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A.Nrs PEULADIILTItIa, January 31, 1863. 7b the Stockholders rtf the Peringgtuauta Railroart Co.: The following statements will exhibit to you the operations of the company for the year 1862: Tho earnings of your tall way between Philadel phia and Pittsburg during the year were: From passengers, first slags $1,681,433 86 From emigrants 46,958 35 $1,731,392 20 379,393 21 74,173 43 nom 'United States ...... From United States mails From expresses under - contract $75,120 00 Extra express freight.... 71,781 96 From freight From mbreelhtneous sources Total ertsrolngs The EXPENBRB or operating the line were For "Conducting Transportation"— ...... $1,313,137 17 For new buildings and extensions 7,32E1 DI ' ---- $1,320,469 18 For " Motive Power".... $1,430,665 09 " new Tools and Ma chinery " new Locomotives added to stook For "Maintenance of Road" $1,064,922 63 " now Second Track and Siding For " Maintenance of Oars" $387,265 01 " new care added to Stock For "General Expensee Total Leaving Net Eirning5....54,873,218 87 The gross revenues of the line this year are equal to $03,183 per mile of road, (858 miles,) and exceed, in the aggregate, those of 1861, $3,001,230.01. This is made up by en increase or $325,373.79, for passen gers and emigrants; .of. $234,235.07, for troops; $2,270,394.29, for general freights, and $174,288.88, tor express and miscellaneous freights. The whole number of passengers carried over the road during the year was 1,1.13,418, averaging a dis tance of '723 miles for each passenger. The number of tone Of .freight moved, (including 164,90310ns of fuel and other material transported for the company ) , was 2,223,051, ernbrecing 835,146 tons of coal. The increase in the coal traffic is 130,892 tons, and the whole tonnage of the line over thnt of last year, 602,466 tone. To accommodate this increase of tonnage—a large share of which is due to the ooritinued interruption to the navigation of the Mississippi river—it has been necessary to expend $899,003.01 for 37 new loco motives, and 930 eight-wheeled freight and coal oars, and $841,039.14 for additional second track and sidings; the cost of all .of which is included in the operating expenses of the road. The operations of the road have been managed br to judicious General Superintendent, Enoch Lewis, "sq.. aided by his vigilant Division Superintend its, G. 1./. Promisees, S. D. Young, A.. tJarnegle, R. Pitcairn, with much "h.3onomy, success, and emption from serious accidents, notwithstanding e immense tonnage that has so rapidly accumuLa , I on the line. 'he repairs and renewals of the fixed and running' 'ldnery of the Company, were committed, under General Superintendent, to J. P. Laird, Esq., uperintcndent of motive power; on the let July ... The increased economy and efficiency of this fitment since he entered upon hie duties, pro ! lisfacitory results for the future. 6: , earnitgs of the Company's canals were : • e Susquehanna division , Juniata division 23,142 29 t,..' i Western division $203,630 09 ^" 8,801 02 l e Miscellaneous sources ' 16,909 38 4 'Total earnings $261,481 'l6 1: ho expenses of, maintaining, improving, and operating the canals 1 or the Susquehanna division $74,736 29 " Juniata division 161,266 41 " Western division' 22,069 86 Showing a loss on the canals dur . $6,606.80. The receipts of the canals exceed those of last year $76,312.72, and the expenses $110,218.97. The latter is nearly all due to the heavy increase ($lOO,- 250.33) in the outlays for rebuilding the upper Ju niata division, stilt unfinished. It has been the po licy of the company to expend the whole proceeds of the canals in their maintenance and enlargement ' v under the expectation that the - increasing local traf fie of the country will at an early date make it a valuable improvement, not only to the country it traverses, but also to its proprietors. This poli cy would effect a much earlier enlargement of the canal east of the mountains, if , the unreasonable discrimination in favor of the Suiqueliannig traffic, required by the Main Line .bill, was, abandoned. The affairs of this department have ibeen very satisfactorily managed by T. T. Wiermitn, 1N41., its judicious And energetic engineer and superintendent. The-net revenues cif the company during the past year would have justified a larger increase in the annual dividends of tile company than 2.per cent. (the amount paid), if the surplus profits remaining— after the . payments of interest, sinking-fund, and dividentia--had been earned whilst the country was atpeace, and its finances based upon a specie stand ard, or if the surplus earnings during this exception al condition of thingi could not be profitably. in vested to protect the future interest of the company. lint as the first position mentioned unfortunately does not exist, and as the other contingency c.!in be fulfilled with great. advantage to the permanent prosperity of the company, the Board has deemed it best to pursue the conservative policy indi cated •by the dividend (eight per cent:-per annum) declared. It has been strengthened in this course by the unfortunate results that have visited other corporations from a division of earn ings arising from adventitious circumstances. 'ln stead of increasing the company's indebtedness to meet expenditures that had been previously autho• sized to preserve the prosperity of the company, the Board has deemed it to be the permanent interest of the shareholders that these unusual net earnings should be applied towards their completion. Under this view, they have been approp'ririted to the con struction of the "Philadelphia and Erie Railroad," the extension of our own works to the Bald Eagle Valley road, to the Tyrone and Clearfield road, and a number of other smaller branch lines, all of which will hereafter add to the business of the main stem, and enable It to pass through any financial crisis that the country may experience, without a dimi nution in the rate of its .eerlii annual dividends. The expenditures .of the company upon these works during 1863, and the improvements and additions to its own line, will .fully absorb its net revenue', for that period, after the payment of Its necessary expenses and dividends. It is impossible to foresee what influence the condition of the cur rency of the country will hereafter have upon the net revenues of the company. Its charges are limited, while the expense of operating the line will be materially afflicted by a non-specie-paying cur rency. If, after the company has passed through the exceptional condition of things that now exists, there should remain surplusprofits after providing for the gradual liquidation of the obligations of the company, as. far as advisable, and for unforeseen' contingencles,'a bonus in shares for the money thus appropriated can prudently be divided. The operations of the existing Sinking ninth'," with such appropriations as can be made to it this year, will reduce the company's ' obligations as they fall due to an amount as low as it will ever be de sirable that they should be canceled. The compara tive small debt that will then be left unpaid can be negotiated when the bonds mature, at a low rate of interest. . • The net earnings of the road during the year after deducting the loss on the canals, were $4,866, 608.57 ; these have been applied, as far as expended, as follows : To paynient of interest on company's debt $572,174 61 To payment of the annual interest and an instalment due on the principal upon the debt to the State for the pur chase of her Main line of Railroads and Canals To paymentsunder lease of " Harrisburg and Lancaster Railroad," 132,159 09. To Interest paid on "Philadel phia and Erie Railroad" bonds, and expenses of main- • taining organization ofCom -lany—( t included Coupons due April 1, 862, no,) $132,418 72 Less the amount received from 80 per cent. of the earnings of the Road, from Feb. 1 to Dec. 31, '62 To interest, &c., paid on mortgages on real estate To appropriation to oinking fund to pay mortgages on the Harrisburg and Lancasterliailroad," it being the difference in the results of the work ing of the old and new leases . 160,938 33 To appropriationio sinking fund to pay second mortgage bonds of "Pennsyl vania Railroad Company?' 'To interest paid on the bonds of the " Steubenville and Indiana Railroad Company" guaranteed by the Penn sylvania Railroad Company To appropriation to, "Commutation Railroads," according to the Act of Legislature, (" including West Penn sylvania Railroad,"). 'To dividends paid to shareholders 'To purchase of bonds of the Philadel- • phia and Erie Railroad Company.... t 600,100 00 'To subscriptions to Junction Railroad Company stock 'Towards the completion of East Brandy wine and Waynesburg railroad 21,672 23 'To AM cunt advanced to Huntingdon and Broad Top Railroad Company, in con nection with the Philadelphia and . Reading Railroad Company, to com plete' it -branch line 'To purehane of bonds of Ty rone,and Clearfield Railroad Company, towards the com pletion of the first 3,i4c miles n(ita,ratßoad $ 127 ,4 00 00 Opayrrienien4e under lease ' of the Tyrone andClearfield Railroad, to finish said road 7,484 08 'o the extension of the Penns§rti.nia Railroad to the Pittsburg and Stab-, • benville Railroad '17.467 65 •To the extension of the Pennsylvania Railroad to the Philadelphia Gas Works 'To the erection of the grain elevator, freight-sheds, and - wharves, at the De laware terminus 197,565 82 To the purchase of real estate for road. 255,768 66 To 'the payments of mortgages and ground rents on real estate... $4,489,878 18 :This Company entered into the possession of the _Philadelphia and Erie Railroad on the let of Febru ... ary last, under the lease sanctioned by your vote at 'it special meeting held during the previous Novem • 'ben This line was then committed to the superin lentlence of Joseph D. Potts, Esq:, Civil Engineer, ..se general manager, who has successfully conducted .pits operations for the eleven months it has been in • ids charge. It will be gratifying - to the shareholders to learn, that notwithstanding the unfinished condition of the . work, this company has not suffered any pecuniary loss in consequence of the responsibilities assumed under this lease. The'progress made towards comp . .pleting the whole line, though not as great as we could have wished, owing 'to the difficulty' in pro curing labor; has been such as to lead us to con& .'slently expect that it maybe opened for use, through out Its length, during the ensuing autumn. The views of the Board In relation to the great 'Value of the Philadelphia and Erie Railroad, not only to the company, but also to the State and this city, as expressed in its report submitted at your : special meeting, remain unchanged. . Including the receipts from the Philadelphia and Erie Railroad line and its canals, the total revenues of the company for 1882 were : From the Pennsylvania Railroad pro per, $10,304,290 96 From the Philadelphia and Die Rail , road, including service of cars on other roads From the receipts of the Pennsylvania canals. Total revenues of company $10,969,239 72 The rettitlis .and additions to the Pennsylvania Railroad have been committed to the charge of Wll- . liam Hazel Wilson Esq., as Chief Engineer, who has managed the a ttairs of this department for seve ral years past, with much system, economy, and abi lity:" Under hie direction, the second traok has steadily progressed until the space requiring to be tilled up is but 3R.?4 miles. He has been instructed to provide materials and lay the second track, be tween the Juniata Aqueduct and Newport, and be tween Anderson's Siding and. Garvin's Bridge, during the present year. This will leave but four teen miles of single track on the line between Har risburg and Pittsburg, after 1858, all.of which is between Lewistown and Mill Creek, except one mile at the Susquehanna bridge. Directions have been given to prepare the road-bed of this portion (except the Susquehanna bridge), that it may be laid in the summer bf 1864, thus giving to the entire line of the old Pennsylvehia Railroad—with the ex ception mentioned—a double track. A third track, at proper intervals, to allow the passenger trains to pass the freight, will be required at no remote . period. That portion of the Harrisburg and Lancaster Railroad Company's road between Marietta and Swatara river, a distance of 24 miles, originally laid with a superstructure entirely too light for the traf fic it was •designed for, will shoe require a seconi track of heavier rails, This line was laid by that company in lieu of a second track, on its main stein, by way of Mount Joy. In consequence of the more favorable gradients of this branch, all of our freight trains pass over it. The large and increasing ton nage thus thrown upon It will render the increased facilities referred to necessary. The Board of Directors have been admonished for several years past by the increasing number of trains that traverse Liberty street, Pittsburg, east of the Pittsburg, Fort. Wayne, and Chicago Railway con nection, that a due regard for the convenience of the citizens of that city would require that this narrow portion of that street should be relieved from the interruptions and risk. they cause to the general travel. The delayineecuring the necessary legis •lation from the Pittsburg City Councils, to enable the company to effect so desirable an object, has prevented its accomplishment at an earlier date. The legislationdesired has nos'bsen obtained; and the real estate and right of way required to effect this change in the line of the road has nearly all been purchased. This outlay, including that re quired to muse the , tracks from this portion of Liberty street, will be quite heav3 - -not less than four hundred thousand dollars—but the objects se cured both to the -company and. to' the city by the change will fully justify this. expendittire. Until this change in the location of the road was - decided upon it was impossible to determine the proper* location for the contemplated Union Pririsenger Sta tion to be erected for the accommodation of our own and the several railway companies entering Pitts burg from the West. This improvement, so long demanded by the travelling public, will now be erected during the present year. • . The extension of your line' to the Delalvare - river ' has been a st urce of great relief to the .business of the company, which could not have been satisfacto rily; disposed of without the increased facilities it lure afforded. A branch from it to' the Philadelphia Gae Works has also been constructed - during the year, whichwill add materially to its revenues. -The. grain elevator, at the Delaware terminus, in, pro-' gress at the date of your last annual meeting, is now ready for use. When the business of the country resumes its accustomed chant els,. the facilities it will affbrd will add largely to the attractions of the line for the strifilfrof ;the • - The dovestment made'ls.othe.ComPany in the Pittsburg, Fort Wayne, and Chicago Railway, for the purpose of eecuringa share of the northwestern • traffic, will, in addition to the advantages originally anticipated from the expenditure, in a short time re turn full interest upon the capital devoted to that object The traffic of the line this year would have justified a reasonable. dividend upon the shares of that Company, but it has been deemed by its Direo tors more prudent to devote the surplus earnings, after paying interest upon its first and second mort gage-bonds, to the renewal of temporary structures erected upbn' the road, and otherwise bring the .standard of the property up to the character which the position and importance of the line 'demands. The finances of this Company are now founded Upon a substantial basis', and it possesses a business -which wlllinsure to it not only ample-revenues to , meet the interest upon all of its bonds, but also fair returns to its ehereholdere. 146,851 96 7,668,419 85 303,460 31 $10.301,290 98 14,409 33 378,930 95 1,824,005 37 241,039 14 • 1,346,961 67 480,077 06 867,332 13 73.3t3 64 5,491072 69 $258,091 56 g 1862 of 480,000 00 118,566 66 13,852 08 29,087 69 349,030 14 34,660 00 463,990 01 986,842 50 11,892 16 34,884 08 40,163 10 130,000 00 413,487 00 251,481 76 VOL 6.7-NO. 157. . Since your last annual meeting, legislation has been obtained from Congress, and from Virginia, authorizing the extension of the Pittsburg and Steubenville Railroad across Brooks county, in the State of Virginia, and the Ohio river. The work of constructing the road and its bridges has been vigo rously commenced, and will. be steadily prosecuted to completion. When finished and connected with ouzo. road, it will give us a line from Pittsburg to Cincinnati, twenty-four miles shorter than any ex isting route, and free from the vexatious interrup tions which have heretofore prevented the full de velopment of our southwestern passenger traffic. The completion of this line will also enable the Steubenville and Indiana Railroad Company to pro vide the means to meet the annual interest upon its bonds guaranteed by this Company, which have for several years been a tax upon its revenues. It is gratifying to your Board to be able to con tinue to report the successful results of the enter prise in which you embarked your funds, originally with but a faint hope of other returns than those which looked to sustaining the commercial and Ma nufacturing interest of this city. During the eight years the company's road has been in operation to Pittsburg, its transportation has steadily increased from 260,000 toss in 1854 to 2,223,000 tons in 1`362, - a result which proves that, whatever may have been the defects of the policy of the company, it has not failed to largely develop the vast internal resources of the Commonwealth,while it has preserved and immensely increased her traffic with' her sister States. The same liberal policy pursued in developing the traffic of the. Pennsylvania Railroad, will be exer cised on the Philadelphia and Erie Line, and we trust with the like beneficial results to the city, the State, and the company, in the development of its local and the distant rail and lake trade. The directors have much pleasure in renewing their acknowledgments to the officers and employees of the company generally, for the succeesfulmkultat of their past year's labors in its service._: Bye - • By order or - the 'Board, -.•- • J. ED .TII.OSISON, President. Tnos. A. SCOTT, Vice President. The quartermaster General's Report. The Quartermaster General of this State has sub mitted his report of the operations of this depart ment during the last year. We present the follow ing abstract of it : By resolution passed by the Legislature, Fcb. 28, 1862, relative to the proper treatment of the killed and wounded Pennsylvania soldiers, the Quarter master General was authorised to procure and fur nish upon the requisition of the Surgeon General, or surgeon having charge of such wounded soldiers, all necessary clothin: required of them. In accordance wi • the resolution, necessary art ales of clothing were purchased under contract, upon requisitions made by surgeons in charge of the sick and wounded. Pennsylvania was the first, and the only State which made this just and eminently pro per regulation to supply her wounded soldlers.with clothing, lost by them iu battle. After the example set by this State, Congress passed a joint resolution, approved on the twelfth day of July, 1882, of like shied. This action of °ingress rellevedthie State from furnishing extra clothing to her volunteers, and left on hand a small quantity undistributed, which can either be turned over to the United States, or issued to such Pennsylvania volunteers as may need the clothing, and not be strictly entitled to it under the United States regulations. Since the last report the barracks at Camp Wash ington, Easton,' and Camp Wayne, West Chester, have been dismantled and sold. The buildings and fences at Camp Washington were repaired and re stored to their former Condition, and the lumber and property left on hand sold at auction. The buildings at Camp Wayne have also been re paired, and lumber sufficient to rebuild the sheds, &c., set aside for that purpose. The remaining lum ber and stoves have been sold, and the proceeds, $507.a1, deposited in, the State Treasury. The camps at ChainbersbUrg, Pittsburg, nd Hul ton were taken possession of by United ' States of ficers, and disposed of by them. After referring,. in detail, to the many things which have been done by our State to alleviate the sufferings of the sick and wounded soldiers, the re port closes with this just tribute to the patriotic wo men who have so nobly-aided the cause of the Union "From the commencement of the war hospital stores have been sent to my care for use of the sick 'and wounded. These, as received, unless specially directed, were forwarded at once to such hospitals as required them, and their receipts acknowledged by letter and through the newspapers. After the bat tles in front of Richmond and Washington, a special appeal having been made, supplies of every kind have been-forwarded from all parts of the State in abundant profusion. The quantity received since the Ist of August has been 694 boxes, 104 barrels, 74' half barrels, kegs; and parcels, making in all 872 packages of hospital stores. The contents of the 'packages have been of the most varied character, embracing everything that could add to the comfort of the soldier. The product of the farm, the work shop, and the manufactory ; the offerings of old age, middle life, youth, and childhood, poured in with a constant streafn. Churches. schools,.and soldiers' aid societies, each in their sphere, labored for the sick and wounded ; and while a few expressed a pre ference as to the distribution of their offeriogs, the general cry was, ' send where mostneeded.' The let ters accompanying these offerings were full otpatri otic and burning loyalty. • "The labor and contributions of the self-sacri doing women of Pennsylvania have been unparal leled. With them, to give all they had seemed not too much for the soldiers, nor have they been satis fied with worlcing and giving. Those who had the opportunit have ministered in the hospitals at the bedside of the sufferers, even at the risk of their own lives. The grateful thanks of. thousands are theirs, and when the history of this wicked rebellion is written; a bright page will record; with grateful pride, the unpretending but noble devotion of the women of our land, in behalf of the soldiers of .the army of freedom." RAVE ANIMALS REASONING POWER?— Prof. Apse's., in a recent lecture in Boston on the "elephant," said: "It is a favorite saying that men are governed by reason and animals by instinct; but I behove that is all wrong. There is no distinc tion of kind between the two, but only of degree.. "As we come to the higher animals, we find the brain larger in proportion to the size of ,the body. But this does not prove a different kind of activity of these partsi but only different intensity. "Now let us see if there is any difference in the mode of action of the brains of men and animals. Every sensation, to be felt, must produce a reac tion. All animals see; hear, smell and taste as well as we do; therefore, the reaction must be the same, and the operation, as far as the body is concerned, is the same. Next, our perceptions Influence our actions, through the operations of the mind; and in • the animals the same influence upon their action is to be • seen ; here, again, is perfect similarity. Although the difference of the intensity of these actions may be great in 4 tlifferent animals, yet the principle is the same. "The animals gratify their appetites, and so-do we, and in the same manner. For instance, every body has seen doge playing only for the pleasure of playing, just as men do: And what right have we to assume that the motive which influences them is not the same as that influencing us I Again, ani mals have memory, just as we have; and they can trace the connection between cause and effect ; and this is reason. " But I will go further; only Mind can communi cate with mind ; and if animals - had no minti, we could have no intercourse with them. Animals can be frothed and this proves the existence• of reason; a connection seen between cause and effect. The means of training animals arc the same as those em ployed for training children ; certain sounds are used as signals. This supposes a perfect logical pro cess, tracing the sequence of -effect from its cause." DEATH OF A CELEBRATED. ANT HAL.— The Court Journal announces the death of a cele brated little animal. White Velvet has just paid the penalty of nature' at the age of forty seven. White Velvet was a pony that our Queen, when a little child, used to ride, and was the first she ever mounted. Poor White Velvet, from the stables of the late Duchess of Kent, became one of listley's great attractions, where be remained many years, till an accident caused him to become lame. He was. then sold for „CI to a Richmond (Yorkshire) baker, when he was harnessed to a cart that contained the bread for distant customers. This work he continued so long that White Velvet be came well known all round the neighborhood; and, ficiallk, a Yorkahlrusquire, with a fine pstato olose to Richmond, ineheer pity, bought him and turned him out in a field, and there left Min to enjoy there minder of hie eventful life In peace and goutfort. ' WEDNESDAY, FEBRUARY 4, 1863 THE NATIONAL FINANCES, Important Letter from Ron. Robert J. Walker—Review of the Great Financial Schemes now before Congress—lnteresting Suggestions from the Ex-Secretary of the Treasury, &c. • The following letter was to-day written ,by Hon. R. J. Walker to Senator Sherman, u a member of the Finance CoMmittie of the Senate. Oa sugges tions are especially important at this time, and its arguments must carry conviction : WASHINGTON, Jan. al, 1863. Hon. John Sherman, Unfled States Senator, j•c., pc.: DEAR. Siu: The great coincidence of our views on the financial and currency questions has given me much pleasure and increased confidence. As we had never compared opinions upon this subject, and Sour speech was delivered in the Senate on the same day that my pamphlet was printed in New York, and both Appeared here simultaneously in the same morning paper, this coincidence is the more remarkable. I have read your bill to provide a national cur rency, and, in compliance with my promise, suggest for your consideration the following amendments: First In 'section 19, strike out the limitation of these notes, or increase the amount. to at least $300,000,000 now, and' an augmentation of ten per cent. every year. lYly reasons for this suggested change are as fol lows: The system proposed by you extends over a period of twentyyears, and should contain provi sions based on that consideration, and calculated to give stability and permanency to the system. The new circulation should be adequate in amount to become a substitute gradually for the notes of all the present banks, not by coercion, but by their own choice, and the preference which the people would certainly give to the new system. By table 84, p. 193 of the eighth census, the condition of the banks was as follows : . Capital. I Loans. Specie. I Circulation IFtO I ' it..lll,&nt), 401,495,083 0383,564, $ 207,02;477 1830'. 227.44A 077 412,6070333 48,671,1 6 101,153,012 Deposits &rifle) • . $253,632,121 Deposits for 18 0 • 127,567,655 Thus you will pereelve that in 1860 the circulation proper of the banks, exclusive of specie, exceeded $207,000,000, and the circulation and deposlta reached $460,000,000. You will perceive, also, that from 'OO to 'CO the increase of circulation proper exceeded $62,000,000, and the increase of circulation and de posits exceeded $1 . 18,000,000. Now, by reference to table thirty-five of the eighth census, p. 196, our wealth increased, from 1850 to 1860, 126.45 per cent. As wealth is the true standard by.which our currency should increase our bank circulation, including 'deposits, increasing at this rate, would have been 51,039,600,000 in . 1870, and $2,349,496,000 in 1880. But, if we diminish the amount at the end of the first decade by one-fourth, the re sult would be $779,700,000 in 1870, and $1,741,122,000 in , lBBo, specie not being. included in these tables or, calculations. Bank deposits are equivalent to circulation in swelling the volume of currency, there being-no dillbrence, in that respect, betiveen bank-notes held by individuals in their sates .and bank-notes deposited by them with the banks; sub; ject to immediate check. lf the now bank-notes were limited to _ $200,000,000, more than one-half the amount would be represented by bank deposits, as shown by table 34. As the object of your bill is to substitute loans taken by the new banks at par for our present car - rency, and to fund legal tenders in United States stock, and thus arrest the alarming depreciation of these notes, and restore the public credit, why limit the extent to which these notes may be funded'? - If it be said the amount may be increased hereafter, why leave this to any-future or doubtful contingen cy 1 Now is the very time when it is most import ant to arrest depreciation, and advance the National credit, and this cannot be accomplished to any groat extent, with the limitation to. $200,000,000. With such a limitation, we shall certainly have two bank. paper systems, the present and the now twetem, each warring against the other; but, in the absence of such limitation, the present banks will gradually, without:any injury or convulsion, transfer their capital to the new system. Surely this is a most cle anable result, and should not be prevented by any limitation; but, on the contrary, encouraged in every proper manner. Fully concurring with you as to the impolicy and unconstitutionality of the present State bank issues, yet I do not desire, nor do I be lieve you do, to do any injustice to these institu tions; but rather to frame such a bill as would make it clearly the interest of the old banks to transfer their capital, gradually to the new system. Experience has shown that there is no danger' of too large bank issues, where such restrictions exist as are found in your bill, and • where United States stock, with such a margin as you provide, must be deposited before receiving the notes. I think, therefore, that there 'should be no limitation as to. amount. • In any. event, thessinotes cannot be depreciated as much as legal-tenders, because they will be secured by the Government stock, with a margin of at least ten per cent. additional, and by all the capital of the bank besides, under a prior lien. Indeed, so im portant is this measure deemed by me, that I believe its plissage would soon be recognized, at home and abroad, both North and South,_ as. insuring the. speedy overthrciw of the rebellion. But if Congress adjourn without' the adoption of such a measure, our finances may be' overthrown in a few .weeks or. months, before decisive vicoiries ate achieved in the field, and thus tempt foreign intervention, increase the lamentable 'divisions in the loyal States, stimulate the South thus to renewed exertions, and expose the Union to imminent peril. • Item assureciOf.the.bill-peuss now;that - newlianks" tinder this act would be at once organized in New Orleans, which would be a most -important step toward restoring the allegiance of Louisiana and the whole Southwest. Doubtless such new banks would also soon 'be organized in Memphis, Nash ville, Alexandria, Norfolk Newbern, and other Southern cities, as, from time to lime, they might be permanently occupied by our troops. The intro duction of such national banks and currency into the South would operate as an. immense reinforce ment to our armies in restoring the supremacy of the Union. If section 19 be retained, the District of Columbia should not be excluded from the new system. It is precisely here that such banks would be required as. fiscal agents for the Government, and the Territories also should be included. The apportionment of the whole amount aocord ing to population, would disregard a well settled principle, that the true measure of the proportional currency of a country is not its numbers but its wealth. Second. The twenty-first section retains two per cent. of the bonds held by the , new banks in lieu of the taxes. As these bonds, by your bill, must exceed the secured circulation at least ten per cent., this provision would make the tax in this form upon cir culation ten jmf cent. greater than that proposed in regard to the old banks. • Stich a discrimination might endanger the success of the new system. In my opinion the tax on the circulation of the old and new banks should be the same say two per cent., as yous al ag prop ose , entrtgethaa: reg e a nV, grdloht:l:l7e banks, as f ail other taxation, State or National. Third. In sections forty-four and forty-eight, I think St. Louis and Chicago should be added. Fourth. As to section 49, I think Congress should prescribe in this act organizing thesanational banks, one uniform Maximum rate of interest, taking 7 per cent., which'prevalls iii New York. It does not fol low (as we now see in New York) that so high a rate would generally be charged. This would be reg,u-' lated by the law of supply and demand. One of the great powers of the Bank of England and of other European banks, is to check dangerous inflations by raising the rate of interest on loans by the banks, and 6 per cent. here as a maximum is too low to se complith this all-important object. If the rate of interest be not uniform, great advantages will be given to these new bankifin some States over others, amounting, in some cases, to nearly double the rate of interest, thus restricting the benefit of extending the new system equally throughout the Union. In some of the States a different rate of interest is pre scribed in different counties. As these new banks are to be the great holders of United States stock and fis cal Agents of the Government, it is essential that no State shduld have the power to destroy them or im pair their usefulness by taxation, by regulating the rate of interest they may receive, or in any other way. The history of the long and dangerous confilctbe tween the Branch Bank of the United States in Ohio and the Federal Government, should teach us a useful lesson on this subject. The fear of State interference, by lessening the rate of interest or otherwise, might defeat the new system. No act of Congress, and especially none as regards fiscal agents of the Government, should be left subject to State interference or control; but its operations should be uniform throughout the United States. Indeed, is not this uniformity and exemption from . State control required by the Constitution?, All na tional bank charters heretofore have provided one uniform rate of interest on loans made by such banks throughout the Union. Besides, the rate of seven per cent. would insure - the speedy success of the new system, and the gradual transfer to it of the capital of the present banks. • Fifth. In section 57, these new banks should. be made snit declared to be fiscal agents of the Government. This would , place their constitutionality beyond question, according to the principles already settled by the Supreme Court of the United States. Sixth. Express provisions should be made in the bill for the deposit with these banks of the funds held by the disburaing officers, and they should pay by checks on these banks. Such. deposits should also be secured by United States stocks. Seventh. Section 20 confines the lowest denomi. nation:of notes to be issued by the new banks to $5. This would be well, and even Ir higher limitation, when peace shall be restored and specie payments re sumed. But I think at present there should be a dif ferent provision. The banks (if any) that will be the most injured by the new system are mainly the small country banks. To prevent auy such injurious ope ration, 1 would give to banks having a capital not exceeding $300,000, all the issueof notes of lower de. nomination than $5. This would be a vast induce ment to these small banks to transfer their capital to the new system, thus funding a large amount of our national currency, under $6, in United States stock. This provision as to notes under $5 should con tinue until specie payment was resumed by the Go vernment, rind, after that perkid, all paper currency under $5, emanating from any source whatever, should be positively prohibited by Congress. lithe present provision as to $5 be retained in the bill we shall have all the evils of two conflicting bank systems, the old and the new.; and the notes of the old banks under $8 (mainly entirely unsecured) will pass chiefly into the hands of the working•classes who, above all others, ought to be protected against ' losses by bank notes. Permit me tecall your attention to other sugges- Bons contained in my article' as published in the Continental Monthly; and especially as to the necesity of making these notes a legal tender, except by the banks, whether under the old or new systems. • if your bill should become a law the nation will .owe to you and to the Secretary of. the Treasury a debt of gratitude for rescuing the Union from ex treme wril. , . ery respectfully, your obedient servant, . R. J. WALKER Treason lit Kansas. • FORT LXAVENWORTII, Jan. 30, ' To the. Editor of The Press: . . : The state of feeling among the Inhabitants of Kansas and some of the other Westerla States in reference to the country is very much divided, one portion 01 the people being loyal .to our Govern ment with all their powers and energies, - while the other portion are doing all they can to produce a hatred towards our Administration and our country. The press, especially in this State, is the medium of knowledge for the mass of the people, and while there are some papeis that uphold. the Govern ment and the Administration in their efforts to crush . the rebellion; there are papers here in. the Wert that are continually putting forth their s poisonous matter before the people, teaching them to disregard the efforts and orders of the authorities of our Government now in the hour. of'dariger. .The editors °fetich vile sheets, Whoever theihe, are not, fit to live under the sway of our blessed country.and Its liberties; - and they do more by their writings here in the North to poison the minds of the people PHILA_DELPEII.A. WEDNESDAY, FEBRUARY . 4. 1863. and clog the affairs of State, than they could posse bly do in the regions of Secessiondom. It is to be hopetlthat the Government will have the matter at tended to in this State, as "delay will be danger ous " to the cause of freedom. These editors do all this work in the name of Constitutional Liberty, and say they are 'Union men and that they only wish to speak the truth, while their hearts are full of vile poison and desire that our country should be divided, slavery extended, and the lawful Adminis tration at Washington cast out of power and the dominion of Jefferson Davis extended and per- petuated. The following is an exact copy of a part of an edi torial that appeared in one of the daily papers of Leavenworth City, Kansas—a paper that is taken by many U. S. officers in this State, who are re ceiving fat salaries from the Government: "We will oppose the Administration, and no amount of abuse, no military despotism, no Bastiles, no threats, whether from lawless military force, or from a de luded and misguided mob, or from a servile and pen sioned press, shall silence us, while we live, in rais ing our humble voice in solemn warning to our countrynien against the encroachments which usur-. patton is making upon the rights of the citizens, and upon the Constitution, which was made to se cure those rights. It is a shame to this generation; it is a disgrace to the American people; it is an out rage upon liberty and the hopes of oppressed hu manity in all countries and all climes, that this Ad ministration should be upheld in its. high-handed anti lawless course, in its exercise of unconstitu tional and despotic power." I have the honor to be, sir, Ac., A. D. J. 'WASHINGTON, Feb. 1 The new Philadelphia Sloop.cf•War ata—Description of the Vessel; her En. g Ines, arc.—She is Considered a Perfect Sue.; molt . PHILADELPHIA, Feb. 2, 1863. .. To the Editor of The NM; Sin: The U. S. steam sloop-of,war Juniata stilllies at anchorjust below the Navy Yard. She was launched in March last, and has been the intervening time fit ting for sea. So great a delay in thivernment ves sel has occasioned much Speculation amongst out siders, and contractors and others have been, per haps not unjustly, blamed; while she has been brought before the public so many timed by ignorant or insincere reporters, that she is now almost as my thical as the phantom ship. . She has been mentioned several times as having bed-plates broken, spars weak end sprung, hull strained, and leaking at a fearful rate, and anemics . of the Administration have taken up'the cry of her being a failure, and it is re-echoed even as far down East as Boston. We all know how embittered New York has become through rivalry, and how much has been said and done to prostrate our Quaker City beneath the whirl of her mighty wheels ; and the non-success of the -Tuniata has been seized upon' to detract from the reputation of artisans and builders, in our navy yard, in comparison with their own at Brooklyn. The Juniata is not a failure by any means, and we wish to show. hem a few reliable facts, how much a great many have been deceived in her. Her entire frame is of live oak; more durahle by one-third than white oak, while the Morton" gahela's is of only half of each material, the former being very scarce since the Southern supply• has been cut off. The spars and rigging are of the, first class, without a defect in any part. Owing to the neglect of the . caulkers, a seam was not finished near the stern post, and the ship made from a foot to eighteen inches of water in twenty-four hours ; butafter finishing the work, she is found to be per fectly tight; and as for being strained, any One sees the absurdity of such a charge against a new ship. The principal difficulty thus far has been with the engine, it being too heavy for the ship, causing her to draw more water aft than calculated ; but never:- theless it is the first one of the kind that has been constructed of the weight specified in the contract. It was built by Messrs. Pusey, Jones, & Co., of Wil-' mington, Delaware, and, notwithstanding the unfa vorable results so far, they have done their work in a thorough and creditable manner. The Navy De partment furnished the designs for this engine, and several others of the Sense class, and in many cases they conflicted with the experience of the builders ; but they were not allowed to depart from the speei fled instructions. It is a back-action engine; of forty two-inch cylinder, and thirty-inch stroke, and is Oa. pable of being worked up to eight hundred horse power. Starting with about twenty pounds of steam, it requires nearly ten pounds more pressure to reverse it, which is a very. serious drawback in action, where rapid changes of position are necessary. The first trial the forward eccentric , and eccentric strap were broken, occasioned by flaws in the cast ing; and-the next trip, the lug of one of the valves, which holds the eccentric rod gave away, owing to the lack of a sufficient, quantity of iron abOutthe socket. When there ere reentering angles upon the surface of- castings, caused by bands, or projections, , the line of contact is much weakened; for in did ag gregation of szystaline . solids, when their . particles COnsolidate under the influence of heat, the crystals arrange themselves perpendicular to the heating sur face of the solids. In two prisms, cast together, so as to make a complete exterior and interior triangle, the particles arrange themselves perpendicular in each leg, and the dividing line is from one vertex to , the other of: the 'triangle. The figure thrinigh this Section is very weak, This was the form at the socket, and was not evidently considered in the draughts, though pointed out in the construction, as a weak ness, and the only remedy of a greater amount of material suggested, but not acted upon. Must con tractors be responsible for the blunders 'and obsti nacy of Government superintendents ? . Instead of fourteen knots ,' as the required speed, she was never calculated to go more than nine under steam' alone, and upon her last trip she logged eight and a half miles an hour, with sixty-four revolutions a minute. As she will probably Increase her number of revolu tions to seventy-five, under a full, head of steam, it is but fair to suppose that she will come up to tilt specified rate of nine knots. With such a powerful anxiliaryas the Juniata , aimmense spread of canvas; no doubt she will acbleVe fourteen or fifteen knots, as she is bark-rigged, With clean water-lines ; but; with steam. alone, never, though a daily recently informed us to the contrary. One thing is certain; the machinery was not finished in the specified tima t as it was fitted on board instead of, as usual, in the shop, consequently it has taken longer, and GoVern-, meet has been depriVed of thamuch-needed services . of the vessel. The Juniata is not an isolated inT stance by any means. The Pawnee cut her journals very badly the first cruise; the Canandaigua, of Boston, heated hers, so: as to preventher running full speed ; the LaCkawanna, of New York ; the SO cramento, of. Portsmouth; the Monongahela; last the -Juniata; - all, except the first, of the same class, have had more or less difficulty with their valves, until they Were either steel-faced or recast and if you wish to go further back, take the frigate Merrimac, one of the very best "Vessels of the United States navy; she had much trouble with her engine during the first year, and spent different portions of it, between the Boston, New; York, and Norfolk navy yards. Thus, we see that it depends not upon the manufailturers Only, but upon the designers also; for, except in the last in stance, it is but fair to suppose that, amongst such a variety of builders, all would' not err in the same, important particular. Even when both parties pert form their whole duty,-in Emelt a complicated piece of mechanism .there -is r always a liability of • sone things Wreaking, for which no one is directly rel sponsible. The Juniata will proceed to Fortress Monroe during the week; and, from past experience, there fel every reason to suppose that all will prove eminent ly satisfactory, notwithstanding the discouraging!, • results of the previous trials. • I 1 am, sir, with great respect, yours, aro., • IsPiMPORT. I The "Essex" at Port Hudson—A Gmilhoat • Reconnoissaneer•lmportaut Reaults—Onr Captures—Story of a.D.efugeo, 4r,e. • • • New ORLEANS, January 24. • RECONNOISSANCE .TO PORT HUDSON BY THE ESSEX—AN "INFERNAL MACHINE" PICKED UP. - • • • • : . . On. Sunday last, the 18th inst. the gunboat Essex made a reconnoissance to Port hudson, going with in range of the enemy's batteries; but failing to draui their fire. ••Perhaps the rebels are too much disgust ed with thelEssex to waste powder by throwing shell at-her, which never , succeed in doing her any da mage. • , • • . Reports have been received to the effect that the re bels had constructed infernal machines; or torpe does, by which they were to -blow the Essex out of water the next time she went- up. This news-was • • brought by contrabands, who- stated that,not . lees than twenty had been prepared: -.One negro, with a look of grave alarm,.warned the.captain of his dan ger as follows , " Cap'n you'd better be sheered at them fellers up there. Theyee put fourteen ob dem are pictorials in deribber." • • • • • Well, When- the.. Essex was near the first water ' battery, the captain observed something floating in the water, which looked like. an old barrel, and he immediately sent out an °dicer and boat's crew to examine it. The lieutenant discovered - a wire-run ning to the shore; and commenced pulling at it. It. finally occurred to him that this might not be safe, and so he cut the wire with his cutlass. He found that it was connected with the barrel, and that under this very barrel was the veritable infernal machine he was looking for. ' . .• It was raised out of the water and put on board the Essex, when an 'examination showed that the thing contained et least 'a barrel of powder; and that it was intended to. be exploded by pulling the wire. It was supposed that the, vessel running over the wire would explode it, or, if not, it could be fired by pulling the wire at the end on the shore. This wire was attached to a cork, and to the cork was attach ed another wire, running into the powder, and to pull out this cork was to set fire to the machine. The torpedo was shaped like a demijohn, and was completely concealed by the barrel attached to its top. It was brought down to Baton Rouge, and On Mon day last taken ashore and placed on the west side of the levee. A strong rope was then fastened to the cork and thrown over the levee. A man then pulled the rope with' ajerk, when the torpedo went ollwith . a frightful explosion, tearing up the levee and mak ing a hole in the ground more . than twenty feet in extent. This was a sufficient demonstration of its -power-to_ n bloy a inj: e s r h i ii h ll i a m n e o a u n t , l) s f p t o hr . water, • if it had be e n fired HUDSON. • . The reported obstructions in • the channel east of Profit Island will amount to little or nothing. The . current in the river is very swift in the vicinity of Port Hudson, and it is well nigh impossible to con struct any permanent ,obstructions.,The inland is Vlry low, and when the river is a its height is nearly all submerged.. The most that, the .rebels could accomplish would be to runlight artillery over, with which to annoy the approaching gunboats. Two or Three days Mace our pickets brought in a corporal and two privates of the 9th Louisiana bat talion,,Who hail been tient:from Olinton , to arrest serters •'near our lines. - The corporal and his anm-' --melee thought it was a favorable opportunity to get home, and E 0 came within the lines and were taken:, OUR NEW NUL DEPARTMENT OF , THE GULF, prisoners. They state that large bodies of troops are moving from ("amp . .Moore, Mississippi, ,to Port Hudson. and that the rebel force at the latter place has been materially increased within the last few days. It is suspected, however, that these prisoners were sent in on purpose to spread false and exagge rated reports of the rebel strength at Port Hudson. There are now only fifteen guns actually mounted on the river at Port Hudson, and five more are ready to be mounted. There is a great difference of opinion among the officers of the navy. In relation to the strength of the place. One will tell you that Oom modore Farragut's fleet could •settle the question with the river batteries in half an hour without any trouble, and another will tell you that Port Hudson is as strong as Vicksburg. PRISONERS. Capt. McElee's cavalry occasionally pick up a wandering rebel soldier. A day or two since they brought in a young man by the name of Hunter, who belongs to Stuart's cavalry. He is the son of Capt. Hunter, who was the rebel provost marshal of Baton Rouge, previous to Gen. Banks' occupation of that city. He said he was aioldier, and was proud of it. He was. dressed in citizens , clothes, and stated that every man furnished his own uni form and dressed as he pleased. He pretended to be totally ignorant of what was going on in the rebel camps, and stated that Stuart died about two weeks after he was wounded. CLINTON. There are now about two hundred and twenty-five rebel soldiers at the village of Clinton, and the post is in command of Col. Lee. There have been many desertions, and within two weoks the force has been thus reduced from three. hundred. to its present number. . . INTERESTING STORY OF A REFUGEE A man-bythe name of Butler made his escape, on Thursday morning; and reached Baton. Rouge in safety. lie resided about two miles above Fort Hudson, and ; under cover of a fog, succeeded In passing all the batteries, in a nkitr, without being detected. Mr. Butler is a native of Louisiana, and says that when this war broke out he secretly took an oath that he would never take up arms against his country. He refused to enlist, and managed to escape the conscription ; but this broOght him under suspicion; and he was vigilantly watched by the re bel spies, and Informers. A fewmonths ago.he bought &flock of twelve hun dred sheep, investing in them all the .property .he owned in the world, and drove them down below Baton Rouge, secretly intending to get them within the Union lines if an opportunity offered. But this intention he did not whisper to any human being, and there was not the slightest legalevidence of any such design. Nevertheless, when about twelve miles below Baton Rouge and many miles from our lines, he was arrested by a number of planters, who came upon him armed—a self-constituted Vigilance Committee. He was taken before a tribunal of some sort, and his property confiscated. The sheep were at once taken for the use of the rebel army, and. Bu tler was thrown into prison. As there was no evi dence against him, hhwever, he was released after six months' incarceration, and, after many weeks of waiting and watching,, succeeded in making his escape. Re states that there are many Union men about Port Hudson, and that they mean to escape as soon as possible; that they all know each other, and have secret signs of recognition. Said he—" I could start from Port Hudson and travel a thousand miles, and put up with a Union man every night." He was aided by Mends in his escape. He started at two o'clock in the morning, and the Rig on the river so completely concealed him that he had no - trouble whatever in passing Port Mullion, notwithstanding the patrol on the shore. HISTORY OF TIIE WAR, The Recent Disastrous Affair in the Hare bor of Galveston—Official Report of a Court of Inquiry into the Causes and Effects of the Matter.. • The fallowing official report of the Court of In quiry, constituted by Admiral Farragut to investi gate the Galveston disaster, is interesting as giving the. nly authentic report of that affair: ' U. S. STEAM-SLOOP IiAMTFOED, - AT ANCEOI7. OFF NEW ORLEANS, January 12, 1863. SIR: In conformity with your instructions, we • proceed to state the facts in relation to the capture of Galveston, Texas on the Ist of January, 1963, as elicited by the testimony before the Court of In quiry. . The naval force- in possession consisted of the Westfield, Clifton, Harriet Lane, Owasco Sachem, and Corypheus. The two latter hadjoined'only.two days previous 'to the attack, having come up from below,.the Sachem (steamer) in a - broken-down con dition, and the Corypheus as her escort. The posi tion of the vessels were as shown by the:accompany ' Mg chart. The United States troopston shore con sisted of two hundred and sixty, rank and file, com manded by Colonel Burrel, of the 42d Massachusetts Volunteers, occupying, by advice of the' command ing naval officer, a wharf in the town. It seems that the night previous to the attack, in formation had been received by the commanding of ficers of both land and naval forces that such an at tempt might be made. ' • At 3.20 A. M. on the first of January, it being bright moonlight, some two or three rebel steamers were discovered in the bay above by the Clifton. The Westfield, from the other channel, likewise made the same discovery. The naval forces, there fore, were not taken by surprise. Very soon after, our troops on shore learned, through their pickets, that the artillery of the enemy WAS in possession of the marketplace, about one quarter of a mile distant: • • The attack commenced on shore, about 3 A. 111., by the enemy upon our troops, which weredefendecl by the Sachem and Corypheus with great energy; Our troops only,replying with musketry, having no .artillery., About dawn the Harriet Lane was at tacked] or rather attacked two rebel steamers, :one of which, the Bayou City, -was armed with 68- pounder rifle gun, had two hundred troops, and was barricaded with cotton beteg some twenty feet from the waterline • The outer, theeffeptune ' was simi larly barricaded, and was , armed with two snlol brass pieces and one hundred and sixty men - (both were common river steamers). The -.Harriet Lane was under way in time, and went up to the attack firing her bow guns, which was answered by the re bels, but their 03-pounder burst at the third fire. The Hamlet Lane ran into the Bayou Clty, carry 'log away her wheel-guard, passed her, 'and gave her a broadside, which did her little or no damage. The other rebel steamer then ran into the Harriet Lane, but. was so disabled by the collision that she was soon afterwards obliged to back in the fiats, where she sank in about eight feet of water, near to the scene of action.- The Bayou City turned and ran into the Harriet Lane, and she remained secured. to her by catching under her guard, pouring in inces sant volleys of musketry, - , as did also the other steamer, which was returned by the Harriet Lane with musketry. This drove the Harriet Lane's met; from her guns, and probably wounded Com mander Wainwright and Lieutenant Commander Lee, the,latter mortally. She was then carried by boardig, by the Bayou City,, her; commander. summoned to surrender, which he refused, gallantly, defending himself with his revolver until killed. But live of the Harriet Lane's men were killed and' live wounded; one hundred and' ten, exclusive of officers and wounded, were -landed on shore pri soners. Her commander and first lieutenant were buried on the following day on shore, in the ceme • tery, with the honors- of war and her other officers paroled. The Creaser), which had been anchored below the town coaling, the night before, got under way, moved up at the commencement of the attack, and engaged the enemy's artillery on shore. When it was tight enough for her to observe that there were two rebel steamers alongside the Harriet Lane, she moved Up to her assistance, ground ing several times in so doing,. owing to,the • narrowness - of the channel. She could only cca sionally brink her 11-inch gun to •bear. She was, soon driven back by the incessant fire of the enemy's musketry, and, when the howitzers of the Harriet Lane opened on her, she concluded she had been captured, and - backed down below the Sachem and Corypheue, continuing her engagement with the enemy on shore. She had all her rifie-gun crew wounded when above, and lost in all 'one man killed and fifteen wounded. The Clifton, beforethe action commenced, went around into Bolivar channel, to render assietance to" the Westfield, which had got under way when the rebel steamers were first die covered. Soon afterwards, got hard and fast ashore, at high water, and then made a signal for assistance . While the Clifton was in the act of rendering this assistance, the flashes of the enemy's guns were first seen in the town. Commander Renshaw then di rected .Lieutenant Commander Law to leave him and to return to the town. • The moon had now gone down, and , it - became quite dark, yet the Clifton with some difficulty got' around into the other channel, opening the batteries ' , upon Fort Point, which the rebels now had posses - sion of,'shelling them out, and driving them up 'the' beach tie she neared the town. Here she anchored and continued•the engagement, but did not proceed up to the rescue of the Harriet Lane, owing to the: failure of the Owasco, the intricacy of the cheerio), and the apprehension of killing the crew of the Ilar-' riet Lane, who were then exposed by the rebeli on her upper deck.. It was now. about 7.30A . .t.M: A white flag was hoisted on the Harriet Lana'. A boat bearing a flag of truce, with a rebel Wilber, and an, acting master of the Harriet Lane, came'down to the Clifton, informing her commander ofthe capture of the Harriet Lane, the death . of her commander and first lieutenant, the killing and wounding of two-thirds of: her crew all of -which was corrobo rated by the acting master. Major Smith, their commander, now proposed that our vessels should all surrender, anti that one should • be allowed, with the crews of all, to leave the harbor; otherwise, they Would proceed down with the Hap , rMt: Lane and all their_ steamers, (three more of which had appeared in light after daylight Mit were neither armed nor barricaded,)and proceedltosapture . the gunboats in line. Lieutenant. Commander Law replied that he was not the commanding officer, and he could not ima gine that such terms could be accented but that he would take the acting master of the Harriet .Lane, and .proceed' over to the Westfield,- and - tender his proposal to Commander. Renshaw. This he did, and went in his own boat. Flags of truce were at this time flying on our vessels, and by the parties on shore. During the absence of Lieutenant Commander Law, and under these nags of truce, the rebels coolly made prisoners of our troops on shore,s ` got more of their artillery into position,.ancl towed the Harriet Lane alongside the wharf, though it had been understood that everything should remain :In Stahl quo until an answer should have been rebeived. Commander .RenshaW refused to accede to the pro position, directed Lieutenant Commander Law to return and get all the vessele out of port as soon as possible, and, as he found he could not get the West field afloat, he should blow her up, ami go on board the army transports. Saxon and .M. A. Boardman, which were lying near him, with ills, o ffi cers and crew. :;-.Upon Lieutenant Commander Law's return to his (vessel, he proceeded' to carry out these directions. i : The nags of truce were 'hauled down,' the enemy lfiring upon the vessels as we then left the harbor: t When the Clifton was half way toward the bar, ',her commander was. Informed by a boat from the Westfield, that in the explosion of that vessel, which - ' they observed some half hour before,. Commander Renshaw, Lieut.. Zimmerman,Bngin eer Green, and , some ten or fifteen of the crew had perished, (the explosion being premature.) Lieut.. Commander Law now being commanding officer, proceeded to -neon his vessels over the bar, and finally concluded lto abandon the blockade altogether, considering the OWasco as his only efficient vessel, and regarding !her as not equal to resist an attack from the liar riet Lane, should she come out for that purpose. By . 8 P. they had all left the blockade, although the iomineeder of the Clifton had been notified by an officer on board the M. A. Boardman,. that another : transport would be down within forty-eight heeire, and requested that he would warn her. off: The vessels which were-left In possession of the enemy were the Harriet Lane, and two coal barks, 'the Oavallo end Elias Pike. The only injury sus tained by the Harriet Lane appears to have been from an 11-inch-shell, under her counter, fired by the Owasco, and the damage to her &and • from the collision. Very respectfully, • . JAMES S. PALMER, Captain. MELANCHTON SMITH, Ciaptain. L A. KIMBERLY, Lieut. Comd'g. Rear Admiral D. G. PARRAGUT, Commanding Western Gulf Blockading Squadron. PETROLEUM IN EN GL A N D.—Petroleum seems to be unpopular in England. Effects have been ascribed twits-. use there which we have never dreamed of in this country. At an anti-petroleum meeting at Birkenhead, several of the inhabitants related !heir ,experiences of the ill elibcts arising from the nauseous smell of the oil. It was stated it was • ruining the flour 'dealers' stook • and green. grocers' goods. The smell prevented people sleep ing at night or eating •by day; and' persons in the neighborhood • sald'they felt as • wretched as if a cloud hung over them. , . , The English should' learn how to reline their petroleum; properly purified it is entirely free from odor. ST/TES IN REBELLION. Mounted Robbers , of the South—Supposed . Extortion in the Southern States—The War In Virginia—Military and Political . -Delusions- - The Guerilla Operations in Tennessee and Kentucky—Latent Rebel News from Texas, .ice. CONDITION OF THE REBEL CAVALRY. (From the Richmond Examiner, Jan. 273 There are some people who advocate a heavy in crease of the cavalry arm of the service. They would make it outnumber, if posaible, all other de scription. of troops. They appeal to the good, solid work of Morgan, Wheeler. and Forrest in the West, and to the clever performances of Stuart in the East, in proof of the super-excellence of the mounted ser vice. With Morgan and Wheeler on their lips, they are enthusiastic for cavalry. 'lnspired by a tran sporting patriotism, they plead for a vast increase of horsemen with the zeal of revival preachers for converted sinners. They show by their devotion to their one idea that they have not been much in camp; that they are un acquainted with the Confederate service; that they know very little of the opinion entertained in the army of "the cavalry;" and that they know even less otthe feeling toward them cherished by the peo ple inhabiting the regions traversed by these troops. ' The country people have a propensity to suit the orthography of words to the ideas associated with the things which they are intended to designate. They call a .Cotswold sheep a Scotch-wool sheep, having the idea that Scotch wool is very long and coarse. The idea of, a mast horrible crucifixion is associated In the pious mind with the name of Cal vary; and inasmuch as the people, and all they have and own, are literally crucified when the mounted 'troops come about, in the simplicity of the unlet tered mind, they confound the technical word desig nating these troops with the most • painful name fn -all the-Scriptures. • A few special detachments of "our cavalry" have done great service ; but if we leave out of view the daring, heroic, and invaluable services of these bri gades, the rest have been a scourge to thepeople and curse to the cause. The expense of horse troops is enormous ; it is three times as great to the Treasury as that of infantry ; and the infliction upon the people of their rapacious and wanton depreda tions istenfold more than that suffered from any other troops. There has not been a considerable battle during the war in which the performances of "our cavalry" have marked any feature of the en gagement ; and in one of the chief duties of mounted troops—that of completing a victory by running down and utterly destroying a routed toe—their services have been below zero. The war has been remarkable in'the fact that it has been fought without 'that important elerrient of European armies known as dragoons. Extended level plains milted' to the operations of these troops are few on our portion of the continent. The heavy compact charge of real cavalry, at the critical ince meet of the battle, bearing down everything before it, and deciding the fate of the day, has not been witnessed in this war. The surest indication of im minent battle to the infantry soldier, impatient for the conflict, is the order, " Cavalry to the rear!" a movement he witnesses with shouts of derision and exultation. We have little cavalry in our service, i • few dragoons light or heavy; fewer still that fulfil the technical idea and purpose of such troops. When fighting is to be done, the - cavalry are ordered out of the way. • A faithful description of the general physiognomy of the "cavalry," as they are seen in their camps and upon their strolling Marchee, might bring a ghastly smile on the rigid lips of the most impas sable ascetic, provided he were off at a safe distance; but the terror which seizes the people on their ap proach is 'overwhelming. They are usually armed with every conceivable weapon- of effence except the sabre of the real dragoon: They are as ignorant, of the - drill as of the sabre practice. They are com fortably clad; but as unwashed and as unkempt as the urchins that play about the wigwams in Ne braska. Their steeds are• strangers to the curry- - comb, stained with habitual mud, small and rickety, and in the order which three rations a week of corn, supplied' by the Government, and as much hay as can be begged or wrested from the farmers along their march, together with hard and reckless riding, may be supposed to produce. l'he sensations they create and the value of see vice they render may be inferred from a single ex ample. A. body of-Yankee hone lately made a raid from a distance of several hundred miles into our lines, dashed down upon one of our railroads, burnt . Some bridges, destroyed several Miles of railroad, and made their way back in no great haste. They . passed through - a - certain village going and return ing, stopped a few hours each time, took a few horses but had no time for other depredations. The "cavalry" went in - pursuit, but did not catch the Yankees, stopped in the same village, and stripped its owners remorselessly of every blade of hay and fodder to be found, every bushel of corn they could put their hands on, and even robbed the smokehouses of their meat. The " cavalry" accomplished a great deal, but it is • a deal - of - mischief ; they perform a vast amount of service, but, unhappily, as a general rule, it inures indirectly to the benefit of the enemy. Their lack of economy is as deplorable as their lack of drill and discipline, and a general disbanding of at least two-thirds of the numerous corps now in the field would be hailed with joy by all the people whom they claim toprofccf. There are a few brigades of splendid mounted troops in the Confederate service ; but that prodi gious body of strolling horsemen who lead an un , settled, glpay life in the border country, stealing here, robbing there; begging in this place, and be having a little better inthat; who are never heard of in the vicinity of the enemy ; who are always too late to catch the Yankees when in force, but are dreadfully ferocious on all individuals ever so loyal to the South, whom they choose to denounce as Union men, and who are known among the common people by the horrifying appellation of the "calva ry,' these troops are a reproach to the Confede . rate service, a curse to the cause against which they have raised , up thonsands of enemies, a scourge to our own people, and a desolation to large districts. - of wilderness sOilntry; - which, but for-Ihelu, Would be producing crops for the general support. lt the forage which has been consumed, stolen, and wasted by theseworse than useless troops had - been saved, it the farms which they have desolated were still in cultivation, and if the farmers, whom they have utterly discouraged from producing crops, were still busy in their blessed calling, an additional amount of: supplies would be raised, over and above what we now have, to support our entire armies in the field ; but, as long as these licensed plunderers are permittedto run riot over the border country, where, crops are most needed for our armies; and which must continue to be the chief theatre of our military operations, we shall not cease to hear of scarce provisions, high prices of food, arbitrary im presaments, desolated farms, and abandoned 'homes and fields. Instead of too few we have far too many cavalry. General Scott held true idea when he discou raged the undue augmentation of this service. Had the. Yankees indulged in the expensive luxury of horses and mules to the extent that we have done in our service, their-exchequer would have been bank rupt in a year. " The sums of money which have been expended in the purchase and.support of horses and muleh in the Confederate service would be in- ; credible if stated. Our "cavalry" have been the great sink-pocket of the war.:brigade quarter- master of one of our generals recently told. the writer that he had purchased a great - many more horses for that particular command than there were soldiers and teamsters belonging to it ;that with' the animals-he had he could mount. every' man ' and every teamster and servant in the command, and a good many of-them would- have a horse to lead beside. - It is this extravagance in horse-flesh that has pro- duccd the present scarcity of these animals, and raised their. prices to the enormous figures now ruling. Ordinary mules sold, last Saturday. at the horse lot, 'at 00 to $6OO. The mortality of Government horses is fearful ; it is fully 50 per cent. a year. The scarcity and high price of draft animals produced by the Ga vernment demand will averely affect the production of grain, and Vrill much more affect the: supply of it, Making the consumption ., of forae, double what it ought to be. An increase . of "t he cevalry " force is simply an impossibility. If we have more cavalry, we must consent to have no more corn., The question of cavalry is' simply a question of absolute ruin. But, happily, this service cannot be increased. The horses are not to be had at practicable prices ; and if they could be, they would have to starve for food. THE BILL TO SUPPRESS EXTORTION. In.the Virginia Senate on Friday,. January 30, the hour for the special order having arrived, the bill to. - suppress extortion was taken up. : lir. Anderson, of Botetourt, one of the ablest and most zealous advocates of the bill, proceeded to ad drain the House in support of the measure. He said —the extraordinary prices throughout the land were caused by the scarcity of- the articles, the want of ' transportation on the lines of communication, and • the combined efforts of speculators and extortion ers in buying up through the country, and hoarding --their commodities in hopes of an-advance in prices. This was what had caused such extravagant prices: Instead of the depreciation of the currency being the • cause, as claimed by some of the opponents of the bill, he wouldshow that it was just the reverse. So' far - indeed, from the depreciation of the cur rency roan the cause, it was the natural effect.. As the primadvanceil, so did necessarily the, issue of Confederate' notes. The Government Sad been foreepby.being-compelled to pay simb high. prices,- to double its issue. The Secretary. of the Treasury, in hie report; puts down the amount of Confederate notes: outstanding on the Ist of December at $200,- 000;000; In- another-part of his report he says that on theist. of July, 1863, if the system he recom mended: to Congress be carried out, the whole amotint. of funded debt will - be $350,000,000. Sup pose, there had been no extortion or advance in price", and the supplies of the Governmentjhad been purchased at 'the prices they formerly were; there would have- been a saving .of $160,000,000, and thereby have reduced the circulation to $140,000,000. Suppose there be - no effort made to check this evil of extortion, is there any reason to believe that prices will remain as they argil - If speculators be allowed to roam unrestrained through the country, ' where mill this system of extortion end? Who would have supposed that since their last session • scarcely sixty days, prices would have increased 2OG , per centl' If the Legialathre does not adopt some . measure to keep prices where •they are . or to .bring them still lower, what is to become of the currency Y ' As an illustration of what extortion and specula tion had brought on the country; Mr. Anderson read - a table contrasting the prices of May, 1881, lust be fore the war—cut from the market report of one of the Richmond papers—with thine of the present time. The figures are not given as exact, but they are correct enough to serve the purposes. The table is interesting, and is well worth being cut out and preserved as a relic of the part of the extortioner in this war : ' MIIVICULTIMAL PRODUCT:I. . * - Before tho War. - Now. White Wheat,' V bu .. 81 50 White Wheat. V bn• ....61. 50 Flour, bbl 750 Flour ,i bbl 22 0) Corn, bush 0 . 70 Corn, bush 330 Myr hundred 1 00 Hay hundred 860 Hides, V lb 007 nia4. 'f lb 040 Beef, el lb • 0 18 Beef , es ir, 0 50 Bacon. V lb 0 13 Bacon,3B Its 0 60 Lard, V lb 016 100 Butter, 'V lb - 0 30 Butter, V lb 1 50 Irish Potatoes 1 00 Irish Potittuos A 0 0 Sweet Potatoes . 100 Sweet Potatoes.•• , 6.00 Apple }frank 1 00 Apple Brandy... ..... .. 15.80 11 001, V !We...-. ... -.. .. 'll 50135 001, Vlb ' 200 ' • - ' OF . MANUFACTURES. Bar trot:L.4 $lO 41Bar Iron, V SO 20 Nails. V , lb - 0 4 Nails, V It. 060 Leather, Soli): 15 03,—. 0 Leather. Sole, V 111.—:. 255 Leather, Upper, .45 lb••. 033 Leather, Upper, lb.. 300 arrrox 000 as. Osaabiirga..Vyard. •.$0 100anabitrits, yard....do 75 Brown Cotton,. yard . . 0101 Brow n Cotton,r , yard. 0 . 76 Sheeting;, 10 yard 0 151 Sheeting, yard 1W " WOOLEN GOODS. Coarse Jea'nes ' $0 . 4 Coarse .leanes $lOO Crenshaw's Gray— •••• 2 OGlCrenshaw's Gray - 28 00 . . - MIACELLANEOUB. Coarse Shoes $l6O Coarse Shoes . .. '....1515 00 Ifigbgnaztered Shoes—,3 50 Hlghquartered Shoes.. 51 00 Boots ' .7.50 Boots 60 00 Wool Hats. doz 700 Wool Hats. le 'dor—. CO 00 Dividends on stocks in cotton companies worth in Play, 1861, $26 to $5O per share, now from $ll2 to 140. The agent of the woolen factory declines giving its dividends until he advises with counsel. IVlr.Anderson, with this terrible picture presented to the House, of what had been brought on us by extortion; proceeded to ask what would be the con sequences if the House sit with folded arms and does nothing to avert this evil. It was a question of life and death with many of our poor soldiers. At the present rate of prices, and if nothing is done to put down the system of extortion, the generous and pa triotic contributions of our,altizens, which had slip; ported ttie.maby. of the; soldiers, oouid not hold out much long' longer.: It was aquestion bertY oralavery with us. - If not - Checked, it' would disband our army. Can we expect our brave troops to remain . in the Held while their families are Starv ing I It would disband our army and ruin our cur rency. But pass the tat, and you will save the cur- THREE CENTS. rency, enable our Government to carry on this war, and secure to the poor soldier an ample supply of provisions and clothing. The Senate adjourned without taking any question; on the bill. FROM FREDERRIKSIEMKG. (Correspondence of the Richmond Whig. FRIMERTOKeItURO, Jan. 1863.—The - inclemency of the weather, and consequent bad condition of the roads and face of the country, are alleged by the correspondent of the New York Post as the reasons for the failure of the Yankee army to cross the Rap pahannock at the point selected, six miles above Falmouth, and their return to their encampments opposite Fredericksburg ; but the disaffection of the troops, openly admitted In the various lettere from their army, coupled, perhaps, with the appearance i of sundry rebel camp fires on the opposite Bide of the river at their intended point of crossing, arc not a little chargeable with this failure and retrograde movement. Why were these obstacles not ascer tained before the commencement of the forward movement I is a question suggested here. But I will not trench upon the jurisdiction of the next special grand inquest that may be sent by Congress to inves tigate the cause of this failure. We are left to speculate whether Burnside will now. " change his base," go into winter quarters, or await the return of lavorable weather to renew his recent intended coup ci' dal. As the programme resolved on was a "short, sharp, and decisive" winter campaign when Burnside accepted his command with the terms annexed, the last mentioned supposition was proba bly correct. But the prospect of an early return of fair weather is just now most unpropitious. The rains which fell at intervals for the past ten days, rendering' the roads difficult of passage, were suc ceeded by a heavy snow storm, which began some 'time before dawn this morning, and continued with out intermission until night. The snow covers the ground.to the average depth of Ste inches, the land- . scape presenting in its fantastic appearance a scene of rare beauty. At present it promises to continue snowing .thrmigh the night. The "oldest inhabi tant " says that winter, with its accompanying bad weather, leas just fairly begun in this latitude. At any rate, we can reasonably promise ourselves a respite from Burnside , s military operations of thirty or six ty days, to borrow the stereotyped diplomatic phrase of Mr. Seward in his despatches. As you may readily imagine, we were not alto gether ignorant of the recent movements of the Yankees; and I would be glad to say something of "the situation" in and around here, did prudential considerations permit. Suffice it to say, our gallant officers and men were eager to give the enemy a suitable reception, and everything " gave notice of awful preparation." Whatever movement may be next attempted, the country reposes with confidence on the skill and valor of Lee and his living wall of brave men, who have "won the loud acclaim of praise" on every battlefield of the "Old Dominion." A noticeable feature in Northern papers received here is the ignorance of the position and movements of our armies; a fact that speaks well for the re ticence of our newspapers on those subjects, not withstanding the assertion of certain sages who mis represent some few districts in the Confederate Con gress. The "empty ignorance and rank conceit" that dictated the accusation that the enemy derived more valuable information from our papers than from any other source, would find its appropriate sphere in some useful employment at home. It is pleasing, however, to acknowledge that the great majority of our Congressmen properly appreciate the functions of the Southern press, and the part rendered by it since this revolution began. Items of interest disconnected from military mat ters are scarce. Little has occurred to vary the daily routine of life in Fredericksburg, save the in terest excited by the enemy's movements. Under apprehension of another shelling, liable to come as a thief in the night, nearly every family has left town, and the appearances of females on the streets are like angels , visits. This is not a proper place for them so long as the enemy's guns look frown ingly on their little city. The braes band of- Barksdale's fine Mississippi brigade have taken quarters in the town, and night ly discourse some excellent and animated music. Gen. W. S. Featherstone, formerly U. S. Con . ;crewman from Mississippi, has -been transferred to the West. He is succeeded by Gen. Conrad Posey, late colonel of the 16th Mississippi Regiment. The troops here 'having been paid the arrearmes due them by the Government, are in fine spirits, *id, with proverbial improvidence, deal it out with liberal band for whatever pleases their fancy or their palates. • • • It is remarkable that the public records of this county escaped the notice of the vandals (luring, their late visit to this city, and are entirely uninjured. Unwilling to trustto the chances of another occasion of the kind, the worthy custodian has had them re moved to a place of greater security. All is quiet to-night, and has been all day, along the lines. Our pickets relieve each other at short in tervals, and are comfortably sheltered from the falling snow when off immediate duty. Their neighbors, on the opposite bank, pace their weary, rounds with nothing save their great-coats to protect them from the peltings of the pitiless storm. Verily, the. Ya nkees have a hard time in thisvweather, and look with envious gaze on the comfortable quarters on this side. Y. (From the Richmond Whiz, Jan. 31.3 • . DELUSIONS. Nothing is more abundant these days than delu sions; of which there are two sorts—one springing from erroneous reports, and the other from error of judgment, or "miscalculation of forces." Of the first kind, the mass meeting which Gov. Foote pro posed to bold over the good news from Kentucky, is an amusing illustration. Of the second, we have two very curious instances in Mr. Lincoln's Secre tary of State, and. Mr. Davis" Secretary. From the beginning, each of these gentlemen has persistently maintained, in the face'of facts, and in spite of law and logic, that the war could not last sixty days. Mr. Seward assured all foreign Governments, in In numerable despatches, that the rebellion would be crushed in sixty days. Mr. Benjamin never lost an opportunity of convincing every man who would listen to him, that European intervention and peace were inevitable In the aforesaid magical sixty days. But the sixty days of both the honorable Secretaries have repeated themselves some dozen times, and the Important event predicted is as remote as ever. llr. Benjamin's delusion is not so tunny as that of Governor Foote; but it may_be that both of these• atiall have the laugh on their side in the lapse of time. _ But, as to Seward, it would be well for him if he could escape as the victim of a delusion. On his skirts is more blood than on those of any other man on this continent; and as sure as there is retribution on earth, or a God in heaven, a bloody doom awaits him. Cowardly as cruel, he may dodge and twist, recant his opinions, and disavow his agents , but the inexorable furies are on his track. The eviiassions he has . aroused will not be appeased; the blood he has shed will not sink unavenged. The monsters lie has engendered will rend him. If justice did not admonish, history would teach us what will be his fate. THE GUNBOAT CAPTURE ON THE CUM BERLAND.. The cditor.of the Shelbyville (Tenn.) Rebel Banner has had an interview with A. C. Cunningham, of Grayson county, Ky., who furnishes some additional particulars of the attack made by Gen. Wheeler upon thp enemy's gunboats and transports at Har peth Shoals: He participated in the adventure, which he de scribes as one of a very thrilling and exciting nature. The gunboat Sidell was surrendered by Capt. Van Dorn, after the first fire, heappearing on the hurri cane roof and waving a white handkerchief very frantically. 'His conduct, however, partook some what of the courageous, as he flaunted his flag of submission under a shower of bullets, and just at that lime the ball of a rifle cannon whizzed in close proximity to his body. ' • - A large amount of -booty was obtained by our cavalry-on the steamer, and they regaled them selves with "cigars and cognac" at the expense of Uncle SSam - The same day a party of 1 orrest's forces . were despatched across the Cumberland to the little town of Ashland, where they destroyed a large quantity of Union supplies. A Union force of cavalry was sent out from Rose cran's army to intercept Wheeler and Forrest, but they did not approach in hailing distance. Had not. the Harpeth river been up beyond the possibility of fording, the whole number would have been cap: tured. As it was, they only learned how near they were to the Confederates, and then ingloriously fled. Several of the party were frozen to death, so severe wee the cold, and so unused were the Union cavalry men to these out-of-doors excursions. The Union forces at Danville, when the Register's informant was there, numbered about 4,000: A brigade, detached from that town,. en route to Frankfort, passed through Harrodsburg and Law renceburg, and stole over 200 negroes. An old man named Nonan (father-in-law of Dr. Maitland), fol lowed this thieving brigade to Frankfort to . reclaim his negroes, but on reaching the camp of the contra bands,. was brutally beaten and otherwise mal treated by the Abolition commander. At Lexington, the private houses are occupied as hospitals. Mrs. T. Bulle's house, a fine residence, was completely ruined by the vandals. The Register says our informant met Carter with hie force twelve miles this aide of Lebanon, just re turning from his East Tennessee raid, but had no opportunity to hear hie report. The people of the Blue Grass region are repre sented as being a unit for the Southern Confederacy, and looking anxiously for the return of our army to relieve them from the Abolition despotism. There is no question that a great revolution in publie.sentiment has occurred, not only. in Ken- tuck y, but in the Northwestern States, since the publication of the emancipation proclamation. Lynchburg Republican. • A Kentuckian sojourning in this city has received a letter from his wife, in Lexington, which confirms the rumors we have had of the demoralization and disbanding of Woolford's Kentucky Cavalry. ' At Frankfort, the Legislature in session is surrounded by three thousand Abolition bayonets, for the rea son that a majority of the members are considered difiloyal,to " the best Government on earth." If this last outrage of the Federal despotism does not arouse the old "Hunters of Kentucky" from their graves, we predict that it will at least fire their proud descendants with a spirit of resistance which will make it impossible that the "dark and bloody ground' , shaillever become part or parcel of the Abo litionized and mercenary Yankee Union.—Knorville - Register. NEWS FROM TEXAS. PROCLA3IATION PROM GEN. MAORIIDER.7GPENING OP GALVESTON TO TRADE. After the battle of Galveston, General Magruder issued the following proclamation, and sent it out in a vessel under a neutral register to a neutral port : PROCLANATION. ' GALVESTON, Jan. 4, 1863. ' Whereas, the undersigned has succeeded in cap• turing and destroying a part of the , enemy's fleet, and in driving the remainder out of the harbor of Gal veston and beyond the neighboring waters, and the blockade having been thus effectually raised, he, therefore, proclaims to aliconcerned that the harbor of Galveston is open for trade to all friendly nations, and their merchants are invited to resume their usual commercial intercourse with this port. Bone at Galveston title, the 4th day of January, 1863. J. B. MAGRUDER, Major General Comm , g.. We had the satisfaction, says the Houston Tele graph of. the 7th ult., of sending a number of copies of our last paper containing copious accounts of the battle by the same vessel, • addressed to the principal journals of the West Indus and Europe. We thus shave reason to hope that the true account of the affair will be published to the outside world. The proclamation ought to have the effect to in vite trade, and bring cargoes of needed supplies_ to our shores. .. --- . . We find the following items in the Telegraph: The Confederate force on the Ist was 3,000 men, but a small portion of which was in the action. They had thirty-one guns all told, on shore and on gunboats, twenty-four of which were light artillery. The enemy, had. six war steamers mounting forty heavy guns. ~ The Galveston city sexton buried twenty-eight persons up to the 3d, ofwhom seventeen were killed in the fight and eleven died subsequently. Confederate bonds are now being taken up at the rate of $100,600 a day in Houston. We learn that the Federals at Sabine Pass run off every night and returriby day to the blockade. They have given up the Pass. We are in full possession. The Dan, which they had rigged up as a gunboat, has fallen into our hands, and been destroyed. Thus every place in our State that has been taken by. the enemy has been redeemed, and to-day the Federal flag floats over not a foot of the sacred soil of Texas. The Victoria Advocate says that a pair of large ca mels are being put on the express from the Rio Grande to Victoria. They are to' be harnessed to a •large two-wheeled cart. They will carry 3,000 pounds, of freight, and make the trip in five to seven days. VELOIMTY. LIGHT2—A French ' aavan, Foucault, claims that he has found a mistake in the received estimate of the 'velocity of light, and that it moves at the rate of 894,000,000 feet per second, in stead of 981,000,000. If he is right, the common cal culation of the' distance of heavenly bodies from each other is incorrect. THE WAR PRESS, (pßLranaD WEEKLY.) Tan Wan Pages Will be sent to subscribers by mall (per annum In advance) at S 1-110 Pico '• 0.00 Too " " -17.00 Twenty Copies" 32.00 Larger Clubs that, Twenty' will tee charged at the BUBO rate, 81.60 per copy. The money msef altooye accompany the order. and fu no instance can . thee terms be deviated/ram, or they afford very little more than the cost of the Payer• /kr Postmasters are requested ea eat se nzente for Tai Wen Puma sir- To the getter-up of s Clab of ton or twenty, an extra copy of the Paper will be given. DEPARTMENT OF VIRGINIA, Affairs on the Peninsula—No Sign of Qen. Wiaes Threatened •Advance--The Poor Borers of the Cavalry Service. [Special Correspondence of The Prose,] WILLTAMSRIIIIG, Feb. let, 1563. Things remain at this place with comparatively &tie change. .The Fifth Penneylvania Cavalry still maintains the advance, under the command of Lieut. Colonel Win. Lewis, and, notwithstandingthe many boasts of General Wier, he has not yet essayed to pay Ms regards to his many friends and admirers in. this town. It is probable that the general has as much respect for the talents of, Gen. Keys, backed by good Yankee sebres and bayonets, as his son has for the kicking capobilities of a certain Philadelphia barber—hence he fella that an advance on this•piace would not be conducive to the comfort of either him self or his half starved and half-fed followers. His recent threats againot the officers participating in the late raid on the White House Reeve but to ani mate the men with a more unsparing and vigorous method of dealing with an enemy. whose greatest talents consist of speech-making end threats, and whose greatest quality le-inactivity. It seems-that the Government is very remiss in allowing such horses as are now bought for the ea valry service to pass inspection. It isnouncommon thing to find thirty horses-out of a. hundred nailer viceable, and whose carcasses serve to augment the many hundreds buried on. this. Peninsula. No wonder there is such a cryasto what becomes of the horses belonging to the Government. Those high in authority throw the blame on the officers, others on the individual cavalry man ;.yet these officials never take it into consideration that the oats issued to cavalry horses, in bags, is averaged at 130 lbs., while the real weight is not over 1.00.E5. per bag ; that hay is averaged at 220 the, per bale, while the real average is rarely over ISO its. The Government allows to each horse in its service, per day, as forage, 14 lbs. hay and 12 its. oats, yet, through the rascality of contractors, each horse rarely receives on an ave rage over eight Its. oats and six its, of hay. This is the true secret of the thinness.and mortality among the horses. The effectiveness of the cavalry service depends entirely on the condi'don of its horses, yet it is crippled and rendered ineffective by the rapa ciousness of contractors,: and neglect of duty among : Government inspectors. Sbouid the last be able to tell a good horse front one which ia either spavined, wind•broken, blind, or foundered, there would be lees cause for the t , immense hospitals around Washington, and the ex— penses of this war materially decreased. G. EUROPM. —The French Mintsteits Visit to Ittelkl26o.lll.l— Secretary Seward's Message to the Rebels by M. Mercier—Speech or Mr. Bright on American 'Affairs—O , DonneliN view Ca binet. CPn ris (Jan. 76) Correspondence of London Tolograpb.) The " Yellow Book," which la usually distributed to the Chambers at the same time wish the "Blue Book," has not yet been issued to the great bodies of the State. lam ignorant of the cause of the de lay, but the substance of several of the documents contained in the volume in question is already known, and amongst them is the following concern. ing America, of whiCh I give you an analysis : In the Brat place, I find a letter Written by Baron Mercier, the French Ambassador at Washington in. which that diplomatist informs the Minister of Fo reign Affairs that he had endeavored to word his re plies in such a manner as to accustom the Gmernment of the White House to the recognition of the South by France, in case hostilities shack/ :continue to rage without any marked result in favor of ate Almost at the same time, .hi. Mercier wrote to Mr. Seward, informing him of the representations made to him by M. Thouvenel upon the subject of considerable losses sustained by several French com mercial honses, by reason of the absolute impos sibility of corresponding with the inhabitants of the Southern States. .In New Orleanialmie that leas is estimated at between six and. eight millions of dollars. M. Mercier demanded that the French consuls should be authorized, upon their own re sponsibility, to forward to the interested parties the letters addressed to them, after having assured them selves that the contents of the said letters were purely commercial. Mr. Seward answered that the demand was of the highest moment, and that it was-- necessary for him to confer on the subject with Pre sident Lincoln, at the same time apologizing for not being able to grant at once what France requested. On the 24th February, 1862; M. Thouvenel asked N. Mercier to deny, as he had done previously, the recognition of the Confederate Government by _France, since that Power intended remaining strict ly neutral. But on the 6th of March the Minister of Foreign Affairs wrote to M. Mercier, stating that the success reaped - by the Federal army in Tennes see might soon put an end to the campaign without the honor of the Government of Washington suffer ing from it, and that France would see with great satisfaction that Government endeavoring to dis cover if there were not some other method of solving the difficulty than war. M. Thouvenel added that the Cabinet of Washington was alone in a position to take the iniative, and tole,/ down the basis of e Compromise, the necessity of which. is fell more keenly everyday. This was the begftrning of the efforts which terminated in - the note addressed by AG Droujja de Lhuys to the Go vernments of England and Banta. But Al. Mercier replied that the political situation - hf the North did not admit of his taking that step—for the present at least—since it would evidently remain without any success. Nevertheless, despite that refusal on the part of the French ambassador, in a conversation he had - with Bar.. Seward, the latter induced Mercier to communicate to him the last despatch of M. Thouvenel, after which, as the baron had antici pated,- the American minister remarked that any step on the part of the neutral Powers with a view to bring about an arrangement could only compli cate the actual difficulties. M. Mercier, in the letter in which he informed M. Thouvenel of that conver sation, added that the almost general opinion in America about the war was as follows: "Nobody pretends to reconnect the South to the Union against its will but only to give it a lesson, and to withdraw it from theinfluence of its present rulers, so that it might return of its own accord. The Federalists are determined to cagy out the t Soothehe end, and if, after that, the mority of the n population persist in wish ingto separate from the Union—well, it will be suffer ed to do 50.,, A despatch, bearing date April lath, throws a lit tle light upon the journey undertaken to Richmond by Baron Mercier, and which created such excite ment at the time. It appears that he undertook it at the suggestion of Mr. Seward himself, who then believed in the speedy reestablishment of the Union, and without having previously informed the French Government of hie intention. Before his departure M. Mercier came to an understanding with our am bassador, and repeated to. Mr. Seward that the ob ject of his journey was not connected with the recognition of the South, but only an attempt to bring about an arrangement.. The American Minister charged him to state at Richmond that the North was actuated by no sentiments of revenge, andthat great satisfaction would be off brded to the inhabitants by the sight of such. Senator& as the South might consent to send. Of the ..many conversations which 31. Mercier mentions having had at Richmond with several im portant personages, that with Mr. Benjamin de serves to be noted down. That gentleman said that the South had reckoned too much upon Europe and the power of the commercial interests in suspense; but that, nevertheless, the whole population was unanimous in desiring separation. The South had suffered much, but was resolved to suffer still more to reach that goal. " We do not dissemble from our selves," added Mr. Benjamin, "that the Federalists are possessed of resources much more considerable than ours, and that they may, in the end, gain pos session of all our ports; but if they take our cities they will only find therein worrier]; children, and old men. In the War of Independence, the English were, at one time, in possession of all the Cities situ ate on the seaboard; but, for all that, they did not succeed in carrying the day._The situation is pre cisely the same. The North combats, as England did formerly, to preserve her supremacy, and we to con quer our independence," &e. a * * After having related the above conversation in ez4 tenso, Baron Mercier adds that everybody held the same language. Nobody heralded to declare that the re-establishment of the Union was impossible. MR. BRIGHT ON AMERICAN AFFAIRS Mr. Bright, on the occasion of the annual banquet of the Birmingham Chamber of Commerce, deli vered the following address: • • • He did not think that success would at tend any attempt in Parliament to undo what wan done at the Congress of Paris in 1651. It did not, stop at a sensible point; but when it was altered; we should go forward .notbackward. The ships Or , belligerent Powers should be made as safe as the goods or belligerent Powers now are if conveyed in neutral vessels. Blockading, was a less horrible mode of warfare then cannonading, because it did not result in ao much loss of life. It was useless to contend that the more horrible warfarewas made the sooner people would require to put an end to it. It did not follow that because war disturbed the commercial element commercial men desired peace. The result of an armistice in America to-morrow would be ruin to many men in Liverpool, who con sidered themselves rolling in wealth. Blockades were virtually at an end. England could no longer blockade Russia, Prussia, France, Italy, Spain, or Austria. Railways bad stopped that. If they were to blockade the .Northern States of America, the price of wheat would be raised from 40s. to 100 s. per quarter. He believed that the interests of all na tions, and especially. of England, required that we should go forward, and not backward, in any changes of international law-making it more humane and more consistent with the moral code. Only England opposed the necessary changes. If war were made leas savage, if peace were made more pos sible by these changes, men would begin to look to• some new mode of settlement other than war. He instanced the Trent affair in which he declared that no insult was offered to England, and the Govern ment knew that no insult was offbred to England, but was not honest enough to let the people know it. • Consequently a savage feeling was aroused- Ten thousand men were sent to Canada in the depth of winter to coerce and menace a nation Which could Put a million of people in arms. [Disapprobation.] If we could cultivate a better temper in the peo ple, we could arrive at a settlement of quarrels equally just much. more speedy, and less costly in treasure and In life. After giving his approval to the cession or the lonian Inland; and urging a like step in the ease of Gibralter, Air. Bright adverted to the cotton difficulty in Lancashire.. He said the Atherican way had produced a strange paralysis in Lancashire. One party destroyed cotton, the other prevented its transport to England. The quantity of American cotton in existence was variously esti mated at about two to four millions of bales; but he believed the stock was really much below the higher figure. An armistice would produce a sudden fall in the present high prices, and sudden ruin to many. This led him to complain that the foreign Secretary, by declaring his opinion that the South would soon be independent of the North, and the Chancellor of the Exchequer, by his speech at Newcastle, had done great damage to the trading interests In Lancashire, because their remarks were acted upon as though. they were based upon authority,and special knowl edge, whereas they were as ignorant on the sutgect as ordinary . individuals. - He also charged the London Times ' with having, partly through ignorance and partly through malice, written such monstrosities about America as to cause. moat disastrous effects in Lancashire. - Where weight was attached to its utterance the results of itsialse brophesying had been that people were afraid to. do. usiness in•Laneasbire,' and the price of cotton. yarn. and cloth bad never risen proportion to. the rifle in. the raw material. With 400,900 bales now in, Liver pool,- there was only a slightuierease in the working of the mills, because of thecuncertalaty whether prices could be sustained. Mr. Riftht concluded with a peroration rejoiqing that, in sqlltoof all draw backs, the world was Meving.in the right direction, and be instanced the emancipation of the slaves in. America as one of the evidences. THE NEW CABINET OF O'DONNELL. MADRID, Jan. 17, 1863.—The new ministry has been formed, and is composed as follows President of the Cow:ma and Minister of War—. Marehel O'Donnell.' - Minister for Foreign Affairs—Marshal Terand. . Minister of the Interior—Marquis de Terri Ar• Ingo. Minister of Finanee—Senor Salarerria. Minister Minister of Public Works—Senor Santa Oruz Minister of Maine—Senor Logan.
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