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meeting the demands contemplated by them. | will be submitted to Congress by the Secretary of the Treasury. It is gratifying to know that the expenditures made necessary by the rebellion are not beyond the resources of the loyal people, and to believe that the same patriotism which has thus far sustained 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 efficiency and the well-being of the various branches of the service intrusted 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 authorized me to call into the field.

I refer with pleasure to those portions 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 Secretary for an organization of the militia upon a uniform basis, is a subject 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 peculiar importance to his recommendation for increasing the corps of cadets to the greatest capacity of the Military Academy.

By mere omission, I presume, Congress 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, properly addressed, has been delivered to each of the persons, and at the dates respectively named and stated, in a schedule, containing also the form of the letter, marked A, and herewith transmitted.

mendation of the Secretary for a more perfect organization of the navy by introducing additional grades in the service.

The present organization 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 making nominations to fill these vacancies for reasons which I will now state. Two of the outgoing judges resided within the State now overrun by revolt; so that if successors were appointed in the same localities, they could not now serve upon their circuits; and many of the most competent men there probably would not take the personal hazard of accepting to serve, even here, upon the supreme bench. I have been unwilling to throw all the appointments northward, thus disabling myself from doing justice to the South on the return 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 judicial career of Judge McLean his circuit grew into an empire-altogether too large for any one judge to give the courts therein more than a nominal attendance-rising in population from one million four hundred and seventy thousand and eighteen, in 1830, to six million one hundred and fifty-one thousand four hundred and five in 1860.

Besides this, the country generally has outgrown our present judicial 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, Minnesota, Iowa, Kansas, Florida, Texas, California, and Oregon, have never had any such courts. Nor can this well be remedied without a change of the system; because the adding of judges to the Su

These gentlemen, I understand, entered upon the duties designated, at the times respectively stated in the schedule, and have labored faith-preme Court, enough for the accommodation of fully therein ever since. I therefore recommend that they be compensated at the same rate as chaplains in the army. I further suggest that general provision be made for chaplains to serve in hospitals, as well 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 administration, and the results of 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 created and brought into service since our difficulties commenced.

Besides blockading our extensive coast, squadrons larger than ever before assembled under our flag have been put afloat and performed deeds which have increased our naval

renown.

I would invite special attention to the recom

all parts of the country, with circuit courts, would create a court altogether 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 are 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 abolished as to all.

Three modifications occur to me, either of which, I think, would be an improvement upon our present system. Let the Supreme Court be of convenient number in every event. Then, first, let the whole country be divided into circuits of convenient size, the supreme judges to serve in a number of them corresponding to their own number, and independent circuit judges be provided for all the rest. Or, secondly, let the supreme judges be relieved from circuit duties, and circuit judges be provided for all the circuits. Or, thirdly, dispense with

circuit judges altogether, leaving the judicial right in itself, but because I have been unwillfunctions wholly to the district courts and an ing to go beyond the pressure of necessity in independent Supreme Court.

the unusual exercise of power. But the pow. I respectfully recommend to the considera- ers of Congress I suppose are equal to the anom. tion of Congress the present condition of the alous occasion, and therefore I refer the whole statute laws, with the hope that Congress will matter to Congress, with the hope that a plan be able to find an easy remedy for many of the may be devised for the administration of jusinconveniences and evils which constantly em- tice in all such parts of the insurgent States barrass those engaged in the practical admin- and Territories as may be under the control of istration of them. Since the organization of this Government, whether by a voluntary rethe Government, Congress has enacted some turn to allegiance and order, or by the power five thousand acts and joint resolutions, which of our arms. This, however, not to be a perfill more than six thousand closely printed manent institution, but a temporary substitute, pages, and are scattered through many volumes. and to ceave as soon as the ordinary courts can Many of these acts have been drawn in baste, be re-established in peace. and without sufficient caution, so that their It is important that some more convenient provisions are often obscure in themselves, or means should be provided, if possible, for the in conflict with each other, or at least so doubt. adjustment of claims against the Government, ful as to render it very difficult for even tho especially in view of their increased number by best informed persons to ascertain precisely reason of the war. It is as much the duty of what the statute law really is.

Government to render prompt justice against itIt seems to me very important that the statute self, in favor of citizens, as it is to administer laws should be made as plain and intelligible the same between private individuals. The inas possible, and be reduced to as small a com- vestigation and adjudication of claims, in their pass as may consist with the fullness and pre- | naturo belong to the judicial department; becision of the will of the legislature, and the sides, it is apparent that the attention of Conperspicuity of its language. This, well done, gress will be more than usually engaged, for some would, I think, greatly facilitate the labors of time to come, with great national questions. It those whose duty it is to assist in the adminis- was intended by the organization of the Court tration of the laws, and would be a lasting of Claims mainly to remove this branch of busi. benefit to the people, by placing before them, ness from the Ilalls of Congress; but while the in a more accessible and intelligible form the court has proved to be an effective and valuable laws which so deeply concern their interest and means of investigation, it in a great degree fails their duties.

to effect the object of its creation, for want of I am informed by some whose opinion: I re- power to make its judgments final. spect that all the acts of Congress now in force, Fully aware of the delicacy, not to say the and of a permanent and general nature, might danger, of the subject, I commend to your carebe revi ed and rewritten, so as to be embraced ful consideration whether this power of making in one volume (or at most two volumes) of or- judgments tinal may not properly be given to dinary and convenient size. And I respectfully the court, reserving the right of appeal on recommend to Congress to consider of the sub- questions of law to the Supreme Court, with ject, and, if my suggestion be approved, to de- such other provisions as experience may have vise such plan as to their wisdom shall seem shown to be necessary. most proper for the attainment of the end pro- I ask attention to the report of the Postmas. posed.

ter General, the following being a summary One of the unavoidable consequences of the statement of the condition of the Department: present insurrection is the entire suppression, The revenue from all sources during the fiscal in many places, of all the ordinary means of year ending June 30, 1861, including the annual administering civil justice by the officers, and permanent appropriation of $700,000 for the in the forms of existing law. This is the case, transportation of free mail matter, was $9,049,in whole or in part, in all the insurgent States; 296 40, being about two per cent. less than the and as our armies advance upon and take pos- revenue for 1860. session of parts of those States, the practical The expenditures were $13,606,750 11, show. evil becomes more apparent. There are no ing a decrease of more than eight per cent, as courts nor officers to whom the citizens of other compared with those of the previous year, and States may apply for the enforcement of their leaving an excess of expenditure over the reve. lawful claims against citizens of the insurgent nue for the last fiscal year of $4,557,462 71. States; and there is a vast amount of debt con- The gross revenue for the year ending June stituting such claims. Some have estimated it 30, 1863, is estimated at an increase of four per as high as $200,000,000, due, in large part, cent on that of 1861, making $8,683,000, to from insurgents, in open rebellion, to loyal cit- which should be added the carniugs of the De. izens, who are, even now, making great sacri-partment in carrying free matter, viz: $700,000, fices in the discharge of their patriotic duty to making $9,383,000. support the Government.

The total expenditures for 1863 are estimated Under these circumstances, I hare been ur- at $12,528,000, leaving an estimated deficiency gently solicited to establish, by military power, of $3,145.000, to be supplied from the Treas. courts to administer summary justice in such ury, in addition to the permanent appropriation. cases. I have thus far declined to do it, not The present insurrection shows, I think, that because I had any doubt that the end proposed the extension of this District across the Poto, -the collection of the debts-was just and mac river, at the time of establishing the capi.

tal here, was eminently wise, and consequently | all hostile demonstrations, and resume their that the relinquishment of that portion of it former relations to the Government. which lies within the State of Virginia was unwise and dangerous. 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 Virginia.

The report of the Secretary of the Interior, with the accompanying documents, exhibits the condition of the several branches of the public business pertaining to that Department. The depressing influences of the insurrection have been especially felt in the operations of the Patent and General Land Offices. The cash receipts from the sales of public lands during the past year have exceeded the expenses of our land system only about two hundred thousand dollars. The sales have been entirely suspended in the southern States, while the interruptions to the business of the country, and the diversion of large numbers of men from labor to military service, have obstructed settle ments in the new States and Territories of the Northwest.

Agriculture, confessedly the largest interest of the nation, has, not a department, nor bureau, but a clerkship only, assigned to it in the Government. While it is fortunate that this great interest is so independent in its na ture as to not have demanded or extorted more from the Government, I respectfully ask Congress to consider whether something more cannot be given voluntarily, with general advantage.

Annual reports, exhibiting the condition of our agriculture, commerce, and manufactures would present a fund of information of great practical value to the country. While I make no suggestions 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 gratulation that the efforts which have been made for the suppression of this inhuman traffic have been recently attended with unusual The receipts of the Patent Office have declined success. Five vessels being fitted out for the in nine months about one hundred thousand slave trade have been seized and condemned. dollars, rendering a large reduction of the force Two mates of vessels engaged in the trade, and employed necessary to make it self-sustaining. one pe son in equipping a vessel as a slaver, The demands upon the Pension Office will be have been convicted and subjected to the penlargely increased by the insurrection. Numer-alty of fine and imprisonment, and one captain, ous applications for pensions, based upon the casualties of the existing war, have already been made. There is reason to believe that many who are now upon the pension rolls, and in receipt of the bounty of the Government, are The Territories of Colorado, Dakotah, and in the ranks of the insurgent army, or giving Nevada, created by the last Congress, have been them aid and comfort. The Secretary of the organized, and civil administration has been Interior has directed a suspension of the pay-inaugurated therein under auspices especially ment of the pensions of such persons upon proof of their disloyalty. I recommend that Congress authorize that officer to cause the names of such persons to be stricken from the pension rolls.

taken with a cargo of Africans on board his vessel, has been convicted of the highest grade of offence under our laws, the punishment of which is death.

gratifying, when it is considered that the leaven of treason was found existing in some of these new countries when the Federal officers arrived there.

Territory. So far the authority of the United States has been upheld in all the Territories, as it is hoped it will be in the future. I commend the ir interests and defence to the enlightened and generous care of Congress.

The abundant natural resources of these The relations of the Government with the Territories, with the security and protection Indian tribes have been greatly disturbed by afforded by organized government, will doubtthe insurrection, especially in the southern less invite to them a large immigration when superintendency and in that of New Mexico. peace shall restore the business of the country The Indian country south of Kansas is in the to its accustomed channels. I submit the respossession of insurgents from Texas and Ar-olutions of the Legislature of Colorado, which kansas. The agents of the United States, ap-evidence the patriotic spirit of the people of the pointed since the 4th of March, for this superintendency have been unable to reach their posts, while the most of those who were in office before that time have espoused the insurrectionary cause, and assume to exercise the powers of agents by virtue of commissions I recommend to the favorable consideration from the insurrectionists. It has been stated of Congress the interests of the District of Coin the public press that & portion of those In-lumbia. The insurrection has been the cause dians have been organized as a military force, and are attached to the army of the insurgents. Although the Government has no official information upon this subject, letters have been written to the Commissioner of Indian Affairs by several prominent chiefs, giving assurance of their loyalty to the United States, and expressing a wish for the presence of Federal troops to protect them. It is believed that upon the repossession of the country by the Federal forces the Indians will readily cease

of much suffering and sacrifice to its inhabitants, and as they have no representative in Congress, that body should not overlook their just claims upon the Government.

At your late session a joint resolution was adopted authorizing the President to take measures for facilitating a proper representation of the industrial interests of the United States at the exhibition of the industry of all nations to be holden at London in the year 1862. I regret to say I have been unable to

give personal attention to this subject~a sub-to the more deliberate action of the Legisla. ject at once so interesting in itself, and so ex- ture. tensively and intimately connected with the In the exercise of my best discretion I have material prosperity of the world. Through the adhered to the blockade of the ports held by Secretaries of State and of the Interior a plan, the insurgents, instead of putting in force, by or system, has been devised, and partly ma- proclamation, the law of Congress enacted at tured, and which will be laid befure you. the late session for closing those ports.

Uoder and by virtue of the act of Congress So, also, obeying the dictates of prudence, as entitled “An act to confiscate property used well as the obligations of law, instead of tranfor ipsurrectionary purposes," approved Au-scending, I have adhered to the act of Congress gust 6, 1861, the legal claims of certain persons to confiscate property used for insurrectionary to the labor and service of certain other per- purposes. If a new law upon the same subject sons have become forfeited; and numbers of shall be proposed, its propriety will be duly the latter, thus liberated, are already depend- considered. The Union must be preserved ; ent on the United States, and must be provided and hence, all indispensable means must be for in some way. Besides this, it is not impos- employed. We should not be in baste to detersible that some of the States will pass similar mine that radical and extreme measures, which enactments for their own benefit respectively, may reach the loyal as well as the disloyal, are and by operation of which, persons of the same indispensable. class will be thrown upon them for disposal. The inaugural address at the beginning of In such case, I recommend that Congress pro- the Administration, and the message to Convide for accepting such persons from such gress at the late special session, were both States, according to some mode of valuation, in mainly devoted to the domestic controversy out lieu, pro tanto of direct taxes, or upon some of which the insurrection and consequent war other plan to be agreed on with such States have sprung. Nothing now occurs to add or respectively; that such persons, on such ac- subtract, to or from, the principles, or general ceptance by the General Government, be at purposes, stated and expressed, in those docuonce deemed free; and that, in any event, steps ments. be taken for colonizing both classes (or the one The last ray of hope for preserving the Union first mentioned, if the other shall not be brought peaceably expired at the assault upon Fort into existence,) at some place, or places, in a Sumter; and a general review of what has occlimate congenial to them. It might be well curred since may not be unprofitable. What to consider, too, whether the free colored peo- was painfully uncertain then, is much better ple already in the United States could not, 80 defined and more distinct now; and the progress fir as individuals may desire, be included in of events is plainly in the right direction. The such colonization.

insurgents confidently claimed a strong support To carry out the plan of colonization may from North of Mason and Dixon's line, and the involve the acquiring of territory, and also the friends of the Union were not free from appreappropriation of money beyond that to be ex- hension on the point. This, however, was soon pended in the territorial acquisition. Having settled definitely, and on the right side. South practiced the acquisition of territory for nearly of the lice, noble little Delaware led off right sixty years, the question of constitutional power from the first. Maryland was made to seem to do so is no longer an open one with us. The against the Union. Our soldiers were assaulted, power was questioned at first by Mr. Jefferson, bridges were burned, and railroads torn up who, however, in the purchase of Louisiana, within her limits, and we were many days, at yielded his scruples on the plea of great expe- one time, without the ability to bring a single diency. If it be said that the only legitimate regiment over her soil to the capital. Now her object of acquiring territory is to furnish homes bridges and railroads are repaired and open to for white men, this measure effects that object; the Government; she already gives seven regi. for the emigration of colored men leaves addi- ments to the cause of the Union, and none to tional room for white men remaining or coming the enemy; and her people, at a regular elechere. Mr. Jefferson, however, placed the im- tion, have sustained the Union, by a larger maportance of procuring Louisiana more on polit- jority, and a larger aggregate vote than they ical and commercial grounds than on providing ever before gave to any candidate or any ques. room for population.

tion. Kentucky, too, for some time in doubt, On this whole proposition, including the ap- is now decidedly, and, I think, unchangeably, propriation of money with the acquisition of ranged on the side of the Union. Missouri is territory, does not the expediency amount to comparatirely quiet, and I believe cannot again absolute necessity—that, without which the be overrun by the insurrectionists. These three Government itself cannot be perpetuated ? States of Maryland, Kentucky, and Missouri,

The war continues. In considering the pol- neither of which would promise a single solicy to be adopted for suppressing the insurrec- dier at first, have now an aggregate of not less tion, I have been anxions and careful that the than forty thousand in the field for the Union; inevitable conflict for this purpose shall not whil”, of their citizens, certainly not more than degenerate into a violent and remorseless revo- a third of that number, and they of doubtful lutionary struggle. I have, therefore, in every whereabouts, and doubtful existence, are in case, thought it proper to keep the integrity of arms against it. After a somewhat bloody the Union prominent as the primary object of struggle of months, winter closes on the Union the contest on our part, leaving all questions people of Western Virginia, leaving them mas. wbich are not of vital military importance ters of their own country.

An insurgent force of about fifteen hundred, I general tone of the insurgents. In those docufor months dominating the narrow peninsula ments we find the abridgment of the existing region, constituting the counties of Accomac and Northampton, and known as eastern shore of Virginia, together with some contiguous parts of Maryland, have laid down their arms; and the people there have renewed their allegiance to, and accepted the protection of, the old flag. This leaves no armed insurrectionist north of the Potomac, or east of the Chesapeake. Also we have obtained a footing at each of the isolated points, on the southern coast, of Hatteras, Port Royal, Tybee 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 and certainly southward.

Since your last adjournment, Lieutenant General Scott has retired from the head of the Army. During his long life, the nation has not been unmindful of his merit; yet, on calling to mind how faithfully, ably, and brilliantly he has served the country, from a time far back in our history, when few of the now living had been born, and thenceforward continually, I cannot but think we are still his debtors. I submit, therefore, for your consideration, what further mark of recognition is due to him and to ourselves, as a grateful people.

With the retirement of General Scott came the executive duty of appointing, in his stead, a General-in-Chief of the Army. It is a fortunate circumstance that neither in council nor country was there, so far as I know, any difference of opinion as to the proper person to be selected. The retiring chief repeatedly expressed hi judgment in favor of General McClellan for the position; and in this the nation seemed to give a unanimous concurrence. The designation of General McClellan is, therefore, in considerable degree, the selection of the country as well as of the Executive; and hence there is better reason to hope there will be given him the confidence and cordial support thus, by fair implication, promised, and without which, he cannot, with so full efficiency, serve the 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 an 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 operations wherein those engaged, can have none but a common end in view, and can differ only as to the choice of means. 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.

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right of suffrage, and the denial to the people of all right to participate in the selection of public officers, except the legislative, boldly advocated, with labored arguments to prove that large 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, I could scarcely 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 which I ask brief attention. It is the effort to place capital on an equal footing with, if not above, labor, in the structure of government. It is assumed that labor is available only in connection with capital; that nobody labors unless somebody else, owning capital, somehow by the use of it, induces him to labor. This assumed, it is next considered whether it is best that capital shall hire laborers, and thus induce them to work by their own consent, or buy them, and drive them to it without their consent. Having proceeded so far, it is naturally concluded that all laborers are either hired laborers, or what we call slaves. And further, it is assumed that whoever is once a hired laborer is fixed 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 condition of a hired laborer. Both these assumptions are false, and all inferences from them are groundless.

Labor is prior to, and independent 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 consideration. Capital has its rights, which are 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 assuming that the whole labor of community exists within that relation. A few men own capital, and that few avoid labor themselves, and with their capital hire or buy another few to labor for them. A large majority belong to neither class -neither work for others, nor have others working for them. In most of the southern States, a majority of the whole people of all colors are neither slaves nor masters; while in the northern, a large majority are neither hirers nor hired. Men with their families-wives, sons, and daughters-work for themselves, on their farms, in their houses, and in their shops, taking the whole product to themse ves, and asking no favors of capital on the one hand, nor of hired laborers or slaves on the other. It is not forgotten that a considerable number of persons mingle their own labor with capitalthat is they labor with their own hands, and also buy or hire others to labor for them; but

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