The report of the Postmaster-General presents a most satisfactory condition of the postal service and submits recommendations which deserve the consideration of Congress. The revenues of the Department for the year ending June 30, 1866, were $14,386,986 and the expenditures $15,352,079, showing an excess of the latter of $965,093. In anticipation of this deficiency, however, a special appropriation was made by Congress in the act approved July 28, 1866. Including the standing appropriation of $700,000 for free mail matter as a legitimate portion of the revenues, yet remaining unexpended, the actual deficiency for the past year is only $265,093--a sum within $51,141 of the amount estimated in the annual report of 1864. The decrease of revenue compared with the previous year was 1-1/5 per cent, and the increase of expenditures, owing principally to the enlargement of the mail service in the South, was 12 per cent. On the 30th of June last there were in operation 6,930 mail routes, with an aggregate length of 180,921 miles, an aggregate annual transportation of 71,837,914 miles, and an aggregate annual cost, including all expenditures, of $8,410,184. The length of railroad routes is 32,092 miles and the annual transportation 30,609,467 miles. The length of steamboat routes is 14,346 miles and the annual transportation 3,411,962 miles. The mail service is rapidly increasing throughout the whole country, and its steady extension in the Southern States indicates their constantly improving condition. The growing importance of the foreign service also merits attention. The post-office department of Great Britain and our own have agreed upon a preliminary basis for a new postal convention, which it is believed will prove eminently beneficial to the commercial interests of the United States, inasmuch as it contemplates a reduction of the international letter postage to one-half the existing rates; a reduction of postage with all other countries to and from which correspondence is transmitted in the British mail, or in closed mails through the United Kingdom; the establishment of uniform and reasonable charges for the sea and territorial transit of correspondence in closed mails; and an allowance to each post-office department of the right to use all mail communications established under the authority of the other for the dispatch of correspondence, either in open or closed mails, on the same terms as those applicable to the inhabitants of the country providing the means of transmission.