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August, when he quietly absconded, swindling all his workmen and many other creditors out of their pay.

Since that date, under the authority given by indorsement dated August 23, 1871, upon my communication of August 19, 1871, (1624, R and H, 1871,) and also by letter from office of the Chief of Engineers, dated August 26, 1871, (1646, R and H, 1871,) I have employed a large force of hired men to remove the obstructions in the Tennessee, between Chattanooga and Kingston. All the work now doing in the improvement of the Tennessee, both above and below Chattanooga, is done by hired labor, and the progress is certain and satisfactory.

There are two good reasons why this system is far better than the contract system. In the first place, where contractors are paid by the cubic yard for the removal of rock, it is scarcely possible even for the most careful inspector to make an exact measurement, and where there is a doubt, the contractor commonly and properly receives the benefit of it. In the second place, the chances of accident from the sudden and unexpected rises of these western and southern rivers make it necessary that contractors should, in order to secure themselves, bid high. If the possible contingency occur, they are safe, though certain to apply to Congress for relief. If it do not occur, their profits are enormous. The General Government, in matters of insurance, insists on being its own insurer. Why not, in matters of work, do its own work? This, of course, means harder work for the officer who is responsible for its execution; but it means also a better school for his assistants, and makes it certain that a work of improvement will be executed as rapidly as the appropriation for it will admit, and with a fixed view to the interest of the whole community interested in it rather than to that of any one individual.

The condition of the appropriations for the improvement of the Tennessee River is as follows, viz:

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21,274 42

Total available June 30, 1871, which includes the forfeited percentage, and of which $60,000 were still undrawn from the Treasury.

Expended during the year..

Available June 30, 1872..

84,906 63

To which must be added the amount of the appropriations made for this river by the act approved June 10, 1872, viz: $25,000 for the improvement of the Tennessee River between Knoxville and Chattanooga, and $50,000 for the continuation of the work in progress on the Tennessee River below Chattanooga, including the Muscle Shoals.

But for the failure of the contractors to perform their work, this entire amount, excepting the two items last appropriated, would have been expended by the close of the fiscal year, and the navigation of the river would have been greatly improved. Under the system of hired labor, much better progress is expected for the coming year.

The following amounts, in addition to those already available, may be

profitably expended in the improvement of the Tennessee River during the fiscal year ending June 30, 1873, viz:

For the continuation of the improvements in progress below Chattanooga, including the Muscle Shoals....

$530,000 00

For the improvement of the river between Chattanooga and Knoxville... 120,000 00

650, 000 00

As stated in my last annual report, the question of opening the Tennessee to navigation has more of a national than of a merely local significance. The only great western river beside the Ohio which reaches the mineral wealth of the Alleghany range, and flowing for hundreds of miles along the spurs of that range, through a country exceptionally rich in coal, iron, and other minerals, it cannot be doubted that had it not been for the obstacle to navigation formed by the Muscle Shoals, a city, the rival of Pittsburgh, would have long since sprung up in the mountains of Eastern Tennessee, to share with her the honors and profits of supplying the South and West with coal, ion, and manufactures.

For five millions of dollars, which sum includes the cost of constructing a steamboat canal around the Muscle Shoals, the Tennessee can be made navigable, at the lowest stage of water, from Knoxville to Paducah-a distance of over seven hundred miles-for vessels drawing 3 feet water.

The nearest port of entry is Louisville, Kentucky. I have been unable to ascertain the amount of revenue collected there. I regret that I am unable to furnish precise information concerning the population, wealth, and resources of the regions likely to be benefited by the completion of the schemes for the improvement of the Tennessee, and for the opening of a line of water communication between the Mississippi River and the Atlantic Ocean by way of the Tennessee River; but I have been unable to get the returns of the last census necessary for this purpose, and the matter must therefore be deferred until my next report is rendered.

SURVEYS.

All the surveys placed in my charge have been completed. They are as follows, viz:

1st. Survey of the Tennessee River from Brown's Ferry to Florence, Alabama. This survey, which covers the obstacle known as the Muscle Shoals, was made with the view of ascertaining the probable cost of connecting the two navigable portions of the Tennessee by the construction of a steamboat canal around these shoals.

My report, transmitted to Washington, March 23, 1872, puts the estimated cost of such a work at $3,676,000.

2d. Survey of the Coosa River, Alabama, from Wetumpka to Greensport. One-half of this survey, viz, From Wetumpka to the bridge of the Selma, Rome and Dalton Railroad, was completed last year, and the remainder, from the same bridge to Greensport, was completed this year.

My report, dated March 23, 1872, based upon the survey of the lower portion, and a reconnaissance of the upper part, put the cost of improv ing the river between Wetumpka and Greensport, so as to admit of the passage of steamers drawing three feet water, at $2,340,746.75; but the survey of the upper part, since made, shows that this estimate is too small by over $50,000, and the probable cost may therefore be taken at $2,400,000.

The report of the survey of the upper portion, made by Assistant J. C. Long, is transmitted herewith.

3d. Survey for a canal route from the Tennessee River, at a point near Guntersville, Alabama, to the head-waters of the Coosa and Warrior Rivers.

4th. Survey for a canal route from the Etowah River to the Ocmulgee River, Georgia.

These two surveys were for canal routes, to form links of the proposed line of water communication from the Mississippi River to the Atlantic Ocean, by way of the Tennessee, Coosa, Etowah, Ocmulgee, and Altamaha Rivers, upon which I reported fully in my communication of May 25, 1872.

The former survey was made by Assistant J. C. Long, and the latter by Assistant R. C. McCalla, and their reports were transmitted to Washington along with my own.

5th. Examination of Etowah River, from Rome to Cartersville. Assistant Long, whose report is transmitted herewith, puts the cost of improving this river, so as to admit the passage of steamboats drawing three feet water, at $274,718.

6th. Examination of the Oostenaula River, from Rome to Resaca. Assistant R. C. McCalla, whose report is transmitted herewith, states that $10,000 or $12,000 would probably be sufficient to insure a depth of 3 feet during dry summer weather.

There have been expended during the year in these examinations and surveys the sum of $20,030.90.

Very respectfully, your obedient servant,

WALTER MCFARLAND,
Major of Engineers.

Brigadier-General A. A. HUMPHREYS,

Chief of Engineers, Washington, D. C.

Abstract of contracts entered into during the fiscal year ending June 30, 1872, for the improvement of the Tennessee River.

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Abstract of bids for improvement of the Tennessee River, opened at Chattanooga, Tennessee, May 29, 1872.

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Abstract of proposals for the improvement of the Upper Tennessee River, opened at Chattanooga, Tennessee, August 21, 1871.

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