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ampled in civilized warfare, the only apology or excuse was, that an equal number of prisoners had been captured by the enemy; but on calling for specifications in regard to tlieee alleged prisoners, it was found that a considerable number represented as pr isoners were not soldiers, but were non-combatants, citizens of towns and villages, farmers, travellers and others in civil life, not captured in battle, but taken at their homes, on their farms, or on the highway, by John Morgan and other rebel raiders. who put them under a sham parole." Another cause why exchanges were stopped was, the declaration of Jeff. Davis that our black troops and their white officers would not be recognized or treated as prisoners of war, if they fell into his hands. Our government had remonstrated, but thus far to little or no effect. "Meantime, well-authenticated statements show that our troops held as prisoners of war were deprived of shelter, clothing, and food, and some have perished from exposure and famine. This savage barbarity could only have been practised in the hope that this government would be compelled, by sympathy for the suffering endured by our troops, to yield to the proposition of exchanging all the prisoners of war on both sides, paroling the excess not actually exchanged, the effect of which operation would be to enable the rebels to put into the field a new army, 40,000 strong, forcing the paroled prisoners into the ranks without exchange, as was done with those paroled at Vicksburg and Port Hudson, and also to leave in the hands of the rebels the colored sol

diers and officers, who are not regarded by them as prisoners of war, and therefore not entitled to the benefit of the proposed exchange. As the matter now stands, we have over 40,000 pri soners of war ready at any moment to be exchanged, man for man/ and officei for officer, to the number held by the rebels," i.e., about 13,000, as above stated. Although the rebel prisoners were treated with every kindness consistent with security, yet, under exist ing circumstances, Mr. Stanton felt called upon to say, that "if it- should become necessary for the protection of our men, strict retaliation will be resorted to; but while the rebel authorities suffer this government to feed and clothe our troops held as prisoners, we shall be content to continue to their prisoner in our hands the humane treatment they have uniformly enjoyed."

The report of the secretary of the navy showed an increase of 161 vessels and 1,175 guns during the year, which, with the vessels then under construction, would make our naval force to consist of 583 vessels, carrying 4,443 guns. Of these vessels forty-six wen, iron-clad steamers for coast service, and twenty-nine for inland service; 203 sidewheel steamers; 193 screw-steamers, and 112 sailing vessels. The number of seamen in service, on the 1st of July, including the Mississippi squadron, was about 34,000. The average monthly enlistments d iring the year were over 1,500. The number of vessels captured by the squadrons and reported by the department, on the 1st of November, was, exclusive of a large number destroyed on the Mississippi and other rivers, 1,045; of which 547 were schooners, 179 steamers, 131 sloops, thirty brigs, twenty-six barks, fifteen ships, 117 yachts and small boats. The value of prizes sent to the courts for adjudication since the blockade was established, was estimated at not less than $15,000,000.

The report on the subject of our national finances, from the secretary of the treasury, which had been looked for by the country at large with profound interest, proved to be a clear, well arranged document, and gave general satisfaction. The amount of debt had fallen short of the amount anticipated; while the receipts from all sources of income, except internal revenue, exceeded the estimates. The debt, July 1st, 1863, was $1,098,793,181; its estimated increase, it was now calculated, would raise it, on July 1st, 1864, to $1,686,956,641. Secretary Chase stated that he had, all along, "kept four objects in view; moderate interest, general distribution, future controllability, and incidental utility." In respect to the first, it was remarkable that our earliest negotiations had been made at the highest rates of interest, and that the public credit which was at the lowest ebb just preceding the breaking out of the rebellion, had steadily improved in the midst of the terrible trials brought by it upon the country. The first loans were negotiated at 7.30 per cent.; the next at 7 per cent., the next at 6 per cent.; more recently large sums were obtained at 5 and 4 per cent.; and the whole of the debt, which was represented by United

States notes and fractional currency bore, of course, no interest. The average rate of interest on the whole debt was, July 1st, 1862, 4.36 per cent; j Jauuary 1st, 1863,4.02 per cent.; July j 1st, 1863, 3.77 per cent.; and Octobei 1st, 1863, 3.95 per cent. In regard to the "general distribution " of the debt, that "had been accomplished by the! Universal diffusion of the United States notes and fractional currency, by the distribution of certificates among great

numbers of contract creditors „ „

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and temporary depositors, and

by arrangements to popularize the loans i by giving to the people everywhere op' portunities to subscribe for bonds." Under this plan, nearly $400,000,000, j in five-twenty bonds in denominations 1 of $50, $100, $500, and $1,000 were i distributed among all classes of the people. "The history of the world," Mr. Chase added with commendable pride, "may be searched in vain for a parallel case of popular financial support to a national government." The next point, the "controllability " of the debt, had been provided for by limiting the periods and reserving certain times of payment of the bonds issued. "Incidental utility " had been secured by receiving large sums on temporary deposit, and maintaining a fund for their | reimbursement which had been used for the convenience of the public. The latter had been further provided for in the uniform currency secured by the j issue of United States notes, by which \ the government was also strengthened in the general distribution of the debt As a further advantage in this direction, the secretary urged anew his »y*.

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tem of national banking, its great feature being "to make use of a portion of the national debt as security for the national currency." In providing for the needs of the treasury in the future, Mr. Chase looked to interest-paying loans, thinking it "clearly inexpedient" to increase the present amount of United States notes or currency as tending inevitably to ruinous depreciations.*

Congress, as we have stated on a previous page, (p. 388), having completed its organization, appointed the usual committees, etc., entered upon its work. Public attention was very much engaged in watching the progress of military and naval affairs; and during the early part of the session there was no occasion for any action, nor any action of special interest or importance. Various resolutions were introduced, some strongly condemnatory of the policy and course of the government, others of a negative, mixed character, and others again highly approving the measures of the president. The opponents of the administration, while urging forward the prosecution of the war, were anx

* Jeff. Davis, in a very long message to the rebel congress, which met early in December, 1863, indulged himself, as usual, in charges of "consistent perfidy,'' '* savage ferocity," "horrible barbarities," and such like, and in denouncing " the plundering ruffians" of which the army of the United States was composed. He also enlarged upon the deplorable condition of the finances of the insurgent states. All efforts by taxation, imposts, etc., hid failed, and "the issues of trca sury notes havo been increased, until the currency in circulation amounts to moro than $600,000,000, or more t'lan threefold the amount required by the business of Ike country." The rebel debt was stated by Mr. Memminger, secretary of the treasury, to be, in round numbers, 51,000,000,000, of which $800,000,000 were in treasury notes; probably another year would raise the debt to more than than $2,500,000,000. For Davis's message, the reader can refer to Appleton's " American An-tval Cyclopaedia" for 1813, pp. 788-799. VOI IV.—fiO.

ious at the same time, not to "subjugate" any of the rebellious states, not to interfere with any of their " domestic institutions," and to allow them, just so soon as the)- laid down their arms, to send representatives to Congress, and enjoy all the privileges and advantages of loyal states. A number of resolutions were introduced, avowing these views and purposes; they were usually disposed of promptly, by being laid on the table or rejected entirely. On the other hand, strongly worded resolutions were proposed, and adopted by large majorities, in support of the government and its policy. Thus, on the 17th of December, Mr. Smith of Kentucky, offered the following resolutions:

"Resolved, That as our country, and the very existence of the best government ever instituted by man, are imperilled by the most causeless and wicked rebellion that the world has seen, and believing, as we do,

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that the only hope of saving this country and preserving this government is by the power of the sword, we are for the most vigorous prosecution of the war until the Constitution and laws shall be enforced and obeyed in all parts of the United States; and to that end we oppose any armistice, or intervention, or mediation, or proposition for peace, from any quarter, so long as there shall be found a rebel in arms against the government; and we ignore all party names, lines, and issues, and recognize but two parties in this war— patriots and traitors.

"He-solved, That we hold it to be the duty of Congress to pass all necessary bills to supply men and money, and the duty of the people to render every aid in their power to the constituted authorities of the government in the crushing out of the rebellion, and in bringing the leaders thereof to condign punishment.

"Resolved, That our thanks are tendered to our soldiers in the field for their gallantry in defending and upholding the flag of the Union, and defending the great principles dear to every American patriot."

The first resolution was adopted by a vote of 98 to 65; the second and third were also adopted by a vote of 152 and 166; a Mr. B. G. Harris of Maryland being the only negative.*

On the 7th of January, 1864, Mr. Baldwin of Massachusetts, offered the following preamble and resolution:

"Whereas, the organized treason having its headquarters at Richmond, exists in defiant violation of the national Constitution, and has no claim to be treated otherwise than as an outlaw; and xohereas, this Richmond combination of conspirators and traitors can have no rightful authority over the people of any portion of the national Union, and no warrant for assuming control of the political destiny of the people of any state or section of this

* A resolution was subsequently offered to expel Mr. Harris for "treasonable language and gross disrespect to the House;" but on the vote being taken, it lacked a few votes of the two-thirds required. Immediately another resolution was offered declaring him to be " an unworthy member of the House," and deserving its severest censures, which passed by a vote of 93 to IS. A similar course was pursued in the case of Alexander Long, of Ohio. Speaker Colfax offered a resolution for his expulsion; but failing a two-thirds vote, Mr. Long was declared, by resolution, " to be an unworthy memLer of the House of Representatives."

Union, and no apology but that of conspiracy and treason for any assumption of authority whatever; therefore,

"Resolved, That any proposition to negotiate with the rebel leaders at Richmond (sometimes called 1 the authorities at Richmond') for a restoration of loyalty and order in those portions of the Republic which have been disorganized by the rebellion, is, in effect, a proposition to recognize the ringleaders of the rebellion as entitled to represent and bind the loyal citizens of the United States whom they oppress, and to give countenance and support to the pretensions of conspiracy and treason; aud, therefore, every such proposition should be rejected without hesitation or delay."

The resolution was adopted, by a vote of ayes 88, nays 24. This and the preceding resolutions furnish a fair indication of the spirit and temper of Congress at the time, and also of the probable course of legislation during its first session. At present, we need not dwell upon the subject, or attempt to go into details; on a subsequent page we shall have opportunity of giving the substance of the action of Congress, and the principal measures adopted.

Following the course pursued on a former occasion, in giving a reswne of matters of general interest at the termination of 1862, we shall ask the reader to pause here a moment, and notice briefly where the country stood, and what were its condition and prospects at the close of 1863. In general, as will have been gathered from preceding pages, the state of affairs was encouraging and hopeful. Our armies

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