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The reduction by congress of the appropriation for this work, has rendered it necessary to greatly reduce the number of agents employed in it, consequently payments cannot be made rapidly as formerly. Many of our old agents are serving gratuitously, rendering us valuable service in protecting those claimants, in their just rights. The warfare of past years, between us and those unprincipled men who seek to defraud these people of their money, has been contained, the results of which during the past year, have been very gratifying, as several of the most notorious of them, have been brought to justice, and others held in check. The difficulties in the way of carrying out this act increase from year to year, for as the decrease of the original claimants becomes more numerous, the trouble of settling the questions of heirship correspondingly increase. In receiving this branch of our work for the four years since the passage of this act, although we do not deny that some mistakes have been made, yet we think it safe to assert, that no other department of the government could have reached these people, and paid this large amount of money to them with more safety I am Sir very respectfully Your obdt servant Geo W. Balloch Bt. Brig. Genl. & Chief D.O.