your office, charted with the general management of rail and river transportation under the recent law of Congress.

Finding in addition to present current duties that there was thrown upon the division millions of dollars of complex, unadjusted accounts for services rendered in the early years of the war, and discovering that not only were Government creditors justly complaining of delay in the settlement of their claims but that these arrears were greatly interfering with the regular business of the office, I gave the subject prompt attention, and I am glad to report that by the vigilant efforts of the division not only have these arrears of business been brought up, but by my request all transportation accounts have been transferred from the general accounting office and are now being regularly audited in the Fourth Division. This change will, I think, in securing a more prompt and efficient investigation by experts, result in a decided improvement.

To perform this service properly, however, the clerical force should be so increased that an examination of all the accounts may be had within a month after their return, and thus errors be promptly detected, instead of continuing for months or years without a remedy.

Until recently, as you are aware, there has been no uniform system in the mode of procuring transportation, in the forms used, or in settling for the same, each quartermaster acting independently, adopting such as best suited his views or convenience, some being good and others materially defective, in furnishing no proper checks, and resulting in irregularity, confusion, and much loss to the Government.

Perceiving this, and convinced that a uniform system in a business so complex and important, even if not perfect, was better than none, or than many various and conflicting ones, and seeing no reason why such uniformity was not attainable and applicable to every section of the country, also satisfied that in no other way could the Government be ers made familiar with their duties, it became a primary object with me to secure such system as, while it should remedy patent defects, would at the same time be satisfactory to the transportation interests of the country.

This end has been, I think, to a great extent attained by General Orders, Numbers 17, March 16, 1865, in reference to passenger transportation; by General Orders, Numbers 29, May 9, 1865, as to freight transportation, and by General Orders, Numbers 18, March 16, 1865, in reference to the settlement of accounts, copies of which are herewith transmitted, together with the forms and blanks adopted and used under such orders. The system is now in general operation with most satisfactory results, and I believe meets not only with the general approbation of Government officers, but also of railroad companies and others furnishing Government transportation.

There are still some defects which can only be corrected by a change in the Regulations, which will probably be made whenever a revision occurs. Experience will also doubtless suggest further improvements which should be adopted as their importance becomes obvious.

A table of distances between al important points in the country has been prepared and other improvements made, which will result in a large saving of labor and expense.

For such particular tabular statements as you may desire I beg leave to refer to my successor in charge of the division, as at the present time the required reports of various officers of the department have not been returned to enable me to collect and furnish the same.