em.

It gives me pleasure to report a decided improvement in the financial
condition of the Post-Office Department as compared with several
preceding years. The receipts for the fiscal year 1861 amounted to
$8,349,296.40, which embraced the revenue from all the States of the
Union for three quarters of that year. Notwithstanding the cessation of
revenue from the so-called seceded States during the last fiscal year,
the increase of the correspondence of the loyal States has been
sufficient to produce a revenue during the same year of $8,299,820.90,
being only $50,000 less than was derived from all the States of the
Union during the previous year. The expenditures show a still more
favorable result. The amount expended in 1861 was $13,606,759.11. For
the last year the amount has been reduced to $11,125,364.13, showing a
decrease of about $2,481,000 in the expenditures as compared with the
preceding year, and about $3,750,000 as compared with the fiscal year
1860. The deficiency in the Department for the previous year was
$4,551,966.98. For the last fiscal year it was reduced to $2,112,814.57.
These favorable results are in part owing to the cessation of mail
service in the insurrectionary States and in part to a careful review of
all expenditures in that Department in the interest of economy. The
efficiency of the postal service, it is believed, has also been much
improved. The Postmaster-General has also opened a correspondence
through the Department of State with foreign governments proposing a
convention of postal representatives for the purpose of simplifying the
rates of foreign postage and to expedite the foreign mails. This
proposition, equally important to our adopted citizens and to the
commercial interests of this country, has been favorably entertained and
agreed to by all the governments from whom replies have been received.

I ask the attention of Congress to the suggestions of the
Postmaster-General in his report respecting the further legislation
required, in his opinion, for the benefit of the postal service.

The Secretary of the Interior reports as follows in regard to the public
lands:

The public lands have ceased to be a source of revenue. From the 1st
July, 1861, to the 30th September, 1862, the entire cash receipts from
the sale of lands were $137,476.26--a sum much less than the expenses of
our land system during the same period. The homestead law, which will
take effect on the 1st of