To the Senate of the United States:

In answer to the resolution of the Senate of the 5th instant, requesting the transmission to the Senate of "any information which may have been received by the Departments concerning postal and commercial intercourse between the United States and South American countries, together with any recommendations desirable to be submitted of measures to be adopted for facilitating and improving such intercourse," I transmit herewith reports from the Secretary of State and the Postmaster-General, with accompanying papers.

The external commerce of the United States has for many years been the subject of solicitude because of the outward drain of the precious metals it has caused. For fully twenty years previous to 1877 the shipment of gold was constant and heavy--so heavy during the entire period of the suspension of specie payments as to preclude the hope of resumption safely during its continuance. In 1876, however, vigorous efforts were made by enterprising citizens of the country, and have since been continued, to extend our general commerce with foreign lands, especially in manufactured articles, and these efforts have been attended with very marked success.

The importation of manufactured goods was at the same time reduced in an equal degree, and the result has been an extraordinary reversal of the conditions so long prevailing and a complete cessation of the outward drain of gold. The official statement of the values represented in foreign commerce will show the unprecedented magnitude to which the movement has attained, and the protection thus secured to the public interests at the time when commercial security has become indispensable.

The agencies through which this change has been effected must be maintained and strengthened if the future is to be made secure. A return to excessive imports or to a material decline in export trade would render possible a return to the former condition of adverse balances, with the inevitable outward drain of gold as a necessary consequence. Every element of aid to the introduction of the products of our soil and manufactures into new markets should be made available. At present such is the favor in which many of the products of the United States are held that they obtain a remunerative distribution, notwithstanding positive differences of cost resulting from our defective shipping and the imperfection of our arrangements in every respect, in comparison with those of our competitors, for conducting trade with foreign markets.

If we have equal commercial facilities, we need not fear competition anywhere.

The laws have now directed a resumption of financial equality with other nations, and have ordered a return to the basis of coin values. It is of the greatest importance that the commercial condition now fortunately attained shall be made permanent, and that our rapidly increasing export trade shall not be allowed to suffer for want of the ordinary means of communication with other countries.

The accompanying reports contain a valuable and instructive summary of information with respect to our commercial interests in South America, where an inviting field for the enterprise of our people is presented. They are transmitted with the assurance that any measures that may be enacted in furtherance of these important interests will meet with my cordial approval.

R.B. HAYES