WAR DEPARTMENT, PAYMASTER-GENERAL'S OFFICE,

Washington, November 1, 1864.

Honorable EDWIN M. STANTON,

Secretary of War:

SIR: I have the honor to submit a report of the official transactions of this department for the fiscal year ending June 30, 1864:

The tabular statement herewith presented exhibits a balance in the hands of paymasters at the beginning of the fiscal year (July 1, 1863) of $66,688,584.23. This balance, with the requisitions of this office in favor of paymasters and sums received from other sources, amounting to $246,796,281.64, leaves to be accounted for the total sum of $313,484,865.87, which is done as follows, to wit:

Payments to Regular Army...................... $6,112,374.81

Payments to Military Academy.................. 159,847.33

Payments to volunteers........................220,853,973.31

Amount of requisitions pending in the

Treasury and not issued on June 30, 1864...... 69,100,000.00

Actual balance in hands of paymasters on June

30, 1864...................................... 17,258,670.42

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Total.........................................313,484,685.87.*

Of these pending requisitions there have, since June 30, 1864, been issued by the Treasury and disbursed to the Army the sum of $68,100,000, leaving yet unissued the sum of $1,000,000, for which requisitions were made before June 30,last.

The entire Army has been paid, or is now in process of payment, to include the muster of August 31, 1864, except the Departments of the Gulf and West Virginia; and paymasters will be in readiness as soon as the needed funds shall be supplied to make payments to October 31, 1864.

The organization of this department now embraces 1 Paymaster- General, with therank of colonel; 2 deputy paymasters-general, with the rank of lieutenant-colonel; 25 paymasters of the permanent establishment, and 409 additional paymasters, with the rank of major. I avail myself of this occasion of my temporary accession to the charge of the department most respectfully to recommend such reorganization of it as, at your instance, Congress has therefore wisely given to the other staff departments of the Army. The duties of this department are surely of no less importance or involve no less responsibility than those of the other staff departments, while in many respects they are more onerous and demand more anxious care and labor than any of them. It is only necessary to recur to the fact that the disbursements of this department swell to the large annual sum of $350,000,000; and when it is considered that-altogether different from the other disbursing departments in this respect-this large amount of money is necessarily paid at stated periods in small sums to individual officers and men, upon carefully prepared vouchers, the immensity of the labor involved will be apparent.

All the disbursing departments of the Army have been remodeled except this one, which I am fully convinced would be as much improved as it is known the others have been by the wholesome changes suggested.

In the staff departments, as in the line of the Army, no incentive is so effective to quicken the zeal of officers as the assured prospect of advancement for faithful and meritorious services. I therefore beg most respectfully to recommend such reorganization as may be readily

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* In view of this summary, the tabular statement is omitted.

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