,of five per ceutum on that_',.of. the year _just closed, or $17,100,000 Add the standing appropri salmi for carrying 'free mail matter.... Making the total estimated revenue 17,800,000. Showing an excess of expenditures of $6,740,413 to be provided for from tho general Treasury. It will also bo necessary to make the- usual, special appropriations as follows: , Mail Steamship service - between San Francisco, Japan and China $500,000 Mall steamship , service between the United States and 150,000 Mail steamship. service between San Francisco and the Sandwich Islands, 75,000 During the year 883,470,500 postage atomPs, of the value of $11,751,014 including 160,000 pone dicul stamps..valued at $14,750: 44,552,300 plain stumped envelopes, representing - $1,285,218. 25,460,750 stamped envelopes, bearing, printed etude and requests for return, to writers repre senting $750,520, and 3,072,600 newspaper wrap pers, valued at $67,372,, were issued , The aggre gate value of these issues Was - $19,863,124—being an Increase Of 3 .45400 per contain over the issues of tho,previous year. The sale of postage stamps 'and stamped envelOpee during the year. as ro. ,ported by the Auditor, was, '514.066,119, or $209,016 more than tho issue; thus absorbing to that amount the stock remaining unsold in the lands of Postmasters June 80,4807. The number of packages of postage stamps lost in the mails 700,000 durfeji the r year ilea - 33,. epreeenting $2;67`.., ~and . of stem ped _envelopes , 7, Yenned at $220.• There were In the service'of the department on the 3d Jan, 1868,, , 8,§91 contractors ;Pr the transPortation-of the atolls. Of , mail routes in operation there were .8,226;' aggregatallengtb, 210.928'rnilee; aggregate annual transportation, - 84,224,325 mike; aggregate annual cost, $10,236,. 056; including the compensation of poattl rail way clerks route agente, local agents, mail- tries sen gere,retail-route znessengent and baggage mss-' tern. In charge of malls, viz: $1,114,333,the aggre gate annual cost was* 1.1,380,389.Tti1s service was _divlded.as,foltows, viz: -Railroad routes-length, .36,018 miles, annual transportation, 34 : 886,- : 178" IntletlV annual cost, $4,177,126: about 3,2 cants per 'Mite. - Steamboat' routes` Length ' 19;647 ' miles; annual transportation 3,707,530 miles; annual cost, $350,331, about 1613 cents per mile. Celerity, certainty and security-Lengtb, 161,233 =ilea; annual tranepottation, 45.540,587 miles; annual cost. $5,438,299; about 12 mate per mile. The length or routes was increased over the pra; ceding 'ear 13,083 .mlige; thh,annuai-transporta tion,,s,24l,p3G, and ce5t,.59 . 29,77 Opt° _which add - beresied eost fiar- railway ems, al - clerks,-route,- local and other other agents, $93,762, making an aggregate of $1,023,562: ---- In reference to-the overland-mail.route-the re- port states that after the failure of several bidders,. whose entitraeterhad` been accepted 'to carry the mail, a contract was made with Wells, Fargo & Co. to carry the mails between the termini[ of the Union Pacitie and Central Pacific Railroads for one year. or untilthe two roads ' meet; 'at the e o ratf 481,760,000 per Minna:, subject to deduc tion pro rata for every section of fifty miles of railroad completed and reported to the depart ment ready to carry the mails, It being estimated thetthe_AttP between the railroads, -covered 'by theitage Service, - will - be lesitened at tberratc-of fifty miles every fifteen days, or a hundred miles a month, and that it will be closed up entirely by ' the let of Auguit, 1839, and that upon this bads the pay to Wells, Fargo 454. Co., sander their ac cepted proposal; will amount in all to about $370,000. Messrs. Wells, Fargo & Co. also ob tained the con tract to carry the mails from Coyote, EA111 , 013, to Denver. Colorado, at , $79,000 per an., nuts; and also, on the route froM Cheyenne, Da,- cotah, to Denver, at 40;970 - per annum, on 'the same terms as above stated. Under these ar rangements the overland mail service on the -three-routes„is now 7 in_segularoperation.-The terrl tor tal mails are now carried ;froth Tort-Aber crombie. Dacotah, to Helena, Montana, at 11194,060. The service; on Gm` route front Sheri dan (on the eastern division of.the UntowPacific Railroad) to ;Santa Fe-bas been increased from three to six . trips` per:. Week, and! the schedule time reduced to four days in summer. The sor vlee Is well performell,, though still occasionally by hostile Indiana: ' The Important route from Salt Lake City to the Danes, Oregon; has been reset from let October:hot for to.x.4ltnee a-week-Fe:nice, at the rate of $149,000 per annum -,A salving, as compared with the last contract, of slo4,oooper annum., The 3014 of June, 186f3. being the period for the expiration of the term;of contracts for trans porting mails In the States of New Jersey, Penn sylvania Delawaredderylandand Ohio, the de naritmenl, In anticipation or the close of the terra, entered upon a sysitematie revision apd re adjustment of. the rates;of pay_on railroad router otthose States. , Vberever the ' returns required or jut:tilled a change from the former rate a cir cular was addressed to the , proprietors -of the route, submitting tho offer of the to department and explainipg Its purpose. In many instances the terms offered have, after considerable eorrespon- Abaco, been accepted, and contracts made ac .ordlngly,., ,In others, , though formai contracts are 'for the service , for • the first quarter of the new term, not executed, Inc department , :has proceeded ' to settle of the rates offered. many routes In other States than those above named' have been brought up fur review, upon applications made by the pro prietors of tho railroads interested,' and In every ease where-the returns showed a readjastotentlo• - be proper it has been ordered. Thus the rates have been changed upon seventy-ono mates In in all, as appears the annexed "table showing the readjustment of rates of pay per mile on certain railroad routes." The total amount of the annual pay upon them roines, under the re adjustment, it will be seen, is $926,043, and the total amount_ of the former annual pay $775,722 - -an excess of the present over the former amount of $150,320. In connection with this subject It may be proper to state that at differ ent OURS within the months of January. Febru ary and ,- March last, while - Congress was in cession, there were submittal to the depart ment. in behalf of a "cadmium on mail service" an-;ainted at a national railroad convention pre - frly - held, - several Schedules of proposed ',ages in the rates of pay for the transports non of molls on -railroad routes, and finally the draught of an act on the subject, to be submit ted:if approved by the Postmaster-General', to the postellice committees of the House and Sen ate. The proposed asst provided that In all con tracts hereafter to be made with railroad compa nies for the transportation of the mail, the rates of compensation should be, at the option of the Postmaeter-General, in proportion either to the weight, of matter to be traneported 'or to the number of cubic feet of car space which the de partnient might require for the acCommodation or its mails and agents. The schedule of rates -,prescribed , in the act' al lowed upon every 'mile-of -actual transporta tion seven cents for car spare per day not ex ceeding twenty-five cubic feet, or weight per day mot exceeding 250 pounds; twelve cents for car apace per day exceeding twenty-five and not ex ceeding fifty cubic feet, or weight per day ex ceeding 250 and not exceeding 500 pounds, and so on, ascending to a similar sliding scale, until, for 2.600 cubic feet, the largest amount of "car apace"found upon - any route reported; the, rate reachedlls cents for every ,mile of ' transporta tion. Theproposed act provided further that an additional sum of one d.ollar should be allowed for every mile run by a train specially required to be run for the transportation of the mall, and two cents per mile• for transportlngM the pas senger cars any agent traveling on theimaineas of the department, routekagents to be.transported free, nut at their own risk.' Among - the other papers was , a -"comparative statement'? purporting to show the effectof the adoption of, the committee's rates upon the whole cost of the railroad mail service in'operation. by which it was made to appear that a diminution of thirty eight per cent. would result, leaving out of the account all car space' beyond the amount re quired to transport the mails as freight, allow ing 'a cubic foot for every- ten pounds' weight; and -this thirty-elght per cent. it was suggested by the committee, would probably be more than sufficient to cover the east of extra' car ,service required for th use'of route agenta and poatal clerks. If wad found, however, upon estimating the - Lear space used upon the first seven - routes-in table E. in the last annual report (pages 72-85), allowing six and or:c heat feet for the {height of 'the ear 'cell -4 "rg,-he :. suggested by ;the coMmittee,, that thirty-eight per cent, would be insufficient to .or the amount of transportation shown upon a routes alone at the committee's rates. To * ,i t , i xtiiin,, thererore,-the, real „effect Which...the ~,ssAc...,ption of the proposed rates would have upon g,' , ;i:'„nite annual coat of mail transportation on rail ' road rates,' a statement was made up in the de partment, predicated upon the "car service” and actual transportation already in use, as shown la table E, in the last animal 'report, by which it was found that the increase of expense would be enormous. Thus, for. Illustration, on the Phila delphia, Wilmingtrin Mid 'Baltimore Railroad mail apartmenteof eight different sizes were re ported, which- were estimated to average 1,750 cubic feet. For this amount of "car space" the schedule prescribed in the ,proposed act allowed i eighlY;one,cents per mile. The number of trips on the route' was reported at twenty-eight 'per week. Each trip inctuding the run forth and back, the number of trips Inuit be.doubled to find the amount of transportation per week on each mile of the road's length" making fifty-six miles, and this again multiplied by fifty-two to find the amount per annum, making 2,912 miles, which, at eighty-one cents per mile, would give $2,868 as the pay per annum for every mile of the road's length. The , present rate is $376. - The disparity on some other 'renters would be still greater, the rates running up from $75 to $2,000 and more, and from $2OO to $3,000 more. On the whole amount of railroad service; in opera tion on the 30th of Juno, 1867, the' effect would bolo Increase the annual expense from 483,812,- 600 to $21,710,023-:an excess of $17,897,423. The department forbearing, upon such a showing, to take any part in„presenting the proposed act to the Poet Mice committees of the two houses of Congress, has proceeded with the. iv,ork of read justing the rates of pay on railroad routes upon a scale within the limits of existing laws and much More 'compatible with'She resources at its command: - During the past year an • engraved post route map, in four sheets, has been completed ,by the topegrapher;:and coplea issued for the use of:the department, representing the, post-offices and mail service in the State of Now York; and ; its connections with adjacen t States, and with the dominion of Canada. This map along with that proviso:tall' published, representing the North eastern Staten hag been tound of great nee in the ' • • • • • • I Ltd '/A Yr. , L , 1 11 1 , OA- . I I y , • s • • • I • - - seteral b anches of ttsieleiiriment'itiiTaireir work tepestizineterif end others; and Oepeeialllftti ; the el4lo3Cf,thetrivelinT'Onitread),postiaffilere. }ln eottleg end = d istribut ing hitt e rs.; . A similar map, of tnefitateta of Pennsylvania, New Jereey, • DClaivere and Maryland was expected to have been.leined before thisbut the Large amonut of work req u ired • in chiapiliation has delayed the leette. The plates are expected from the en graver within three monthe. The map of the State Maine! , end laillegencres is also well advanced Ite Prighitrer'a s4 hands and _be completed about , the same time. Drawings are being prepared for the map of Ohio and Indientii-,and these other Ststfese;lti" groups, twill be talon up` as fast as thetteehltar nature and the magnitude - of this work will - Ine s imposed ' 5 , L t - .4 ` • -Thef menet of finetritnponedc totitractOra ; and deductiobs made from their pay during the year was $116,609,, and the amount remitted