On the Morehead City and Goldsboro' Railroad we have rebuilt twenty-seven miles of the track, and furnished it with new iron and laid new ties on many miles more since February last. These views also hold good, unless I am misinformed, with regard to the railroad leading into New Orleans, the Memphis and Little Rock Railroad, the Memphis and Charleston Railroad, and the Mobile and Ohio Railroad. They have all been improved at great expense while in our hands.
In the third rule proposed by the quartermaster general it is provided that all materials for permanent way used in the repair and construction of any road, and all damaged material of this class which may be left along its route, having been thrown there during operation of destruction and repair, shall be considered as part of the road, and given up with it also without compensation. If this means to give up any new iron that we have on the line of any road, it seems to me to concede to the parties to whom the roads are to be surrendered more than they have a right to claim. For instance, there is now lying at Alexandria, on the line of the Orange and Alexandria road, iron sufficient to lay thirty miles of track. It seems manifest to me that this iron should not be surrendered to the road without being paid for. In my judgment it is also advisable to establish the principle that the Government will not pay for the damages done any road in the prosecution of hostilities, any more than it will pay for similar damages done by the enemy. With these exceptions, the principles proposed by the quartermaster general appear to be correct.
In accordance with these observations, I would recommend that the following rules be determined upon to govern the settlement of these matters:
1. The United States will, as soon as it can dispense with military occupation and control of any road of which the Quartermaster's Department is in charge, turn it over to the parties asking to receive it who may appear to have the best claim, and be able to operate it in such a manner as to secure the speedy movement of all military stores and troops, the quartermaster general, upon the advice of the commander of the department, to determine when this can be done, subject to the approval of the Secretary of War.
2. Where any State has a loyal board of works, or other executive officers charged with the supervision of railroads, such road shall be turned over to such board of officers rather than to any corporations or private parties.
3. When any railroad shall be so turned over, a board of appraisers shall be appointed, who shall estimate and determine the value of any improvements which may have been made by the United States, either in the road itself or in its repair shop and permanent machinery, and the amount of such improvements shall be a lien upon the road.
4. The parties to whom the road is turned over shall have the option of purchasing at their value any tools, iron, or any other materials for permanent way which have been provided by the United States for the improvement of the road and have not been used.
5. All other movable property, including rolling stock of all kinds, the property of the United States, to be sold at auction, after full public notice, to the highest bidder.
6. All rolling stock and materials of railroads captured by the forces of the United States, and not consumed, destroyed, or permanently fixed elsewhere—as, for instance, when captured iron has been laid upon other roads—shall be placed at the disposal of the roads which originally owned them, and shall be given up to these roads as soon as it can be spared and they appear by proper agents authorized to receive it.
7. No payment or credit shall be given to any railroad recaptured from the enemy for its occupation or use by the United States to take possession of it, but its capture and restoration shall be considered a sufficient consideration for all such use; nor shall any indemnity be paid for injuries done to the property of any road by the forces of the United States during the continuance of the war.