War of the Rebellion: Serial 106 Page 0336 OPERATIONS ON THE PACIFIC COAST. Chapter LXII.

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necessary for him to leave the service. But knowledge that facts in the premises I must nevertheless recommend, as I now do, that his resignation be accepted. While upon the subject of resignations I beg to remark that the cause assigned by Doctor Holton for his resignation is valid and sufficient doubltless for its acceptnce. But there is another which in its practical workings is almsost as potent, and which precludes the possiblility for any oa the officers at this post to remain much longer in the service; I allude to their non-payment since they entered the service, as also that of the entire command. This has borne heavily upon the officers, more especially as they have been compelled to hire money, some of them for more than a year past, with which to purchase their horses and eqipments, and to defray personal expenses. The act of Congress of June 18, 1862, requiring "that company officers of volunteers", and unjustly applied to the field and staff of regiments also, 'shall be paid on the muster and pay rolls", has worked a great injury to the officers here, as it has no doubt in other portions of this department, by inhibiting the use of "pay accounts", which in our case could have been used as collaterals, at or near their face, in obtainig the money for our expenditures. But no such arrangement could be effected under the new regulation, as by its requirements the death of the officer, or his removal to other and distant post, would enahance the probablity of delay in payment of his indebtedness and increase the risk and expense attanding its final collection. Hence the greater rate of interest charged.

But this is not all. They money borrowed has been spice, and must be paid in the same currency, while payment to the officers is liable to be made in Treasury notes, worth here not more than 50 to 55 cents per dollar, and very little sale for them even at those low figures; thus, paractically, with interest which hac accrued on the amount borwared, it will require more than $2 of the money in which the officer is paid to replay $1 of that which he owes. With this condition of things, too, each officer and soldier of this command is serving for less than half pay, and has done si, some of them, for more than sixteen months past. Under these circumstances it must be impossible for any of the officers here to serve much longer without becoming irretrievably bankrupt and briging upon themselves all that cntrumely and reproach that such misfortune is always sure to create. But private injure is not all that tnal mode of payment inficts. It is exceedingly determinatal to the public service generally, as without any stated market value to the notes, and no surety as to when payment in them, even, will be made, in every purchuase or other expediture made here, not only the current San Fancisco discount on the notes is added to the specie value of the article or service, but, in addition to all this, a large percentage for the risk of a further deprcition in their value, and a vexatioud delay in payment.

It is thaut that capital protect istself from loss, and perhaps relizes better prifits than under the old and better system of payment in coin. But the soldier has not this power, not even that to protect himself against loss, and if paid in notes must necessarily receipt in full for what is equivalent to him of half pay or less, for the service he has rendered, and must continue to fulfill his part of contract with the Government, for the same reduced rate of pay, until his period of service shall terminate. This, in its practical results, is making a distinction between capital and labor, or personal service, unfriendly and injurious to the latter, that I am sure was never contemplated or designed by the War Department, and it abolishment here at least would be of