Unknown to Edwin M. Stanton, October 31, 1865

Hon. Edwin M. Stanton,

Secretary of War:

Sir : I have the honor to submit a report of the official transaction of the Pay Department of the Army for the fiscal year ending Junj

The tabular statements herewith presented exhibit the details f roi

which the following statement in gross is made if

Balance in hands of paymasters and unissued requisitions in Treas¬ ury at beginning of fiscal year (July 1, 1864) – ….. –

Received from the Treasury during the fiscal year (including un¬ issued requisitions in Treasury on J une 30, 1865) . . – – – – –

Received by paymasters from other sources, exclusive of sums transferred among themselves . . . . . – .

Total to be accounted for

Accounted for as follows :

Disbursements to the Regular Army – 1 –

Disbursements to the Military Academy –

Disbursements to the volunteers – – – – . .

Total disbursement – – – – – – – on ‘ 1

Amount of unissued requisitions in the Treasury on 60, 1865 Balance actually in hands of paymasters on June 30, 1865 .

$86,039,808.^ 337, 200, 000. ( 6,815,137.,’

308, 730, 960. 65, 900, 000. 55, 423, 985.

This large amount in the hands of paymasters at the end of th fiscal year was an unavoidable necessity from the fact that at tn <

*Here omitted in view of the publication of full report in Series I, Vol. XEA, ^^^TabSar^statements omitted in view of the general summary following.

precise period of time the department was everywhere throughout the country under the greatest pressure of payments to mustered-out troops, and money in large sums had to be kept thus distributed.

From the above it will be seen that the sum actually disbursed dur¬ ing the fiscal year and in process of disbursement at the end thereof was $430,054,946.37.

Since the beginning of the current fiscal year, besides the above sums in the hands of paymasters and the unissued requisitions stated, $94,000,000 have been disbursed and distributed for disburse¬ ment, making a total expenditure of $524,054,946.37 during the last fiscal 3^ear and the present one to this date.

Of this large sum more than one-half ($270,000,000) has been paid to disbanded volunteer troops mustered out of service.

From the early days of June to the present time this department) has made final payment to more than 800,000 officers and men. The number paid cannot be definitely stated for the want of time for full official returns to be received from the many various and distant points of payment throughout the country, especially as these pay¬ ments are still continuing. Enough, however, is known with cer¬ tainty to establish the fact that the figures stated are not in excess.

This is an extraordinary exhibit of work performed chiefly within the three months of June, July, and August— $270,000,000 of money paid to 800,000 individual men. When the manner of these payments is observed, with a knowledge of the particularity required in each case — the accounts varying in amounts, each to be separately computed in its several items of pay, clothing, bounty, &c., with such stoppages as may be chargeable deducted; the final amount stated and the sig¬ nature of each officer and man to be appended in duplicate to the receipt rolls— a just appreciation may be formed of the stupendous labor involved. No similar work of like magnitude, regarding its immensity both as to men and money and the small limit of time in which it has been performed, has, it is believed, any parallel in the history of armies.

The troops for discharge were, under the orders from the AdjutantGeneral’s Office, transported to their respective State rendezvous as rapidly as the proper officers of the various organizations could dis¬ patch the duty of mustering out.

This department engaged to prepare with funds officers at all the sixty different places of designated rendezvous throughout the States, and to make prompt payment in the shortest practicable time on the arrival of each organization, so as substantially to avert delays, with all their evil consequences, at the places of rendezvous. How far this pledge on our part has been redeemed the country can answer.

, The facts of record in the War Department show no delays of moment occurring in any quarter; none, at least, chargeable to this depart¬ ment. The work is mainly accomplished, satisfactorily accomplished, beyond the most sanguine anticipations of those who could under- (j stand and properly measure the vastness of the undertaking.

• For this result the country is indebted largely to the zeal, intelli- , gence, and sleepless industry of a corps of experienced paymasters who signalized themselves in this the closing act of their military staff ” service by a faithfulness and devotion which reflects the highest honor !; upon them as a body and as individual officers. To them, under the skillful management of their supervising district chiefs, this depart- ‘-ment owes its success; and I take occasion, as the head of the department, in this public official communication to render to them favorable a solution of a difficult problem. It becomes my duty also to notice here, in most favorable terms, the valued services of the officers and clerks connected immediately with this office. They appreciated the emergency and bent themselves to the difficult work which, for a time, pressed upon the office with almost overwhelming weight.* With payments simultaneously pro¬ gressing at sixty different points, widely separated, with the necessity of keeping each one supplied with funds from day to daj^ and a neces¬ sity also that each should have no more than required for immediate . disbursement — drawing from the Treasury at the rate of 120,000,000 per week and compelled to make close estimate and careful watch of its daily distribution, so that the demand at each given point should be surely supplied and yet no more than supplied ; telegrams and let¬ ters continually pouring in noting the movement and destination of troops, and repeating these notices to the proper points of rendezvous; applications and appeals constantly arriving requiring immediate answers; new questions arising and referred to this office for instructions, &g. — kept our thoughts, our pens, our press, and the telegraph in constant requisition by day and by night. Mid all this I am happy to bear testimony that every one labored with cheerful alacrity — in some instances, indeed, during the heated season, even beyond their strength. It may be said of these, as I have said of the paymasters in the field— but for their willing efforts, rendered with self-denying devotion, the work could not have been a success.

The unstinted facilities extended, sir, by your authority and orders, in the free use of the military telegraph, the printing press, and all other agencies that could be profitably applied to the end, together with the liberal confidence which you were pleased to repose in this office, leaving to it an almost unrestricted discretion to manage, with¬ out hindrance, its own details; your concurrence in and support of its acts and orders — these reveal the vital secret of a result so favorable.

I cannot close this branch of my subject without a grateful expres¬ sion of indebtedness to the officers of the Treasury Department for the courteous and zealous attention with which, during the trying exigency, they always entertained the importunate demands of this office. What often seemed as hopeless impossibilities obstructing the financial path were, by their fervent efforts, readily dispelled, and thus all our requisitions were met with most satisfactory promptness.

At the date of my last annual report, besides the small number of officers constituting the Pay Department of the Regular Army (and which is without casualty or change since), there were in the service 409 additional paymasters, contingent appointments under the law of July, 1838. Afterward, up to March 3, 38 others were appointed: and confirmed, making a total of 447, accounted as follows: Resigned, 89; commission declined, 1; dismissed,4; appointments canceled, 21; dropped, 2; died of disease, 5; lost at sea, 1; killed by guerrillas, 2; died while prisoner of war, 1 ; mustered out. Ill; total casualties, 237; remaining in service, 210.

This reduction may still continue, following with even pace, as their services can be spared and their accounts be rendered, the progress of the reduction of the Army.

The sudden disbandment of our volunteer hosts, besides their final payment on the ordinary forms of muster-out rolls and other discharge papers, has devolved upon this department an inordinate accumula¬ tion of “referred claims” transmitted for adjustment and payment. These have arisen from various causes, but chiefiy from the inability of the officers charged with the execution of the muster-out papers to reach a complete history as to pay, clothing, bounty, &c. , of large numbers of enlisted men, so as to enable a final settlement at the time of discharge. To all such certificates of discharge are furnished, upon which are indorsed the fact of non-payment, and the holders are directed to forward the same, as the basis of their claim, to the Pa5^master-General for adjustment.

Such magnitude has this demand attained that it has been found necessary to organize a special division of paymasters as an attach¬ ment of this Bureau to take exclusive cognizance of this class of claims.

This “division of referred claims” is now composed of a chief supervising paymaster of much intelligence, judgment, and experi¬ ence, with twelve other paymasters; also competent officers of experience and a corps of sixty-four active clerks. The peculiar labors of this division could not be near so well performed under any other organization, having, as this does, enlightened paymasters to supervise every branch of the work, each being responsible for his own.

Every claim sent to this division requires for its elucidation a care¬ ful and laborious search through all the previous rolls on file in this and the Second Auditor’s Office, besides constant reference to the Adjutant-General’s Office, to trace out through the past records all the facts touching the case, the charges, stoppages, forfeitures, &c., that It may be stated with accuracy the balance due the claimant. This done, vouchers in form covering that balance are filled out and transmitted to the claimant for his signature, which returned to the paymaster, the latter remits a check for the amount. From this it will be seen how tedious is the work of this division, what careful industry it demands, and how inevitable are the delays complained of by impatient claimants.

The clerical force of this Bureau is without material change since the date of my last annual report.

For months past, in anticipation of an early permanent reduction ot that force, I have refrained from recommending new appointments to fill such vacancies as have occurred by resignation and other casualties.

This course, I apprehend, may continue without injury or material inconvenience to the public service. Such, however, is the sudden accumulation of the business of the Bureau, by reason of the present influx for examination of rolls and other classes of vouchers, result¬ ing from the recent and continued large payments to disbanded troops already adverted to, that but a very slight reduction in the number jOt clerks employed will be practicable for some months to come.

I need hardly urge the unqualified conviction that the compensa- .tion allowed by the Government to this indispensable class of public agents is quite inadequate in view of the present exorbitant cost of the necessaries of life. The clerks of this Bureau as a body are aighly meritorious and deserving public servants. None, I am sure, oetter than they have by faithful industry earned just title to favor¬ able consideration. It becomes my duty, therefore,

respectfully, but sation now by law fixed for the clerks employed in this Bureau.