Congress had scarcely time to consider this grave proposition when the President issued on the first day of the new year (1863) his formal Proclamation abolishing slavery in all the States in rebellion against the Government, with the exception of Tennessee, and of certain parishes in Louisiana and certain counties in Virginia whose population was considered loyal to the Government. Tennessee was excepted from the operation of the Proclamation at the urgent request of Andrew Johnson who, after the fall of Nashville in the preceding spring, had resigned from the Senate to accept the appointment of military governor of his State. His service in the Senate, with his State in flagrant rebellion, was felt to be somewhat anomalous and he was glad to accept a position in which he could be more directly helpful to the loyal cause. He possessed the unbounded confidence of Mr. Lincoln who yielded to his views respecting the best mode of restoring Tennessee to the Union, and her inhabitants to their duty to the National Government. There is good reason for believing that both Mr. Lincoln and Mr. Johnson afterwards regarded the omission of Tennessee from the Proclamation of Emancipation as a mistake, honestly made in the first place by Governor Johnson and too readily acceded to by the President.

The recommendation of Mr. Lincoln for a system of compensated emancipation was taken up promptly and cordially by the Republican members of both branches of Congress. The House appointed a special committee on the subject. With but little delay a bill was passed appropriating to Missouri, the first State considered, ten millions of dollars with the restriction that the money should be paid only to the loyal slave-holders. The Senate increased the amount to fifteen millions of dollars and returned it to the House for concurrence in the amendment. The measure had been thus passed in both branches but with stubborn opposition on the part of some prominent Democratic leaders from Missouri. John B. Henderson in the Senate and John W. Noell in the House labored earnestly to secure the compensation for their State, but the bill was finally defeated in the House. By factious resistance, by dilatory motions and hostile points of order, the Democratic members from Missouri were able to force the bill from its position of parliamentary advantage, and to prevent its consideration within the period in which a majority of the House could control its fate. The just responsibility for depriving Missouri of the fifteen millions of dollars must be charged in an especial degree to Thomas L. Price, Elijah H. Norton, and William A. Hall, representatives from that State, who on the 25th of February, 1863, by the use of objectionable tactics deprived the House of the opportunity even to consider a bill of such value and consequence to their constituents. A large majority stood ready to pass it, but the determined hostility of the Democratic members from Missouri defeated the kindly and generous intentions of Congress towards their own State. At a later period in the session the attempt was made to pass the bill by a suspension of the Rules, but this motion though it received the support of a majority was defeated for the lack of two-thirds of the votes as required. The Democratic members of Missouri were again active in resisting the boon which was offered to their State and so earnestly pressed by the Republicans of the House.

MISTAKE OF BORDER STATE MEN.

The course of the Missouri representatives was sustained by the solid vote of the Democratic members from the free States, and received the co-operation of a majority of representatives from the Border slave States. If the bill for Missouri had passed, a similar relief would have been offered to Kentucky, West Virginia, Maryland and Delaware. Mr. Crittenden whose influence with the representatives from these States was deservedly great could not be persuaded to adopt the President's policy. The consideration which influenced him and other Border State men to the course which subsequent events proved to be unwise, was their distrust of the success of the Union arms. The prospect had grown steadily discouraging ever since the adjournment of Congress in the preceding July, and with the exception of General McClellan's success at Antietam there had been nothing to lighten the gloom which deeply beclouded the military situation. The daily expenditures of the nation were enormous, and the Secretary of the Treasury had at the opening of the season estimated that the National debt at the close of the current fiscal year would exceed seventeen hundred millions of dollars. The Border State men chose therefore to maintain possession of their four hundred thousand slaves, even with the title somewhat shaken by war, rather than to part with them for the bonds of a Government whose ability to pay they considered extremely doubtful.

They could readily have secured, indeed they were urged to accept, fifty millions of dollars, the equivalent of gold coin, in securities which became in a few years the favorite investment of the wisest capitalists in the world. Such opportunities are never repeated. The magnanimous policy of the President and the wise liberality of the Republican party were precisely adapted, if the Border State men could have seen it, to the critical situation of the hour. Subsequent events prevented the repetition of the offer, and the slave-holders were left to thank themselves and their representatives for the loss of the munificent compensation proffered by the Government. They could not believe Mr. Lincoln when at the pressing moment he pleaded with them so earnestly to accept the terms, and flavored his appeal with the humorous remark to Mr. Crittenden: "You Southern men will soon reach the point where bonds will be a more valuable possession than bondsmen. Nothing is more uncertain now than two-legged property."

After the unfortunate issue of the Peninsular campaign and in the fear that Lee might turn directly upon Washington, a new army was organized on the 27th of June, 1862, and placed under the command of Major-General John Pope. It included the forces which had been serving under Frémont, Banks and McDowell, and was divided into three corps with these officers respectively in command. General Frémont considering the designation below his rank asked to be relieved from the service, and his corps was assigned to General Rufus King, and soon after to General Sigel. General Pope took the field on the 14th of July with a formidable force. General McClellan was still within twenty-five miles of Richmond, and with Pope in front of Washington, the Confederate authorities were at a standstill and could not tell which way to advance with hope of success or even with safety.

If the army of Lee should move towards Washington he might be compelled to fight General Pope protected by the extensive fortifications on the south side of the Potomac, leaving Richmond at the same time uncovered, with the possibility that McClellan, re-enforced by Burnside's corps which lay at Fortress Monroe, would renew his attack with an army of ninety thousand men. But as soon as the Confederates ascertained that McClellan was ordered back to the Potomac, they saw their opportunity and made haste to attack Pope. Fault was found with the slowness of McClellan's movements. His judgment as a military man was decidedly against the transfer of his army from the point it occupied near Richmond, and it cannot be said that he obeyed the distasteful order with the alacrity with which he would have responded to one that agreed with his own judgment.

AGGRESSIVE COURSE OF THE CONFEDERATES.

No reason can be assigned why if the Army of the Potomac was to be brought back in front of Washington it should not have been transferred in season to re-enforce General Pope and give a crushing blow to Lee. General McClellan was directed on the third day of August to withdraw his whole army to Acquia Creek, and as General Halleck declares, "in order to make the movement as rapidly as possible General McClellan was authorized to assume control of all the vessels in the James River and Chesapeake Bay, of which there was then a vast fleet." General McClellan did not begin the evacuation of Harrison's Landing until the 14th of August—eleven days after it was ordered. General Burnside's corps was ordered on the 1st of August to move from Newport News to Acquia Creek, and an estimate of the transportation facilities at command of General McClellan, may be formed from the fact that Burnside's whole corps reached their destination in forty-eight hours. General Lee knew at once by this movement that it was not the design to attack Richmond, and he made haste to throw his army on Pope before the slow moving army from Harrison's Landing could re-enforce him. General McClellan did not himself reach Acquia Creek until the 24th of August. The disasters sustained by General Pope in the month of August could not have occurred if the forces of the Union, readily at command, had been brought seasonably to his aid. It was at this crisis that the unfortunate movements were made, the full responsibility for which, perhaps the exact character of which, may never be determined, but the sorrowful result of which was that the Union forces, much larger in the aggregate than Lee's, were divided and continually outnumbered on the field of battle.

Flushed with success the Confederate authorities pushed their fortunes with great boldness. General Bragg invaded Kentucky with a large army and General Lee prepared to invade Pennsylvania. The cruel defeat of General Pope disabled him for the time as a commander, and the Administration, fearing for the safety of Washington, and yielding somewhat to the obvious wishes of the soldiers, ordered General McClellan on September 2 to assume command of all troops for the defense of the Capital. General Lee avoiding the fortifications of Washington, passed over to Maryland, and prepared to invade Pennsylvania with a force formidable in numbers and with the added strength of a supreme confidence in its invincibility. General McClellan moved promptly westward to cut off Lee's progress northward. After preliminary engagements the main battle of Antietam was fought on the 17th of September, resulting in a Union victory. Lee was severely repulsed and retreated across the Potomac.