specified conditions favorable to the different telegraph companies, which privileges, however, were to be ignored under certain circumstances. Previous to cessation of hostilities these lines had been operated to a great extent by the rebel authorities, making it necessary, therefore, on account of the morale of the former employes and the peculiar power of the telegraph for public good or evil, for the Government to exercise its prerogative in regard to the operations of the lines referred to. Under the present arrangement the telegraph companies are called upon to repair their lines and put them in good working order, furnishing all labor and material therefor, the United States to be at no outlay beyond the expense of maintaining purely military lines and military stations. An account is to be kept of all Government business passing over the lines. The account, however, is not assumed as an indebtedness by the Government, but is left open for future consideration or settlement.

The amount of supplies which will be required for future operations of the military telegraph, so far as I am at present informed, will be such as is necessary only for maintaining the lines at present in use. It is supposed that the Government will require no more lines constructed, unless, perhaps, in Texas, or upon the Western frontier.

The amount of money expended during the year ending June 30, 1865, for the purchase of material and supplies required for the u. s. Military Telegraph was about $300,000. One hundred and thirty thousand dollars of this amount, however, was for the purchase of 285 miles of English submarine cable, the greater portion of which is still on hand. Probably not more than from $1,000 to $1,500 per month will hereafter be required for the purchase of necessary material and supplies.

So long as the military telegraph lines in present use are needed by the Government it will require about $75,000 per month to supply, maintain, and operate theof these telegraph lines to Government shall cease from time to time, and the lines are taken down or otherwise disposed of, the expenditures for maintaining the U. S. Military Telegraph will be proportionately reduced. A considerable revenue to Government will probably be derived from the sale of the material now on hand so soon as the same shall be of no further use to the Government. Such of the lines as may be located most advantageously or commercial purposes can undoubtedly be disposed of to the owners of the "telegraph right of patent" within the territory through which the lines pass and at a reasonable consideration. The less important lines can be taken down and the material sold.

The number of miles of land and submarine U. S. Military Telegraph lines in operation July 1, 1864, was, after deducting error in former report, as follows:

Land. Submarine Aggregate

Miles. Miles. Miles.

July 1, 1864. 4,955 1/4 52 3/4

Constructed during the 3,246 1/2 68 3/4

year.

In operation within the 8,201 3/4 121 1/2 8,323 1/4

year.

Taken down or abandoned 2,049 46 1/4

during the year.

In operation June 30, 6,152 3/4 75 1/4 3,228

1865.