to prepare them for usefulness as members of the military profession arise mainly from the qualifications of the candidates being so exceedingly limited. While at the present time it may not be expedient to increase the standard for admission, I do urgently recommend that a selection from at least five candidates to be nominated for each appointment may be authorized by law, when every section of the country would more certainly have its due proportion of graduates entering the Army annually. Should this principle be authorized by law, the examination of the candidates could be ordered in several sections of the country at convenient military posts, and thus save a great annual expense now incurred by partially educating and returning deficient cadets to their distant homes, insure a much greater proportion of members who could master the course of studies, and avoid the numerous and frequent discharges from the Academy for inability to acquire the requisite information and proficiency for a graduate of this institution.

FINANCES.

During the year ending June 30, 1865, the expenditures

of the department for fortifications on the Atlantic,

Gulf of Mexico, Pacific Coast, and on the Northern

Lakes, including bridge trains, intrenching tools,

and for all other military purposes,

amounted to...................................... $5,174,335.23

For civil works, as lake harbors, harbors on the

Atlantic, survey of the lakes, they amounted to.. 218,400.00

And for the Military Academy, not including the

pay of professors and cadets..................... 86,685.00

Making a total annual expenditure of.............. 5,479,420.23

The accounts of the disbursing officers of the department have been regularly forwarded from month to month. These accounts had accumulated in the department during the past four years beyond the means allotted to the financial branch to examine, correct, and forward to the Treasury Department for final settlement.

During the year 1,203 monthly accounts, amounting toexamined and forwarded to the Auditor for final settlement, and there remain on hand at this time 398 monthly accounts to be examined, amounting to $4,492,964.85. At the rate of progress made during the past year in the examination of these accounts the work in a short time will be brought up to the months in which they are received form the officers. No defalcation or losses in any way exist in the disbursements and accountability of the officers of the department.

At the present time all property purchased for the armies in the field, either worn or of a perishable character, is being sold, and the avails will be returned to the Treasury. The amount of sales to this date is $34,123.12. The residue of this property is being stored in engineer deports for further use, at the Jefferson Barracks depot, Mo., and at the Willets Point depot, N. Y., under charge of engineer officers and troops of the Engineer Battalion.

The property of the department in the hands of its agents is accounted for quarterly, and the returns examined in this Bureau.

The number of returns examined during the year is .... 220

And remaining to be examined.......................... 43

Making the number of property returns rendered by

officers.............................................. 263

RICHD. DELAFIELD,

General and Chief of Engineers U. S. Army.