I'd never heard that before, and can't surmise why Lee would say that. It should be noted though that McClellan deserves much credit for molding the Army of the Potomac into a professional force. Before he took over it was a number of smaller forces which were poorly organized, poorly led, poorly supplied, poorly equipped and poorly trained. McClellan changed the personality of the whole army and invigorated it with a new spirit while ceaselessly bombarding the war department for more men, more and better supplies and food and better armaments. He created the Army that would eventually win the war.

McClellan deserves credit for making Washington DC all but impregnable by whatever forces the South could bring to bare, which changed the strategic character of the war to one where the South was unlikely to force an outright decision against such a massive force, but would be forced to fight an attritional and political campaign it was ill suited to win (the demographic and industrial capacity of the South v. that of the North, and, of course, the contentious issue of slavery). It was a new type of warfare, and one which we now know was to change the face of conflict forever, and the feat of organizing and equipping such a force and the huge strategic tail it required to operate - the first of its kind - during a national crisis is impressive indeed.

McClellan's campaigns, though failures, were not poorly conceived. His failure was one of understanding: the technology of warfare (specifically, the rifled musket in the hands of loose-order infantry) was shifting towards the defensive - a fact gruesomely proven by the slaughter of WWI - and all leaders during this war would make mistakes as to how to best be effective on the offensive, mistakes that ended in carnage and bloodshed (this was not limited to the Northern Armies, as Pickett's doomed charge stands sober proof). So while all commanders flailed about trying to solve the problem of attack in the face of troops firing accurately from cover, most of the Union leadership - McClellan included - still thought in the terms of capturing prestigious enemy landmarks such as Richmond when they should have focused on the Army of N. Virginia and the South's capacity and willingness to wage war.

McClellan stands astride the gap of modern and pre-industrial war. He understood the need to mobilize and concentrate a huge force properly armed, equipped, trained and organized by a single command to employ the might an industrial nation can bring to bare against its enemies. He failed - repeatedly - however to devise a strategy to effectively do so against his opponent. Lee had the advantage of fighting defensive campaigns in almost every event, which gave him the advantage over the short term. Both times Lee took the offensive he was defeated, in one case defeated so badly at Gettysburg that the outcome of the war became a forgone conclusion. It wasn't until U.S. Grant came to the conclusion that continuing the offensive despite a tactical failure was the only way to win the war of attrition that the Union Armies truly began to make a slow and bloody progress. That Army, which was better supplied, equipped and supported and - crucially - more numerous than its opponent was the logical conclusion of the Army originally designed by General McClellan.

If you view Generalship as being solely who wins the battle then McLellan is not obviously the best general of the Union. Historians often view with hindsight. But it's important to remember that the civil war saw America's Armies expand to never seen before sizes. The US began the Mexican War with a force about the size of a large Confederate Division or a depleted Union Corps, for instance.

McLellan was instrumental in shaping the large-sized US armies that were raised in the early war. He was capable at organising and training the armies under his command which were of a size not seen in US history. There was no training or experience in this type of warfare: the number of men he commanded in Seven Days was almost three times that Winfield Scott commanded in the Mexican War. He held the morale of his troops - they cheered when they heard that he had retaken the command before Sharpsburg.

Additionally his cautiousness can be considered justified if you think about military intelligence at the time. The US had only a fledgling intelligence service and McLellan sincerely believed that in the Peninsular campaign the forces arrayed against him were much, much larger than they were - and his intelligence was not contradicting him. A major defeat there by what he thought was a much larger Confederate force would leave the road to Washington open.

It could also be because Lee did not hold a lot of other generals in high esteem. He absolutely hated John Pope. Hooker he once referred to as "Mr Joe Hooker." Perhaps, if the quote is true, Lee saw in McLellan the man who shaped the Army that would go on to defeat the Confederacy. Not a small accolade.

My understanding of this is from watching some lectures posted online by US military colleges and also the two books: The Battle Cry of Freedom by James McPherson and This Hallowed Ground by Bruce Catton.

You say he is on record, but where? I'd be interested to see that.