The recommendations of the General of the army as to its future organization are presented for your consideration without abridgment. He refers fully to the reports of the heads of bureaus. The remarks made by myself as to these will be found embodied in the abstracts of the reports hereinafter referred to.

ADJUTANT GENERAL'S DEPARTMENT.

The Adjutant General submits a table of the "Organization of the Regular Army," an exhibit of the actual strength of the army, and a statement of the position and distribution of troops. He recommends a repeal of so much of section 6 of the act of March 3, 1869, as prohibits further appointment or promotion, leaving the organization of the Adjutant General's Department as it was fixed by section 10 act of July 28, 1866, and also embodies in his report other recommendations.

INSPECTION DEPARTMENT.

The results of the inspection service during the past year have been to discover and bring to the notice of the proper authorities the qualifications of officers to fill the positions assigned them; the condition of troops in regard to discipline, drill, and efficiency-whether duty has been neglected; laws, regulations, or orders violated; public property misapplied, lost, or wantonly destroyed; whether there have been extravagant or unnecessary expenditures of public money, stores, or material; and the personal responsibility for all irregularities and abuses, with suggestions for remedial action.

The report shows that, through the agency of this branch of the service, there has been continued improvement in the discipline and efficiency of the troops, as well as the promotion of a more discriminating and careful regard for the economical application of public money and property.

The number of inspectors now provided by law is deemed insufficient for the requirements of the service. An increase in the number of assistant inspectors general is therefore recommended.

BUREAU OF MILITARY JUSTICE.

The Judge Advocate General reports the number of records of mili tary courts received, reviewed, and registered, to be 14,944; number of special reports made, 1,352. This bureau, in addition to its regular duties, has been charged with the duty of systematically arranging and indexing the important state papers belonging to the offices of the late Colonel L. C. Turner, judge advocate, and Brigadier General L. C. Baker, provost marshal, and the work is steadily progressing. Lists are also being prepared of the fines and forfeitures imposed by military courts, and of cases of remission of the same.

QUARTERMASTER'S DEPARTMENT.

The expenses of the Quartermaster's Department during the fiscal year ending June 30, 1869, were $21,968,484 08, a reduction of fourteen and a half millions below those of the preceding fiscal year.

In February, 1869, the number of civilians hired by this department exceeded ten thousand, which has since been reduced to four thousand. Five hundred line officers have done duty in the Quartermaster's Department, in addition to the officers of that establishment, eighty-four in number.

The report states that the clerical force of this office has been reduced so low by late legislation as to seriously retard the public business, and to provide for the settlement of accounts, some increase in the force is necessary.

A building capable of accommodating all the bureaus of the War Department, fire-proof and secure, is much needed. Military records of great value are exposed to destruction, and are so scattered as to impede and delay the public business. The monthly rental of buildings at Washington, and lots occupied by buildings owned by the United States, amounted to $4,264 19, being a yearly rental of $50,954 28.

The railway companies, to which the military railroad material of the Quartermaster's Department was sold on credit at the end of the war, incurred a debt originally of $7,591,406. Interest has increased this amount to $9,000,000, about one-half of which has been paid; but some railroads being in default and showing no disposition to meet their obligations, suit has been lately ordered to be brought against them.

But few vessels have been owned by this department during the year. The railroads of the country, having declined to adhere to the war rates of transportation, have been paid during the fiscal year upon their general tariffs, with a classification of military supplies settled in conference at a convention of general freight agents. There have been paid for water transportation during the year $1,424,222 82, and for railroad transportation $2,253,304 30. Of this amount $933,166 21 was paid to the Pacific railroads, one-half being paid in cash, and the other half retained in the Treasury to meet the interest on the bonds guaranteed by the United States. During the year 96,000 persons, 3,700 animals, and 62,000 tons of stores have been moved by water, and 60,000 persons, 14,000 animals, and 40,000 tons of stores by railroad. 27,000 tons of stores have been moved by contractors for wagon transportation. The Pacific railroad has occupied some of the principal routes of former wagon transportation, and has saved the government much money in supplying the posts along its line.

By arrangement between the Departments of War and the Interior, supplies for the Indian service are now transported by the Quartermaster's Department on routes in the Indian Territory-the actual cost, under the contracts, being refunded to the War Department out of the

appropriation of $2,000,000 for pacification of the Indians, granted April 10, 1869.

Although the amount of clothing and equipage on hand at the end of the war has been reduced by sales and issues, there still remains a stock valued at over $42,000,000. The general depots have been reduced to four, and at only two of them is there any large collection of material, viz: at the Schuylkill Arsenal on the Delaware, and at Jeffersonville, on the Ohio. This latter is being drawn upon constantly, but it still contains over fourteen million dollars' worth of war material.

There are seventy-two national cemeteries and three hundred and thirteen local, post, or private cemeteries in which soldiers lie buried. The titles of seventy-one of the national cemeteries have been approved as perfect by the Attorney General. Three hundred and twenty-two thousand six hundred and seven interments are reported, of which 171,946 have been identified. The expenditure on this work has been nearly three millions of dollars.

During the year 5,855 animals were purchased and 3,492 were sold. These latter produced the sum of $223,338 28.

SUBSISTENCE DEPARTMENT.

Subsistence supplies for the army have been mainly procured in the large market cities of the country. The average cost of the ration at these markets has been about twenty-three cents. Efforts to procure salt meats on the Pacific Coast for troops stationed there have met with great success, supplies of excellent quality having been obtained at favorable prices. Tobacco, at an average monthly value of $19,000, has been furnished to troops at cost prices, and the Freedmen's Bureau has been supplied with stores to the value of nearly $250,000, most of which has already been paid for, and the remainder is in process of refunding at the Treasury.

The issues to Indians at various points have amounted to more than $150,000, and at the request of the Interior Department stores valued at $37,500 were issued to destitute Osages and others to prevent starvation during the winter. Under an arrangement between the War Department and the Department of the Interior, the Indian Department is being furnished with food for the Indians on several reservations on the Missouri River and in the Indian Territory. The ration so furnished is prescribed or approved by the Interior Department, and its value is to be repaid from appropriations made by section 4 of the act of April 10, 1869.

There has been paid $27,621 75 as commutation of rations to Union soldiers while prisoners of war. Claims for supplies furnished the army during the war, amounting to $2,899,806 15 have been received, of which $288,033 87 have been allowed, and $2,581,064 13 have been rejected.. During the fiscal year 11,907 accounts and returns have been received

from various officers, of which 11,787 have been examined and referred to the Third Auditor for final settlement.

The Subsistence Department has lost an honorable and excellent officer by the death, by assassination, of Brevet Lieutenant Colonel J. G. Crane, commissary of subsistence, at Jackson, Mississippi, June 8, 1869.

A change in the army ration by extending the variety of articles, increasing some and diminishing others, and also in the manner of disposing of the savings in soldiers' messes and bakeries, would be of advantage to the service.

I unite with the Commissary General in recommending that the proviso to section 2, act of March 2, 1827, be repealed. This will allow officers of the line, when acting as assistant commissaries of subsistence, to receive twenty dollars per month in addition to their pay, in place of the sum of twenty dollars less one ration per day, now allowed.

MEDICAL DEPARTMENT.

The current expenditures of the Medical Department during the fiscal year ending June 30, 1869, were $233,561 21; the total expenditure of that department, including "war debts" and "refundments," was $708,305 36, and the available balance on hand at the close of the year was $1,792,050 73.

The health of the troops has been good. Yellow fever has appeared at Key West only, and at this point there were forty-three cases and twenty-one deaths; but by the prompt removal of the troops to a new station the ravages of the disease were at once stopped. The total number of cases on the sick-list during the year was 104,235. The average number constantly on sick report was 2,367, or about 5.5 per cent. The number of deaths was 548, of discharges for disability 1,128. The first volume of the Medical and Surgical History of the War is being printed.

The number of commissioned medical officers for duty on June 30, 1869, was 161, being an average of one medical officer to 204 men. The number of posts was 239, besides detachments and outposts. There are now two vacancies of surgeons and forty-two of assistant surgeons in the medical corps.

The experience of the past three years has shown that the present organization of the medical staff is satisfactory; but that, even were all the vacancies in it filled, it would still be barely adequate to the demands made upon it.

PAY DEPARTMENT.

The Paymaster General presents the following summary exhibit: Balance in hands of paymasters at the beginning of the

fiscal year July 1, 1868 ...

$5,981, 578 14

Received from the Treasury during the fiscal year..... 36, 245, 000 00

Received by paymasters from other sources, exclusive of sums transferred among themselves..

Total to be accounted for

Accounted for as follows:

Disbursements to the regular army .

Disbursements to the Military Academy ...

Disbursements to volunteers, (back pay and bounties)..

Total disbursements...

Amount refunded to Treasury..

Balance in hands of paymasters June 30, 1869.

Total...

$238, 192 06

42, 464, 770 20

$18,678, 250 61

185, 258 78

19,918, 635 43

38, 782, 144 82

48, 948 37 3,633, 677 01

42, 464, 770 20

At the date of the last annual report there still remained in service eighteen additional (volunteer) paymasters, retained for the payment of bounties to discharged volunteer soldiers.

Congress, by an act approved March 3, 1869, authorized and directed the transfer, from this office to the Second Auditor of the Treasury, of all additional bounty claims pending and unsettled on the first day of May following. After that transfer was accomplished, it became practicable to dispense with the services of additional paymasters, and they were accordingly honorably discharged. There remain now in service. only the sixty regular paymasters authorized by the act for the reorganization of the army, passed July 28, 1866. This force cannot with safety be subjected to much reduction while the number of military stations shall remain as at present.

The Paymaster General states that he is confirmed in the opinion that no system can be devised, which, equal to the present one, can be made to combine the advantages of prompt payment to the troops, the safety of the public money, an accurate and immediate accountability, with the slightest possible liability to embezzlement or defalcation, and with the least cost to the government.

The disbursements for reconstruction purposes are $2,613,293 46, and the balance in hands of paymasters October 2, 1869, are $110,643 79. In accordance with the requirements of law, all claims for the additional bounties granted by the act of July 28, remaining in the Paymas ter General's office unsettled on the 1st of May last, were transferred to the Second Auditor of the Treasury for settlement. Of the total number-441,959-received, there were examined and settled by the Pay Department 440,608, leaving for transfer to the Auditor but 1,351 cases, of which the major part had been examined and determined, but not yet paid, for want of receipted vouchers from the claimants.

The total amount disbursed by the Pay Department for additional bounties, including those settled by the Second Auditor and paid by the department on Treasury certificates, from the beginning to the 30th June last, is $57,220,150.