wh.ch promised to become of permanent advantage in de veloping the resources of the country in minerals and manufac tures, and introducing provision crops on an enlarged scale iu the Cotton States of the Confederacy.

In the month of December occurred an event which promised the most fortunate consequences to the South, with respect to foreign intervention and her release from the blockade. The Confederate government had deputed Mr. James M. Mason, of Virginia, and Mr. John Slidell, of Louisiana, commissioners, respectively, to England and France. They had escaped the blockade at Charleston on a Confederate vessel, and arriving at the neutral port of Havana, had left there on the 7th day of December in a British mail-steamer, the Trent, commanded by Capt. Moir. The next day after leaving port, the British vessel, while in the Bahama channel, was intercepted by the Federal steam-frigate, San Jacinto, Commander Wilkes, being brought to by a shotted gun, and boarded by an armed boat's crew. The persons of the commissioners and their secretaries, Messrs. Eustis and Macfarland, were demanded; they claimed the protection of the British flag, and refused to leave it except at the instance of actual physical force, which Lieut. Fairfax, who had boarded the vessel, then declared he was ready to use. The Trent was an unarmed steamer, and as resistance was hopeless, the commissioners were surrendered, under a distinct and passionate protest against a piratical seizure of ambassadors under a neutral flag.

This outrage done by a Federal vessel to the British flag, when it was learned in the South, was welcome news, as it was thought certain that the British government would resent the insult, and as the boastful and exultant tone in the North, over the capture of the commissioners, appeared to make it equally certain that the government at Washington would not surrender its booty. War between England and the North was thought to be imminent. Providence was declared to be in our favor; the incident of the Trent was looked upon almost as a special dispensation, and it was said, in fond imagination, that on its deck and in the trough of the weltering Atlantic the key of the blockade had at last been lost.

These prospects were disappointed by the weakness of the government at Washington, in surrendering the commissioners

and returning them to the British flag. The surrender was an exhibition of meanness and cowardice unparalleled in the po litical history of the civilized world, but strongly characteristic of the policy and mind of the North. The people of the North had, at first, gone into raptures over the arrest of the commis sioners; the newspapers designated it as "worth more than a victory in the field;" the hospitalities of the city of New York were offered by its common council to Capt. Wilkes, and a dinner was given him by leading citizens of Boston, in honor of his brave exploit in successfully capturing, from the deck of an unarmed mail-steamer, four unarmed passengers. The government at Washington had given every indication of its approval of the arrest. The compliments of the Cabinet had been tendered to Capt. Wilkes, and a proposition introduced intc Congress to distinguish his piratical adventure by a public vote of thanks. The subjects of the capture were condemned to close cells in Fort Warren.

Despite all this manifest indorsement by the government of the legality and value of the arrest of the commissioners, Mr. Seward did not hesitate to surrender them when the alternative of war with Great Britain was indicated to him, in the dispatches of that government demanding, in very simple and stern terms, the reparation of the outrage that had been committed upon its flag.

In a letter to Mr. Adams, the representative of the Washington government at London, Mr. Seward had advised him to make no explanations, as the Washington Cabinet thought it better that the ground taken by the British government should first be made known to them. The ground of its claims was never furnished by the British government. Its demand for reparation and apology was entirely naked, and evidently disdained to make a single argument on the law question. With unexampled shamelessness, Mr. Seward made the plea himself for the surrender of the commissioners; he argued that they could not be the subjects of a judicial proceeding to determine their status, because the vessel, the proper subject of such a proceeding, had been permitted to escape; and with • a contemptible affectation of alacrity to offer, from a returning sense of justice, what all the world knew had been extorted from the alarms of cowardice, he declared that he "cheerfully”

surrendered the commissioners, and did so in accordance with long-established American doctrine.

In surrendering the commissioners, the Washington govern ment took the opportunity to declare its reassured hopes of the Union, and to express its contempt for the Southern revolution. In his letter to Earl Russell, Mr. Seward took particular pains to declare, that "the safety of the Union did not require the detention of the captured persons;" that an "effectual check” had been put to the "existing insurrection," and that its "waning proportions" made it no longer a subject of serious consideration.

The declaration was false and affected, but it contained an element of truth. There is no doubt that, at the time it was made, the power of the revolution in the South was declining; and a rapid survey of the political posture, and of events transpiring in the latter half of the year 1861, affords painful evidence of relaxation on the part of the Confederate government, and of instances of weakness and abuse that the people, who had pledged every thing and endured every thing in a contest for freedom, had no right to expect.

REVIEW OF AFFAIRS AT THE CLOSE OF THE YEAR 1861.

The justice of history compels us to state that two causesthe overweening confidence of the South in the superior valor of its people, induced by the unfortunate victory of Manassas, and the vain delusion, continued from month to month, that European interference was certain, and that peace was near at hand, conspired, about this time, to reduce the Southern cause to a critical condition of apathy.

Western Virginia had been abandoned to the enemy almost with indifference, and with an apathetic confidence in an army that was in danger of becoming demoralized, and in the prospects of European interference, which were no brighter than formerly, except in imagination, the South carelessly observed the immense preparations of the North, by sea and land, to extend the area of the contest from the coasts of Carolina to the States on the Mississippi, and to embrace her whole territry with the lengthening arms of the war.

While the enemy was busy making his immense naval prep

arations against our sea-coast, and building scores of gunboats on the upper Mississippi to drive our armies out of Kentucky and Tennessee, the Southern government had shown the most extraordinary apathy; the spirit of our armies was evidently decaying, and abuses of extraordinary magnitude had crept into the civil administration of our affairs. No corresponding activity was manifested by us in the line of naval enterprise adopted by the enemy. Means were not wanting for at least some emulation in this respect. Large appropriations had been made by Congress for the construction of gunboats and objects of river defence; the State of Virginia had turned over to the Confederate government the best navy-yard on the continent, and two armories with their machinery; and with the means and appliances at Gosport and Richmond, it is not doubted that, with proper activity, the government might have created a considerable fleet.

The North had improved the advantage of its possession of a navy by increasing its numbers. Nearly a hundred vessels of different descriptions were purchased by it, and fleets of gunboats fitted out for operations on the coast and rivers. Two naval expeditions had already, before the close of the year, been sent down the Carolina coast, and without accomplishing much, had given serious indications of what was to be expected from this arm of the service on the slight fortifications of our ocean frontier.

On the 29th of August, a naval expedition from Fortress Monroe, under command of Commodore Stringham and Majorgeneral Butler, had reduced the two forts at Hatteras Inlet, and had signalized their victory by the capture of fifteen guns and 615 prisoners, among whom was Commodore Barron, the Confederate officer in command.

The capture of Port Royal, on the South Carolina coast, on the 7th of November, by the bombardment of Forts Walker and Beauregard, gave to the enemy a point for his squadrons to find shelter, and a convenient naval depot. The attack was made on the 7th of November, by a Federal fleet, numbering fifteen war-steamers and gunboats, under command of Capt. Dupont, flag-officer of the south Atlantic blockading squadron. The attack was easily successful by the bombardment of the forts at the entrance of the sound. It may be imagined how

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inefficient our defences must have been, when the fact is, that they yielded after a bombardment which continued precisely four hours and thirty minutes; the condition of Fort Walker at this time being, according to the official report of General Drayton, who was in command, "all but three of the guns in the water front disabled, and only five hundred pounds of pow der in the magazine." But these were only the first lessons of the enemy's power and our improvidence in defences, that were to be taught us on the coast.

The privateering service had yielded us but poor fruits. The Savannah, the first of the privateers, was captured, and her crew treated as pirates, at least so far as to load them with irons, and confine them in felons' cells. With the exception of the Sumter (an awkwardly rigged bark) and one or two others, the privateers of the South were pretty closely confined within their own harbors and rivers by the blockading fleets. The "militia of the seas," that, it was predicted in the early part of the war, would penetrate into every sea, and find splendid prizes in the silk ships of China, and the gold-freighted steam ers of California, had proved but an inconsiderable annoyance to the extensive commercial marine of the North; it had captured during the year but fifty prizes in smacks, schooners, and small merchantmen, and by this time the South had learned that its privateering resources were about as delusive as that other early and crude expectation of adventitious aid in the war-the power of " King Cotton."

It is curious, indeed, how the early expectations of the manuer and conduct of a war are disappointed by the progress of its events, and its invariable law of success in the stern competitions of force, without reference to other circumstances. It was said, at the beginning of the war, that, while cotton would "bring Europe to its knees," the Southern privateers would cut up the commerce of the North, and soon bring the mercenary and money-making spirits of that section to repentance. Neither result was realized. At the close of the year 1861, the South appeared to be fully convinced that it was waging a war in which it could no longer look for aid to external and adventitious circumstances; that it could no longer hope to obtain its independence from European interference, or from cotton, or from the annoyances of its privateers, or from the