which were conversions from State banks. Changes from State systems to the
national system are rapidly taking place, and it is hoped that very soon
there will be in the United States no banks of issue not authorized by
Congress and no bank-note circulation not secured by the Government. That
the Government and the people will derive great benefit from this change
in the banking systems of the country can hardly be questioned. The
national system will create a reliable and permanent influence in support
of the national credit and protect the people against losses in the use of
paper money. Whether or not any further legislation is advisable for the
suppression of State-bank issues, it will be for Congress to determine.
It seems quite clear that the Treasury can not be satisfactorily conducted
unless the Government can exercise a restraining power over the bank-note
circulation of the country.

The report of the Secretary of War and the accompanying documents will
detail the campaigns of the armies in the field since the date of the
last annual message, and also the operations of the several administrative
bureaus of the War Department during the last year. It will also specify
the measures deemed essential for the national defense and to keep up and
supply the requisite military force.

The report of the Secretary of the Navy presents a comprehensive and
satisfactory exhibit of the affairs of that Department and of the naval
service. It is a subject of congratulation and laudable pride to our
countrymen that a Navy of such vast proportions has been organized in so
brief a period and conducted with so much efficiency and success.

The general exhibit of the Navy, including vessels under construction on
the first of December, 1864, shows a total of 671 vessels, carrying 4610
guns, and of 510,396 tons, being an actual increase during the year, over
and above all losses by shipwreck or in battle, of 83 vessels, 167 guns,
and 42,427 tons.

The total number of men at this time in the naval service, including
officers, is about 51,000.

There have been captured by the Navy during the year 324 vessels, and the
whole number of naval captures since hostilities commenced is 1379, of
which 267 are steamers.

The gross proceeds arising from the sale of condemned prize property thus
far reported amount to $14,369,250.51. A large amount of such proceeds is
still under adjudication and yet to be reported.

The total expenditure