turned over by the vote of the 8th of June and the proclamation of the Governor. This, however, can only prove a temporary inconvenience, as the Government has admitted its readiness to pay our troops from and after the 31st of July, the date of the Governor's proclamation, and such as have not been paid by the State since that period will be paid by the Confederate paymaster, and of course the advances by the State on this account refunded.

The undersigned present herewith a general and detailed statement of their expenditures, marked A and B, respectively, by which it will be seen that they amounted, on the 1st instant, to $4,637,198.77. And after paying some outstanding liabilities, the whole expenditure will fall little if any short of $5,000,000. Upon this, however, they expect soon to be able to credit the amount of supplies on hand, and which were turned over and transferred to the Confederate Government, to be paid for in cash. The inventory of these supplies, so far as it could be completed, has been forwarded to Richmond for payment, and one of the members of this board is now absent on that business. The amount of these supplies so far as ascertained is about $700,000, subject to be increased by future returns. To meet these expenditures bonds of the State were issued in the first instance, to the amount of $2,000,000, and it was hoped that by an early settlement with the Confederate Government any further issue could be avoided, and thus save considerable expense; but by the act of the last Congress, the claims of all the States have to be audited before payment can be made; and this being impossible until a settlement could be had with all the various military departments of the State, it was determined by the board to issue bounds to the full amount of the expenditure. That has been done to the extent of $1,000,000 in addition, and will be continued until the remainder is covered, unless for any reason your hall see proper to suspend it. The Bank of Tennessee is largely in advance to the State over and above the bonds received, and in this and in the whole negotiation with the State, has manifested through its officers a most liberal and patriotic policy. The same can with equal truth be said of the Union and Planters' Banks and their officers. They did not hesitate to advance what was desired by the board, and all seemed willing to share in the difficulties of the public emergency. The undersigned take pleasure in commending the conduct of these three institutions, and they are entitled for their liberality to the gratitude of the community.

The undersigned, besides transferring all the public supplies on hand, have also turned over to the Confederate Government all their contracts, for the manufacture of arms and ammunition, so that the State is no longer incumbered with that large source of expense. There remains on hand as a future charge the armory established at Nashville. It has been employed exclusively in repairing old guns, and has added considerably to the stock of arms. It can be made highly useful in this branch of business, as there are thousands of guns in the State now wholly useless that can be rendered available for the field. The machinery already acquired by this establishment and such as may be added will give it the capacity of manufacturing new arms of the first quality to a considerable extent. All that it can make will be received and paid for by the Confederate Government at liberal rates. It is not probable, from the investments made, that any loss can ensue. On the contrary, if it were desirable, its operations can be rendered profitable; but whether it shall be continued or what disposition shall be made of it is respectfully submitted to your judgment and discretion. The