stipulated to be performed until the 1st day of June, 1850, which has accordingly been done. The officer superintending the construction of the vessels expresses the opinion that the Atlantic will be the first in readiness; that it is possible she may sail some time in the following month of January; the Pacific will be ready by the first of March; that two others will probably not be completed earlier than the first of August, 1850; and that a contract has been entered into by Mr. Collins for the frame of the fifth vessel. No information has yet been received of the probable period of her final completion. The department is informed that the contractors are making exertions to complete their vessels, to enter upon the service for which they are designed, by the time stipulated.

The contractor for the New Orleans and Chagres line bound himself to establish a line of steamships, to consist of at least five vessels, for the transportation of the United States mail from New York to New Orleans twice a month and back, touching at Charleston, (if practicable,) Savannah and Havana, and from Havana to Chagres and back, twice a month; that two of the steamships should be completed and ready for service on the first day of October, 1848, and should be of the burden of not less than fifteen hundred tons; that, should the secretary of the navy determine to employ a steamer of not less than six hundred tons burden for the service between Havana and Chagres, in lieu of one of the five steamers of not less than fifteen hundred tons burden, then the contractor agreed to construct a steamship complete in all respects for performing the service, and answering all the conditions required by the law. The contractor further bound himself to complete and have in readiness for service the two remaining steamships by the first day of October, 1849; that the line of steamships should be kept up by alter ations, repairs, or additions, (of approved character,) fully equal to the exigencies of the service, and the faithful accomplishment of the purposes intended by the law; that the vessels should be in full and entire operation on the first of October, 1849; that each and all of the said steamships should be commanded by an officer of the navy of the United States, not below the grade of lieutenant, to be selected by the contractor with the approval and consent of the secretary of the navy; that the officers should be accommodated on board thereof, in a manner becoming their rank and station, without charge to the government of the United States; and further agreed to receive on board of each of said steamships, and accommodate in a manner suitable to their rank without charge to the government, four passed midshipmen of the United States navy, to serve as watch officers. In December last, before any of the vessels under this contract were completed, the contractors, desirous to meet the wishes of the department, proposed to place on the route, temporarily, the ocean steamer Falcon, and she was accepted until the steamships to be constructed under the contract should be ready to take their places on the line; the department reserving the right to terminate the arrangement wherever it should think proper to do so. In view of the facts that no vessel of this line has been completed, that the demands of our citizens require every facility for the transmission of the mails and for the transportation of passengers on this route which can be afforded, I have not thought proper to discontinue the service, and the Falcon has been, and continues to be, actively and usefully engaged between New Orleans and Chagres. When the steamships contracted for shall be accepted for service, or when, from any other cause, the department deems it proper to dispense with the services of the Falcon, notice will be given to the proprietors in accordance with the agreement under which she is now employed. But one steamship built under this contract has been reported as ready for the service, either by the contractor or his assignees, and that has not been accepted. Commodore Perry, the superintending agent, reported on the 17th of Septem

ber that the Ohio was not then coppered, and consequently cannot be considered as finally completed according to contract. The Ohio has, since that date, been placed, by her owners, on the line between New York and New Orleans, and sailed on the 20th of September on her first trip without being accepted by the department. The contractor, some days before the sailing of the Ohio, informed me that she would commence the mail service on the 20th of September, and asked that the watch officers provided by law should be sent on board. The vessel not having been completed according to the contract, I did not accept her in fulfilment thereof, and declined to order the officers to the service as suggested. To prevent, however, any embarrassment or delay in the movements of the vessel, the officers were ordered to report to Commodore Perry, to be assigned to duty in the event of the completion of the Ohio according to the agreement, and with permission, if she were not so completed, to join the ship on such terms as might be agreed upon between themselves and the proprietors. The vessel not having been completed, Commodore Perry declined to order the passed midshipmen to duty on board of her, and the terms which were proposed by the proprie tors not being such as could be accepted by those officers, they did not join the ship. The vessel has gone on her third trip and has not yet been completed, and I have no positive assurances that she will be finished on her return a third time to New York. The Georgia is progressing rapidly, and may be ready in January next. The construction of the other vessels for this line has not been commenced.

By a contract of assignment, inade on the 3d day of September, 1847, A. G. Sloo assigned his contract made with the United States to George Law, Marshall O. Roberts, and Bowes R. M'Ilvaine, upon certain trusts declared in a deed dated the 17th of August, 1847, and the assignees and trustees have proceeded in the contracts with the United States. Difficulties have arisen between these parties which have led to a law-suit now pending in the courts of New York. The department regards this litigation as well calculated to embarrass and postpone the final completion of the other vessels, if not to endanger the ultimate fulfilment of the contract with the government.

The law under which these vessels are constructed does not clearly and distinctly define the powers and rights of the government over them. While the proprietors have been willing to receive on board the passed midshipmen, they have nevertheless claimed the right to prescribe their duties, and to assign them their positions; and while the passed midshipmen are received as watch officers, the executive duties of the ship and her navigation may be confided to others selected by the proprietors. I, therefore, urgently invite the attention of Congress to the law under which the contract was made, to the service in which the vessels are to be engaged, and to the condition of the contract itself, that, should it be deemed advisable to extend the terms, then it may regulate the whole subject by some distinct and unequivocal legislation.

After a careful consideration of this subject I cannot withhold the expression of an opinion adverse to embarking any further in the proposed union of public and private means in this system of ocean steamers, as calculated to promote the interest of the navy. Whatever may be the view which Congress may entertain as to the policy of transporting the United States mail, and affording facilities for the transportation of passengers and freight in the manner proposed by such a system, 1 entertain a decided opinion that if it should be regarded as the mode and manner which Congress has determined on for increasing the naval force of the United States, it will be found in the end entirely subversive of the object which it intends to promote. To the extent to which the present contracts have committed the faith of the government, and to the extent of the obligations under the contracts, they are of course strictly to be regarded and scrupulously to be performed. Yet, as a naval establishment, I deprecate any further extension of

the system, as fraught with incalculable mischief to the navy, and involving im. mense expenditures of public money. All must appreciate the great importance of rapid, regular, and safe transmission of our mails to all quarters of the world, and all are sensible of the great commercial advantages that must result therefrom. The contracts already made, and the sums already appropriated, are fully adequate to a thorough test of the experiment. I believe, however, it is a subject that should in the future be left to the competition of private enterprise. I feel assured that in the struggle American enterprise and American industry will eventually be successful; for a naval establishment, that which we are most in need of, is an independent naval steam force, of such extent and of such magnitude as the wisdom and liberality of Congress may think sufficient, and the necessities of the country may require.

Those governments from whose examples the present system was adopted, have immense independent steam navies, in which a proper military education and discipline are secured to the officers and men, and upon which they mainly rely for their naval strength and power. Until we have provided a steam power for our navy adequate for our protection, I cannot but consider it as premature and unwise to regard the proposed system as answering the necessities and wants of the government for a naval establishment.

Congress has heretofore, in its liberality to the navy, and in view of the necessity of an independent force, expended vast sums of money in establishing navy yards, and in the construction of docks and machinery of all kinds for the accommodation and equipment of vessels for its service. Thus there is afforded every facility required for the maintenance of the navy; and the large quantities of stores and materials which, under the former policy of the government have been procured and are now at its command, afford the means of building and equipping vessels better adapted to the naval service, and on terms more economical than can be furnished from any other quarter. While the policy may have been wise to collect and prepare these materials in time of peace, so as to be at our command in periods of difficulty and emergency, the great change that has occurred in the condition of our country no longer renders it necessary to the same extent. Most of the materials required in the construction and outfit of a fleet, to any extent whatsoever, are to be found every where throughout the country, and no emergency can arise when a deficiency need be apprehended. To retain those on hand is unnecessary; they are constantly deteriorating, and the constant improvements in the construction and equipment of vessels render it unwise to continue the present system of accumulation. The interest of the government would be promoted by discontinuing contracts for most of the materials we now possess, and by converting those on hand, as they may from time to time be required, to the repairs and outfits of the vessels now in the service, and to the construction of such others as our necessities require. It would therefore seem proper and economical to avail ourselves of the advantages now at our command, and apply the materials now in store to such an extension of our naval force as is desired.

The sums appropriated by Congress, and included in the navy appropriations, for the transportation of the United States mail between New York and Liverpool, between New York and New Orleans, and Havana and Chagres, and between Panama and Astoria, are as follows, viz.:

Total sum appropriated,

Of which there has been drawn from the treasury the sum of

Leaving unexpended the sum of

$874,600

874,600

$1,749,200

€81,500

$1,067,700

The amount drawn from the treasury, viz. $681,500, was to make the advances to the contractors authorized by the act approved August 3, 1848. No advance, however, has been made to either of the contractors for mail steamers by this department since the month of May last. Prior to the 4th of March, 1849, the amount of one year's service of the New York, New Orleans, and Chagres line had been advanced to the proprietors, since which no money has been drawn from the treasury on account of that line of steamers, the department not feeling itself at liberty, under the law and the circumstances, to make advances beyond the amount of one year's service. For the Liverpool line advances have been made amounting to $142,500, in equal sums, on the steamers Atlantic and Pacific, which advances are secured by liens on the vessels.

A contract was made, under the authority granted by the act of Congress of April 14, 1842, with Robert L. Stevens, for the construction of a war steamer, shot and shell proof, to be built principally of iron, upon the plan of the said Stevens; and the sum of $250,000 was appropriated towards carrying the law into effect. The contract bore date the 10th of February, 1843; the time for its completion expired two years after the date of the contract. Nothing appears to have been done under this contract; no plan was furnished; the construction of the iron war steamer was not commenced. The contract was renewed on the 14th of November, 1844, and the time extended for completing the vessels two years from that date. Some preparation was made under the second contract, and a portion of the materials was procured, but no plan was submitted by the contractor, and the secretary of the navy withheld all payments after December, 1845. Thus the matter rested until the 9th of September, 1848, when a third contract was made with Mr. Stevens, and four years from that date were given for the completion of the iron war steamer. No precise plan has yet been submitted by the contractor to the department, and no progress has been made in the construction of the vessel beyond the purchase and delivery of certain quantities of iron. Under these circumstances I declined to pay bills for iron presented in July last, and further payments under this contract will not be made. The matter, however, is submitted to Congress for its decision. Of the sum appropriated for this object, there is now in the treasury an unexpended balance of $183,521 22, which it is believed should have been carried to the surplus fund. A report in this case, prepared by the chief of the Bureau of Construction, &c., is herewith submitted.

The 13th section of the act of Congress of August 3, 1848, authorizes the secretary of the navy to cause persons in the naval service or marine corps, who shall become insane while in the service, to be placed in such lunatic hospitals as, in his opinion, will be most convenient and best calculated to promise a restoration to reason. I do not think it advisable to remove the insane of the navy or marine corps from the navy hospitals to private institutions. The skill and acquirements of the medical officers of the navy, and the comforts and advantages to be afforded by the navy hospital fund, are believed to be ample for all the beneficent purposes designed by Congress for those unfortunate persons. The number of insane persons at present in the navy hospitals is but twelve, and this number, it is believed, will not be greatly increased. The reports of the attending surgeons represent most of the cases as beyond the hope of amendment.

A joint resolution of the 9th of May, 1848, authorized the secretary of the navy, if, in his opinion, it was advantageous to the public interest, to make contracts for a term not exceeding five years for the purchase of American water-rotted hemp for the use of the United States Navy, provided it could be had of equal quality with the best foreign hemp, and at a price not exceed ing the average price of such hemp for the last five years. After the passage of this resolution all purchases in open market were suspended, and no foreign hemp has been purchased since that period. No advertisement for supplies

of hemp under the resolution was published until the 4th of March last. On that day proposals were invited for the delivery of a quantity of about five hundred tons annually for a term not exceeding five years. Under this advertisement several offers were made; the form of the bidding, however, was decided to be erroneous, and not according to the law. All the bids were rejected, and the department determined not to enter into contracts thereon. Prior to the passage of the resolution, purchases of hemp had been made, and contracts were in existence at its date, for the delivery of considerable quantities. There were in store at the navy yard at Boston, on the 30th of September last, 762 tons of hemp, of which 600 tons were of foreign growth and preparation. At the period of the passage of the resolution an opinion was entertained that the heavy expenses to be incurred in preparing for the production of the finer qualities of water-rotted hemp deterred our farmers and hemp-growers from entering into contracts for a single year's supply for the navy, and hopes were entertained that an extension of the terms of contracts to a longer period would induce the farmers and growers to enter into contracts with the government, and that such extension of time would justify the necessary outlay to be incurred in the erection of the machinery and fixtures required for its thorough preparation. That such was the design of the resolution, and such the hopes of its friends and advocates, there can be no doubt. Experience, however, has not realized these expectations. The farmers and hemp-growers have evinced an unwillingness to enter into contracts, and numerous petitions and communications, remonstrating in the strongest terms against the proposed plan, have been forwarded to the department. But two bids were offered by the hemp-growers, and they were for small quantities, not exceeding twenty-five tons per year. Bids were offered by others than those engaged in the growth and preparation of the article, proposing to sup ply the entire quantity annually required for the use of the navy for the term of five years. Under the authority vested in the department by the resolu tion, had there been no objection to the legality of the bids themselves, it would have declined entering into contracts for the supply necessary for the next five years; as the result of such contract, if made, would have been to create an absolute monopoly in the hands of a single individual, or of an association, of the entire supply of water-rotted hemp for the navy, to the exclusion of farmers and growers, for whose benefit the resolution was obviously intended. The department is convinced that the object contemplated by the resolution cannot be attained under the existing provisions. Such alterations and limitations should be made as will prevent a monopoly, and which will secure the supply of hemp for the navy to those actually engaged in its growth and preparation.

The opinion is entertained that if the government will make known its willingness and determination to purchase American water-rotted hemp alone, if it can be procured at a price not exceeding the average price paid for the last five years for foreign hemp, that quantities adequate to the wants of the navy, and of a quality greatly superior to the foreign hemp, would be prepared and offered by the farmers of the West at such points as would suit the convenience of the government,

The encouragement designed by the resolution was intended to reach the agricultural interest, and, by a regular and constant demand for all that may be required for the navy, afford the opportunity for fair experiment in the preparation at home of an article essential to the protection and prosperity of the country.

The buildings in connexion with the ropewalk at Memphis will shortly be completed. A steam-engine and all other machinery required for the manu facture of cordage has been contracted for; the machinery is already completed, the steam-engine is in a state of forwardness. The rope walk and