On the 2nd of February a Bill for Arming Negroes passed the

38,458,008 50

41,777,628 16

14,913,315 25

223,108,000 00

Treasury notes under Acts prior to 1857

Treasury notes under Acts subsequent

Treasury notes, seven-thirty per cent. interest

Temporary deposits at 4 per cent.

Temporary deposits at 5 per cent.

United States' notes, legal tender and receivable for Customs

United States' notes, legal tender

Postal currency less than $1

Certificates of indebtedness, 6 per cent.

Requisitions on the Treasury for soldiers' pay and other creditors, due but not paid

Total funded and unfunded debt to Jan. 2, 1863, according
to the books in the Treasury Department
To which may be added the estimates of appropriations made
and asked for to July 1, 1864 (including $100,000,000
that may be undrawn at the end of the year, and which
will be due, though not paid), amounting to, say

Public debt estimated to July 1, 1864, if the war continues on the same scale to that time

6,844,036 00

110,321,241 65

59,117,597 46

$783,804,252 64

1,216,195,747 36

.$2,000,000,000 00

To show the increase of the cost of all leading articles of consumption with the price of gold, which is measured by the increase of the paper currency, the following table was prepared by one of the commercial newspapers of New York, giving the value of fifty-five leading articles, in units, at the different dates mentioned, and the premium on gold, and the amount of irredeemable paper money afloat at each date:

The general price of these commodities was eighty per cent. higher in October this year than it was in February last year. Fifty-five articles, of which the price was $804 then, cost now $1455. These articles of daily consumption, which were used for fuel and food, may be taken as an illustration of the effects of this rise in prices on the poor. Taking coal per ton, and sugar and coffee per 100lb. we find :

Wages had not risen in this proportion, and the consequence was an immense amount of suffering.

House of Representatives, by a majority of 83 to 54. It provided that the President might arm such number of negroes as he might deem necessary for a term not exceeding five years. Their rations, clothing, and equipments were to be the same as for other soldiers, and their pay not to exceed the then rates; they were to be officered by white or black persons, and governed by the Articles of War and such special rules as the President might direct; but no black officer was to exercise authority over white officers or men, nor were privates or labourers of colour to receive more than $10 per month. There was an important proviso that no slaves of loyal owners should be thus employed, nor should any recruiting offices be opened in Delaware, Maryland, West Virginia, Kentucky, Tennessee, or Missouri without the consent of the Governors of those States.

The term of the existing Congress expired on the 4th of March. It had passed the Conscription Act, the Banking and Currency Bills, and the Act authorizing the President to suspend the Habeas Corpus at his discretion. But there being still business for the Senate to transact, the President issued a proclamation summoning an extra Session of that body, to commence immediately after the adjournment; so that the meetings of the Senate were not interrupted.

The Bill of Indemnity for certain recent acts of arbitrary arrest and imprisonment by the President and the Secretaries of State and War was brought before the Senate, and the debate lasted till five o'clock on the following morning. A motion for adjournment was made, but was not carried. On attempting to resume the discussion, a member, Mr. Bayard, who had protested against the Bill as unconstitutional, was called to order by the Chair on the ground that the Bill had passed. As no vote was taken upon it, the Democrats contended that it was not law, and must be resisted.

At the end of January, after an unsuccessful attempt at attack, General Burnside resigned the command of the army of the Potomac, and was succeeded by General Hooker. In taking leave of the troops, General Burnside said, speaking of his own inglorious campaign, "The short time that he has directed your movements has not been fruitful of victory, nor any considerable advancement of our line; but it has again demonstrated an amount of courage, patience, and endurance that under more favourable circumstances would have accomplished great results."

Two expeditions were now organized by the North, from which great expectations were entertained. The one was the sailing of a naval armament to attack and capture Charleston; and the other, a simultaneous attempt by General Banks operating from New Orleans, and General Sherman operating from Memphis, to open the river Mississippi. General Banks was to attack Port Hudson not far from Bâton Rouge, while General Sherman pressed forward the siege of Vicksburg in the upper part of the great river. At this time General Grant commanded the Federal army of the

Mississippi, and General Rosencrans the Federal army in Tennessee. General Sherman's troops began to work at continuing a canal which had been dug some months previously by a body of negroes under General Williams, with the intention of diverting the channel of the Mississippi from the bed of the river opposite Vicksburg. On the other side, General Joseph Johnstone, who commanded the Confederates in the Western Department, concentrated 150,000 men for the defence of the city.

The naval force destined for the attack on Charleston reached the harbour at the beginning of February. It was under the command of Commodore Ingraham, and he made the attempt to force a passage to the city during the night, while the moon was shining brightly. His ships, however, were met by the iron-clad steamers of the Confederates, and were so damaged that they were obliged to turn round, and with difficulty made their escape to the open sea. Another attempt by the Federals on Galveston harbour about the same time also signally failed, and their vessels were so completely beaten off that the Confederates claimed the right to declare that the blockade was raised. A circular was accordingly addressed by Mr. Benjamin, the Confederate Secretary of State, to the Consular Agents at the Confederate ports, in which he stated:

"I have again to inform you of the raising of the blockade of two Southern ports by superior forces. This Government is officially informed of the total dispersion and disappearance of the blockading squadron recently stationed off Galveston harbour by the combined attack of land and naval forces of the Confederacy. In this attack the enemy's steamer 'Harriet Lane' was captured, and the flagship of the squadron, the 'Westfield,' was blown up and destroyed. The blockade of the port of Galveston is, therefore, at an end. The armed river boats which raised the blockade at Galveston then proceeded to Sabine Pass, where they again attacked the enemy's blockaders, captured thirteen guns, a large quantity of stores, and a number of prisoners. No blockading fleet now exists off Sabine Pass, and the steamers of the Confederacy were, at the last accounts, cruising off the Pass with no enemy in sight. This information is given for the guidance of such of the merchants of your nation as may desire to trade with either of the open ports of Galveston or Sabine Pass."

A second attack was made upon Charleston on the 7th of April, by a strong Federal naval force under the command of Admiral Dupont. When the fleet came within range of Fort Sumter, the batteries there and on Sullivan's Island opened fire with such deadly effect that the Admiral's ship became quickly disabled, and was obliged to retire from the contest. The rest of the squadron had no better success, and were compelled to abandon the attempt, as the iron-clad vessels were so seriously injured as to be unable to continue the contest, and one of them was sunk. The approach to the inner harbour was defended not only by the shore batteries, but

also by three lines of floating obstructions, which rendered the passage wholly impracticable.

Commodore Farragut, who last year performed the most brilliant exploit of the war on the Federal side, by the capture of New Orleans, commanded the flotilla on the Mississippi, which was to force its way up the river past the Port Hudson batteries, and so advance to the attack of Vicksburg from the south. He succeeded in his object in the middle of April, after losing some of his vessels in an engagement with the batteries, and he reached the Red River, from which Vicksburg had drawn its supplies, and opened a communication with Admiral Porter, who commanded the flotilla operating against the place from the river. A considerable Federal force was marched to a point on the right bank of the Mississippi below Vicksburg; the Confederate works at Grand Gulf were bombarded and occupied; and the Federal army, conveyed across the river to Bowlingsburg, gained a firm footing in Mississippi. Upon the fate of this stronghold the chief interest of the war this year was for some time concentrated. It had already held out so long that it was believed by the Confederates to be impregnable. In front a belt of marsh land, two hundred yards in width, stretched three miles along the Mississippi to the foot of the precipitous hill on the side of which the terraced city stood. Every terrace, and the summit of every slope, was covered with batteries, and from the south of the Yazoo river the approaches were hardly less formidable. A series of ravines, formed by winter torrents, constituted so many outworks for the town, which engineering skill enabled the garrison to convert into strong positions. An attempt to reduce the place was made by cutting the "level" of the Yazoo river, so as to inundate the whole country in the rear of Vicksburg, and enable the Federals to float their lighter transports up from the Mississippi and Yazoo, and so intercept the communications between Vicksburg and Jackson, and cut off the supplies of the garrison. But they did not confine themselves to this, which might be justified as a military manœuvre; but, in mere wantonness of destruction, in order to injure Confederate property as much as possible, they in the month of March cut the dykes by which the mighty stream of the Mississippi is kept from overflowing its banks as it runs past the States of Arkansas and Louisiana, and an extent of territory amounting to not less than 5000 square miles was covered by the rushing waters and converted into a pestilential marsh.

An attempt to take Vicksburg by assault previously had completely failed. An immense flotilla, containing General Sherman's army of 40,000 men, glided down the Mississippi from Memphis, and disembarked the troops a few miles up the Yazoo river. They advanced to the attack, but were repulsed with fearful slaughter. President Davis set apart the 27th of March to be observed, in the Confederate States, as a day of fasting, humiliation, and prayer. He stated in his proclamation:

"It is meet that, as people who acknowledge the supremacy of

the living God, we should be ever mindful of our dependence on Him, and should remember that to Him alone can we trust our deliverance, that to Him is due the devout thankfulness for signal mercies bestowed on us, and that by prayer alone can we hope to receive continued manifestation of that protecting care which has hitherto shielded us in the midst of trials and dangers. In obedience to this precept we have from time to time been gathered together with prayers and thanksgiving, and He has been graciously pleased to hear our supplications, and to grant abundant exhibitions of His favour to our arms and our people.

"Through many conflicts we have now attained a place among nations which commands their respect; and let the enemies who encompass us around and seek our destruction see that the Lord of Hosts has again taught them the lesson of His inspired word, 'that the battle is not to the strong,' but to whomsoever He willeth to exalt. Again an enemy, with loud boasting of power, of their armed men and mailed ships, threaten us with subjugation, and with evil machinations seek, even in our homes and at our own firesides, to pervert our men-servants and our maid-servants into accomplices of their wicked designs.

"Under these circumstances it is my privilege to invite you once more to meet together and prostrate yourselves in humble supplication to Him who has been our constant and never-failing support in the past, and to whose protection and guidance we trust for the future."

On the 10th of April President Davis issued an address to the Confederate States, in which he referred with pardonable ambition to the success of their resistance hitherto, and, while he spoke hopefully of the future, called upon his countrymen to make fresh exertions for their independence. He said :

"Your devotion and patriotism have triumphed over all these obstacles, and called into existence the munitions of war, the clothing and the subsistence which have enabled our soldiers to illustrate their valour on numerous battle-fields, and to inflict crushing defeats on successive armies, each of which our arrogant foe fondly imagined to be invincible. The contrast between our past and present condition is well calculated to inspire full confidence in the triumph of our arms. At no previous period of the war have our forces been so numerous, so well organized, and so thoroughly disciplined, armed, and equipped as at present. The season of high water, on which our enemies relied to enable their fleets of gunboats to penetrate into our country and devastate our homes, is fast passing away; yet our strongholds on the Mississippi still bid defiance to the foe, and months of costly preparations for their reduction have been spent in vain. Disaster has been the result of their every effort to turn or storm Vicksburg and Fort Hudson, as well as every attack on our batteries on the Red River, the Tallahatchie, and other navigable streams. Within a few weeks the falling waters and the increasing heats