CHICAGO, ILL., July 25, 1864.

Colonel W. HOFFMAN,, U. S. Army,

Commissary-General Prisoners of War, Washington, D. C.:

COLONEL: Inclosed I have the honor to transmit the report of the inspection of Camp Douglas, camp for prisoners of war near Chicago, Ill. The camp is in excellent condition, well disciplined and policed. Great credit is due to Major L. C. Skinner, Eighth Regiment Veteran Reserve Corps, in immediate charge of the camp, and his assistant, Captain W. Sponable, Fifteenth Regiment Veteran Reserve Corps, both practical, industrious, and efficient officers. I saw the camp last April. The change since then for the better is astonishing. The water as now supplied for the number in camp is sufficient, though owing to the size of th main pipe, 3-inch, much delay is occasioned in obtaining it. Should the number of prisoners be increased to 12,000, the capacity of the camp, I would recommend that 6-inch main pipes be allowed. This change now is very necessary as safeguard in case of fire. Some old buildings that have been used by Federal troops, now abandoned, are being moved in the prison inclosure, to be occupied as prison quarters. I doubt if there will be sufficient to fill the entire unoccupied space; if not, I would recommend, if more prisoners are to be sent to this camp, that the commanding officer be directed to build as cheap as possible the deficient number. This, I am convinced, will maintain the present good police of the camp and be healthier and cheaper than if tents are used. Major Skinner has in his possession $270 called confiscated funds. This money, in part, was taken from that clothes of prisoners, secreted in the seams and elsewhere, and, in part, accrued from sale of boots, after they were defined as contraband. He wishes instructions as to what disposition shall be made of it. The prison fund at end of June, 1864, amounted to $19,691. 50. No payments were made during that month, the commissary being out of funds. To what extent he is indebted I was unable to ascertain. The commissary stated he had in possession some $1,700, credited to Camp Butler, that could be disbursed if so directed. The means of accounting for money deposited by individual prisoner is safe and simple. No dissatisfaction has been expressed or losses sustained. The trade with the sutler, as I understand it, is as follows: Money is received and placed to the credit of prisoner. Receipt is given to him for the amount. The prisoner gives the sutler an order on the commanding officer for a stated amount, the sutler giving him at the time checks for the amount called for by the order, which checks are received at the sutler's store for goods from prisoners only, this sutler being allowed to trade with only prisoners, the checks being useless elsewhere or in the hands of any one else. The sutler handing the prisoner's order to the commanding officer, receives the money on it. I called the attention officer to the order on the subject. The way now in vogue appears to him the only practical way of dealing. Strict instructions are given to the guard and the prisoners, the duties of the one and the privileges of the other well defined. The hospital is a good two story building, with four wards, mess-room, kitchen, &c., adjoining a two story laundry. It is outside the prison inclosure, distant about 200 yards, in a separate inclosure. Capacity, 200 to 225 beds. Built last winter and spring at a cost near $10,000. Occupied in April. As it is not large enough to accommodate all the sick prisoners, two of the old abandoned buildings are being moved into the hospital inclosure, which will give the hospital an additional capacity of seventy beds. This will accommodate all sick prisoners, except smallpox cases. The report shows