I am waiting for your return of the Army report, in order to take definitive measures for the disbandment. I am in hopes, that the Officers will be less disatisfied, than was anticipated; and that the arrangement will not be objected to, by any disinterested man. It would be impossible to complete the payment and discharge by the 1°. of June, and I propose giving a latitude, with reference to the 15. of June.

There was an error committed by the Board of Officers, in stating the number of the Infantry retained, which ought to have been less by 100, than they report. The deduction leaves the aggregate at 9980; and corrects the error in the addition. Any alterations made in the arrangement, will be slight, and within the scope of the discretion, which you have authorised. I am anxious to relieve the officers and the public from further suspence. An addition is strongly reccommended on the subject of Officers provisionally retained in the Pay Department, so as to give a Deputy to each Division; and in the Hospital Department, I believe I mentioned before, that I proposed to retain provisionally, an Assistant Apothecary for each Division.

My determination not to sacrafice the public stock, has produced some clamour among the Bankers and Brokers, but it has appreciated the value in the market; and this day the Bank of Pennsylvania has offered to subscribe 600,000 Dollars at the rate of 95 dollars in Treasury Notes for 100 Dlrs in Stock. The offer when I went to Philadelphia was at the rate of 89 in that City, at the rate 87 in New-York, and at the rate of 85 in Boston. I have no doubt of success in raising the Stock still higher; and I am anxious, as much as possible, to avoid encreasing the issue of Treasury Notes. The Army and Navy Departments, however, are insatiable in their demands. When I have surmounted their wants, and provided for the foreign debt, I hope to be able to call in, gradually, the Treasury Notes, which have been dishonored. The Treasury will then be able to move regularly, though heavily and slowly in consequence of the obstructed circulating medium. I am, Dr Sir, most respectfully & faithfully, Yrs.

Be so good as to return the report for transferring appropriations in the War Department. Mr. Graham says it has not yet been received.

I inclose a letter from Genl. Chandler, for your instructions.1 I believe there is no precedent; and it will introduce the cases of Genls Brown, Winchester, and Macomb; and, perhaps, others in inferior ranks.