It was recommended in my last annual message that our Indian system be remodeled. Congress at its last session, acting upon the recommendation, did provide for reorganizing the system in California, and it is believed that under the present organization the management of the Indians there will be attended with reasonable success. Much yet remains to be done to provide for the proper government of the Indians in other parts of the country, to render it secure for the advancing set-tier, and to provide for the welfare of the Indian. The Secretary reiterates his recommendations, and to them the attention of Congress is invited. The liberal provisions made by Congress for paying pensions to invalid soldiers and sailors of the Republic and to the widows, orphans, and dependent mothers of those who have fallen in battle or died of disease contracted or of wounds received in the service of their country have been diligently administered. There have been added to the pension rolls during the year ending the 30th day of June last the names of 16,770 invalid soldiers and of 271 disabled seamen, making the present number of army invalid pensioners 22,767 and of navy invalid pensioners 712. Of widows, orphans, and mothers 22,198 have been placed on the army pension rolls and 248 on the navy rolls. The present number of army pensioners of this class is 25,433 and of navy pensioners 793. At the beginning of the year the number of Revolutionary pensioners was 1,430. Only 12 of them were soldiers, of whom 7 have since died. The remainder are those who under the law receive pensions because of relationship to Revolutionary soldiers. During the year ending the 30th of June, 1864, $4,504,616.92 have been paid to pensioners of all classes. I cheerfully commend to your continued patronage the benevolent institutions of the District of Columbia which have hitherto been established or fostered by Congress, and respectfully refer for information concerning them and in relation to the Washington Aqueduct, the Capitol, and other matters of local interest to the report of the Secretary. The Agricultural Department, under the supervision of its present energetic and faithful head, is rapidly commending itself to the great and vital interest it was created to advance It is peculiarly the people's Department, in which they feel more directly concerned than in any other. I commend it to the continued attention and fostering care of Congress. The war continues. Since the last annual message all the important lines and positions then occupied by our forces have been maintained and our arms have steadily advanced, thus liberating the regions left in rear, so that Missouri, Kentucky, Tennessee, and parts of other States have again produced reasonably fair crops.