All the great industrial interests of the loyal States were never more active, more prosperous, than at this time. All that has been lost by the supply of men to the army has been made up by increased activity and energy, and the adaptation of machinery to work heretofore done by the human hand. There is only this marked difference: heretofore all these great forces have been applied for the benefit of the arts of peace; now they all look primarily to the prosecution of war; and years would have to elapse-far more than would be required to crush out the rebellion-before we should develop our full strength for

war.

Within less than two years we have thrown into and sustained in the field an army of a million of men. We have created a navy with which we have blockaded a coast greater in extent than was ever attempted by any government before, and by our inventions and improvements so completely revolutionized naval warfare as to render the navies and sea-coast defences of the world wellnigh useless.

The efficiency of this blockade is attested not only by the destitution of the rebels in every article of foreign production, but by the cry that comes to us every day from all parts of the world, in any degree dependent upon the products of the blockaded territory, stimulating us to still greater exertion to crush out this rebellion, that the blockaded ports may be thrown open to the legitimate commerce of the world.

And while, in our efforts to maintain our government and vindicate free institutions, we neither asked nor desired the aid of any foreign nation or government, we did at least expect of the leading powers of Europe that they should refrain from extending aid and encouragement to a rebellion against a friendly government, thereby prolonging a struggle which can only bring misery and suffering upon the whole civilized world, and may in the end lead to a war between our government and some of those powers, the full effects of which the future alone can disclose.

We have carried on, shall carry on, and conclude this war, without touching one dollar of the accumulated capital of the country. We are already astonished at the revenue now being raised from the taxation of our daily productions, and yet we do not begin to realize the amount to be yielded by the system already adopted, or the extent to which that system may be enlarged, without imposing any grievous burdens upon the people-any burden to which they will not cheerfully submit to accomplish the object intended.

No government can long carry on a war which must be sustained by the accumulated capital of the country, and there is scarcely a limit to the time war may be prosecuted by a government whose credit is sustained by the revenues derived from the accumulating wealth of the country.

Every dollar the rebels have expended or can expend in this rebellion has been and must continue to be drawn from their accumulated capital. Their intercourse with foreign nations has been almost wholly suspended, all their industrial interests have been paralyzed, and there is no source from which they can derive revenue or means for the maintenance of the war, except by depriving the people of their property, day after day, and year after year, so long as the war shall continue, thus reducing them to poverty and want. This is a truth which the people in the revolted States are already beginning to realize. They had been made to believe that an export duty on cotton, which the world would be obliged to pay, would yield them the richest revenue ever realized by any government; and that if the federal government should attempt interference with its exportation, they could command the armies and navies of Europe to fight their battles for them. How bitter must be their disappointment as they apply with their own hands the torch which consigns it to ashes, and then are compelled to supply to their leaders, from their other property, the means to sustain the rebellion! Their currency has almost ceased to be regarded, even by themselves, as the

representative of value. Conscription has exhausted their people, and the wealth which long years of uninterrupted prosperity, under the best government the world ever saw, had placed in their hands, has already been expended, and they are now struggling on with the vain hope that dissensions among ourselves or foreign intervention may save them from that ruin which they see clearly impending over them. Every day must show them more and more clearly that on neither of these sources can they rely for help. The utter scorn and contempt with which every man in the loyal States who proposes any adjustment of this contest except the absolute, unqualified, and unconditional subjugation of every rebel in the land to the Constitution and the laws, is held by every officer and soldier in our army, and every loyal man in the country, must banish from their minds the last ray of hope from that source. The reaction which followed the recent slight manifestations of a willingness on the part of a few secession sympathizers to offer terms of compromise must convince them that they have no allies in the loyal States on whom they can rely; and the present condition of affairs in Europe must forever crush that false and delusive hope which they have heretofore entertained, that the intervention of European powers might enable them to accomplish what they know full well they can never attain unaided.

We now see clearly what we have to do. We must obtain uninterrupted control of the Mississippi. We must reach those great railroad arteries-the one bordering the Atlantic seaboard, the other stretching through the Virginia and Tennessee valleys to the west and south. We must, as soon as possible, take the few fortified seaports remaining in possession of the rebels; and then we shall have virtually disarmed the rebellion, cut it off from all external sources of food and arms, and have surrounded it by forces which can press upon it from any quarter, at the same time severing into isolated portions the rebel territory and destroying their means of intercommunication; by which alone they have hitherto been enabled to meet us in force wherever we have presented ourselves, and by which alone they have been able to feed and supply their armies.

By possessing ourselves of, and keeping open, the great natural highways alone, (and a possession of a navy by us should have early suggested this,) we sever parts of their territory mutually dependent, and, while crippling them, enable ourselves to speedily concentrate our forces at any point where it may he advisable to strike.

These decisive measures we are actually executing or preparing to execute. The successes and conquests we have already described have carried us through the preliminary stages, and the blows we now strike-each one of them that succeeds will reach the very vitals of the rebellion. Let any one cast his eye upon the map and these truths will be apparent.

It may be that in the future, as in the past, we shall meet with reverses: they are the inevitable incidents of a great war extending over so vast a territory, and requiring great armies at so widely separated points. We have already seen that it is not our true policy to attempt an actual military occupation of the rebel territory, except at a few and important controlling points. We must destroy their armies, and to do this we must concentrate, not scatter, our forces. It is better to operate successfully against one stronghold or one army than to at tempt three and fail. The indications now clearly are that, both in the east and the west, the campaign of 1863 will give us brilliant achievements-decisive victories. Our generals now in the field have the full confidence of the soldiers and the people, and the armies will go forth, knowing that their ranks are to be made full; that every day that passes will add to, not diminish, their strength or numbers. Never before did the world see such an army in the field; never before did generals lead such men to battle. Each man goes forth feeling, not only that he has a soldier's reputation to maintain, but also that he has a country Rep. Com. 108-5

to defend in which his interest is as great as that of the highest officer in the land. Such an army, with its energy, power, intelligence, and will, properly directed, must be invincible. The past has already demonstrated that the true American soldier can be relied upon, to dare, do, and endure all that human power can attempt, accomplish, or sustain.

Let no officers be placed or kept in command of such men who have not the ability to command and the will to do; thus the errors and mistakes of the past will be avoided in the future, the fond hopes and anticipations of a true and loyal people realized, the government vindicated, and rebellion speedily and forever crushed.

We know that this contest has cost us and will cost us treasures and bloodthe best blood ever shed by any people in maintenance of their government and in defence of free institutions-the blood of the flower of our land. Let us not make their lives a vain offering, by for a moment entertaining the idea of a partition of our territory, which would forever involve us in anarchy and border wars, or by any base compromise with rebels.

We owe it to the noble dead who have shed their blood in founding and defending this government; we owe it to ourselves; we owe it to the countless millions who are to come after us, to maintain this government and the institutions we have inherited from our fathers-the richest legacy ever bequeathed by one generation to another—and to transmit them to our posterity, if not improved, certainly unimpaired.

In conclusion, your committee will only say, that all the men who hold high positions in the army and navy, and have rendered valuable services to the country, with whom they have held intercourse, unite in the opinion that fighting, and only fighting, can end this rebellion; that every traitor in the land must and shall be made to acknowledge and yield absolute, unqualified, and uncondi tional obedience to the Constitution and laws.

And your committee believe this to be the sentiment, not only of the army and navy, but of every man in the country-traitors and cowards alone excepted.

B. F. WADE, Chairman.

Z. CHANDLER.

D. W. GOOCH.

JOHN COVODE.

G. W. JULIAN.

M. F. ODELL.

NOTE.—The committee, as originally appointed, consisted of the following members:

When Mr. Johnson was appointed military governor of Tennessee, he left to take charge of his duties there, and Mr. Joseph A. Wright, of Indiana, was appointed to the vacancy thus created. When the term of service of Mr. Wright in the Senate expired, by the election of his successor for the remainder of the session of Congress, no appointment was made to fill the vacancy upon this committee.

JOURNAL

OF

THE JOINT COMMITTEE

ON THE

CONDUCT OF THE PRESENT WAR.

IN SENATE OF THE UNITED STATES, December 9, 1861.

Resolved by the Senate, (the House of Representatives concurring,) That a joint committee of three members of the Senate and four members of the House of Representatives be appointed to inquire into the conduct of the present war; that they have power to send for persons and papers, and to sit during the recess of either house of Congress. Attest:

J. W. FORNEY, Secretary.

IN THE HOUSE OF REPRESENTATIVES OF THE UNITED STATES,

December 10, 1861.

Resolved, That the House of Representatives concur in the foregoing resolution of the Senate. EM. ETHERIDGE, Clerk.

Attest:

IN THE SENATE OF THE UNITED STATES, December 17, 1861. Ordered, That Mr. WADE, (BENJAMIN F., of Ohio,) Mr. CHANDLER, (Z., of Michigan,) and Mr. JOHNSON. (ANDREW, of Tennessee,) be of the joint committee provided for in the preceding resolution on the part of the Senate. J. W. FORNEY, Secretary.

Attest:

IN THE HOUSE OF REPRESENTATIVES OF THE UNITED STATES,
December 19, 1861.

Ordered, That Mr. Gooch, (DANIEL W., of Massachusetts,) Mr. COVODE, (JOHN, of Pennsylvania,) Mr. JULIAN, (GEORGE W., of Indiana,) and Mr. ODELL, (MOSES F., of New York,) be appointed the said committee on the part of the House of Representatives. Attest:

EM. ETHERIDGE, Clerk.

WASHINGTON, D. C., December 20, 1861.

The committee met pursuant to call of the chairman, at 10 o'clock a. m., in the room of the Committee on Territories of the Senate; all the members present.

On motion,

Mr. B. F. Wade was elected chairman of the committee.

Mr. Covode was authorized to procure a competent person to act as stenographer and clerk to the committee.

On motion of Mr Chandler, it was

Ordered, That this committee will proceed to investigate the disaster to our arms at Bull Ran, Virginia, in July last.

The chairman was instructed to call upon the Secretary of War to procure certain information in relation to the western department of our army. Ordered, That, in summoning officers of the army, in active service, to appear before this committee, the Sergeant-at-arms be instructed to leave the time of their attendance to be fixed by them, so as to do no injury to the service.

By the unanimous consent of the committee, it was agreed that, as a matter of honor, none of its members should reveal anything that transpired in committee until such time as the injunction of secrecy should be removed. Adjourned to 11 a. m. to-morrow.

WASHINGTON, D. C., December 21, 1861.

The committee met pursuant to adjournment. Present: The chairman, Messrs. Chandler, Gooch, Covode, Julian, and Odell.

William Blair Lord, of New York city, selected as the stenographer and clerk, appeared and was duly sworn.

The chairman stated that, in pursuance of the instructions of the committee, he had called at the office of the Secretary of War; Mr. Cameron was not there, but he saw Mr. Scott, the Assistant Secretary, who, in reply to a verbal inquiry, stated that, so far as he knew, there were no proceedings pending or expected to be made pending against Major General John C. Frémont touching his administration of the western department. The Assistant Secretary then left the room to confer with the adjutant general, and in a short time returned and repeated substantially his previous statement. At the request of the chairman the Assistant Secretary reduced to writing his final answer, as follows:

"DECEMBER 20, 1861.

"MY DEAR SIR: No proceedings have been entered in regard to General Frémont. Major Totten, assistant inspector general, St. Louis, has been directed to investigate all matters touching the business of the department of the west, and report thereon.

"Yours, respectfully,

"Hon. B. F. WADE."

On motion of Mr. Gooch, it was

"THOMAS A. SCOTT.

Resolved, That Messrs. Chandler and Odell be appointed a sub-committee to inquire at the War Department and elsewhere and report the number of men accepted by the government; also the number of men now actually in the field, their character, and where located; also the number of officers of each grade now in service; also the number of regiments in process of formation, accepted, but not yet mustered into service.

On motion of Mr. Gooch, the chairman was instructed to address the following communication to Major General George B. McClellan:

"WASHINGTON, D. C., December 21, 1861.

"SIR: You are aware that a joint committee has been appointed by the Senate and House of Representatives to inquire into the conduct of the war. Our committee, at a meeting held this morning, unanimously expressed a desire, before proceeding in their official duties, to have an interview with you at our room, at the Capitol, at such time as may suit your convenience, in view of your pressing engagements.