bay. Many of them have now been discharged from service or advertised for sale, orders for the reduction of the transport fleet having been given as soon as hostilities ceased.

The return of the armies from the South, the transportation of the discharged soldiers to their homes, the transfer of troops to Texas, the return of refugees expelled from the South by General Sherman, and of rebel prisoners released at the termination of the war, have, however, taxed the resources of the Quartermaster's Department heavily during the last spring and summer.

The transport service has been most satisfactorily performed. Upon the ocean a fleet of over 700 vessels has been constantly employed, with the reported loss by storm, by collision, and by fire, of only three; one steamship was destroyed in each of these modes.

The repair of the railroads from Chattanooga to Atlanta by the military railroad branch of the Quartermaster's Department, under the charge of Bvt. Brigadier General D. C. McCallum, was referred to in the last annual report. Upon the advance of General Sherman from Atlanta he destroyed the railroad in his rear, blew up aluildings at Atlanta, sent back his surplus stores and all the railroad machinery which had to that time supplied his Army. The stores and the railroad stock were safely withdrawn to Nashville, and after the dispersion of the army of Hood, which had broken the railroad in Georgia and Tennessee in its advance, the Railroad Construction Corps again took the field and reopened railroad communication with Chattanooga, Atlanta, and Decatur. After the fall of Macon and Augusta it become necessary, in order to supply the army of Major-General Wilson, to open railroad communication between Augusta and Atlanta and Macon. This was successfully accomplished.

A division of the Construction Corps, fully organized, under the command of Colonel Wright, with tools and equipments, was transferred, in December and January, from the Tennessee to Savannah, by way of Baltimore. As General Sherman did not repair the railroads of Georgia and South Carolina, but marched northward, lightly equipped, living upon the supplies in his wagon trains, and by foraging upon the enemy, this division of the Construction Corps was transferred to Beaufort, N. C., and after its fall to Wilmington, where it repaired and restocked the railroads from those ports to Goldsborough and to Raleigh. General Sherman's army was thus quickly provisioned, reclad, reshod, and equipped for a march to the James.

The surrender of the rebel armies and pacification of the Southern States have enabled the Quartermaster's Department to return to their former possessors most of the railroads which have been in military possession during the war. The department, in transferring them to their boards of directors-reorganized upon a loyal footing-delivers up the roads and bridges in whatever condition they may be at the time of the transfer.

The great accumulation of railroad engines and cars upon the Western military railroads in being disposed of to the railroads of the Southwest, which have suffered severely from the operations of both armies during the war. Under the orders of the Executive this stock is being delivered to the companies, who are to pay for it within two years, at a valuation fixed by a broad of officers and experts assembled by the Government.