But the real amount of the new bonds, estimating them on a basis of 6 per cent. bonds, will be less than the amount of the undisputed debt above mentioned, for we propose that the new bonds shall not draw 6 per cent. from date, but that the interest for the first years shall be as follows: For the first year the interest shall be at 2 per cent.; for the second year, 3 per cent.; and for the third year, 4 per cent.which will be an annual reduction from the interest of the first three years of the following amounts: For the first year... For the second year.. For the third year..

In all.....

$160,000 120,000 80,000 $360,000

Which will make the new bonds, estimating them on the basis of 6 per cent. bonds, for an amount less than the old and undisputed debt above mentioned, by the sum of $87,827.08.

As it is desirable for the good name and prosperity of the State that all the paper outstanding, having her name and official seal on it, shall be withdrawn and canceled, we propose to get up and deposit, at the time of the issue of the new bonds, and without any further charge or remuneration than the funding of the undisputed debt as above mentioned, the following outstanding bonds, the legality of which has been disputed-that is to say:

Railroad Aid bonds, with interest to July 1, 1877. $7,157,145 Levee bonds, with interest to July 1, 1877. 2,751,118 Excess of Holford bonds, with interest to July 1, 1877.....

Making, in all....................

1,566,288 $11,474,501

of a disputed debt which the State will get in without paying a cent therefor.

This will remove every ground of reproach against the State, and will give her as good standing as that of any State in the Union.

We propose that the first semiannual coupon shall be payable July 1, 1878.

No new bond shall be issued under this plan until we deposit in the State Treasury one-half of the nominal amount of each of said kinds of bonds above mentioned, both the disputed and undisputed, as they are above designated; and for every new bond of $1,000 issued, there shall first be deposited in the State Treasury the following amounts of each of said kinds of bonds-that is to say:

Of the old bonds issued to the Real Estate and
State Banks, and of the bonds funded under
the act of 1868, excluding the Holford bonds, ex-
of the Holford bonds, for amount disputed..
cept for amount which is undisputed....
Of the Railroad Aid bonds....
Of the Levee bonds...

Total......

$981 95 891 56 1,789 29

687 78

$3,800 58

The new bonds shall be issued in denominations of $500 or $1,000, at the option of the holders of the surrendered bonds, and similar provisions shall be made for securing the payment of the interest on the new bonds as is made by law for securing the payment of the interest on the new outstanding Loughborough bonds. We are to pay all expenses in the matter, except that of printing the bonds.

This proposal is made for the approval of the Board of Finance, and subject to the approval of the Legislature.

Respectfully submitted,

JOHN D. ADAMS, For self and J. E. REDFIELD. To the Board of Finance, City of Little Rock.

General McDowell; of the Columbia, by Brigadier-General Howard; and of Arizona, by Colonel A. V. Kautz.

General Sheridan's command embraces substantially the vast territory west of the Mississippi, to and including the Rocky Mountains, from the Canadian line to the Mexican frontier, containing the great majority of the nomadic and hostile Indians of the country; headquarters, Chicago, Ill. General Hancock's comprises, substantially, all the country east of the Mississippi, bordering the Northern lakes, the Atlantic and Gulf coasts; headquarters, New York City. General McDowell's includes the States and Territories bordering on the Pacific Ocean; headquarters, San Francisco, Cal.

Besides the above, there is the Department of West Point, commanded by Major-General Schofield, which is somewhat exceptional in its nature, being designed to give due importance to the Military Academy, and to invest the commanding general thereof with power to exercise all the functions necessary to secure thorough discipline and administration.

The Secretary of War recommends that authority be given to the President to increase the strength of the depleted companies now embraced within the Army organization. He

says:

The Army now has a sufficient number of officers, regiments, and companies; but the companies are too small. I recommend that the President be authorized to recruit all companies of infantry to 50 men each, and all batteries of artillery to 75 men each, with power, in his discretion, in case of emergency, to increase the former to 100 and the latter to 122

men each. We may safely assume that such a discretion would be exercised with becoming moderation and prudence; and the result would be that the grand aggregate would never, in any probable emergency arising in the recess of Congress, exceed 40,000 men, while 30,000 would suffice to meet any demands upon the Army that can at this time be certainly anticipated.

It must not be forgotten, in considering this question, that there must always be a large percentage of an army not available for duty in the field. Besides the number of soldiers on the sick-list, and those employed on detached duty of various kinds, a large number of men are always needed for guard and garrison duty. For example: we have now about 226 military posts, at most of which men are necessarily employed continually in taking care of and guarding government property. We have some 18 arsenals and armories, besides about 40 storehouses or depots, at each of which is stored prop erty of great value belonging to the Government. The vast interests involved in the protection of the property of the United States at these numerous and widely-scattered places renders it necessary to keep a considerable force on duty for that purpose, and

therefore withdrawn from other service.

The number of desertions during the year ending June 30, 1877, was 2,516; 1876, 1,844; 1875, 2,521; 1874, 4,606; 1873, 7,271.

The Signal Service has continued its usefulness in the diffusion of scientific and practical information. The duties now devolved upon that service are, besides the instructions in military signaling and telegraphy, to conduct the

observation and report of storms; to report upon the average depth of water in the great rivers of the interior, and give notice of their dangerous rises; to give assistance to the lifesaving service on the coast; and to construct and repair military telegraph lines. There have been maintained, during the year, 159 stations of observation. Of the published "Indications," 86.16 per cent. have proved correct. The average of 90 per cent. is believed to be attainable. These reports appear regularly in almost all of the daily newspapers of the country, and no great storm has passed over the United States without pre-announcement.

The publication of the official records of the Civil War has been diligently and systematically pursued during the past year. Since the beginning of the work, several years ago, there have been published 47 volumes, containing more than 33,000 pages, of which 37 volumes relate to the United States, and 10 to the Confederacy. The war-records of the Confederate States have been published up to the end of the year 1861. A very large amount of materials remains for publication. It is the intention to print all records pertaining to the war. But there are important documents in the possession of State and private societies and individuals. This fact explains the marked difference between the quantity of Federal and that of Confederate documents that have been issued; since the records are published in chronological order, and many early ones relating to the Confederacy are not yet in the possession of the Government.

The estimates of the War Department for the fiscal year ending June 30, 1878, amount to $43,115,443, as follows:

Salaries, contingent expenses, and postage.
Military establishment..
Public works.......

Miscellaneous....

$1,193,884 81,597,270

7,953,078

2,871,210

The most important army operations during the year were those against the Nez Percés Indians under Chief Joseph. The great body of the Nez Percés have been for several years on the Lapwai Reservation, in the northwest part of Idaho Territory. But ever since 1863, Joseph, at the head of about 500 Indians, has claimed the boundaries of the reservation as established by the Stevens treaty of 1855, more especially that part of it west of Snake River, in Oregon, and known as the Wallowa Valley. Though this valley was never the home of Joseph and his followers, who usually lived on Salmon and Snake Rivers, nevertheless they persisted in their claims to it. It was conceded to them by President Grant, in his executive order of June 16, 1873; but on June 10, 1875, this order was revoked, and all that part of Oregon west of Snake River, embracing the Wallowa Valley, was restored to the public domain. It has been partly surveyed; forms a part of Union County, Oregon, and settlers have acquired legal titles under the laws of the United States.

Early in 1877 the Government decided to have Joseph and his band removed from the Wallowa to the reservation in Idaho. Orders were accordingly given to General Howard "to occupy Wallowa Valley in the interest of peace," and efforts were made by that officer to induce Joseph to comply with the wishes of the Government. On the 21st of May, General Howard reported that he had had a conference with Joseph and other chiefs on the 19th, and that "they yielded a constrained compliance with the orders of the Government, and had been allowed 30 days in which to gather in their people, stock," etc. On June 14th the Indians belonging to Joseph from Wallowa, White Bird from Salmon River, and Looking-Glass from Clearwater, had assembled near Cottonwood Creek, on the border of the reservation, apparently in compliance with their engagement, when news reached General Howard, who was at Fort Lapwai, that four white men had been murdered on John Day's Creek, to the south of this reservation, by some Nez Percés, and that White Bird had proclaimed that he would not go on the reservation. Information of other murders was also received. General Howard now dispatched two cavalry companies, with 99 men, under Captain Perry, to the scene of disorder. The latter officer found the Indian camp at White Bird Cañon, and on June 17th made an unsuccessful attack, with a loss of one lieutenant and 33 men.

General Howard now determined to take the field in person, and, having collected a force of about 400 men, on July 11th discovered the Indians in a deep ravine on Clearwater, near the mouth of Cottonwood Creek, where he at once attacked them. On the next day the Indians were fairly defeated and driven in confusion, losing their camp and much of their provisions. General Howard reported 23 warriors killed, "at least twice as many" wounded, and 23 taken prisoners, besides 17 women and children captives. His own loss was 13 men killed, and 2 officers and 22 men wounded. General Howard's force was about 400; the Indians numbered 400 warriors.

On the 17th Joseph began his famous retreat eastward toward the Buffalo country by the Lo-Lo trail, which, in the language of General Sherman, is "one of the worst trails for man and beast on this continent." General Howard delayed pursuit for some days, to give increased security to the people in his rear against apprehended danger, and to enable his own reenforcements to come within reach. He then reorganized his command, sending one force up north into the Spokane country; another was held in reserve near the Indian reservation; and he himself, with a select force, started in pursuit on the Lo-Lo trail. The Indians reached Rawn's Fort and passed up the Bitter-Root Valley with a large herd of horses. Colonel Gibbon, who was then in Montana, started in pursuit with 15 officers and 146 men, who were afterward joined by 34 citizens. He overtook

the Indians on a branch of Big Hole or Wisdom River, and attacked them August 9th; but being greatly outnumbered, he was compelled to assume the defensive, till the Indians withdrew on the night of the 10th. Colonel Gibbon reported his loss at 2 officers, 6 citizens, and 21 enlisted men killed, and 5 officers, 4 citizens, and 31 men wounded. The enemy's loss was about 90 killed, besides a large number wounded.

On the morning of the 11th General Howard arrived with a small escort, and resumed the pursuit. On August 20th, when General Howard was at Camas Prairie, the Indians turned on him, stampeded and ran off his pack-train, which was partly recovered by his cavalry. The Nez Percés, after leaving Henry's Lake in Montana, passed up the Madison and Fire-Hole Basin into the National Park, and crossed the divide and the Yellowstone River above the falls and below the lake. They next crossed the Snowy Mountains and moved down Clark's Fork, with General Howard in close pursuit. On September 13th Colonel Sturgis had a fight with them on the Yellowstone below the mouth of Clark's Fork, capturing several hundred of their horses, and killing a number of the Indians. He continued the pursuit. The Indians crossed the Yellowstone, passed north through the Judith Mountains, and reached the Missouri River near Cow Island on September 22d. On the following day they crossed the Missouri, and continued north toward the British boundary.

Meanwhile General Howard had sent word to Colonel Miles, at Tongue River, of the flight of the Indians. Colonel Miles at once moved across the country with such troops as he had at hand, and, turning north, crossed the Missouri River near the mouth of the Mussel-Shell. On September 30th he overtook the Nez Percés near the mouth of Eagle Creek, and, after a severe engagement, in which 2 officers and 21 men were killed, and 4 officers and 38 men wounded, he captured the entire band of Indians, numbering between 400 and 500 men, women, and children. The Indians in this fight lost, in killed, 6 of their leading chiefs and 25 warriors, besides 46 wounded. General Howard, with a small escort, arrived on the field a short time before the surrender, but did not exercise any command.

"Thus," says General Sherman, "has termiminated one of the most extraordinary Indian wars of which there is any record. The Indiaus throughout displayed a courage and skill that elicited universal praise; they abstained from scalping; let captive women go free; did not commit indiscriminate murder of peaceful families, which is usual; and fought with almost scientific skill, using advance and rear guards, skirmish-lines, and field-fortifications. Nevertheless, they would not settle down on lands set apart for them ample for their maintenance; and, when commanded by proper authority, they began resistance by murdering

The war between Russia and Turkey, which occupied the attention of all Europe during 1877, was also of great interest to a large part of Asia. At the same time that the Russians entered upon Turkish territory in Europe, they crossed from the Caucasian provinces into Turkish Armenia. Although at first decidedly successful, they afterward met with several reverses, which forced them to retreat to the border. In October they again began to advance, and in November took the fortress of Kars. This made their campaign in Asia a complete success. (See TURKEY.)

Besides the vast territories of Russia and Turkey in Asia, the war also affected the entire Mohammedan world on that continent. Persia, although not taking an active part in the struggle, was known to sympathize with

789,900 17,291,300

Russia. In Afghanistan, Turkistan, and India the struggle was watched with the greatest interest by the Mohammedan population, and large contributions of money, with expressions of sympathy, were sent to Constantinople. (See MOHAMMEDANS.)

An event which in its ultimate results may again change the political map of Asia, was the death of the Amir Yakub Beg of Kashgaria. The Chinese troops having, at the close of 1876, completely subdued the rebellion in Soongaria, after a campaign of ten years, pro ceeded to attack Yakub Beg in his own territory. In the midst of the campaign he died— by an assassin's hand, it is said. (See KASHGARIA.)

In India, Lord Lytton, in the presence of a vast assembly of native chiefs, proclaimed the