The ordinary revenues from all sources for the fiscal year ended June 30, 1879, were $273,827,184.46; the ordinary expenditures for the same period were $266,947,883.53, leaving a surplus revenue for the year of $6,879,300.93.

The receipts for the present fiscal year, ending June 30, 1880, actual and estimated, are as follows:  Actual receipts for the first quarter, commencing July 1, 1879, $79,843,663.61; estimated receipts for the remaining three quarters of the year, $208,156,336.39; total receipts for the current fiscal year, actual and estimated, $288,000,000.

The expenditures for the same period will be, actual and estimated, as follows:  For the quarter commencing July 1, 1879, actual expenditures, $91,683,385.10; and for the remaining three quarters of the year the expenditures are estimated at $172,316,614.90, making the total expenditures $264,000,000, and leaving an estimated surplus revenue for the year ending June 30, 1880, of $24,000,000.  The total receipts during the next fiscal year, ending June 30, 1881, estimated according to existing laws, will be $288,000,000, and the estimated ordinary expenditures for the same period will be $278,097,364.39, leaving a surplus of $9,902,635.61 for that year.

The large amount expended for arrears of pensions during the last and the present fiscal year, amounting to $21,747,249.60, has prevented the application of the full amount required by law to the sinking fund for the current year; but these arrears having been substantially paid, it is believed that the sinking fund can hereafter be maintained without any change of existing law.

The Secretary of War reports that the War Department estimates for the fiscal year ending June 30, 1881, are $40,380,428.93, the same being for a less sum of money than any annual estimate rendered to Congress from that Department during a period of at least twelve years.

He concurs with the General of the Army in recommending such legislation as will authorize the enlistment of the full number of 25,000 men for the line of the Army, exclusive of the 3,463 men required for detached duty, and therefore not available for service in the field.

He also recommends that Congress be asked to provide by law for the disposition of a large number of abandoned military posts and reservations, which, though very valuable in themselves, have been rendered useless for military purposes by the advance of civilization and settlement.

He unites with the Quartermaster-General in recommending that an appropriation be made for the construction of a cheap and perfectly fireproof building for the safe storage of a vast amount of money accounts, vouchers, claims, and other valuable records now in the Quartermaster-General’s Office, and exposed to great risk of total destruction by fire.

He also recommends, in conformity with the views of the Judge-Advocate-General, some declaratory legislation in reference to the military statute of limitations as applied to the crime of desertion.  In these several recommendations I concur.