War of the Rebellion: Serial 108 Page 1066 MD., E. N. C., PA., VA., EXCEPT S. W., & W. VA. Chapter LXIII.

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These difficulties were aggravated when the currency became dpreciated, and prices were determined by commissioners, so as to lighten the burden on the Treasury and without reference to the market. They have been still more aggravated by the subjugation of the most productive parts of the country, the devastation of other portions, and the destruction of railroads. Production has been diminished and the quantity of supplies has been so much reduced that under the most favorable circumstances subsistence for the army would not be certain and adquate. At present these embarrassments have become so much accumulated that the late Commissary-General pronounces the problem of subsistence of the Army of Northern Virginia, in its present position, insoluble, and the present Commissary-General requires the fulfillment of conditions, though not unreasonable, nearly impossible. The remaks upon the subject of subsistence are applicable to the clothing, fuel, and forage requisite for the army service, and in regard to the supply of animals for cavalry and artillery. The transportation by railroad south of this city is now limited to the Danville road. The present capacity of that road is insufficient to bring supplies adequate to the support of the Army of Northern Virginia, and the continuance of that road, even at its existing condition, cannot be relieved on. It can render no assistance in facilitating the movement of troops.

The chief of Ordnance reports that he has a supply of 25,000 arms. He has been dependent on a foregin market for one-half of the arms used. This source is nearly cut off. His work-shops in many instances have been destroyed, and those in use have been impaired by the withdrawal of details. He calls loudly for the withdrawal of men from the army to re-enstablish the efficiency of some of them. There is reason to apprehend that the most important of the manufactures of arms will be destroyed in a short time, and we have to contemplated a deficiency of arms and ammunition. The foregoing observations apply to the Niter and Mining Bureau, and the Medical Department is not in a better condition than the other bureaus. The armies in the field in North Carolina and Virginia do not afford encouragement to prolonged resistance. General Lee reported a few days ago the desertion of some 1,200 veteran soldiers. Desertions have bene frequent during the whole season, and the morale of the army is somehat impaired. The causes have been abundant for this. Exposed to the most protracted and violent campaign that is know in history, contending against overhwelming numbers, badly equipped, fed, paid, and cared for in camp and hospital, with families suffering at home, this army has exhibited the noblest qualities. It sees everywhere else disaster and defeat, and that their toils and sufferings have been unproductive. The army of North Carolina can scarcely be regarded as an army. General Johnston has at Charlotte less than 3,000 dispirited and disorganized troops, composed of brigades that are not so large as regiments should be. General Hardee has a mixed command; a small portion of it is probably efficient. The troops from the Tennessee army have not arrived, and we cannot hope that they will arrive in good condition.

The political condition is not more favorable. Georgia is in a state that may properly be called insurrectionary against the Confederate authorities. Her public men of greatest influence have cast reproach upon the laws of the Confederacy and the Confederate authorities, and have made the execution of the laws nearly impossible. A mere mention of the condition in Tennessee, Missouri, Kentucky, Western Virginia, the line of the Mississippi, the sea-board from the Potomac to the