The Chief Signal Officer recommends the complete and permanent organization of the Signal Service. The subject was last year favorably reported upon and recommended by the President to Congress. It is now, again, submitted in the hope that suitable legislation may be had in this regard.

PRESERVATION OF WAR RECORDS.

Since the report of my predecessor, made one year ago, the work of the publication of the official records of the War of the Rebellion, both Union and Confederate, has been diligently and systematically pursued, though under a much diminished force of printers and copyists, during the present fiscal year, by reason of a largely reduced appropriation. As far as accomplished, this consists of a series of volumes in print, thus multiplying the widely-scattered documents on file, so that they can be readily examined in a condensed form. By this means, as well as by a judicious distribution of a few copies, records of inestimable value are secured from possible loss by fire, and from the obliterating influences of time. The arrangement of the matter is in chronological order, and great care is exercised in comparing what is put in print with the originals. The report above alluded to shows an aggregate of thirty volumes issued since the commencement of the work, several years ago, of which twenty-two volumes have reference to military operations on the part of the United States, and eight volumes pertain to operations on the part of the Confederate States. At present the volumes aggregate forty-seven, (embracing up ward of 33,000 pages,) of which thirty-seven relate to the United States and ten to the Confederate States, as follows:

United States.-Reports of Operations, 12 volumes; Military Corre spondence, 3 volumes; War Department, Letters Received, 1 volume; War Department, Letters Sent, 1 volume; War Department, Telegrams Received, 6 volumes; War Department, Telegrams Sent, 4 volumes; Halleck's Telegrams Received, 5 volumes; Halleck's Telegrams Sent, 4 volumes; Summary of Military Operations, 1 volume. Total 37 volumes.

Confederate States.-Reports of Operations, 2 volumes; War Department, Letters Received, 1 volume; War Department, Letters Sent, 1 volume; War Department, Telegrams Received, 1 volume; War Department, Telegrams Sent, 1 volume; Adjutant and Inspector General's Telegrams Sent, 1 volume; Miscellaneous, General, and Special Orders, 1 volume; Military Correspondence and General and Special Orders, 1861, 1 volume; Troops Tendered Confederate War Department, 1 volume. Total, 10 volumes.

It will be seen that this effort to get valuable historical matter into proper form, and to redeem it from a chaotic condition, is now assuming a position of importance in which the whole country is deeply interested. That its prosecution should be. provided for by a permanently

organized working force, under intelligent and faithful supervision, and by liberal appropriations from year to year, until completed, seems to be manifest.

The war records of the Confederate States have been published up to the end of the year 1861. The mass of material yet on hand for publication is very large. It is known, however, that documents of an important character are in the hands of State and private societies and individuals. These obtained and arranged chronologically with the rest, a more satisfactory result will be arrived at, and supplementary editions avoided, as it is the intention to print fully and accurately all records pertaining to the War of the Rebellion, from whatever source procurable. Hence, the discrepancy, at present, between the number of volumes issued from the two great fountains of supply, as seen above. It is hoped that, in due time, with the aid of such legislation as may be necessary, the government will be able to obtain originals not now in possession, or, at least, of duly authenticated copies.

The Brady collection of war views, purchased by Congress for twentyfive thousand dollars, are gradually becoming defaced, through the de terioration and destruction of the sensitized surfaces of the negatives I recommend that Congress, through a special appropriation, authorize the Secretary of War to institute, measures for the preservation of these pictures of battle-fields and other military scenes, in view of the fact that to coming generations they will be invaluable as illustrations of the publication of the official records of the war of the rebellion.

QUARTERMASTER'S DEPARTMENT.

The appropriations for the Quartermaster's Department for the last fiscal year were $1,500,000 less than in the previous year, notwithstanding the increase in the cavalry arm. Yet the expenditures and liabili ties have been kept within the appropriations, except in the item of transportation, for which a deficiency estimate of $1,200,000 has been submitted. Exigencies have caused the numerous movements of bodies of troops, and great expenditure has been incurred in their concentration at critical points.

The question of payment for transportation to certain land-grant railroads having been, in accordance with the acts of Congress, adjudicated by the courts, and the decision of the United States Supreme Court obtained in their favor, they are entitled to payment for the transportation of officers, soldiers, military supplies, and material. Their right to payment having been decided in the courts, it becomes the duty of this department to ask the repeal of the act of March 3, 1875, prohibiting such payment, and the grant of an appropriation for the payment of accounts found to be due, as well as provision for the payment of future indebtedness to the roads in question. In this connection reference is made to the letter of the Secretary of War of March 2, last, which has been printed in Senate Document No. 45, 44th Congress, 2d session.

I quite agree with the Quartermaster-General, that, in a military point of view, the interests of the government require the passage of a law under which all railroads shall be obliged to transport, at the earliest practicable time, the men and material of the United States, leaving the adjustment of the question of accounts to be determined in such manner as the Legislature may provide.

Indebted railroads.

The balance due the United States by the Southern railroads, to whom, at the close of the war, the United States rolling stock and railroad material collected at and near Nashville was, under executive orders of August and October, 1865, sold on credit, is $1,865,793.22. Only $345 was collected from these roads during the year.

Judgment was obtained in the United States court for the middle district of Tennessee, at the October term of 1876, against the Nashville and Northwestern Railroad, for $866,150, but no moneys have been realized as yet under the decision and judgment.

Congress has relieved some of the indebted roads; has directed compromises with others, but certain legislation necessary to settle some outstanding accounts asked by the Executive Departments has not been granted. For details on this subject, reference is made to the report of the Quartermaster-General.

Claims.

Under the act of 4th July, 1864, great numbers of claims for Quartermaster's stores furnished to the Army in States not in rebellion have been filed. One thousand one hundred and two such claims, amounting, as presented, to $1,808,228.84, were acted on by the QuartermasterGeneral during the year. Of these, he reported favorably to the Third Auditor, under the law, 460; his recommendation for allowance amounting to $155,272-about one-third the amount claimed; 642 were rejected, amounting to $1,352,159.88. There remained on file for action, at the close of the year, 12,590 claims, aggregating $7,391,755.50.

I concur with the Quartermaster-General in the opinion that some method of settling this great mass of claims should be provided. I recommend that these claims be transferred to the Commissioners of Southern Claims, or some other tribunal having more time and better facilities for their consideration and decision than are possessed by these officers.

New posts.

Two new posts have been located, one on Tongue River and one on the Little Big Horn. For these posts the sum of $200,000 was appropriated, and good progress toward their erection has been made during the past year. The appropriation coming too late to be applied during the time of navigation last year, delay has been caused by the active employment of the troops (sent to establish the posts) against the Nez

Percés, who have been finally captured by the forces under the commander of the posts on Tongue River.

The establishment of a new post at Hell Gate Pass of the Rocky Mountains, in Montana, has been ordered, and work thereon is in progress. A military reservation in the pass has been declared.

Depot at San Antonio.

The appropriation of $100,000 for a quartermaster's depot at San Antonio, Tex., has been used during the fiscal year in the erection of a building six hundred and twenty-four feet square, inclosing a courtyard of five hundred and fifty-eight feet square. Nearly nine acres are. included in the area within the outer wall, and nearly two acres are under roof. The total reduction in rents resulting from the construction of this building will reach the sum of $5,670.00 per annum, while the economy and convenience of the service and the safety of the storage of the large quantity of valuable supplies accumulated at this central post of military operations in the Southwest and on the Mexican border are greatly increased.

Purchase of sites in Texas.

The site of Fort Brown, for the purchase of which Congress, in 1875, granted an appropriation of $25,000, is still in litigation, or, at least, litigation is still threatened. The heirs of the Señora Cavazos have notified the department that their title has been confirmed by the United States court, and that they are not content with the sum appropriated by Congress, and have requested that the Army evacuate Fort Brown, held as a military post since General Taylor first defeated the Mexican. army on the Rio Grande. The city of Matamoras announces its intention to contest, before the Supreme Court of the United States, the Cavazos title.

No title has yet been obtained to site of Ringgold barracks on the Rio Grande.

The owner of the site of Fort Duncan refused to accept the $10,000 granted by Congress for the purchase. He demanded an additional sum of $358, which the War Department, under the law, could not pay. In the mean time a twenty years' lease, under which the United States held possession, expired, and the owner of the soil thus acquired title to all the United States buildings thereon. He then fixed his price at $20,000, and demanded and collects $2,400 a year rent. The Secretary of War, in July, 1876, recommended an appropriation of $20,000 to make the purchase, but no appropriation has yet been given.

National military cemeteries.

There are seventy-nine national military cemeteries, which are carefully maintained, which improve in beauty and condition with age. The head-stone contracts have finally been so far completed that all the head

stones provided for in the contracts as originally made are in place 258,566 graves have been permanently marked with marble or granite stones, suitably inscribed, at a cost of $786,360.14, and the contracts are fulfilled.

Some cemeteries having been declared national military cemeteries since the contracts were made, the contractors have consented to supply them also with head-stones, the estimated cost of which will be about $20,000, and a balance of $192,000 of the original appropriation of $1,000,000 will remain. It is suggested that authority be given by Congress to use a portion of this sum to mark the graves of soldiers buried in private and village cemeteries, to which the law did not extend. Sixty thousand dollars, it is believed, would suffice for this purpose.

SUBSISTENCE DEPARTMENT.

As no appropriation for subsistence of the Army has been made for the current fiscal year, supplies (with the exception of the limited amounts which could be purchased from proceeds of sales of subsistence supplies) have been procured on credit.

No difficulty has been experienced in purchasing the necessary supplies, and at most points the prices paid have not been more in excess of the cash prices than the usual rates of interest upon the cash value of the stores; but in some places, where there was but little competi tion, excessive prices appear to have been demanded, as in portions of Montana, where supplies were required for General Howard's command. These stores have not been paid for, but the bills therefor will be thoroughly scrutinized, and only such sums allowed as may appear just to the seller and to the government.

The Subsistence Department has been frequently called upon during the past to issue subsistence stores to Indians, even at the risk of exhausting the supplies of the Army on the frontier. The transportation to the distant posts is costly, difficult, and sometimes impracticable at certain seasons of the year, and a careful consideration of the subject has induced the belief that were all issues, both to the Army and to Indians, made by the Subsistence Department, a greater certainty of supply would be secured, with the advantage of the use of but one set of issuing officers and employés. Officers of the Army now inspect most of the supplies purchased for the Indians.

BUREAU OF MILITARY JUSTICE.

The Judge-Advocate-General earnestly recommends additional legis lation which shall fix beyond question a specific period of limitation to prosecution in cases of desertion.

The 103d Article of War, fixing the limit of time within which a per son shall be liable to be tried and punished by a general court-martial is construed by the Attorney-General, as well as the Judge-Advocate