PUBLIC DOCUMENTS. 



795 



arrive, we must execute so much of it as our condition 

 renders practicable. Whenever the withdrawal of the 

 enemy snail place it in our power to make a census 

 and apportionment of direct taxes, any other mode of 

 levying them will be contrary to the will of the law- 

 giver, and incompatible with our obligation to obey 

 that will; until tnat period, the alternative left is to 

 obey the paramount precept, and to execute it accord- 

 ing to the only other rule provided, which is to " make 

 the tax uniform throughout the Confederate States." 



The considerations just presented are greatly en- 

 forced by the reflection that any attempt to apportion 

 taxes among States, some of which are wholly or par- 

 tially in the occupation of hostile forces, would subvert 

 the whole intention of the framers of the constitution, 

 and be productive of the most revolting injustice, in- 

 stead of that just correlation between taxation and rep- 

 resentation which it was their purpose to secure. With 

 large portions of some of the States occupied by the 

 enemy, what justice would there be in imposing on the 

 remainder the whole amount of the taxation of the entire 

 State in proportion to its representation ? What else 

 would this be in effect than to increase the burden of 

 those who are the heaviest sufferers by the war, and to 

 make our own inability to protect them from invasion, 

 as we are required to do by the constitution, the ground 

 for adding to their losses by an attempted adherence 

 to the letter, in violation of the spirit of that instru- 

 ment? No such purpose could have been entertained 

 and no such result contemplated by the framers of the 

 constitution. It may add weight to those considerations 

 if we reflect, that although the constitution provided 

 that it should go into operation with a representation 

 temporarily distributed among the States, it expressly 

 ordains, after providing for a census within three years, 

 that this temporary distribution of representative 

 power is to endure " until such enumeration shall be 

 made." Would any one argue that, because the census 

 cannot be made within the fixed period, the Govern- 

 ment must, at the expiration of that period, perish 

 for want of a representative body? In any aspect in 

 which the subject can be viewed, I am led to the con- 

 clusion already announced, and which is understood to 

 be in accordance with a vote taken in one or both 

 houses at your last session. I shall, therefore, until we 

 are able to pursue the precise mode required by the 

 constitution, deem it my duty to approve any law 

 levying the taxation which you are bound to impose 

 for the defence of the country, in any other practica- 

 ble mode which shall distribute the burden uniformly 

 and impartially on the whole property of the people. 



In your former legislation you have sought to avoid 

 the increase in the volume of notes in circulation by 

 offering inducements to voluntary funding. The meas- 

 ures adopted for that purpose have been but partially 

 successful, and the evil has now reached such a magni- 

 tude as to permit no other remedy than the compulsory 

 reduction of the currency to the amount required by the 

 business of the country. This reduction should be ac- 

 companied by a pledge that, under no stress of circum- 

 stances, will that amount be exceeded. No possible mode 

 of using the credit of the Government can be so disas- 

 trous as one which disturbs the basis of all exchanges, 

 renders impossible all calculations of future values, 

 augments, in constantly increasing proportions, the 

 price of all commodities, and so depreciates all fixed 

 wages, salaries, and incomes as to render them inade- 

 quate to bare subsistence. If to these be added the 

 still more fatal influence on the morals and character 

 of the people, to which I have already adverted, I atn 

 persuaded you will concur in the conclusion that an 

 inflexible adherence to a limitation of the currency at 

 a fixed sum is an indispensable element of any system 

 of finance now to be adopted. 



The holders of the currency now outstanding can 

 only be protected in the recovery of their just claims 

 by substituting for their notes some other security. If 

 the currency is not greatly and promptly reduced, the 

 present scale of inflated prices will not only continue 

 to exist, but by the very fact of the large amounts 

 thus made requisite in the conduct of the war, those 



prices will reach rates still more extravagant, and the 

 whole system will fall under its own weight, thus ren- 

 dering the redemption of the debt impossible, and de- 

 stroying its whole value in the lianas of the bolder. 

 If, on the contrary, a funded debt, with interest se- 

 cured by adequate taxation, can be substituted for the 

 outstanding currency, its entire amount will be made 

 available to the holder, and the Government will be in 

 a condition enabling it, beyond the reach of any prob- 

 able contingency, to prosecute the war to a successful 

 issue. It is therefore demanded, as well by the in- 

 terest of the creditor as of the country at large, that 

 the evidences of the public debt now outstanding in 

 the shape of Treasury notes be converted into bonds 

 bearing adequate interest, with a provision for taxa- 

 tion sufficient to insure punctual payment and final 

 redemption of the whole debt. 



The report of the Secretary of the Treasury presents 

 the outlines of a system which, in conjunction with 

 existing legislation, is intended^ to secure the several 

 objects of a reduction of the circulation within fixed, 

 reasonable limits ; of providing for the future wants of 

 the Government; of furnishing security for the punc- 

 tual payment of interest and final extinction of the 

 principal of the public debt, and of placing the whole 

 business of the country on a basis as near a specie 

 standard as is possible during the continuance of the 

 war. I earnestly recommend it to your consideration, 

 and that no delay be permitted to intervene before 

 your action on this vital subject. I trust that it will 

 be suffered to engross your attention until yon shall 

 have disposed of it in the manner best adapted to attain 

 the important results which your country anticipates 

 from your legislation. 



It may be added that, in considering this subject, 

 the people ought steadily to keep in view that the^ 

 Government, in contracting debt, is but their agent ; 

 that its debt is their debt. As the currency is held 

 exclusively by ourselves, it is obvious that, if each 

 person held Treasury notes in exact proportion to the 

 valuation of his whole means, each would in fact owe 

 himself the amount of the notes held by him, and, 

 were it possible to distribute the currency among the 

 people in this exact proportion, a tax levied on the 

 currency alone, to an amount sufficient to reduce it to 

 its proper limits, would afford the best of all remedies. 

 Under such circumstances, the notes remaining in the 

 hands of each holder after the payment of his tax, 

 would be worth quite as much as the whole sum pre- 

 viously held, for it would purchase at least an equal 

 amount of commodities. This result cannot be per- 

 fectly attained bv any device of legislation, but it can 

 be approximated by taxation. A tax on all values has 

 for its effect, not only to impose a due share of the 

 burden on the noteholder, but to force those who 

 have few or none of the notes to part with their pos- 

 sessions to those who hold the notes in excess, in order 

 to obtain the means of satisfying the demands of the 

 tax gatherer. This is the only mode by which it is 

 practicable to make all contribute as equally as possi- 

 ble in the burden which all are bound to share, and it 

 is for this reason that taxation adequate to the public 

 exigencies, under our present circumstances, must be 

 the basis of any funding system or other remedy for 

 restoring stability to our finances. 



To the report of the Secretary of War yon are re- 

 ferred for details relative to the condition of the army, 

 and the measures of legislation required for maintain- 

 ing its efficiency, recruiting its numbers, and furnish- 

 ing the supplies necessary for its support. 



Though we have lost many of the best of our soldiers 

 and most patriotic of our citizens the sad but unavoida- 

 ble result of the battles and toils of such a campaign 

 as that which will render the year 1863 ever memora- 

 ble in our annals the army is believed to be, in all 

 respects, in better condition than at any previous pe- 

 riod of the war. Our gallant defenders, now veterans, 

 familiar with danger, hardened by exposure, and con- 

 fident in themselves and their officers, endure priva- 

 tions with cheerful fortitude and welcome battle with 

 alacrity. The officers, by experience in field service 



