Statement showing the number and amount of money orders issued, with the amount of fees received therefor, the number and amount of orders paid and amount repaid at issuing offices, the amount allowed postmasters on account of commissions and clerk hire, and the miscellaneous and total expenses at each and all of the money order offices from November 1, 1864, to June 30, 1865. *Clerk hire allowed. In operation from Feb. 25 to June 3. Commenced operations Feb. 11, 1863. REPORT OF THE SECRETARY OF THE NAVY. NAVY DEPARTMENT, December 4, 1865. SIR: In my last annual report I presented to Congress and the country such description as the occasion seemed to require of the measures of administration by which our naval force had, during the preceding four years, been created and organized, with an account of the method and manner in which it had been applied in arduous and unexampled forms of action for the suppression of the rebellion. The review then given of the principal operations and the brilliant achievements of our navy closed with the memorable recovery of the harbor and the almost impregnable defences of Mobile. In this report, besides the exposition of the ordinary business of this department, including the suggestions and recommendations deemed necessary for the proper regulation of the naval service in the present condition of the country, it will be my duty to complete the official record of the triumphs of the navy in the final operations and closing scenes of the war, to indicate the new arrangement and organization of the several squadrons consequent upon the termination of the blockade and the cessation of active hostilities, to exhibit the vigilance and energy of our blockading and cruising service, as testified by the number and value of the captures made in the unrelaxing and successful efforts to cut off illicit commercial intercourse with rebel ports; and especially to exhibit the policy and measures of the department in effecting at the earliest moment, in view of returning peace, a reduction of naval expenditures, while providing for the prompt re-establishment at any time of our great naval power in all its efficiency to meet the exigencies of any possible crisis in which its services may be invoked to maintain the rights or vindicate the honor of the country. The demands upon the naval service, which for four years had been exacting, were relaxed upon the fall of Fort Fisher. That event, and the possession of Cape Fear river, closed all access to Wilmington, the port of rebel supplies, put an end to illicit traffic with the States in insurrection, and extinguished the last remnants of that broken commerce which foreign adventurers had, notwithstanding constant and severe losses, persisted in carrying on by breach of blockade. The capture of Wilmington was preliminary to the fall of Richmond and the surrender of the rebel armies, which were thenceforward deprived of supplies from abroad. It released at once a large portion of our naval force, and led to immediate measures for the reduction of our squadrons, and the withdrawal of all vessels which could be dispensed with from the blockade. Such of them as were purchased and no longer required by the government, have from time to time been sold to meet the demands of reviving commerce, which has rapidly expanded as the country became quieted and industry was resumed at the south. Trade and peaceful employment have led to the reopening of the avenues of commercial and social intercourse, and the steamers bought from the merchant service for war purposes have been to a great extent returned to their former pursuits. NORTH ATLANTIC SQUADRON-CAPTURE OF WILMINGTON AND ITS DEFENCES. As early as 1862 the necessity of closing the port of Wilmington became a primary object with this department, and was never relinquished; but without military aid and co-operation it could not be effected or even wisely attempted. In September, 1864, the department had such assurances of military assistance as to feel warranted in entering upon the necessary preparations for assembling an adequate naval force to undertake and perform its part in accomplishing the work. In order that there should be no failure, the department concentrated a sufficient force to insure success. To place that force under the command of the first officer in the navy was a duty. Vice-Admiral Farragut was therefore selected to conduct the enterprise, but impaired health, the result of exposure and unremitted exertions during two years of active labor and unceasing efforts in the Gulf, rendered it imprudent for that distinguished and energetic officer to enter upon this service. He had, moreover, important work yet to be finished on the Gulf coast, where he was then operating, and was therefore on his own request excused from this new command. Rear-Admiral Porter, who had shown great ability as the commander of the Mississippi squadron, and had identified himself with many of its most important achievements, was transferred to the command of the North Atlantic squadron, which embraced within its limits Cape Fear river and the port of Wilmington. A fleet of naval vessels, surpassing in numbers and equipments any which had assembled during the war, was collected with despatch at Hampton Roads. Various causes intervened to delay the movement, and it was not until the early part of December that the expedition departed for Beaufort, N. C., the place of rendezvous. Some further necessary preparations were there made, which, together with unfavorable weather and other incidents, delayed the attack until the 24th of December. On that day Rear-Admiral Porter, with a bombarding force of thirty-seven vessels, five of which were iron-clads, and a reserved force of nineteen vessels, attacked the forts at the mouth of Cape Fear river, and silenced them in one hour and a quarter; but there being no troops to make an assault or attempt to possess them, nothing beyond the injury inflicted on the works and the garrison was accomplished by the bombardment. A renewed attack was made the succeeding day, but with scarcely better results. The fleet shelled the forts during the day and silenced them, but no assault was made, or attempted, by the troops which had been disembarked for that pur pose. Major General Butler, who commanded the co-operating force, after a reconnoissance, came to the conclusion that the place could not be carried by an assault. He therefore ordered a re-embarkation, and informing Real-Admiral Porter of his intention, returned with his command to Hampton Roads. Immediate information of the failure of the expedition was forwarded to the department by Rear-Admiral Porter, who remained in the vicinity with his entire fleet, awaiting the needful military aid. Aware of the necessity of reducing these works, and of the great importance which the department attached to closing the port of Wilmington, and confident that with adequate military co-operation the fort could be carried, he asked for such co-operation, and earnestly requested that the enterprise should not be abandoned. In this the department and the President fully concurred. On the suggestion of the President, Lieutenant General Grant was advised of the confidence felt by Rear-Admiral Porter that he could obtain complete success, provided he should be sufficiently sustained. Such military aid was therefore invited as would insure the fall of Fort Fisher. A second military force was promptly detailed, composed of about eight thousand five hundred men, under the command of Major General A. H Terry, and sent forward. This officer arrived off Fort Fisher on the 13th of January. Offensive operations were at once resumed by the naval force and the troops were landed and intrenched themselves, while portion of the fleet bombarded the works. These operations were continued throughout the 14th with an increased number of vessels. The 15th was the day decided upon for an assault. During the forenoon of that day forty-four vessels poured an incessant fire into the rebel forts. There was, besides, a force of fourteen vessels in reAt 3 p. m. the signal for the assault was made. Desperate fighting ensued, traverse after traverse was taken, and by 10 p. m. the works were all carried, and the flag of the Union floated over them. Fourteen hundred sailors and marines were landed and participated in the direct assault. serve. Seventy-five guns, many of them superb rifle pieces, and nineteen hundred prisoners were the immediate fruits and trophies of the victory; but the chief value and ultimate benefit of this grand achievement consisted in closing the main gate through which the insurgents had received supplies from abroad and sent their own products to foreign markets in exchange. Light-draught steamers were immediately pushed over the bar and into the river, the channel of which was speedily buoyed, and the removal of torpedoes forthwith commenced. The rebels witnessing the fall of Fort Fisher, at once evacuated and blew up Fort Caswell, destroyed Bald Head Fort and Fort Shaw, and abandoned Fort Campbell. Within twenty-four hours after the fall of Fort Fisher, the main defence of Cape Fear river, the entire chain of formidable works in the vicinity shared its fate, placing in our possession one hundred and sixty-eight guns of heavy calibre. The heavier naval vessels being no longer needed in that quarter, were despatched in different directions-some to James river and northern ports, others |