The channel of the Potomac at this point runs nearer the shore than at any other place for many miles below, thus requiring less wharfage than at any other point. Being within the line of the defenses of Washington renders it free from a liability to be surprised or attacked by the enemy, and requires no guard for its protection other than that required at all times for the defense of the other depots at and in the vicinity of the capital of the country, and is, besides, near enough to Washington to be under the immediate supervision and control of the head of the Cavalry Bureau.

Its topographical features admirably adapt it to the purpose to which it has been applied, being ground gently sloping to the west and southwest, in extent ample for all purposes; soil, a mixture of sand and gravel, with an abundance of good water, either from the Potomac River, which runs on the north and west sides, or from the large stream of very pure spring water running on the east side, called Oxon Run.

A building having been secured on H street, No. 374, at a rent of $70 per month, in which to locate the office of the Cavalry Bureau, estimates were made for funds to start with; advertisements were inserted in the authorized newspapers for men and material, and the work at once begun, and, all things considered, such as the failure of contractors, the difficulty of procuring laborers, &c., has progressed up to this time with unusual rapidity.

In connection with this depot is a dismounted camp where all new regiments of cavalry can be sent to be mounted, armed, accoutered, and equipped, and to which men of there sent to be refitted and again sent to the field.

Measures will be taken, as so can be constructed at the cavalry depot, to get on hand an amount of forage sufficient to guard against the contingency of the Potomac River being closed by ice during the coming winter.

My assistants in the Bureau are Lieutenant Colonel C. G. Sawtelle, chief quartermaster; Lieutenant A. J. Alexander, in charge of records, returns, reports, details, &c., and Captain William R. Price, in charge of issues of ordnance and ordnance stores-all officers of experience in the field, as well as thoroughly acquainted with the duties with which they are intrusted.

There are stables and barracks at Saint Louis, Mo., capable of holding from 10,000 to 12,000 men and horses, which are not now required for other purposes and which are to be turned over to the Cavalry Bureau for a cavalry depot in the West. It is thought that these two general depots, with temporary structures for the accommodation of 4,000 or 5,000 horses, at either Louisville, Indianapolis, or Columbus, Ohio, will satisfy the wants and requirements of the cavalry arm of the service. I should recommend the erection of the last.

I should recommend that the contract system be dispensed with as far as consistent with the public interest, and that most of the purchases be made in open market and first hands.

In order that owners of horses may derive the most benefit from this system of purchase in open market, and at the same time the Government be enabled to get at all the horses in the country without the necessity of increasing the number of agents too largely, the same agent can be assigned to different points in his district or region, spending a limited time at each point, due notification being given to all concerned of such an arrangement. These points should be located on main avenues of land or water transportation, and the horses shipped or sent to depots as fast as they are purchased.