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Four military departments are now organized in the territory where these operations were carried on, viz: the departments of the Ohio; of the Missouri, of the Tennessee, and of the Cumberland, and their present military condition will hereafter be noticed.

In the department of North Carolina the successful expedition of Major General Burnside, by the occupation of Roanoke Island, Newbern, and the reduction of Fort Macon, struck a heavy blow; and under a military governor, the honorable Edward Stanley, the protection of the laws has been extended to the loyal inhabitants of that State, and facility afforded for organizing a civil government and casting off the rebel yoke.

In the department of the south active operations have been for a time suspended by the presence of yellow fever and by the death of Major General Mitchell, the late gallant commander of that department. A premature attack upon Charleston, against the orders of the then commanding general, resulted in the failure that was apprehended by him. The capture of Fort Pulaski, by Major General Hunter, has effectually closed the port of Savannah, and the government securely holds Hilton Head and Beaufort. The enemy was forced to abandon the siege of Fort Pickens, and other portions of Florida are in our occupation. A recent expedition along the coast was attended with success, detailed in the report of the general-in-chief.

In the department of the Gulf the operations of Major General Butler have been distinguished by great energy and ability. The occupation of New Orleans and the control of the mouth of the Mississippi have been among the most brilliant and important results of the war.

The period is believed to be not far distant when all the rebel forces will be driven from the banks of the Mississippi, and the navigation of that river rendered secure.

The recent operations in the department of the Missouri are detailed in the report of the general-in-chief. The State of Missouri is believed to be secure against any aggression by the enemy, and in the State of Arkansas the dispersion of the rebel forces will enable the military governor of that State to take proper measures for the restoration of the civil authority of the United States within its borders.

The department of the northwest, embracing the States of Iowa, Minnesota, Wisconsin, and the Territory of Dakota, was organized for the emergency occasioned by an Indian outbreak, and placed under command of Major General John Pope. The Indian hostilities have been suppressed, and further trouble from that source is not apprehended. Such force as may be deemed requisite by the military authorities will be held in readiness for any sudden necessity. The Indian hostilities in Minnesota, by whomsoever instigated, seem to have been accompanied with more than usual cruelty and outrage. Heavy losses in property are said to have been endured by the inhabitants, and application has been made to this department for compensation. As it has no funds applicable to that purpose, nor authority to assess the damages, the subject will require congressional action. Three hundred captured Indians have been tried by court-martial, and their sentence of death is now under your consideration.

The rebels under Sibley were driven from the department of New Mexico by General Canby, and the force in that department, now under command of General Carleton, will be able to protect the inhabitants of that remote Territory.

The department of the Pacific has been free from any of the calamities occasioned by the rebellion; but an earnest and deep sympathy has been manifested by the loyal citizens of the Pacific States in support of the Union cause. Volunteers have come forward to fill the ranks of the army, and, with unparalleled liberality, large sums of money have been transmitted by humane and loyal citizens of California for the relief of our sick and wounded soldiers. The patriotic loyalty of our brethren on the Pacific, thus humanely exhibited, evinces their estimate of the value of the Union, and their willingness to share the burden of maintaining it from sea to sea.

In the department of the Ohio the invasion of Kentucky by General Bragg, the terrible battle of Perrysville, and the escape of Bragg's army, were events that pressed heavily upon the government, and moved deeply the hearts of the people, especially in the western States. These events are about to undergo investigation, and when the causes to which they are attributable are judicially ascertained they will be laid before you for your action. Recent events prove that whatever hold the spirit of rebellion may once have had in Kentucky it is now to be reckoned as a State loyal and steadfast to the Union.

The department of the Tennessee is now under command of Major General Grant. The principal operations in that department have already been alluded to, and are detailed in the report of the generalin-chief. Their importance cannot be over-estimated. The occupation of Memphis-next to New Orleans, the principal mart on the Mississippi-and the wise and vigorous measures of Major General Sherman, commanding there, have opened a market for cotton and other southern products, the beneficial effects of which are already felt in the reviving commerce of the country.

The department of the Cumberland, embracing that portion of the State of Tennessee east of the Tennessee river and the Cumberland Gap, was placed, upon the removal of General Buel, in command of Major General Rosecrans. Having a well-disciplined and gallant army under his command, a proper degree of diligence and activity cannot fail to exercise an important influence upon the speedy termination of the war.

From a survey of the whole field of operations, it is apparent that whatever disasters our arms may have suffered at particular points, a great advance has nevertheless been made since the commencement of the war. When it began the enemy were in possession of Norfolk and every port of the southern coast. They held the Mississippi, from Cairo to New Orleans. Now the blockaded ports of Charleston and Mobile only remain to them on the seaboard, and New Orleans and Memphis have been wrested from them. Their possession of Vicksburg obstructs the Mississippi, but it is to them of no commercial use. Their strongholds on the Tennessee and Cum. berland rivers have been captured. General Andrew Johnson, as military governor of Tennessee, holds Nashville. The enemy have been driven from Kentucky, West Tennessee, Missouri, part of Arkansas; are fleeing before Grant in Mississippi, and all their hopes of Maryland are cut off. In commercial, political, and strategical points of view, more success has attended the Union cause than was ever witnessed upon so large a theatre in the same brief period against so formidable an enemy.

The Union forces are now in the field under able commanders, stronger than ever, resolute, and eager to be led against the enemy, and to crush the rebellion by a vigorous winter campaign. The ar. mies of the Potomac and of the west stand ready to vie with each other in quickest and heaviest blows against the enemy. Taught by experience the ruin of inaction and the hazard of delay, a spirit of earnest activity seems to pervade the forces of the United States beyond what has hitherto been exhibited. In the numerous battles and engagements that have occurred, our armies in genera splayed the courage and determination that should inspire officers and sol. diers fighting in defence of their government. Many gallant lives have been lost, and many brave and distinguished officers have fallen. For the dead deep sorrow is felt by the government and people of the United States. A detailed report of those who have fallen in battle, or have distinguished themselves in the field, will be presented to you as soon as all the necessary official reports can be obtained. Some promotions in reward of gallant service have already been made from the ranks, and to high command ; others have been delayed for want of the reports of subordinate commanders, in order that promotion may be governed, not by partiality or prejudice, but upon due consideration of relative merit. By a resolution of Congress passed at the last session, the President was authorized to distribute two thousand medals to private soldiers of distinguished merit. From'different specimens a selection has been made, and the medals are to be ready in January for distribution.

The reports of the adjutant general, quartermaster general, commissary general, chief of ordnance, chief of engineers, chief of topographical engineers, paymaster general, and surgeon general, herewith submitted, show the operations of the respective bureaus of this department during the past year. Some of them contain details and information which, for obvious reasons, ought not to be placed, by publication at present, within the reach of the enemy. Whatever details relating to the public security, contained in these reports and not herein stated, which may be required for the information of Congress or congressional committees, will be furnished under your direction.

The adjutant general's office is charged, among other important duties, with the business relating to enlistments, recruiting, and drafting militia. Under your calls of July and August there are already in the field over four hundred and twenty thousand new troops, of which three hundred and ninety-nine thousand (399,000) are volunteers, three hundred and thirty-two thousand (332,000) of whom have volunteered for three years or during the war.

It will be remembered that the call was made at one of those periods of despondency which occur in every national struggle. A chief hope of those who set the rebellion on foot was for aid and comfort from disloyal sympathizers in the northern States, whose efforts were relied upon to divide and distract the people of the north, and prevent them from putting forth their whole strength to preserve the national existence. The call for volunteers and a draft of the militia afforded an occasion for disloyal persons to aceomplish their evil purpose by discouraging enlistments, and encouraging opposition to the war and the draft of soldiers to carry it on.

Anxiety was felt in some States at the probable success of these disloyal practices, and the government was urged to adopt measures of protection by temporary restraint of those engaged in these hostile acts. To that end provost marshals were appointed in some of the States, upon the nomination of their governors, to act under the direction of the State executive, and the writ of habeas corpus was suspended by your order. By the order of the department arrests were forbidden unless authorized by the State executive or by the judge advocate. Some instances of unauthorized arrests have occurred, but when brought to the notice of the department the parties have been immediately discharged. By a recent order, all persons arrested for discouraging enlistments or for disloyal practices, in States where the quotas of volunteers and militia are filled up, have been released. Other persons, arrested by military commanders and sent from departments where their presence was deemed dangerous to the public safety, have been discharged upon parole to be of good behavior and do no act of hostility against the government of the United States. While military arrests of disloyal persons form the subject of com. plaint in some States, the discharge of such persons is complained of in other States. It has been the aim of the department to avoid any encroachment upon individual rights, as far as might be consistent with public safety and the preservation of the government. But reflecting minds will perceive that no greater encouragement can be given to the enemy, no more dangerous act of hostility can be perpetrated in this war, than efforts to prevent recruiting and enlistments for the armies, upon whose strength national existence depends. The expectations of the rebel leaders and their sympathizers in loyal States that the call for volunteers would not be answered, and that the draft could not be enforced, have failed, and nothing is left but to clamor at the means by which their hopes were frustrated, and to strive to disarm the government in future, if, in the chances of war, another occasion for increasing the military force should arise.

Beside aiding State authorities respecting the draft and enlistments, another important duty is assigned to the provost marshals. The army returns and the report of the general-in-chief show that a' large number of officers and enlisted soldiers, who are drawing pay and rations, are improperly absent from their posts. The pursuit of such persons and their compulsory return to duty is a necessary function of a provost marshal, and such number only as may be required

for that purpose will be retained in the service. The

The pay and bounty allowed by act of Congress to recruits have afforded strong temptation to practice fraud upon the government by false returns on muster-rolls and false charges for subsistence. Diligent efforts are being made for the detection of all such practices, and to bring the guilty parties—some of whom have held respectable stations in societybefore a proper

civil or military tribunal as soon as the necessary preliminary investigations by the judge advocate can be completed. The same course is being pursued in respect to fraudulent contractors and disbursing officers.

The expenditure for enlistments, recruiting, drilling, and subsistence of volunteers, regulars, and militia, amounts to the sum of twenty millions six hundred and ninety-two thousand two hundred and eightytwo dollars and ninety-nine cents, ($20, 692,282 99.)

In some States the whole quota of volunteers and militia called for was entirely filled up by volunteers, without draft. In some the whole number of volunteers was raised, and a part of the militia. Other States are deficient in volunteers and have not yet made their draft, but have taken measures for that purpose. Illinois and Iowa have furnished more volunteers than their quota under both calls. The general acquiescence of all the loyal States in the measures deemed necessary to strengthen the arties and prosecute the war, at every hazard, to final success, proves the fidelity of the people to their government, and their determination to maintain its unity and uphold its authority over the whole territory of the United States. Wherever any forcible opposition to the draft has appeared it was confined to narrow limits, and was suppressed by the action of the State authorities, through the provost marshal, without the intervention of any armed force of the general government.

The advantage of filling up the old regiments is shown by many considerations. Various expedients have been adopted to accomplish that object. The official returns show that since the call for volun. teers forty-nine thousand nine hundred and ninety (49,990) recruits have been added to the old regiments. By the aid of some legislation, it is hoped that this important object may be effectually attained.

The adjutant general's office has also had charge of the exchange of prisoners. In the month of July a cartel of exchange was arranged by General John A. Dix, on the part of the United States, and General Hill, of the rebel army, under which large numbers of prisoners of war bave been exchanged. There still remain some parolled prisoners belonging to the United States army, whose exchange will be effected at the earliest opportunity.

Experience has shown that serious defects exist in the militia law, which should be promptly remedied, and that the laws in relation to volunteers also need amendment. The views of the department on these subjects will be communicated to the appropriate committees of Congress. The patriotic zeal and efficient aid cordially rendered by the respective governors of the loyal States in the laborious and complicated duties pertaining to raising the volunteers and making the draft are thankfully acknowledged by this department.

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