ber last. We have spent about $500,000 in bringing it into its present condition, and I have no doubt our improvements could be sold for that sum to the Baltimore and Ohio Company, should they obtain the title to the road bed from the proper authorities of Virginia. Why, then, should we give them up for nothing?

On the Morehead City and Goldsborough Railroad we have rebuilt twenty-seven miles of the track and furnished it with new iron, and laid new ties on many miles more since February last. These views also hold good, unless I am much misinformed, with regard to the railroads leading into New Orleans, the Memphis and Little Rock Railroad, the Memphis and Charleston Railroad, and the Mobile and Ohio Railroad. They have all been improved at great expense while in our hands.

In the third rule proposed by the Quartermaster-General it is provided that all materials for permanent way used in the repair and construction of any road, and all damaged materials of this class which may be left along its route, having been thrown there during operations of destruction and repair, shall be considered as part of the road, and given up with it, also without compensation. If this means to give up any new iron that we have on the line of any road, it seems to me to concede to the parties to whom the roads are to be surrendered more than they have a right to claim. For instance, there is now lying at Alexandria, on the line of the Orange and Alexandria road, iron sufficient to lay thirty miles of track. It seems manifest to me that this iron should not be surrendered to that road without being paid for. In my judgment it is also advisable to establish the principle that the Government will not pay for the damages done to any road in the prosecution of active hostilities, any more than it will pay for similar damages done by the enemy. With these exceptions the principles proposed by the Quartermaster-General appear to be correct.

In accordance with these observations I would recommend that the rules be determined upon the govern the settlement of this matter:

First. The United States will, as soon as it can dispense with the military occupation and control of any road of which the Quartermaster's Department is in charge, turn it over to the parties asking to receive it who may appear to have the best claim, and to be able to operate it in such a manner as to secure the speedy movement of all military stores and troops, the Quartermaster-General, upon the advice of the military commander of the department, to determine when this can be done, subject to the approval of the Secretary of War.

Second. Where any State has a loyal board of public works, or other executive officers charged with the supervision of railroads, such roads shall be turned over to such board or officers, rather than to any corporations or private parties.

Third. When any railroad shall be so turned over a board of appraisers shall be appointed, who shall estimate and determine the value of any improvements which may have been made by the United States, either in the road itself or in its repair shops and permanent machinery, and the amount of such improvements shall be a lien upon the road.

Fourth. The parties to whom the road is turned over shall have the option of purchasing at their value any tools, iron, or other materials for permanent way which have been provided by the United States for the improvement of the road but have not been used.