had "but postponed the campaign for a few months," while the possession of Western Virginia and the occupation of Hatteras and Beaufort have nobly redeemed our transient reverses.' Speaking of the Springfield armory as their only reliance, in consequence of the destruction of that at Harper's Ferry, which had been destroyed "to prevent its possession and use by the Rebels," and of the fact that "its greatest product, prior to these troubles, had never exceeded eight hundred muskets per month," he added that, by pushing the manufac ture night and day, there had been made, "during the past month of October, a total of six thousand and nine hundred muskets; and it is confidently expected that ten thousand will be manufactured during the present month." He reported

large purchases of arms that had been made in Europe, and agents there still purchasing. He spoke of the health of the army, of its satisfactory condition, and of "the good men and women in different States, impelled by the highest motives of benevolence and patriotism, who had come in aid of the constituted sanitary arrangements of the government, and been greatly instrumental in diminishing disease in the camps, giv ing increased comfort and happiness to the life of the soldier, and imparting to our hospital service a more humane and generous character."

He called attention to several suggestions he deemed needful to make more effective the army thus gathered, and more secure the capital whose safety was so near to the nation's heart, and so necessary for the success of their efforts to maintain its integrity. He closed with this reference to slavery: "It is already a grave question what shall be done with those slaves who were abandoned by their owners on the advance of our troops into Southern territory, as at Beaufort in South Carolina. The number left within our control at that point is very considerable, and similar cases will probably occur. What shall be done with them? . . . . They constitute a military resource, and, being such, that they should not be turned over to the enemy is too plain to discuss. Why deprive him of supplies by a blockade, and voluntarily give him men to produce them? The disposition to be made of the

slaves of Rebels, after the close of the war, can be safely left to the patriotism and wisdom of Congress. The representatives of the people will unquestionably secure to the loyal slaveholders every right to which they are entitled under the Constitution of the country." So little did even the leaders comprehend of the real nature of the conflict on which they had entered, or anticipate the actual issues of the strife and the final outcome of the great Rebellion.

The Secretary of the Navy introduced his report by a reference to "three different lines of naval operations, upon an extended scale, demanded by the situation of the country, and which had been entered upon by the Department.

"The closing of all the insurgent ports along a coast line of nearly three thousand miles, in the form and under the exacting regulations of an international blockade, including the naval occupation and defence of the Potomac River, from its mouth to the Federal capital, as the boundary line between Maryland and Virginia, and also the main commercial avenue to the principal base of our military operations."

"The organization of combined naval and military expeditions, to operate in force against various points of the Southern coast, rendering efficient naval co-operation with the position. and movements of such expeditions when landed, and including also all needful naval aid to the army in cutting intercommunication with the Rebels and in its operations on the Mississippi and its tributaries."

"The active pursuit of the piratical cruisers which might escape the vigilance of the blockading force and put to sea from the Rebel ports."

This "triple task, more arduous, it is believed, in some respects, than has before been demanded from the maritime power of any government," was at once rolled upon the Department, and at a time, too, when its little navy, intrinsically weak, was made still more so by the perfidious conduct of the conspirators in Mr. Buchanan's Cabinet. So dispersed and dismantled had it been, that "only a feeble force," the Secretary said, "of men and vessels, scarcely sufficient for ordinary police operations, was at that time available on the

Atlantic coast." On the 4th of March, 1861, there were "forty-two vessels in commission, carrying five hundred and fifty-five guns, and about seven thousand and six hundred men. . . . . The home squadron consisted of twelve vessels, and of those only four were in Northern ports and available for service." While the vessels abroad and thus widely dispersed were, with three exceptions, ordered home, the Department proceeded at once, and with all the resources at its disposal, in the work of recuperation and enlargement, by refitting those in ordinary, repairing those in need of repair, building anew, and purchasing largely, so that on December 1st the Secre tary could say, as he did: "When the vessels now building and purchased, of every class, are armed, equipped, and ready for service, there will be a total of two hundred and sixty-four vessels, two thousand five hundred and fifty-seven guns, and twenty-two thousand men."

A portion of his report he also devoted to matters of detail and recommendations designed to render more effective this important arm of the service. He bore emphatic testimony to the courage, ability, unfaltering fidelity, and devotion to the cause of the country, of its patriotic officers and brave men, and affirmed that "the historic renown of the American navy has been elevated and augmented." He, too, had been confronted with the question of slavery in the persons of “fugitives from insurrectionary places," who had sought refuge in the Federal vessels. To the naval commanders who had sought instructions from the Department, his reply had been: "If insurgents, they should be handed over to the custody of the government; but if, on the contrary, they were free from any voluntary participation in the Rebellion, and sought the shelter and protection of our flag, then they should be cared for and employed in some useful manner, and might be enlisted to serve on our public vessels or in our navy yards, receiving wages for their labor"; or, if they could not be thus employed, "they should be allowed to proceed freely and peaceably, without restraint, to seek a livelihood in any loyal portion of the country."

A week later the Secretary of the Treasury presented a

long and elaborate report, setting forth with some minuteness of detail, and his reasons therefor, the policy he had recommended, and which had been adopted by Congress, for the important and essential purpose of furnishing funds for the prosecution of the war. After specifying two loans already effected, and the issue of treasury notes that had been limited to fifty million dollars, he said that his "reflections had led to the conclusion that the safest, surest, and most beneficial plan would be to engage the banking institutions of the three chief commercial cities of the seaboard to advance the sums needed, .... to be reimbursed as far as practicable from the proceeds of similar bonds subscribed by the people through the agencies of the National Loan." This plan, which he announced as having been successful, was based upon the hope, he said, "that the capital of the banking institutions and the capital of the people might be so combined with the credit of the government in a proper provision for necessary expenditures, as to give efficiency to administrative action, whether civil or military, and competent support to public credit." Without specifying the particular loans, their amounts and dates, it may be added, as additional reasons given for the policy adopted, that it was "to secure to the people equal opportunity with the banks, for participation in the loan; and to avoid competition between the government and the associated institutions in the disposal of bonds." He then recapitulates, and gives as the result of his efforts in effecting loans and in the issue of treasury-notes that the government on the 30th of November, 1861, had realized the sum, in round numbers, of one hundred and ninety-seven million dollars.

But, while success had thus crowned his efforts in borrowing money, the Secretary was compelled to add that "the receipts of revenue from duties have not, as yet, fulfilled the expectations indulged at the date of the July report." He alluded to a difference of view between Congress and himself, especially in regard to "the diminished duties on tea, coffee, and sugar," as being, "however warranted by considerations of general policy, certainly disadvantageous to the revenue." He also alludes to "the changed circumstances of the coun

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try" as having proved, "even beyond anticipation, unfavorable to foreign commerce."

He then spoke of the great increase of expenditures made necessary by the action of Congress, which, being "animated by a desire for a short and decisive contest, went beyond the recommendation of the President, and authorized the acceptance of volunteers in such numbers, not exceeding five hundred thousand, as he might deem necessary"; of its action in reference to "a large increase of the regular army"; of "the liberal additions made of pay and rations"; and of "additional sums required for the increase of the navy and other purposes." All this made increased appropriations necessary, and accordingly he specified as being required, in round numbers, the sum of two hundred and fourteen million dollars, "beyond the estimates of July."

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He urged with great point and pertinacity the importance of a reduction of expenditure within the narrowest practicable limits." He claimed that "contracts for supplies to the army and navy, as well as for public work of all descriptions, should be subjected to strict supervision, and the contractors to rigorous responsibility." "Unnecessary offices," he said, "should be abolished, and salaries and pay should be materially reduced." This, he argued, would not only lighten the burdens imposed by the war, but exert a moral benefit upon the people of special importance and value. He recommended the confiscation of the property of the conspirators, contending that "the property of Rebels should be made, in part at least, to pay the cost of rebellion."

After saying that, however much might be saved by retrenchment, and however economically the war should be prosecuted, "large sums must remain to be provided for by taxation and loans," he added, "Reflection has only confirmed my opinion that adequate provision by taxation for ordinary expenditures, for prompt payment of interest on the public debt, existing and authorized, and for the gradual extinction of the principal, is indispensable to a sound system of finance. The idea of a perpetual debt is not of American nativity, and should not be naturalized." If, at any time, the exacting