Under and by virtue of the act of Congress entitled "An act to confiscate property used for insurrectionary purposes," approved August 6, 1861, the legal claims of certain persons to the labor and service of certain other persons have become forfeited; and numbers of the latter, thus liberated, are already dependent on the United States, and must be provided for in some way. Besides this, it is not impossible that some of the States will pass similar enactments for their own benefit respectively, and by operation of which persons of the same class will be thrown upon them for disposal. In such case I recommend that Congress provide for accepting such persons from such States, according to some mode of valuation, in lieu, pro tanto, of direct taxes, or upon some other plan to be agreed on with such States respectively; that such persons, on such acceptance by the General Government, be at once deemed free; and that, in any event, steps be taken for colonizing both classes (or the one first mentioned, if the other shall not be brought into existence) at some place or places in a climate congenial to them. It might be well to consider, too, whether the free colored people already in the United States could not, so far as individuals may desire, be included in such colonization.

To carry out the plan of colonization may involve the acquiring of territory, and also the appropriation of money beyond that to be expended in the territorial acquisition. Having practised the acquisition of territory for nearly sixty years, the question of constitutional power to do so is no longer an open one with us. The power was questioned at first by Mr. Jefferson, who, however, in the purchase of Louisiana, yielded his scruples on the plea of great expediency. If it be said that the only legitimate object of acquiring territory is to furnish homes for white men, this measure effects that object; for the emigration of colored men leaves additional room for white men remaining or coming here. Mr. Jefferson, however, placed the importance of procuring Louisiana more on political and commercial grounds than on providing room for population.

On this whole proposition, including the appropriation of money with the acquisition of territory, does not the expediency amount to absolute necessity-that, without which the Government itself cannot be perpetuated?

The war continues. In considering the policy to be adopted for suppressing the insurrection, I have been anxious and careful that the inevitable conflict for this purpose shall not degenerate into a violent and remorseless revolutionary struggle.

.

In the exercise of my best discretion I have adhered to the blockade of the ports held by the insurgents, instead of putting in force by proclamation the law of Congress enacted at the late session for closing those ports.

So, also, obeying the dictates of prudence, as well as the obligations of law, instead of transcending I have adhered to the act of Congress to confiscate property used for insurrectionary purposes. If a new law upon the same subject shall be proposed, its propriety will be duly considered. The Union must be preserved; and hence all indispensable means must be employed. We should not be in haste to determine that radical and extreme measures, which may reach the loyal as well as the disloyal, are indispensable.

The inaugural address at the beginning of the Administration, and the message to Congress at the late special session, were both mainly devoted to the domestic controversy out of which the insurrection and consequent war have sprung. Nothing now occurs to add or subtract to or from the principles or general purposes stated and expressed in those documents.

The last ray of hope for preserving the Union peaceably expired at the assault upon Fort Sumter; and a general review of what has occurred since may not be unprofitable. What was painfully uncertain then is much better defined and more distinct now; and the progress of events is plainly in the right direction. The insurgents confidently claimed a strong support from north of Mason and Dixon's line; and the friends of the Union were not free from apprehension on the point. This, however, was soon settled definitely, and on the right side. South of the line, noble little Delaware led off right from the first. Maryland was made to seem against the Union. Our soldiers were assaulted, bridges were burned, and railroads torn up within her limits; and we were many days, at one time, without the ability to bring a single regiment over her soil to the capital. Now her bridges and railroads are repaired and open to the Government; she already gives seven regiments to the cause of the Union, and none to the enemy; and her people, at a regular election, have sustained the Union by a larger majority and a larger aggregate vote than they ever before gave to any candidate or any question. Kentucky, too, for some time in doubt, is now decidedly and, I think, unchangeably ranged on the side of the Union. Missouri is comparatively quiet, and, I believe, cannot again be overrun by the insurrectionists. These three States of Maryland, Kentucky, and Missouri, neither of which would promise a single soldier at first, have now

an aggregate of not less than forty thousand in the field for the Union; while of their citizens, certainly not more than a third of that number, and they of doubtful whereabouts and doubtful existence, are in arms against it. After a somewhat bloody struggle of months, winter closes on the Union people of Western Virginia, leaving them masters of their own country.

An insurgent force of about fifteen hundred, for months dominating the narrow peninsular 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 his 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.

It continues to develop that the insurrection is largely, if not exclusively a war upon the first principle of popular government-the rights of the people. Conclusive evidence of this is found in the most grave and maturely-considered public documents, as well as in the general tone of the insurgents. In those documents we find the abridgment of the existing 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 a 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 those 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 daughterswork for themselves, on their farms, in their houses, and in their shops, taking the whole product to themselves, 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 capital-that is, they labor with their own hands, and also buy or hire others to labor for them; but this is only a mixed, and not a distinct class. No principle stated is disturbed by the existence of this mixed class.

Again: as has already been said, there is not of necessity any such thing as the free hired laborer being fixed to that condition for life. Many independent men everywhere in these States, a few years back in their lives, were hired laborers. The prudent, penniless beginner in the world labors for wages awhile, saves a surplus with which to buy tools or land for himself, then labors on his own account another while, and at length hires another new beginner to help him. This is the just, and generous, and prosperous system, which opens the way to all, gives hope to all, and consequent energy, and progress, and improvement of condition to all. No men living are more worthy to be trusted than those who toil up from poverty-none less inclined to take or touch aught which they have not honestly earned. Let them beware of surrendering a political power which they already possess, and which, if surrendered, will surely be used to close the door of advancement against such as they, and to fix new disabilities and burdens upon them, till all of liberty shall be lost.

From the first taking of our national census to the last are seventy years; and we find our population, at the end of the period, eight times as great as it was at the beginning. The increase of those other things