Fully aware of the delicacy, not to say the danger of the subject,

I commend to your careful consideration whether this power of making

judgments final may not properly be given to the court, reserving the

right of appeal on questions of law to the Supreme Court, with such other

provisions as experience may have shown to be necessary.

I ask attention to the report of the Postmaster general, the following

being a summary statement of the condition of the department:

The revenue from all sources during the fiscal year ending June 30,

1861, including the annual permanent appropriation of $700,000 for the

transportation of "free mail matter," was $9,049,296.40, being about 2 per

cent. less than the revenue for 1860.

The expenditures were $13,606,759.11, showing a decrease of more than

8 per cent. as compared with those of the previous year and leaving

an excess of expenditure over the revenue for the last fiscal year of

$4,557,462.71.

The gross revenue for the year ending June 30, 1863, is estimated at

an increase of 4 per cent. on that of 1861, making $8,683,000, to which

should be added the earnings of the department in carrying free matter,

viz., $700,000, making $9,383,000.

The total expenditures for 1863 are estimated at $12,528,000, leaving an

estimated deficiency of $3,145,000 to be supplied from the treasury in

addition to the permanent appropriation.

The present insurrection shows, I think, that the extension of this

District across the Potomac River at the time of establishing the capital

here was eminently wise, and consequently that the relinquishment of

that portion of it which lies within the State of Virginia was unwise and

dangerous. I submit for your consideration the expediency of regaining

that part of the District and the restoration of the original boundaries

thereof through negotiations with the State of Virginia.

The report of the Secretary of the Interior, with the accompanying

documents, exhibits the condition of the several branches of the public

business pertaining to that department. The depressing influences of the

insurrection have been specially felt in the operations of the Patent and

General Land Offices. The cash receipts from the sales of public lands

during the past year have exceeded the expenses of our land system only

about $200,000. The sales have been entirely suspended in the Southern

States, while the interruptions to the business of the country and the

diversion of large numbers of men from labor to military service have

obstructed settlements in the new States and Territories of the Northwest.

The receipts of the Patent Office have declined in nine months about

$100,000.00 rendering a large reduction of the force employed necessary to

make it self-sustaining.

The demands upon the Pension Office will be largely increased by

the insurrection. Numerous applications for pensions, based upon the

casualties of the existing war, have already been made. There is reason to

believe that many who are now upon the pension rolls and in receipt of the

bounty of the government are in the ranks of the insurgent army or

giving them aid and comfort. The Secretary of the Interior has directed

a suspension of the payment of the pensions of such persons upon proof

of their disloyalty. I recommend that Congress authorize that officer to

cause the names of such persons to be stricken from the pension rolls.

The relations of the government with the Indian tribes have been greatly

disturbed by the insurrection, especially in the southern superintendency

and in that of New Mexico. The Indian country south of Kansas is in the

possession of insurgents from Texas and Arkansas. The agents of the United

States appointed since the 4th of March for this superintendency have been

unable to reach their posts, while the most of those who were in office

before that time have espoused the insurrectionary cause, and assume

to exercise the powers of agents by virtue of commissions from the

insurrectionists. It has been stated in the public press that a portion of

those Indians have been organized as a military force and are attached

to the army of the insurgents. Although the government has no official

information upon this subject, letters have been written to the

Commissioner of Indian Affairs by several prominent chiefs giving

assurance of their loyalty to the United States and expressing a wish for

the presence of Federal troops to protect them. It is believed that upon

the repossession of the country by the Federal forces the Indians will

readily cease all hostile demonstrations and resume their former relations

to the government.

Agriculture, confessedly the largest interest of the nation, has not

a department nor a bureau, but a clerkship only, assigned to it in

the government. While it is fortunate that this great interest is so

independent in its nature as not to have demanded and extorted more from

the government, I respectfully ask Congress to consider whether something

more cannot be given voluntarily with general advantage.

Annual reports exhibiting the condition of our agriculture, commerce, and

manufactures would present a fund of information of great practical value

to the country. While I make no suggestion as to details, I venture the

opinion that an agricultural and statistical bureau might profitably be

organized.

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

gratulation 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 of vessels engaged in the trade and one person in

equipping a vessel as a slaver have been convicted and subjected to the

penalty of fine and imprisonment, and one captain, taken with a cargo of

Africans on board his vessel, has been convicted of the highest grade of

offense under our laws, the punishment of which is death.

The Territories of Colorado, Dakota, 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 United States has been upheld in

all the Territories, as it is hoped it will be in the future. I commend

their interests and defense to the enlightened and generous care of

Congress.

I recommend to the favorable consideration of Congress the interests of

the District of Columbia. The insurrection has been the cause of

much suffering and sacrifice to its inhabitants, and as they have no

representative in Congress that body should not overlook their just claims

upon the government.

At your late session a joint resolution was adopted authorizing the

President to take measures for facilitating a proper representation of

the industrial interests of the United States at the exhibition of the

industry of all nations to be holden at London in the year 1862. I regret

to say I have been unable to give personal attention to this subject--a

subject at once so interesting in itself and so extensively and intimately

connected with the material prosperity of the world. Through the

Secretaries of State and of the Interior a plan or system has been devised

and partly matured, and which will be laid before you.

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 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. I have therefore in every case thought

it proper to keep the integrity of the Union prominent as the primary

object of the contest on our part, leaving all questions which are not

of vital military importance to the more deliberate action of the

Legislature.

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 topics 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, can, not 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 us. 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 hoard 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 that 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 daughters,--work 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 which

men deem desirable has been even greater. We thus have at one view what

the popular principle, applied to government through the machinery of

the States and the Union, has produced in a given time, and also what if

firmly maintained it promises for the future. There are already among

us those who if the Union be preserved will live to see it contain

200,000,000. The struggle of to-day is not altogether for to-day; it is

for a vast future also. With a reliance on Providence all the more firm

and earnest, let us proceed in the great task which events have devolved

upon us.

A. LINCOLN.

MESSAGE TO CONGRESS.

WASHINGTON, December 20, 1861.

TO THE SENATE AND HOUSE OF REPRESENTATIVES:

I transmit to Congress a letter from the secretary of the executive

committee of the commission appointed to represent the interests of those

American citizens who may desire to become exhibitors at the industrial

exhibition to be held in London in 1862, and a memorial of that

commission, with a report of the executive committee thereof and copies

of circulars announcing the decisions of Her Majesty's commissioners in

London, giving directions to be observed in regard to articles intended

for exhibition, and also of circular forms of application, demands for

space, approvals, etc., according to the rules prescribed by the British

commissioners.

As these papers fully set forth the requirements necessary to enable those

citizens of the United States who may wish to become exhibitors to avail

themselves of the privileges of the exhibition, I commend them to your

early consideration, especially in view of the near approach of the time

when the exhibition will begin.

A. LINCOLN.

LETTER OF REPRIMAND TO GENERAL HUNTER

TO GENERAL HUNTER.

EXECUTIVE MANSION, WASHINGTON,

Dec.31, 1861

MAJOR-GENERAL HUNTER.

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