Semi-atteltig Coht. WM. LEWIS, Editor and Proprietor A. TYHURST, Associate Editor, TEnTIS.—"Tez Gym" is patitstent twice a week at $1.150 a yeas-7b cents for six months-50 cents for three months—in advance. HUNTINGDON, PA. Thursday afternoon, Dec. 5, 1861 Our Flag Forever. THE NEWS. —Resolutions have been introduced in Congress declaring slaves of all re bels free, but the prevailing opinion in Washington appears to be in favor of letting slavery take care of itself. —Maj. Bowen, at the head of alann tired cavalry, attacked the forces of the notorious Freeman at Salem, Mo., on Saturday last, and completely rout ed them and held possession of the town. From 10 to 30 were killed and wounded on both sides. —George Opdyke, (Rep.) was elect ed Mayor of New York on Tuesday last, over two Democratic candidates. The vote was as follows : George Opdyke,(Rep.) - 25,259 C. G. Gunther, (him. - Dem.) 24,588 Fernando Wood, (Mozart) 24,185 —Ex-Senator Gwin and Calhoun Benham of California, have been set at liberty, and aro now in Washington. —ln the Senate on yesterday, Mr. Saulsbury offered a resolution appoint ing Edward Everett, Ex-Senator Pugh, George M. Dallas, Chief Justice Taney, and others, a commission, to meet a similar commission front the seceded States and arrange for a cessation of hostilities and a restoration of the Un ion. It was received with laughter and laid aside. —John C. Breekinridge was, on yes terday, expelled from the Senate by a unanimous vote. —No news of importance from thrs army on the Potomac. THE STATE OF THE NATION FIRST ANNUAL MESSAGE ABRAHAM LINCOLN, PRESIDENT of the UNITED STATES Read in Congress Tuesday De- comber 3d, 1861 Fellow-citizens of the Senate and House of Representatives: In the midst of unprecedented poli tical troubles, wo have cause of great . geatitude to God for unusual good health and most abundant harvests. You will not be surprised to learn that in the peculiar exigencies of the times, our intercourse with foreign na tions has been attended with profound solicitude, chiefly turning upon our. own domestic affairs. A disloyal por tion of the American people have, during the whole year, been engaged in an attempt to divide and destroy tho Union. A nation which endures factious do mestic division is exposed to disrespect abroad, and one party, if not both, is sure, sooner or later, to invoke foreign intervention. Nations thus tempted .to interfere are nota_ 1 ways able to re sist the counsels of seeming expedien cy and ungenerous ambition, although measures-adopted under such influen ces seldom fail to be unfortunate, and injurious to those adopting them. The disloyal citizens of the United States who have offered the ruin of our country in return for the aid and comfort which they have invoked abroad, have received less patronage and encouragement than they proba bly expected. If it were just to sup pose, as the insurgents have seemed to .assume, that foreign nations, in this case, discarding all moral, social and treaty obligations, would act solely :and selfishly for the most speedy res toration of commerce, including espe cially the acquisition of cotton, these nations appear as yet not to have seen their way to their object more directly or clearly through the destruction, than through the preservation of the Union. If we could dare to•believe that for eign nations are actuated by no higher principle than this, I am quite sure a sound argument could be made to show them that they can reach their aim more readily and easily by aiding to crush this rebellion, than by giving en couragement to it. The principal lever relied on by the insurgents for exciting foreign nations to hostility against us, as already intimated, is the embarrass ment of commerce. These nations, however, not' improbably saw from the first that it was the Union which made as well our foreign as our domestic commerce. They can scarcely have failed to perceive that the effort for disunion produces the existing difficul ty, and that one strong nation promi ses more durable peace and a more extensive and reliable commerce, than can the same nation broken into hos tile fragments. It is not my purpose to review our discussions with foreign States, because whatever might be their wishes or dispositions, the integ rity of our country and the stability of our Government, depends not upon them, but on the loyalty, virtue, patri otism and intelligence of the Ameri can people. The correspondence itself, with the usual reservations, lb herewith submit ted. I venture to hope it will appear that wo have practised prudence and liberality towards foreign powers, averting causes of irritation and with firmness maintaining our own rights and honor. Since, however, it is ap parent that here, its in every other .State, foreign dangers necessarily at -tend domestic difficulties, I recommend that adequate and am ple measures be adopted for maintain ing the public defences on every side, While udder this general recommen dation, provision for &kidding our sea coast line occurs to the mind. I also, in the same connection, ask the attention of Congress to our great lakes and rivers. It is believed that some fortifications and depots of arms and munitions, with harbor and navi gation improvements, all at well selec ted points upon these, would be of great importance to the national de fence and preservation. I ask attention to the views of the Secretary of War, expressed in his re- I port upon the same general subject. I deem it of importance that the loyal regions of East Tennessee and Wes tern North Carolina should be connec ted with Kentucky and other faithful parts of the Union by railroad. I therefore recommend, as h military measure, that Congress provide for the construction of such road as speedily as possible. Kentucky, no doubt, will co-operate and, through her Legisla ture, make the most judicious selection of a line. The Northern terminus must connect with some existing rail road, and whether the route shall be from Lexington or Nicholasville to the Cumberland Gap, or from Lebanon to the Tennessee line in the direction of Knoxtille, or on some still different line can readily be determined. Ken tucky and the General Government co-operating, the work can be comple ted in a very short time, and when done, it will be not only of vast pres ent usefulness, but also a valuable per manent improvement, with its cost, in all the future. Some treaties designed Chiefly for the interests of commerce, and having no grave political importance, have been negotiated, and will be submitted to the Senate for their consideration. Although we have failed to induce some of the commercial powers to adopt a desirable melioration of the rigor of a maritime war, we have re moved all obstructions from the way of this humane reform, except such as are merely of temporary and acciden tal occurrence. I invite your attention to the corres pondence between ller Britannic Maj esty's Minister, accredited to this Gov ernment, and the Secretary of State, relative to the detention of the British ship Perthshire, in June last, by the United States steamer Massachusetts, for a supposed breach of the blockade. As this detention was occasioned by an obvious misapprehension of the facts, and as justice requires that we should commit no belligerent act not founded in strict right as sanctioned by public _4w, I recommend that an appropriation be made to satisfy the reasonable demand of the owners of the vessel for her detention. I repeat the recommendation of my predecessor, in his annual message to Congress in December last, in regard to the disposition of the surplus which will probably remain after satisfying the claims of American citizens against China, pursuant to the aWards of the Commissioners under the act of the 3d of March, 1859. If, however, it should not be deemed advisable to carry that recommenda tion into effect, I would suggest that authority be given investing the prin cipal over the proceeds of the surplus referred to in good securities, with a view to the satisfaction of such other just claims of our citizens against Chi na as are not unlikely to arise hereaf ter in the course of our extensive trade with that empire. , • By the act of the sth of-August last, Congress authorized the ..President to instruct the Commanders'itc suitable vessels to defend themselvell against and capture pirates. This authority has been exercised in a single instance only. For the more effectual protec tion of our extensive and valuable commerce la the Eastern seas, especi ally, it seems to me that it would also be advisable to authorize the command ers of sailing vessels to recapture any prizes which pirates may make of Uni ted States vessels and their cargoes, and the Consular Courts now estab lished by law in Eastern countries to adjudicate the cases, in the event that this should not be objected to by the local authorities. If any good reason exists why we should persevere longer in withholding our recognition of the independence and sovereignty of Hay ti, I am unable to discover it. Unwilling, however, to inaugurate a novel policy in regard to them with out the approbation of Congress, I sub mit for your consideration the expedi ency of an appropriation for maintain ing a charge d'affeires near each of those new States; it does not admit of a doubt that important commercial ad vantages might be secured by favora ble treaties with them. The operations of the Treasury du ring the period which has elapsed since your adjournment, have been conduc ted with signal success. The patriot ism of the people has placed at the dis posal of the Government, the large means demanded by the public exigen cies. Much of the National Loan has been taken by citizens of the industri- ' al classes, whose confidence in their country's faith and zeal, for their coun try's deliverance from the present peril have induced them to contribute to the support of the Government the whole of their limited acquisitions. This fact imposes peculiar obligations upon us to economy in disbursement and ener gy in action. The revenues from all sources, in cluding loans for the financial year, ending on the 30th of June, 1861, was $86,835,900 27, and the expenditures for the same period, :including pay ments on account of the public debt, were $84,578,834 47, leaving a balance in the Treasury, on the Ist of July, of $2,257,065 80. For the first quarter of the financial year, ending on the 30th of September, 1801, the receipts from all sources, including the balance of the Ist of July, were 3102,532,609 27, and the expenses $98,239,733 09, leav ing a balance on the Ist of October, 1861, of $4,292,776 18. Estimates for the remaining three quarters of the year, and for the finan cial year of 1803, together with his view of ways and moans fur meeting the demands contemplated by them, will be submitted to Congress by the Secretary of the Treasury. It is gratifying to know that the ex penditures made necessary by the re bellion are not beyond the resources of the loyal people, and to believe that the same patriotism which has thus far szstilined the Government will continue to sustain it till peace 'and union shall again bless the land. I respectfully refer to the report of the Secretary of War for infOrmation respecting the numerical strength of the army and for recommendations, having in view an increase of its effi ciency and the well-being of the vari ous branches of the service entrusted to his care. It is gratifying to know that the patriotism of the people has proved equal to the occasion, and that the number of troops tendered greatly exceeds the force which Congress au thorized me to call into the field. .I. refer with pleasure to those por tions of his report which make allusion to the creditable degree of discipline already attained by our troops and to the excellent sanitary condition of the entire army. The•recommendation of the Secre tary for an organization of the militia upon an uniform basis, is a suitject of vital importance to the future safety of the country, and is commended to the serious attention of Congress. The large addition to the regular army in connection with the defection that has so considerably; diminished the number of its officers, gives pecu liar importance to his recommendation for increasing the corps of Cadets to the greatest capacity of the Military Academy. By mere omission, I presume, Con gress has failed to provide Chaplains for hospitals occupied by volunteers.-- This subject was brought to my notice, and I was induced to draw up the form of a letter, one copy of which, proper ly addressed, has been delivered to each of the persons, and at the dates, re spectively named, and stated in a schedule containing also the form of the letter (letter marked A,) and here with transmitted. The gentlemen I understood entered upon the duties designated at the times respectively stated in the schedule, and have labored faithfully there over since. I therefore recommend that they be compensated at the same rate as• Chaplains in the Army, further sug gesting that general provision be made fo• Chaplains to serve at Hospitals as wells as with. ,regiments. The report of the Secretary of the Navy presents in detail the operations of that branch of the service, the activity and energy which have characterized its adminis tration and the results of the measures to increase its efficiency and power. Such have been the additions by construction and purchase, that it may almost be said a Navy has been crea ted and brought into service since our difficulties commenced. Besides block ading our extensive coast, squadrons larger than ever before assembled un der our flag, have been put afloat and performed deeds which have increased 1 our Naval renown. I would invite special attention to the recommendations of the Secretary for a more perfect organization of the Navy, by introducing additional grades in the service. The present organiza tion is defective and unsatisfactory, and the suggestions submitted by the Department, will, it is believed, if adopted, obviate the difficulties alluded to, promote harmony and increase the efficiency of the Navy. There are three vacancies on the bench of the Supreme Court; two by the decease of Justices Daniel and McLean, and one by the resignation of Justice Campbell. I have so far forborne snaking nominations to fill these vacancies for reasons which I will now state : Two of the out-going Judges resided within the States now overrun by revolt, so that if their suc cessors were appointed in the same lo calities, they could not now serve upon their circuit, and many of the most competent men there, probably would not take the personal hazard of ac cepting to serve, evon here, upon the Supreme Bench. I have been unwil ling to throw all the appointments Northward, thus disabling myselffrom doing justice to the South on the re turn of peace, although I may remark that to transfer to the North one which has heretofore been in the South, would not, with reference to territory and population, be unjust. During the long and brilliant judi cial career of Judge McLean, his cir cuit grew into an empire altogether too large for any one Judge to give the Courts therein more than a nomi nal attendance, rising in population from 1,470,018 in 1830, to 6,151,405 in 1800. Besides:this, the country gene rally has outgrown our present judi cial system. If uniformity was at all intended, the system requires that all the States shall be accommodated with Circuit Courts attended by Supreme Judges, while, in fact, Wisconsin, Min nesota, lowa, Kansas, Florida, Texas, California and Oregon have never had any such Courts. Nor can this well be remedied, with out a change of the system, because the adding of Judges to the Supreme Court, enough for the accommodation of all parts of the country with Circuit Courts, would create a Court altogeth er too numerous for a judicial body of any sort. And the evil, if it be one, will increase as new States come into the Union. Circuit Courts aro useful, or they are not useful. If useful, no State should be denied them. If not useful, no State should have them.— Let them be provided for all, or abol ished to all. Three modifications occur to me, either of which I think would be an improvemontupon our present system. Let the Supreme Court ho of conve nient number in every event. Then first, let the whole country be divided into circuits of convenient size, the Supreme Judges to servo in a number of thCm corresponding to their own number, and independent Circuit Judges be provided for all the rest; or, secondly, let the Supremo Judges be relieved fl•om Circuit duties, and Cir cuit Judges provided for all the Cir. enits ; or, thirdly, dispense with tho Circuit Courts all together, leaving the Judicial functions wholly to the Dis trict Court and an independent Su, promo Court. I respectfully recommend to the consideration of Congress the present condition of the Statute Laws with the hope that Congress will be ablo to find an easy remedy for many of the in conveniences and evils whichconstant ly embarrass those in the practical ad ministration of thorn. Since the or ganization of Government, Congress has enacted some five thousand acts and joint resolutions, which fill more than six thousand closely printed pages, and are scattered through many vol- Many of these acts Wive been draWn in haste and Without sufficient caution, So that their provisidns are often oh- . scare in themselves, or In conflict with each other, ;_ dr, at least, sd doubtful as to render it very difficult for even the best inforniod to ascertain precisely what the statute Imi/really is, It seems to me very important that the statute laws should be made as plain hod in telligible as possible, and be reduced to as small a compass as may consist, with the fullness and precision of the Legislature and the perspicuity of its language. This, well done, would, I think, greatly facilitate the labors of those whose duty it is to assist in the administration of the laws, and would be a lasting benefit to the people by placing before them, in a more accepta ble and intelligible form, the laws which so deeply concern their interests and their duties. I am informed by some, whose opinions I respect, that all the acts of Congress now in force, and of a permanent and general na ture, might be revised and re-written, so as to be embraced in one volume, or, at most, in two volumes, of ordi nary and commercial size, and I re spectfully recommend to Congress to consider on the subject, and if my sug gestion be approved, to devise such plan as to their wisdom shall seem most proper for the attainment of the end proposed. One of the unavoidable consequen ces of the present insurrection, is the entire suppression in many places of all the ordinary means of administer ing civil justice by the officers, in the form of existing law. This is the case, in whole or in the part, in all the in surgent States, and as our armies ad- Vance upon and take possession of parts of those States, the practical evil be comes more apparent. There are no courts nor officers to whom the citizens of other States may apply fur the enforcement of their law ful claims against citizens of the in surgent States, and there is a vast amount ofdebt constitutingsuch Some have estimated it as high as $200,000,000 due in large part from in surgents in open rebellion to loyal citi zens, who arc even now making great sacrifices in the discharge of their pa triotic duty to support the Government. Under these circumstances, I have been urgently solicited to establish, by Mil itary power, courts to administer sum mary justice in such cases. I have thris far declined to do it; not because I had any doubt that the end proposed—the collection of the debts—was just and right in itself, but because I have been unwilling to go beyond the pressure of necessity in the unusual exercise of power. But thepowers of Congress, I suppose, are equal to the anomalous occasion, and therefore I refer the whole matter to Congress, with the hope that a plan may be devised for the adminis tration of justice in all such parts of the insurgent States and Territories as may be under the control of this Gov ernment, whether by a voluntary re turn to allegiance and order, or by the power of our arms. This, however, is not to be a perma nent institution, but a temporary sub stitute, and to cease as soon as the or dinary courts can be re-established in peace. It is important that sonic more convenient means should be provided, if possible, for the adjustment of claims against the Government, especially in view of their increased number by reason of the War. It is as much the duty of Government to render prompt justice against itself in favor of citi zens, as it is to administer the same between private individuals. The in vestigation and adjudication of claims in their nature belong to the judicial department. Besides, it is apparent that the attention of Congress will be more than usually engaged some time to conic with great National questions. It was intended by the organization of the Court of Claims mainly to re move this branch of business from the halls of Congress, but while the Court has proved to be an effective and val uable means ofinvestigation, it, ingreat degree, fails to effect the object of its creation for want of the power to make its judgments final. Fully aware of the delicacy, not to say the danger of the subject, I commend to your care ful consideration whether this power of making judgments final, may not properly be given to the Court reser ving the right of appeal, on questions of law to the &Treble Court, with such other provisions as experience may have shown to be necessary. I ask attention to the report of the Postmaster General, the following be ing a summary statement of the con dition of the Department. The reve nue front all sources during the fiscal year, ending Juno 30, 1861, including the annual permanent appropaation of $700,000 for the transportation of free mail matter, was 89,047,290 40, being almost two per cent, less than the revenue, for 1860. The expenditures., were $13,606, 759, 11; showing a de crease of more than eight per cont. as compared with those of the previous year, and leaving an excess of expen ditures over the revenue for the last fiscal year of $4,557,402.79. The gross revenue for the year ending Tune 30th, 1803, is estimated at an increase of four per cent. on that of 1861, ma king $8,683,000, to which should be added the earnings of the Department in carrying free matter, viz., $700,000, making $9,383,000. The total expenditures for 1863 are estimated at $12,528,000, leaving an estimated deficiency of $3,145,000, to be supplied from the Treasury, in addi tion to the permanent appropriation. The present insurrection shows, I think, that the extension of this dis trict across the Potomac river at the time of establishing the Capitol here, was eminently wise, and consequently that the relinquishment of that por tion of it which lies within the State of Virginia, was unwise and danger ous. I submit for your consideration the expediency of regaining that part of the district, and the restoration of the original boundaries thereof, through negotiations with the State of Virgin ia. The report of the Secretary of the Interior, with the accompanying doc uments, exhibits the condition of the several branches of the public business pertaining to that Department. The depressing influences of the insurrec tion have been especially felt in the operations of the T?atent and General Land Offices. The cash receipts from the sales of public lands, during the past year, have exceeded the expenses of our land sys tem only about f 200,500. The Afties have heen . entirely suspended in the Southern States, while the interrup tions to the business of the cotintry, and the diversion of large numbers of men to military service; have restrict ed settlenients in the new States and territories of the Northwest. The receipts of the Patent Office have declined in nine indnthis about $lOO,OOO, middling a large deduction df the, force enipldyed necessary, to make it self-sustaining, The demands upon the Pension Of fice will be largely- increased by the insurrection. Numerous applications for pensions, based upon the casualties of the exist ing war, have already been made. There is reason to bolith‘o that many who are now upon the pension rolls, and in receipt of the bounty of the Government, are in the ranks of the insurgent army, or giving them aid and comfort. The Secretary of the Interior has directed a suspension of the payment of the pensions of such persons upon proof of their disloyalty. I recommend that Congress author ize that officer to cause the names of such persons to be stricken from the pension rolls. The relations of the Government with the Indian tribes have been great ly disturbed by the insurrection, es pecially in the Southern Superinten dency and in that of New Mexico.— The Indian country south of Kansas is in the possession of insurgents from Texas and Arkansas. Teo agents of the United States Government, appointed since the 4th of March for this superintendency, have been unable to reach their posts, while the most of those who wore in the office before that time, have es poused the insurrectionary cause, and assume to exercise the power of agents by virtue of commissions from the in surrectionists. It has been stated in the public press that a portion of these Indians have been organized as a military force, and are attached to the army of the insur gents. Although the Government has no official information upon this sub ject, letters have been written to the Commissioners of Indian Affairs by several prominent Chiefs, giving assu rance of their loyalty to the United States, and expreising a to, for the presence of Federal troops to protect them. It is believed that upon the re possession of the country, by the Fed eral forces, the Indians will readily cease all hostile demonstrations and resume their former relations _to the Government. Agriculture, confessedly the largest interest of the nation, has not a De partment nor a bureau, but a clerkship only assigned to it in the Government. While it is fortunate that this great interest is so independent in its nature as to not have demanded and extorted more from the Government, I respect fully ask Congress to consider whether something more cannot be given vol untarily with general advantage. Annual reports exhibiting the con dition of our agriculture, commerce and manufactures, would present a fund of information of great practical value to the country. While I make no suggestion as to details, I venture the opinion that an Agricultural and Statistical Bureau might profitably be organized. The execution of the laws for the suppression of the African Slave Trade, has been confided to the Department of the Interior. It is a subject of gratu lation that the efforts which have been made for the suppression of this inhu man traffic, have been recently atten ded with unusual success. Five ves sels being fitted out for the slave trade have been' seized and condemned. Two mates of vessels engaged in the trade, and one person engaged in equipping a slaver, have been convicted and sub jected to the penalty of fine and im prisonment; and.. one captain taken with a cargo of Africans on board his vessel, has been convicted of the high est grade of offence under our laws, the punishment of which is death. The Territories of Colorado, Dako tall and Nevada, created by the last Congress, have been organized, and civil administration has been inaugu rated therein under auspices especially gratifying, when it is considered that the leaven of treason was found exist ing in some of these new countries when the Federal officers arrived there. The abundant native resources of these territories with the security and pro tection offered by an organized Gov ernment, will doubtless invite to them a large immigration, when peace shall restore the business of the country to its accustomed channels. I submit the resolutions of the Leg islature of Colorado, which evidence the patriotic spirit of the people of the Territory. So far the authority of the United States has been upheld in all the Ter ritories, as it is hoped it will be in the future. I commend their interests and defence to the enlightened and gener ous care of Congress. I recommend to the fitvorablo con sideration of Congress the interests of the District of Columbia. The insur rection has been the cause of much suffering and sacrifice to its inhabitants, and as they have no representative in. Congress, should not overlook their just claims upon the Government. At your late Session a joint resolu tion was adopted authorizing the Pres ident ta take measures for facilitating a proper representation of the indus trial interests of the United States, at the Exhibition of the Industry of Na tions, to be holden at London in the year 1862. I regret to say, I have been unable to give personal attention to this sub ject—a subject at once sointeresting iu itself, and so extensively and Intl mately connected with the material prosperity of the world. Through the Secretaries of State and of the Interi or, a plan or system has been devised and partly matured, and which will be laid before you. Under arld by virtue of the act of Congress, entitled An Act to Confis cate Property used for Insurroetlonary Purposes, approved August 6th, 1861, the legal claims of certain persons to the hlbor and service of certain other persons have become forfeited, and numbers of the latter thus liberated are already dependant on the United States, and must be provided for in some way. Besides this it is not im possible that some of the States will pass similar enactments for their own benefit respectively, and by operation of which persons of the same class will he thrown upon them for disposal. , • In .such case, I recommend that Con gress provide for accepting such per sons front Such Staters acedrding to some mode df valdatidd- lieu pro tanfd Of direct taxes, or iiptiri Some other plan td be agieed upon with Stich States reSpectfiilly,. that midi:persons on such accePtiincbS by • the General Government be at once - deemed free, and that in any ,event steps be taken for colonizing both classes (or the one first mentioned if the other shall not be brought into existence,) at some place or places in a climate congenial to them. It might be well to consider too, whether the free, colored people already in the United States, could not so far as individuals may desire, be in eluded in such colonization. To carry out the plan of coloniza tion may Involve the acquiring of ter ritory and also the appropriation of money beyond that to be expended in the territorial acquisition. Having practised the acquisition of territory for nearly sixty years, the question of the Constitutional power to do so is no longer an open one With Ws. Tho power was questioned at first by Mr. Jefferson, who, however, in the pur- I chase of Louisiana, yielded his scru ples on the plea of great expediency. If it be said that tho only legitimate object of acquiring territory is to fur nish homes for white men, this meas ure effects that object, for emigration of colored men leaves additional room for white men remaining or coming here. Mr. Jefferson, however, placed the importance of procuring Louisiana more on political and commercial grounds, than on providing room for population. On 'this whole proposition, including the appropriation of money, with the acquisition of territory, does not the expediency amount to absolute neces sity, without which the Government itself cannot be perpetuated if the war continues. In considering the policy to be adop ted for suppressing the insurrection, I have been anxious and careful that the inevitable conflict for this purpose shall not degenerate into a violent and remorseless revolutionary struggle. I have, therefore, in every case, thought it proper to keep tho integrity of the Union prominent as the primary ob ject of the contest on our part, leaving all questions which aro not of' vital military importance, to the more de liberate action of the legislature. In the exercise of my best discre tion, I have adhered to the blockade of the ports held by the insurgents, in stead of putting in force by proclama tion the law of Congress enacted at the late session for closing these ports. So also, obeying the dictates of pru dence as well as the obligations of law, instead of transcending I have adhered to the act of Congress to confiscate property used for insurrectionary pur poses. If a now law upon the same subject shall be proposed, its propriety will be duly considered. The Union must be preserved, and hence all indispensable means must be employed. We shall not be in haste to determine that radical and extreme measure, which may reach the loyal as well as the disloyal, are indispensa ble. The inaugural address at the begin ning of the Administration and the message to Congress at the late special session, were both mainly devoted to the domestic controversy out of which ' the insurrection and consequent war have sprung. Nothing more occurs to add or ab stract to or from the principles or gen eral purposes stated and expressed in that document. The last ray of hope for preserving the Union, peaceably, expired at the assault upon Fort Sum ter, and a general review of what has occurred since, may not be unprofitable. What was painfully uncertain then, is much better defined and more dis tinct now, and the progress of events is plainly in the right direction. Tho insurgents confidently claimed a strong support from north of Mason and Dix on's line, and the friends of the Union were not free from apprehension on that point. This, however, was soon settled definitely, and on the right side. South of the line, noble little Delaware led off right from the first. Maryland was made to seem against the Union. Our soldiers were assault ed, bridges were burned, and railroads torn up within her limits, and we were many days, at ono time, without the ability to bring a single regiment over her soil to the Capitol. Now her bridges and railroads are repaired and open to the Government. She already gives seven regiments to the cause of the Union, and none to the enemy, and her people at a regular election, have sustained the Union by a large major ity, and a larger aggregate vote than they ever before gave to any candi date on any question. Kentucky, too, for some time in 'doubt, is now decidedly, and, I think, unchangeably, ranged on the side of the Union. Missouri is comparative ly quiet, and I believe cannot again be overrun by the insurrectionists. These three States of Maryland, Kentucky and Missouri neither of which would promise a single soldier, at first, have now an aggregate of not less than for ty thousand in the field for the Union, while of their citizens certainly not more than a third of that number, and they of doubtful whereabouts and doubtful existence, are in arms against it, after a somewhat bloody struggle of months. Winter closes on the Union people of Western Virginia, leaving them masters of their own country. An insurgent force .of about fifteen hundred for months dominating the narrow peninsular region of the coun ties of A.cconme and Northampton, and known as the Eastern Shore of Vir ginia, together with some contiguous parts of Maryland, have laid down their arms, and the people thero have renewed their allegiance to and ac cepted the protection of the old flag. This loaves no armed insurrection north of the Potomac or oast of the Chesapeake. Also, wo have obtained a footing at each of the isolated points on the southern coast of Hatteras, Port Roy al, Tybeo Island, near Savannah, and Ship Island; and we likewise have some general accounts of popular movements in behalf of the Union, in North Carolina and Tennessee. These things demonstrate that the cause of the Union is advancing steadily south, ward. Since. your last adjournment, Lieut. General Scott has retired from the head of the army. During his long life the nation has not been unmindful of his Merit. Yet, s on calling to mind hoW faithfully, ably and brilliantly he had served the country for a time far back in obi , histOry, when few of the now living had been born, and thence forward con tinnally, I cannot but think We arc still his debtors. I submit; therefore, for your consideration, what further mark of recognition is due to him and to ourselves as zi grateful peOple. With the retiremeut'of Gen. Scott, came the exeeutiVe duty of appointin g in his stead a General-in-Clnef of the army. It is a fortunate circumstance that neither in council or country was there, so far as I know, any difference of opinion as to the proper person to be selected. - The retiring 'Chief roz peatodly exprosSed his judgment in favor of General McClellan for the po sition, and in this the 'nation decreed to give a unanimous concurrence. The designation 'or Gen. McClellan is therefore in a considerable degree, the selection of the country as well as of the Executive, and licilo .there better reason to hope that there be given him the Confidence' and cur , dial support thus, by fair implication, ' promised, and without which he can= not with so full efficiency serve thd country. It has been 'said that one bad general is better than two good ones, and the saying is true, if taken to mean no more than that our army is better directed by a single mind, though inferior, than by two superior ones, at variance and cross. purposes with each other. And the same is true in all joint observations wherein those engaged can have none but a common end in view and can' differ only as to the choice ofmeans. In a storm at sea, no one on board can wish the ship to sink, and Yet, not unfrequently, all go down - together, because too many will direct and no single mind can be allowed to, control. It continues to develop that-the in surrection is largely, if not exclusive ly, a war upon the 'first prineiptcs of popular Government—the rights of the people. Conclusive evidence of this is found in , the most g rave and maturely considered public documents as well as in the general tone of the insurgents. In these documents we find the abridgement of the existing right of suf frage, and the denial to the people of all right to participate in the selection of public officers, except the Legislature, boldly advocated, with labored argu ments, to prove that largo control,of the people in Government is the source of all political evil. Monarchy itself is sometimes hinted at as a possible refuge from the power of the people. In my present position Icouldsearce ly be justified were I to omit raising a warning voice against this approach of returning despotism. It is not needed nor fitting here that a general argument should be made in favor of popular institutions. But there is One point, with' its connections, not. so hackneyed as most others, to id" I ask a brief attention. It is the effort to place capital on an equal footing with if not above labor, in the structure of the Government_ It is assumed that labor is available only in connection with capital, that nobody labors unless somebody else owing capital, somehow by the_nseL of it, induces him to labor. This resumed, it is next considered whether it is best that capital shall hire laborers, and thus induce them to work by their owtr consent, or buy them and drive them to it without their consent. • Having proceeded so far, it is nittu rllly concluded that all laborers aro either hired laborers or what we call slaves. And further, it is assumed, that whoever is once a hired laborer, is fix ed in that condition for life. Now there is no such relation between capital and labor, as assumed, nor is there any such thing as a free man being fixed for life in the rendition of a hired la-. borer. Both these assumptions are false, and all inferences from them are groundless. Labor is prior to and in dependent of capital. Capital is only the fruit of labor and could never have existed if labor had not first existed, Labor is the superior of capital and deserves much the higher considera tion. Capital has its rights, which aro as worthy of protection as any other rights. Nor is it denied that there is and probably always will be a relation between labor and capital, producing mutual benefits. The error is in as suming that the whole labor of the community exists within that relation. A few men own capital and that few avoid labor, or buy another few to la bor for them. A large majority belong to neither class, neither work for oth ers nor have others working for them. In most of the Southern States a ma jority of the whole people, of all col ors, aro neither slaves nor masters, while in the Northern, a large major ity are neither hirers nor hired. Men with thoir families, wives, sons and daughters, work for themselves on their fitrins, in their houses, and in their ships, taking the, product to themselves, and asking no fiwors of capital on the one hand nor of hired laborers or slaves on the other. It is not forgotten that a considerable num ber of persons mingle their own labor with their capital—that is, they labor with their own hands and also buy or hire others to labor for them; but this is only a mixed and not a distinct class, No principle stated is disturbed by thia existence of this mixed class, Again,as has already been said, there is not of necessity any such thing as the free hired laborer being fixed to that condition for life. Many indopen, dent mon everywhere in those States, a few years back In their lives were hired laborers. The prudent, penniless beginner in the world, labors for wages awhile, saves a surplus with-which to buy tools or land for himself; then labors on his own account another while, and at length hires another new beginner to help him, 'this is the just, and generous and prosperous system which opens the way to all, and consequently energy and progress and improvement of con dition to all. No men living aro more worthy to be trusted than those who toil up from poverty. None less inelined to take or touch aught whleh they have not honestly earned. Let them beware of surren dering a political power which• they already possess, and which, if surren dered will surely be used to close the door of advancement against such as they, and to fix new disabilities and burdens upon them, till 411 of liberty shall he lost,