I have the honor to submit the following annual report of the administration of this department:

EXPENDITURES, APPROPRIATIONS, AND ESTIMATES.

The actual expenditures under this department for the fiscal year ending June 30, 1881, were $42,122,201.39.

The appropriations for 1882 were $44,889,725.42.

The estimates for 1883 are $44,541,276.91.

The estimates presented to me for revision included—

For armament of fortifications.......

Fortifications and other works of defense..

Improving rivers and harbors......

Improving Mississippi River, by commission

Public buildings and grounds in and near Washington
Surveys of lakes.....

$720,000 4, 186, 500 29, 101, 300 4,323, 000

749,000

20,000

39,099, 800

This amount has been reduced, on my revision, to aggregate $10,689,000, which sum, if judiciously allotted by Congress, will be, in my judgment, a reasonable allowance for this class of expenses during the next fiscal year.

The remainder of the estimates includes salaries and expenses of the departmental civil establishment and amounts for the support of the Army, for armories and arsenals, and for miscellaneous objects. For these purposes the estimates for 1883 are $33,852,276.91, being $296,321.37 in excess of the estimates for 1882, and $2,082,851.49 more than the appropriations for the current fiscal year. This increase grows out of apparent necessities in the public service, which are fully set forth by items in detail, accompanied with notes, in the book of estimates. While the estimates of expenses for this class show an increase, there is in the estimates of expenses for improvements, including rivers and harbors, a decrease which overbalances the difference, and makes the estimates for 1883 $348,448.51 less than the appropriations for 1882.

THE ARMY.

The report of the General of the Army contains recommendations of the highest importance. He again calls attention to the public necessity of legislation authorizing the Army to be recruited to a strength of thirty thousand enlisted men, as provided by section 1115 of the Revised Statutes. As is remarked by the General, our companies are too small for efficient discipline and for economical service. There are in the Army four hundred and thirty companies, which are necessarily widely scattered over our vast domain, to guard property and to prevent, as far as foresight can, complications and troubles of every variety and kind, at one time protecting the settlers against Indians, and again Indians against the settlers. When these occur, re-enforcements have to be hurried forward from great distances, and always at heavy cost for transportation of men, horses, wagons, and supplies. This cost in the aggregate is probably more than sufficient to supply an increase of twenty per cent. of private soldiers, which will add little, if any, to the annual cost of the Army, and yet give great relief to our overtaxed soldiers. In the last ten years our frontiers have so extended, under the protection of our small Army, as to add at least a thousand millions of dollars to the taxable wealth of the nation. This protection has enabled emigrants to settle up remote parts of the country, and is a principa cause of the great prosperity which is felt throughout all parts of our vast domain.

It should be remembered that of the enlisted force of any army a large part, not far from fifteen per cent., is, for many causes, not available at any one time as a fighting force; so that the legislation recommended would, after proper allowances, give an actual combatant force of about twenty-five thousand men.

I concur most earnestly in his recommendation.

Whilst the troops have been kept very busy during the past year, no serious Indian or other war has occurred, but great progress has been made in collecting and locating Indians, hitherto hostile, on their proper reservations. Sitting Bull and his adherents, who had fled into British territory, are now held at Fort Randall, Dakota, as prisoners of war, and the Utes have been moved to a new reservation in Utah. A sudden outbreak of a part of the Apaches occurred in Arizona, and it was found necessary to re-enforce for a short time the usual garrisons in Arizona by a strong detachment from New Mexico. Some of the guilty Apaches are now held as prisoners for trial; some have escaped into Mexico, while the greater part of the tribe remain on their reservation at San Carlos, under their proper civil agent.

The General recommends that section 1232 Revised Statutes be amended so as to read:

SEC. 1232. No officer shall use an enlisted man as a servant, in any case whatever, without proper compensation, or without his own consent and that of his commanding officer.

It appears that in many remote places no servants can possibly be obtained, and officers must not only cook their own meals, but groom their horses, or violate the law as it now stands. It would seem clear that no officer can habitually do such work and properly supervise his company and command.

In addition to the means for extended practical instruction for officers now given at the Artillery School at Fortress Monroe, and the Engineer Establishment at Willets Point, New York, arrangements are so far made for a School of Application for the cavalry and infantry at Fort Leavenworth that it will probably be in operation before January next. There will be, habitually, a garrison of one company of artillery, four companies of infantry and four of cavalry, to which will be attached, for instruction, one officer of each regiment of infantry and of cavalry for a detail of two years. These will receive instruction in the military art, and then rejoin their proper regiments, to be succeeded by a similar detail every two years, so that in time the whole Army will thus be enabled to keep up with the rapid progress in the science and practice of war.

The Signal School at Fort Myer provides for the instruction of eight subalterns each year in that branch of knowledge; but as it takes five years thus to instruct one officer of each of the forty regiments, practical instruction in all the signaling which is essential to the Army is also taught at West Point, at Fortress Monroe, and will be at Fort Leavenworth, thus embracing the whole Army.

The earnest attention of Congress is called to the need of legislation to prevent intrusion upon Indian lands, especially from Kansas into the Indian Territory. A large military force, at great expense, now patrols the boundary line; the only penalty which can be inflicted upon the intruder being removal by force and a pecuniary fine, the magnitude of which is not of the smallest importance to him, its collection being impossible. Section 2148 of the Revised Statutes should be amended by providing for imprisonment as well as fine in such cases.

ADJUTANT-GENERAL'S DEPARTMENT.

The Adjutant-General urgently recommends that legislative authority be given for the employment of civilian clerks at division and departmental headquarters, to do the work now performed by persons enlisted in the general service, as it is called, who are in name soldiers, but in fact clerks. Such a measure would restore 147 men to active duty as soldiers, and they could be replaced, it is estimated, by 113 clerks employed at salaries the aggregate of which would be nearly $20,000 less than now paid. This recommendation is approved, and I would also recommend a like enactment in respect to General Service clerks now employed in the War Department. The system grew out of the necessities of the war, and creates a certain amount of confusion, as General Service" clerks, being nominally enlisted men of the Army,

are not borne on the clerical rolls. This clerical work must be had, but it ought to be performed by regular clerks.

The Adjutant-General also calls attention to a discrimination, in the matter of compensation, against the clerks under him, which would be corrected by the abolition of the class of "General Service" clerks, and a new arrangement such as is shown in his report, which I recommend. The Codified Army Regulations, prepared under the direction of my predecessor, are now being issued.

The Adjutant-General recommends that the Secretary of War be authorized to make a proper allowance to officers on court-martial or military board duties, to enable them to meet the exceptional expenses caused by such duties.

The rapidly increasing number of calls from the Pension Office for information from the rolls of the Army, in connection with claims for pension, led to the formation by the Adjutant-General of a new branch in his office last April, designated as the "Enlisted Volunteer Pension Branch." By the act of March 3, 1881, twenty-five additional clerks of the lowest class, viz, at an annual salary of $1,000, were authorized to be employed in this office, but their want of acquaintance with the minutiae of Army rolls and records, and the consequent necessity devolving on the older clerks to devote much time to their instruction, has necessarily prevented the attainment of the highest results. The fol lowing table, however, is a gratifying exhibit of the labors of this branch and of other divisions of the office engaged in business relating to claims for pension, bounty, homestead grants, &c.:

The report of the Inspector-General shows that the accounts of all officers of the Army who have disbursed public moneys during the past year have been carefully examined, and the reports of balances verified.

Nearly all the military posts have been inspected during the year. The discipline of the troops is reported as very good. They are well armed and well fed and clothed.

Great attention has been paid to target practice, and marked improvement is noted. A regular competition is now established throughout the Army, prizes being given annually in military departments and divisions, and biennially after a contest between the best marksmen of the three military divisions.