794 



PUBLIC DOCUMENTS. 



tral nations, and that the necessary result must be the 

 exhaustion of our specie reserve. Wheat, in the be- 

 ginning of the year 186-', was selling at one dollar and 

 thirty cents per bushel, not exceeding, therefore, its 

 average price in time of peace. The other agricultu- 

 ral products of the country were at similar moderate 

 rules, thus indicating that there was no excess of cir- 

 culation, and that the rate of premium on specie was 

 lici^IiU'iicil I iy the exceptional causes which tended to 

 its exhaustion without the possibility of renewing the 

 supply. 



This review of the policy of your predecessors is 

 given in justice to them, and it exhibits the condition 

 of the finances at the date when the permanent Gov- 

 ernment was organized. 



In the mean tune, the popular aversion to internal 

 taxation by the General Government had influenced 

 the legislation of the several States, and in only three 

 of them South Carolina, Mississippi, and lexas 

 were the taxes actually collected from the people. The 

 quotas devolving upon the remaining States had been 

 raised by the issue of bonds and State Treasury notes, 

 and the public debt of the country was thus actually 

 increased instead of being diminished by the taxation 

 imposed by Congress. 



Neither at the first nor second session of the pres- 

 ent Congress were means provided by taxation for 

 maintaining the Government, the legislation being 

 confined to authorizing further sales of bonds and is- 

 sues of Treasury notes. Although repeated efforts 

 were made to frame a proper system of taxation, you 

 were confronted with an obstacle which did not exist 

 for your predecessors, and which created grave em- 

 barrassment in devising any scheme of taxation. 

 About two thirds of the entire taxable property of 

 the Confederate States consists of lands and slaves. 

 The general power of taxation vested in Congress by 

 the provisional constitution (which was to be only 

 temporary in its operation) was not restricted by any 

 other condition than that " all duties, imposts, and ex- 

 cises should be uniform throughout the States of the 

 confederacy." But the permanent constitution, sanc- 

 tioning the principle that taxation and representation 

 ought to rest on the same basis, specially provides that 

 " representatives and direct taxes shall be apportioned 

 among the several States according to their respective 

 numbers, which shall be determined by adding to the 

 whole number of free persons including those bound 

 to service for a term of years, and excluding Indians 

 not taxed three fifths of all slaves." 



It was further ordered that a census should be made 

 within three years after the first meeting of the Con- 

 gress, and that " no capitation or other direct tax shall 

 be laid, unless in proportion to the census or enumer- 

 ation hereinbefore directed to be taken." 



It is plain that, under these provisions, capitation 

 and direct taxes must be levied in proportion to the 

 census, when made. It is also plain that the duty is 

 imposed on Congress to provide for making a census 

 prior to the '22d of February, 1865. It may further be 

 stated that, according to the received construction of 

 the Constitution of the United States (a construction 

 acquiesced in for upward of sixty years), taxes on 

 lands and slaves are direct taxes, and the conclusion 

 seems necessarily that, in repeating, without modifica- 

 tion, in our constitution, this language of the Consti- 

 tution of 1787, our convention intended to attach to it 

 the meaning which had been sanctioned by long and 

 uninterrupted acquiescence. So long us there seemed 

 to be a probability of being able to carry out these 

 provisions of the constitution in their entirety, and in 

 conformity with the intentions of its authors, there 

 was an obvious ditliculty in framing any system of 

 taxation. A law which should exempt from the bur- 

 den two thirds of the property of the country, would 

 be as unfair to the owners of the remaining third as 

 it would be inadequate to meet the requirements of 

 the public service. The urgency of the need was such, 

 however, that, after very great embarrassment, and 

 more than three months of assiduous labor, you suc- 

 ceeded in framing the law of the 24th April, 1863, by 



which you sought to reach, so far as was practicable, 

 every resource of the country, except the capital in- 

 vested in real estate and slaves, and by means of an 

 income tax and a tax in kind on the produce of the 

 soil, as well as by licenses on business occupations 

 and professions, to command resources sufficient for 

 the wants of the country. But a very large proportion 

 of these resources could only be made available at the 

 close of the present and the commencement of the en- 

 suing year, while the intervening exigencies permitted 

 no delay. In this state of affairs, superinduced almost 

 unavoidably by the fortunes of the war in which we 

 are engaged, the issues of Treasury notes have been 

 increased until the currency in circulation amounts to 

 more than six hundred millions of dollars, or more 

 than threefold the amount required by the business of 

 the country. 



I need not enlarge upon the evil effects of this con- 

 dition of things. They are unfortunately but too ap- 

 parent. In addition to the difficulty presented to the 

 necessary operations of the Government and the effi- 

 cient conduct of the war, the most deplorable of all its 

 results is undoubtedly its corrupting influence on the 

 morals of the people. The possession of large amounts 

 of Treasury notes has naturally led to a desire for in- 

 vestment, and with a constantly increasing volume of 

 currency, there has been an equally constant increase 

 of price in all objects of investment. The effect has 

 stimulated purchase by the apparent certainty of prof- 

 it, and a spirit of speculation has thus been fostered, 

 which has so. debasing an influence and such ruinous 

 consequences that it is our highest duty to remove the 

 cause, and no measures directed to that end can be too 

 prompt or too stringent. 



Reverting to the constitutional provisions already 

 cited, the question recurs whether it be possible to ex- 

 ecute the duty of apportioning taxation in accordance 

 with the census ordered to be made as a basis. So 

 long as this appeared to be practicable, none can deny 

 the propriety of your course in abstaining from the 

 imposition of direct taxes, till you could exercise the 

 power in the precise mode pointed out by the terms of 

 the fundamental law. But it is obvious that there are 

 many duties imposed by the constitution which depend 

 for their fulfilment on the undisturbed possession of 

 the territory within which they are to be performed. 

 The same instrument which orders a census to be made 

 in all the States imposes the duty on the confederacy 

 " to guarantee to every State a republican form of gov- 

 ernment." It enjoins on us "to protect each State 

 from invasion," and while declaring that its great ob- 

 jects and purposes are " to establish justice, insure do- 

 mestic tranquillity, and secure the blessings of liberty 

 to ourselves and our posterity," it confers the means 

 and thereby imposes on us the paramount duty of ef- 

 fecting its intent, by " laying and collecting taxes, du- 

 ties, imposts, and excises necessary to pay the debts, 

 provide for the common defence, and carry on the Gov- 

 ernment of the Confederate States." 



None would pretend that the constitution is violated 

 because, by reason of the presence of hostile armies, 

 we are unable to guarantee a republican form of Gov- 

 ernment to those States or portions of States now tem- 

 porarily held by the enemy, and as little justice would 

 there be in imputing blame for the failure to make the 

 census, when that failure is attributable to causes not 

 foreseen by the authors of the constitution, and beyond 

 our control. The general intent of our constitutional 

 charter is unquestionably that the property of the 

 country is to be taxed in order to raise revenue for the 

 common defence, and the special mode provided for 

 levying this tax is impracticable from unforeseen caus- 

 es. It is, in my judgment, our primary duty to execute 

 the general intent expressed by the terms of the in- 

 strument which we have sworn to obey, and we can- 

 not excuse ourselves for the failure to fulfil this obli- 

 gation on the ground that we are unable to perform it 

 in the precise mode pointed out. Whenever it shall 

 be possible to execute our duty in all its parts, wo 

 must do so in exact compliance with the whole letter 

 and spirit of the constitution. Until that period shall 



