On the evacuation of Richmond by the rebels and its occupation by our troops, our military authorities took possession of these works and placed a guard over them. I found matters in this condition and everything still remains precisely as at the moment of occupation. On my arrival here it was represented to me that if these works could be put in operation by the Government employment would thus be given to a large number of mechanics and large number of mechanics and laborers, suddenly thrown upon the charity of the Government for food, to prevent actual starvation. As you are aware, the ordnance officer sent to examine these works with that view reported against putting them in operation on account of the Ordnance Department. On examining the works and hearing his views I fully concurred in his report. Since then the works have remained under a military guard and entirely idle, except for the repair of a few irons for a bridge which General Michie is constructing to replace the pontoon bridge connecting this city with Manchester a work of military necessity. These works are considered to be very valuable, and are far the most extensive and important of any in all the Southern States. By lying idle the machinery will rapidly deteriorate, and the care of them is expensive to the Government. If put in operation they would render most valuable assistance in repairing and putting in order the rolling stock of railroads in Virginia and North Carolina. Moreover these works if in active operation, would give employment to mechanics and laborers whose families have been thrown upon the charity of the Government. Under all the circumstances, I respectfully recommend:

I. That the chief of ordnance be directed to take possessions of and to remove from the works all ordnance and ordnance stores which he may deem of value to the Government.

II. That as soon as General Michie shall have completed the repair of iron-work required for the construction of his bridge (which will require only a few days) the military authorities be relieved from the charge of these works, and that they be disposed of, temporarily, in one of the following modes: First, to turn over the possession to the company who own them, to be run by it for the benefit of whomsoever it may concern, leaving that question for the adjudication of the civil courts, and also the confiscation of the stock of any particular stockholder, who has been guilty of treason and not restored to civil rights by amnesty or special pardon. A military officer or special agent might be appointed, if deemed necessary, to superintend the accounts and books and to see that none of the material on hand be improperly disposed, of and, to prevent any of the proceeds from going to stockholders whose property the Government intends to confiscate. Second, to run the works on account of, and for the benefit of, the Government till the final adjudication of the courts. By doing this I think the Government will be the loser, as in the hands of agents the expenses are likely to be more than the receipts. Third, to turn it over to Treasury agents as abandoned rebel property to be confiscated to the United States. If this be done I doubt whether the loyal or rebel owners, or the United States, will ever reap much benefit from the proceeds. Moreover, not the entire works, but only the interests of disloyal stockholders, are liable to confiscation, and any such confiscation and sale will be subject to the rights, claims, and liens of loyal creditors contracted before the war.

Very respectfully, your obedient servant,

H. W. HALLECK,

Major-General, Commanding.

80 R R-VOL XLVI, PT III