In "that portion of the Union lately in rebellion" the aspect of affairs is more promising than, in view of all the circumstances, could well have been expected. The people throughout the entire South evince a laudable desire to renew their allegiance to the Government and to repair the devastations of war by a prompt and cheerful return to peaceful pursuits, and abiding faith is entertained that their actions will conform to their professions, and that in acknowledging the supremacy of the Constitution and laws of the United States their loyalty will be unreservedly given to the Government, whose leniency they can not fail to appreciate and whose fostering care will soon restore them to a condition of prosperity. It is true that in some of the States the demoralizing effects of the war are to be seen in occasional disorders; but these are local in character, not frequent in occurrence, and are rapidly disappearing as the authority of civil law is extended and sustained. Perplexing questions are naturally to be expected from the great and sudden change in the relations between the two races; but systems are gradually developing themselves under which the freedman will receive the protection to which he is justly entitled, and, by means of his labor, make himself a useful and independent member in the community in which he has a home. From all the information in my possession and from that which I have recently derived from the most reliable authority I am induced to cherish the belief that sectional animosity is surely and rapidly merging itself into a spirit of nationality, and that representation, connected with a properly adjusted system of taxation, will result in a harmonious restoration of the relation of the States to the National Union. The report of Carl Schurz is herewith transmitted, as requested by the Senate. No reports from the Hon. John Covode have been received by the President. The attention of the Senate is invited to the accompanying report from Lieutenant-General Grant, who recently made a tour of inspection through several of the States whose inhabitants participated in the rebellion. ANDREW JOHNSON. WASHINGTON, _December 20, 1865_. _To the Senate of the United States_: In reply to the resolution of the Senate of the 19th instant, requesting that the President, if not inconsistent with the public service, communicate to the Senate the "report of General Howard of his observations of the condition of the seceded States and the operation of the Freedmen's Bureau therein," I have to state that the report of the Commissioner of the Bureau of Refugees, Freedmen, and Abandoned Lands was yesterday transmitted to both Houses of Congress, as required by the third section of the act approved March 3, 1865. ANDREW JOHNSON. WASHINGTON, _December 21, 1865_. _To the Senate_: