of State governments which have arrayed themselves in rebellion against the Federal authority. To this end, the limits of Virginia might be so altered as to make here boundaries consist of the Blue Ridge on the east and Pennsylvania on the north, leaving those of the south and west as at present. By this arrangement two counties of Maryland (Allegheny and Washington) would be transferred to the jurisdiction of Virginia. All that portion of Virginia which lies between the Blue Ridge and Chesapeake Bay could then be added to Maryland, while that portion of the peninsula between the waters of the Chesapeake and the Atlantic, now jointly held by Maryland and Virginia, could be incorporated into the State of Delaware. A reference to the map will show that these are great natural boundaries, which for all time to come would serve to mark the limits of these States.

To make the protection of the capital complete, in consideration of the large accession of territory which Maryland would receive under the arrangements proposed, it would be necessary that the State should consent so to modify here constitution as to limit the basis of here representation to her white population. In this connection it would be the part of wisdom to reannex to the District of Columbia that portion of its original limits which act of Congress was retroceded to the State of Virginia.

It is already a grave question what shall be done with those slaves who were abandoned by their owners on the advance of our troops into Southern territory, as at Beaufort District, in South Carolina. The number let within our control at that point is very considerable, and similar cases will probably occur. What shall be done with them? Can we afford to send them forward to their masters, to be by them armed against us or used in producing supplies to sustain the rebellion? Their labor may be useful to us. Withheld from the enemy, it lessens his military resources, and withholding them has no tendency to inducven in the rebel communities. The constitute a military resource, and being such, that they should not be turned over to the enemy is too plain to discuss. Whey deprive him of supplies by a blockade and voluntarily give him men to produce them?

The disposition to be made of the slaves of rebels after the close of the war can be safely left to the wisdom and patriotism of Congress. The representatives of the people will unquestionably secure to the loyal slaveholders every right to which they are entitled under the Constitution of country.

SIMON CAMERON,

Secretary of War.

PAYMASTER-GENERAL'S OFFICE,

December 2, 1861.

Honorable SIMON CAMERON,

Secretary of War:

SIR: I have the honor to submit herewith a report of the transactions of the Pay Department for the fiscal year June 30, 1861. It is shown by the tabular statement herewith* that there remained in the hands of paymasters on the 30th of June, 1860, applicable to payments in the first quarter of the last fiscal year, the sum of $454,724.93, in additional to which they have received from the Tresury and other sources, exclusive of amounts transferred from one to another or repaid

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*Detailed statement omitted, as the totals are given in this report.

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