"Slave Trade Report.

"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 congratulation that the efforts which have been made for the suppression of this inhuman traffic have been recently attended with unusual success. Five vessels being fitted out for the slave trade have been seized and condemned. Two mates engaged in the trade and one person in equipping a vessel as a slaver have been convicted, and subjected to the penalty of a fine and imprisonment; and one captain 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.

"The New Territories in the West.

"The territorries of Colorado, Dacotah, and Nevada, created by the last Congress, have been organized, and civil administration has been inaugurated therein under auspices especially 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. The abundant natural resources of these territories, with the security and protection afforded by organized Government, 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 Legislature of Colorado, which evidence the patriotic spirit of the people of the territory. So far the authority of the

In this report he also stated:"The appropriations asked for the service of the next fiscal year are computed for a force of 500,000 men. I propose, with the object of reducing the Volunteer force to 500,000, with the consent of Congress, to consolidate such of the regiments as may from time to time fall below the regulation standard. The adoption of this measure will decrease the number of officers, and proportionably diminish the expenses of the army. The disaster of Bull's Run was but the natural consequence of the premature advance of our brave, but undisciplined, troops, which the impatience of the country demanded. The betrayal, also, of our movements by traitors in our midst enabled the rebels to choose and intrench their position, and by a reinforcement in great strength, at the moment of victory, to snatch it from our grasp."

In the report of the Secretary of the Navy, the following account

was given of the employment of the marine force of the United States during the civil war:"The limited number of ships and men at command when the proclamation announcing announcing the blockade of the ports of the insurgent States was issued, and the inadequate means provided by the last Congress for the emergency, devolved upon the Department the necessity for calling into immediate service not only all the naval forces, but vessels from the commercial marine. Purchases were accordingly made and charters hastily executed for the exigency, and orders peremptorily issued to forthwith equip and prepare for service the public vessels that were dismantled and in ordinary at the several yards. The force thus hastily gathered was placed along our coast, and divided into two squadrons, one of which, designated as the Atlantic Blockading Squadron, had for its field of operation the whole coast extending from the easternmost line of Virginia to Cape Florida, and was under the command of Flag-officer Silas H. Stringham. The other, or Gulf Squadron, operating from Cape Florida westward to Rio Grande, was commanded by Flag-officer William Mervine. These officers repaired to their stations, and were reinforced from time to time by the arrival of such vessels as were despatched to their commands, and under their supervision and direction all the ports upon their stations were subjected to a blockade as rigid and effective as the peculiar nature of our maritime frontierwhich has, through a large por. tion of its entire extent, a double

coast, inner and outer-would admit. Our principal naval vessels are not, from their great draught of water, adapted to blockade service on our shallow coast, which has been guarded with extreme difficulty. The ports of North Carolina especially, situated within the interior shallow waters of their sounds and inlets, afforded peculiar facilities to a class of small vessels, aided by fraudulent papers and foreign flags, to elude the vigilance of the sentinel ships whose special duty it was to interdict commerce with the insurgents. The duty of guarding the coast, and enforcing the blockade, has been one of great labour, as well as ceaseless vigilance and responsibility. With the steadily-increasing force that added to the squadrons, the efforts of the insurgents to elude our ships were also increased, in order to supply the pressing necessities that af flicted the whole of the rebel States. The duties imposed upon the flag-officers became spondingly arduous, and eventually more extensive in their operation and detail than could be well executed by one commander. A vigilant watch has been maintained at the passes of the Mississippi, by which the commerce of New Orleans has been successfully interdicted. The task of blockading the coast is unattractive, and devoid of adventure. Those who have engaged in this rebellion have neither commerce nor a navy to reward or stimulate to exertion. One method of blockading the ports of the insurgent States and interdicting communication, as well as to prevent the egress of pri

corre

vateers which sought to depredate on our commerce, has been that of sinking in the channels vessels laden with stone. The first movement in this direction was on the North Carolina coast, where there are numerous inlets to Albemarle and Pamlico Sounds and other interior waters, which afforded facilities for eluding the blockade, and also to the privateers. For this purpose a class of small vessels were purchased in Baltimore, some of which have been placed in Ocracoke Inlet. Another and larger description of vessels were bought in the eastern market, most of them such as were formerly employed in the whale fisheries. These were sent to obstruct the channels of Charleston harbour and the Savannah River; and this, if effectually done, will prove the most economical and satisfactory method of interdicting commerce at those points."

At the close of the year the balance of success was certainly in favour of the South. Its policy was simply a defensive policy, and all it asked was to be let alone. The North, on the other hand, had undertaken the task of conquest, and unless it could pursue a career of victorious invasion, it failed. But not one inch of territory had been recovered to the Union since the Secession began. The Confederate army lay entrenched on the Potomac, and threatened Washington, and the only serious battle had resulted in a disastrous de

feat of the Federal forces. Apparently nothing can shake the stern resolution of the South, which hates the Union with a hatred of which it is difficult for us to form an idea; and it declares its determination to suffer anything and everything, rather than submit to the domination of the North. But it is fearfully overmatched in numbers and resources; and the blockade of its ports cuts it off from all external supplies, and isolates it from the rest of the world. It remains to be seen how far it will be able to cope with the enormous masses of men whom the North will be able to bring into the field, and especially whether it can contend against the naval force of its opponents; and by this we mean not only sea-going ships, but gun-boats and other armed craft, which will be able to penetrate the great rivers that intersect the continent, and thus afford a support to the armies of the invader against which the South has nothing equivalent to oppose. If, for instance, a steam flotilla from the North can force its way down the Mississippi, the Confederate positions will be in great danger of being taken in flank, and the Border States will be reached by an invading army with far more ease than could possibly be the case if there were no navigable river. But it is idle to speculate on the future course of this tremendous contest. Our next volume will, no doubt, have to record some momentous results.