CONFEDERATE STATES. 



253 



next, will be fundable only in seven per cent, bonds. 

 Respectfully, 



C. G. MEMMIXGER, Secretary of Treasury. 



All these operations continued down to the 

 close of the year, and the result was the fol- 

 lowing amount of debt, Jan. 1, 1863 : 



COXFEDEBATE DEBT. 



expenditure from the 18th of February, 1862, 

 when the Provisional Government terminated, 

 to Dec. 31, 1862, being almost 10^ months. The 

 results were as follows : 



Thus the debt apparently increased more in 

 the last five months than in the previous sixteen 

 months of the war. One cause was the rise in 

 prices, which reacted upon the Government, 

 requiring more money for the same purpose. 

 This increase is however less than it appears ; 

 since, of the interest Treasury notes, $11,004,- 

 600 were still on hand. Also of the 8 per 

 cent, bonds $8,000,000 were on hand. Of the 

 real increase of these bonds outstanding, $7,- 

 000.000 were derived from the produce loan, 

 and $17,422,250 from funded notes. There 

 was a large increase of interest bearing Treasury 

 notes ; and this increase added to the amount 

 of bonds funded, makes nearly 20J millions per 

 month derived from that source. There re- 

 mained, however, $290,149,692 paper money 

 outstanding at the close of the year, and the 

 estimates required the sum of $357,929,229 to 

 carry on the Government to July, 1863. The 

 disasters that must flow from a further issue of 

 paper to that amount induced many of the 

 States of the Confederacy to guarantee a war 

 debt of the Confederate Government. The 

 Secretary of the Treasury therefore proposed 

 that ; 1st, all the paper money issued prior to 

 Dec. 1 should cease to be currency on the 1st 

 of July, 1863, up to which time it maybe fund- 

 ed in bonds ; 2d, to impose a war tax on prop- 

 erty that should yield $48,000,000 per annum 

 to meet the whole interest on the public debt ; 

 3d, that the States' guarantee should be ac- 

 cepted for $500,000,000, to be issued in a 6 

 per cent, stock. 



The interest on the bonds being payable in 

 paper Buffers virtual decline through the rise in 

 the prices of commodities. It was argued, there- 

 fore, that although by requiring the funding of 

 the notes, the price of the bonds would decline 

 in the market, their value to the holders would 

 rise by reason of the better currency in which 

 they get their interest. By the same means 

 the expenses of the Government would be re- 

 duced, and the ultimate aggregate of the debt 

 be decreased. The war "tax proposed upon 

 property, it was estimated, would give $35,000,- 

 000, arid an income tax of $28,000,000 would 

 give 63 millions, or 60 millions net, which would 

 leave 12 millions to apply to so much of the 

 principal of the debt annually. 



The report of the Secretary of the Treasury, 

 for the close of the year, gave the revenue and 



Customs 



"War tax 



Miscellaneous 



Bonds, 8 per cent 



Call certificates, 6 per cent. 



Treasury notes, 7 3 /i per cent 



Loans, February, isGl, S per cent- 

 Coin from Bank of Louisiana 



Currency 



$668,556 

 16.664,518 



6.171,553 $23,504.657 

 $41,898,286 

 59.742,796 

 113.740,000 

 1,37.' - 

 2,530,799 

 215,554,585 434,342,042 



Total $457.846,699 



Expenses $375,244,413 



Public debt paid 41,727322 416,971.735 



Balance $40,574,964 



The war tax collected was large, but includ- 

 ed a tax upon State bonds. In relation to 

 which the Secretary remarks : " The very large 

 amount of money invested in this form was in- 

 cluded in the war tax of the last year, and the 

 tax thereon was paid everywhere, except by 

 those who raised the question in South Caro- 

 lina. For the ensuing year the case would be 

 different. If the same tax were laid by Con- 

 gress, it is probable that the holders of State 

 bonds would claim exemption under this deci- 

 sion, and Congress itself might be unwilling to 

 reenact, in the same form, a law which had 

 been declared unconstitutional by the coordi- 

 nate branch of the Government, until that de- 

 cision is reversed. The question is of such 

 magnitude, and involves such great interests, 

 that an appeal was taken. But this appeal can- 

 not be decided until a Supreme Court shall be 

 organized." 



When the advance of the Federal armies 

 into the Confederate States, both at the West 

 and on the coast, commenced, the citizens were 

 urged to burn all the cotton and tobacco. In 

 Richmond, on the 26th of February, a conven- 

 tion of Representatives from a number of the 

 States was held. Its object was thus stated by 

 the chairman : " As cotton was king and to- 

 bacco vice-regal, it was proposed to ascertain 

 how far they could be made to subserve the 

 cause of independence." Several propositions 

 were made, viz., "that the crops should be volun- 

 tarily destroyed, that the Government should 

 purchase them and then destroy them if neces- 

 sary." The result of all the proceedings on 

 the subject was the passage of a law by Con- 

 gress ordering all cotton to be destroyed 

 ' when it was about to fall into the hands of 

 the enemy." The amount of cotton raised 

 during the year was about one fourth of that 

 of the previous year. More land was devoted 

 to raising crops of grain, and the demands of 

 the war reduced the number of cultivators. 

 The British consul at Savannah returned to 

 the Foreign Office the following estimate of 

 the stock on hand at the close of the year : 



According to reports made to the Comptroller Gen- 

 eral of this State oy the tax collectors, the amount of 

 land planted in cotton this year in Georgia is about 

 260,000 acres, yielding in round numbers 60,000 bales 

 of cotton of 500 pounds each ; ordinarily the production 

 is 700,000 bales, requiring an area of "about 3,000,000 



