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Gov. Letcher's Message.

Committees of the two Houses, appointed on the Penitentiary, will make a careful and thorough examination of the institution, its measurement, its accounts, the modes of furnishing supplies of raw material, the character of that material, and of the articles manufactured, the management of the Penitentiary and indeed of everything connected with Committees heretofore given, very little attention to this institution — far less than it should have received at their hands. It has always appeared to me that if this institution were systematically and energetically managed — managed with that system and energy that a business man would do upon any pursuit in which he was engaged — it ought to yield a profit instead of before a drain upon the treasury. It has never holded a profit so far; but it does not follow, therefore, that it cannot be made to yield a Seeing, since I have been in office, that it has been a burden upon the treasury, I have to think that it would be better to hand out the establishment to the highest under such regulations as the wisdom of the General Assembly may suggest. Whatever may be your conclusions on the subject, certain that something must be done to secure more promptitude than has been here before exhibited in its administration. The fiscal year terminated on the 30th of September last, and up to this moment I have received no reports showing that its transactions have been settled up to that date. The between this and the day of the of the General Assembly is only three days. Why this is so I am not able to determine. I recommend that you pass a law requiring the accounts for each quarter to be settled up and closed within ten days after the quarter has expired.

I communicate herewith reports from the directors of the Eastern and Western Lunatic They were received at so late a day I have had no opportunity to examine them, has as yet been received from the directors of the Trans- Alleghany Lunatic I suppose no progress has been with the buildings, as Pierpont seized of carried away all the money to the credit of the State in the bank at Weston, shortly after the passage of the Ordinance of Secession.

It is expected that the Military Institute will be again open for the reception of cadets early in the month of January next. In a like this. I consider it a matter of the importance to keep that institution in operation. In the past six months we have had abundant reason to appreciate its value to the State. The services which have been ordered by the professors and cadets have been invaluable and it is difficult to see how they could have been dispensed with without serious detriment to the Commonwealth and the Southern cause. This institution deserves to be fostered and supported, and I trust you will provide liberally and generously for it.

I command also the University of Virginia, the first literary institution in the Southern Confederacy, to your fostering care and attention. It has established itself firmly in the directions of the people of the State and of the Southern country, and whatever is necessary to enable if to maintain the reputation it as acquired, should be cheerfully accorded

The Deaf, Dumb, and Blind Asylum buildings Staunton are now in the possession of the Confederate Government, and are used for hospital purposes. The pupils and teachers have been removed to the Female Institute that place, and are comfortably provided for.

to your consideration the report of the Adjutant General and the documents which accompany it. The onerous and oppressive duty of this office have been discharged with ability and untiring energy and Since the war commenced the of this officer have been greatly increased. They are of the most responsible and important character. He has labored earnestly to preserve the arms, and keep them a place for a time of need, and in this policy he has been ably and energetically supported by the Superintendent of the Armory. If the policy declared in a resolution passed by the house of Delegates at the last session had prevailed, and the flint lock muskets had been delivered to J. R. Anderson & Co under their contract with the military commission, what could have been the condition of our State at the moment? Thousands of our people could have been unarmed, and we could not have sent to the field more than half the men we have put in service, at the most important crisis for the South that has ever occurred.--The resolution failed to pass the Senate, and the State retained the possession of the arms.

Under the action of the Convention, the armory has been transferred to the Confederate Government, to be held for use during the war. The terms of transfer are embodied in a deed and agreement attached, which has been duty acknowledged and recorded in the clerk's office of the Hustings Court of this city. This paper and others relating to the Harper's Ferry machinery, and the guns, ammunition, &c., captured at the Norfolk Navy Yard, have been communicated to the Convention, and will soon be published with the proceedings of that body, and to them I refer you for full information on these interesting matters.

They have received from the Secretary of the Navy, Hon, S. R. Mallory, an interesting correspondence relating to the supply of nitre, and mode of preparing nitre beds, and their probable production. The subject is of the importance to every citizen of the Southern of federacy, involved as we are in a war which may continue many years to come. --That cannot be carried on without gunpowder, and gunpowder cannot be fabricated without nitre. A supply of this indispensable article must be procured speedily; and I bring the subject to your attention, in the say with the confident expectation, that one will offer such inducements as will stimulate our people to engage in its production, and in the manufacture of gunpowder — Whatever action you may determine upon in regard to this subject, should be taken with a little delay as practicable.

Powder mills have been or are being erected in the counties of Page, Pendleton, Greenbrier, and perhaps in other sections of the State, as I have been informed. What amount of powder they will manufacture daily, I have not been able to ascertain. Any one arrangement that can be given to the manufacture should be afforded promptly, in order that we may keep up the supply, and gather a efficient amount ahead to relieve on the subject, and to give full abundant supply of this indispensable article.

at the last session to incorporate the Virginia Canal Company, and to transfer the rights and franchises of the James river and Kanawha Company thereto, will expire by us own limitation, on the 29th day of January next if the Virginia Canal Company be not organized by the appointment of President and Directors as therein required. I approved of the passage of the Act; and if our troubles had not occurred, I feel persuaded that the company would have been organized, and the enlargement and ex of the improvement commenced-- under existing circumstances, I recommend an extension of the time of organization. I think it is advisable to extend it to the 29th of January, as I believe, if peace shall be restored, a very short time only will elapse before the contemplated arrangements will be consummated.

The Convention having passed an ordinance prescribing the flag of Virginia, I have had a number prepared, which I have protect to our infantry regiments at Centreville and others are in course of preparation on the other regiments is now in service. The case on their presentation at Centreville was interesting. The flags were received with a demonstrations of patriotic joy, and as the regiments retired, with their flags waving in the breeze, the display was striking and The presentation took place in the of Generals Johnston Smith, Beau Stuart, Jackson, Early, distinguished officers. It is to say that the preparation and presentation of the flags were suggested by

companies of the State have been and faithful in the of duty in this crisis. Their employees and agent have spared no transfer effort, to transport, with the least delay, troops, supplies and ammunition to desired points; and they deserve and shall received the thanks of the people not only of Virginia, but of the Confederacy. They have mostly won the confidence of the country and in times like these it becomes the Legislature to deal generously and liberally with them, giving to them such aid as will enable them to promote the public interest, without pecuniary sacrifice.

Our railroads have not been constructed with special reference to military purposes and objects, but the war has demonstrated that if they had been constructed with this view, they could not have been better adapt to our wants and necessities. The Virginia and Tennessee, the Central, the Orange and Alexandria, the Manassas Gap, the Richmond, Fredericksburg and Potomac, the Richmond and Petersburg, the South-Side, the Richmond and Danville, the Harper's Ferry and Winchester, the York River, and but by no means least, the Norfolk and Petersburg roads, have all rendered essential and valuable services. Indeed, it is difficult to conceive how we could have dispensed with them, or either of them. Their connections are as important as the roads themselves; and it really seems as if Providence wise Providence had superintended, directed, and controlled our entire system of internal improvements of every kind in Virginia and throughout the Southern Confederacy.

The subject of the currency, at all times of the utmost importance, is doubly important now, when the public attention is so entirely engrossed with the war, its prosecution, and its results. Your attention is earnestly invited to the consideration of such measures as will relieve the people from the mischiefs of an inflated and irresponsible small note currency. The whole country is flooded with small notes, as small in amount as five cents, and running up to three dollars, issued by corporations and individuals. The pecuniary responsibility of the individuals who have issued large amounls of this kind of paper is entirely unknown to persons residing out of their immediate neighborhoods. Such notes can have only a local character, circulation, and credit; and if, as is often the case, they fall into the hands of persons who carry them away to some other point in the State, the holder finds himself unable to use them in his business transactions, and they therefore become a total loss.

Some of our corporations, that have been generous in appropriations to aid in providing for our volunteers and their families, have issued considerable amounts, which constitute, in great measure, the local circulation. Such is the case in regard to the city of Richmond, and perhaps other places. The city has issued near three hundred thousand dollars of notes of denominations of one and two dollars, and of fifty cents. Our city and town corporations, savings banks, and numerous individuals, in different parts of the State, have issued large amount. I have no information which will enable me to state the amount, but from such information as I have received, I estimate the amount of the issues of small notes (exclusive of those issued by our banks) at upwards of a million of dollars.

On the 26th day of April, 1861, the Convention passed ‘ "an ordinance authorizing the banks of the Commonwealth to issue notes of the denomination of one and two dollars to an amount not exceeding five per cent. of their respective capitals. "’ I am not advised as to the amount that has been issued under the ordinance. The aggregate capitals of all our banks, as appears from returns made to this Department, is $16,566,510, five per cent. upon which would amount to $82,833,50. This ordinance expires by his own limitation at the end of thirty days from this day.

If we are to have notes of the denomination of one and two dollars, exclusive of those authorized to be issued by the banks of the State I recommend that you shall prescribe the terms and conditions upon which, and designate the authorities by whom they shall be issued. It is one to the laboring classes, who are usually the sufferers from a small note currency, that this shall be done. I have no hesitation in recommencing that individuals shall be prohibited from issuing them, under severe penalties.

Under the authority vested in me by an ordinance of the Convention, I issued a proclamation, dated May 11th, 1861. prohibiting the exportation of breadstuffs, &c., from this State to any one of the States under the dominion of Lincoln. Robert A. Mayo, Esq., had a contract with the United States Government for supplying tobacco for the navy for three years, from July 1st, 1860. He desired to fill his contract, but the proclamation prevented him from doing so, and as he insists that he has been damaged, he desires to bring the question before the General Assembly. The papers will be hereafter transmitted.

You assemble to enter upon your legislative duties at a period of unusual importance and interest to the State, and not less important and interesting to the Confederacy. I congratulate you upon the agreeable fact that the antipathies and prejudices engendered by the partisan contests through which we have annually passed, while members of the old Government, have almost died away and have been succeeded by an ‘"era of good feeling."’ You meet together as Virginians, to inaugurate and adopt such measures of legislation as will advance the prosperity of our people, and strengthen and multiply the ties that bind together the States composing the Confederacy. It becomes patriots to cultivate a kind and fraternal spirit, to the end that our counsels may be harmonious and our action united. I will be found ready to co-operate in all measures which your wisdom and patriotism may suggest for the promotion of the happiness, for the advancement of the prosperity, for the maintenance of the rights and the preservation of the institutions of our constituents, and the perpetuation of civil and religious liberty.

John Letcher.

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