In the development of the popular spirit in the south since the close of the war two well-marked periods can be distinguished. The first commences with the sudden collapse of the confederacy and the dispersion of its armies, and the second with the first proclamation indicating the "reconstruction policy" of the government. Of the first period I can state the characteristic features only from the accounts I received, partly from Unionists who were then living in the south, partly from persons that had participated in the rebellion. When the news of Lee's and Johnston's surrenders burst upon the southern country the general consternation was extreme. People held their breath, indulging in the wildest apprehensions as to what was now to come. Men who had occupied positions under the confederate government, or were otherwise compromised in the rebellion, run before the federal columns as they advanced and spread out to occupy the country, from village to village, from plantation to plantation, hardly knowing whether they wanted to escape or not. Others remained at their homes yielding themselves up to their fate. Prominent Unionists told me that persons who for four years had scorned to recognize them on the street approached them with smiling faces and both hands extended. Men of standing in the political world expressed serious doubts as to whether the rebel States would ever again occupy their position as States in the Union, or be governed as conquered provinces. The public mind was so despondent that if readmission at some future time under whatever conditions had been promised, it would then have been looked upon as a favor. The most uncompromising rebels prepared for leaving the country. The masses remained in a state of fearful expectancy. This applies especially to those parts of the country which were within immediate reach of our armies or had previously been touched by the war. Where Union soldiers had never been seen and none were near, people were at first hardly aware of the magnitude of the catastrophe, and strove to continue in their old ways of living. Such was, according to the accounts I received, the character of that first period. The worst apprehensions were gradually relieved as day after day went by without bringing the disasters and inflictions which had been vaguely anticipated, until at last the appearance of the North Carolina proclamation substituted new hopes for them. The development of this second period I was called upon to observe on the spot, and it forms the main subject of this report. RETURNING LOYALTY.