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it came from the House, be passed. This report was agreed to, after long debate, and the bill thus became a law.

The relations in which the Rebel States are placed by their acts of secession towards the General Government, became a topic of discussion in the House of Representatives, in a debate which arose on the 8th of January, upon aħ item in the appropriation bill, limiting the amount to be paid to certain commissioners to the amount that might be collected from taxes in the insurrectionary States. Mr. Stevens, of Pennsylvania, pronounced the opinion that the Constitution did not embrace & State that was in arms against the Government of the United States. He maintained that those States held towards us the position of alien enemies--that every obligation existing between them and us had been annulled, and that with regard to all the Southern States in rebellion, the Constitution has no binding force and.no application. This position was very strongly controverted by men of both parties. Those who were not in full sympathy with the Administration opposed it, because it denied to the Southern people the protection of the Constitution; while many Republicans regarded it as a virtual acknowledgment of the validity and actual force of the ordinances of secession passed by the Rebel States. Mr. Thomas, of Massachusetts, expressed the sentiment of the latter class very clearly when he said that one object of the bill nnder discussion was to impose a tax upon States in rebellion, --that our only authority for so doing was the Constitution of the United States, and that we could only do it on the ground that the authority of the Government over those States is just as valid now as it was before the acts of secession were passed, and that every one of those acts is utterly null and void. No vote was taken which declared directly the opinion of the House on the theoretical question thus involved.

The employment of negroes as soldiers was subjected to a vigorous discussion, started on the 27th of January, by an amendment offered to a pending bill by Mr. Stevens, directing the President to raise, arm, and equip as many volunteers of African descent as he might deem useful, for such term of service as he might think proper, not exceeding five years, to be officered by white or black persons in the President's discretion-slaves to be accepted as well as freemen. The members from the Border States opposed this proposition with grcat earnestness, as certain to do great harm to the Union cause among their constituents, by arousing prejudices which, whether reasonable or not, were very strong, and against which argument would be found utterly unavailing. Mr. Crittenden, of Kentucky, objected to it mainly because it would convert the war against the rebellion into a servile war, and establish abolition as the main end for which the war was carried on. Mr. Sedgwick, of New York, vindicated the policy suggested as having been dictated rather by necessity than choice. He pointed out the various steps by which the President, as the responsible head of the Government, had endeavored to prosecute the war successfully without interfering with slavery, and showed also how the refusal of the Rebel States to return to their allegiance had compelled him to advance, step by step, to the more rigorous and effective policy which had now become inevitable. After considerable further discussion, the bill, embodying substantially the amendment of Mr. Stevens, was passed; ayes 83, noes 54. On reaching the Senate it was referred to the Committee on Military Affairs, which, on the 12th of February, reported against its passage, on the ground that the authority which it was intended to confer upon the President was already sufficiently granted in the act of the previous session, approved July 17, 1862, which authorized the President to employ, in any military or naval service for which they might be found competent, persons of African descent.

One of the most important acts of the session was that which provided for the creation of a national force by enrolling and drafting the militia of the whole country,--each State being required to contribute its quota in the ratio of its population, and the whole force, when raised, to be under the control of the President. Some measure of the kind seemed to have been rendered absolutely necessary by the revival of party spirit throughout the loyal States, and by the active and effective efforts made by the Democratic party, emboldened by the results of the fall elections of 1862, to discourage and prevent volunteering. So successful had they been in this work, that the Government seemed likely to fail in its efforts to raise men for another campaign; and it was to avert this threatening evil that the bill in question was brought forward for the action of Congress. It encountered a violent resistance from the opposition party, and especially from those members whose sympathies with the secessionists were the most distinctly marked. But after the rejection of numerous amendments, more or less affecting its character and force, it was passed in the Senate, and taken up on the 23d of February in the House, where it encountered a similar ordeal. It contained various provisions for exempting from service persons upon whom others were most directly and entirely dependent for support,—such as the only son of a widow, the only son of aged and infirm parents who relied upon him for a maintenance, etc. It allowed drafted persons to procure substitutes; and, to cover the cases in which the prices of substitutes might become exorbitant, it also provided that upon payment of $300 the Government itself would procure a substitute, and release the person drafted from service. The bill was passed in the House with some amendments, by a vote of 115 to 49,--and the amendments being concurred in by the Senate, the bill became

a law.

The finances of the country enlisted a good deal of attention during this session. It was necessary to provide in some

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way for the expenses of the war, and also for a currency; and two bills were accordingly introduced at an early stage of the session relating to these two subjects. The Financial bill, as finally passed by both houses, authorized the Secretary of the Treasury to borrow and issue bonds for $900,000,000, at not more than six per cent intérest, and payable at a time not less than ten nor more than forty years. It also authorized the Secretary to issue Treasury notes to the amount of $400,000,000, bearing interest, and also notes not bearing interest to the amount of $150,000,000. While this bill was pending, a joint resolution was passed by both houses, authorizing the issue of Treasury notes to the amount of $100,000,000 to meet the immediate wants of the soldiers and sailors in the service.

The President announced that he had signed this resolution in the following

MESSAGE. To the Senate and House of Representatives :

I have signed the joint resolution to provide for the immediate pay. ment of the army and navy of the United States, passed by the Houso of Representatives on the 14th, and by the Senate on the 15th inst. The joint resolution is a simple authority, amounting, however, under the existing circumstances, to a direction to the Secretary of the Treasury to make an additional issue of $100,000,000 in United States notes, if so much money is needed, for the payment of the army and navy. My approval is given in order that every possible facility may be afforded for the prompt discharge of all arrears of pay due to our soldiers and our sailors.

While giving this approval, however, I think it my duty to express my sincere regret that it has been found necessary to authorize so large an additional issue of United States notes, when this circulation, and that of the suspended banks together, have become already so redundant as to increase prices beyond real values, thereby augmenting the cost of living, to the injury of labor, and the cost of supplies to the injnry of the whole country. It seems very plain that continued issues of United States notes, without any check to the issues of suspended banks, and without adequate provision for the raising of money by loans, and for funding the issues, so as to keep them within due limits, must soon produce disastrous consequences; and this matter appears to me so important that I feel bound to avail myself of this occasion to ask the special attention of Congress to it.

That Congress has power to regulate the currency of the country can hardly admit of doubt, and that a judicious measure to prevent the deterioration of this currency, by a reasonable taxation of bank circulation, or otherwise, is needed, seems equally clear. Independently of this general consideration, it would be unjust to the people at large to exempt banks enjoying the special privilege of circulation, from their just proportion of the public burdens.

In order to raise money by way of loans most easily and cheaply, it is clearly necessary to give every possible support to the public credit. To that end, a uniform currency, in which taxes, subscriptions, loans, and all other ordinary public dues may be paid, is alınost if not quite indispensable. Such a currency can be furnished by banking associations authorized under a general act of Congress, as suggested in my message at the beginning of the present session. The securing of this circulation by the pledge of the United States bonds, as herein suggested, would still further facilitate loans, by increasing the present and causing a future demand for such bonds.

In view of the actual financial embarrassments of the Government, and of the greater embarrassment sure to come if the necessary means of relief be not afforded, I feel that I should not perform my duty by a simple announcement of my approval of the joint resolution, which proposes relief only by increasing the circulation, without expressing my earnest desire that measures, such in substance as that I have just referred to, may receive the early sanction of Congress. By such measures, in my opinion, will payment be most certainly secured, not only to the army and navy, but to all honest creditors of the Government, and satisfactory provision made for future demands on the Treasury.

ABRAHAM LINCOLN.

The second bill—that to provide a national currency, secured by a pledge of United States stocks, and to provide for the circulation and redemption thereof, was passed in the Senate,-ayes 23, noes 21, and in the House, ayes 78, noes 64,-under the twofold conviction that so long as the war continued the country must have a large supply of paper-money, and that it was also

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