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SIR: I have the honor to submit the following report of the condition of this Department on the 1st of October, 1864. The last statements submitted to Congress were up to the 1st of April, 1864. The receipts into the Treasury for the two quarters ending on the 1st of October, are as follows:
The expenditures during the same period are as follows:
This balance is made up as follows:
The public debt on the 1st of October, 1864, was as follows:
The estimates submitted by the various departments for the support of the Government for the six months from 1st January to 1st July, 1865, are as follows:
The balances of appropriations not drawn on the 1st of October, 1864, are as follows:
The expenditures were estimated by my predecessor for the three months from 1st April to 1st July at $162,000,000. At this rate the expenditures for the six months should have been
yet to be charged against existing appropriations.
This amount deducted from the balance of appropriations undrawn, viz: $744,165,118 95, leaves the following amount from past appropriations applicable to the expenditures of the six months from the 1st of January to the 1st of July, 1865, $467,416,504.
The preceding tables of the public debt, derived from the books of the Register, present an aggregate of $1,147,970,208. The following summary includes the results of the taxation and funding of the old issues, which do not yet appear on the books of the Register, and exhibits the state of the debt with more precision.
A table of the public debt on the 1st of April, 1864, prepared on the same principle, shows it to have been as follows:
Which compared with the sum of debt similarly ascertained on the 1st October, $1,218,376,185, shows an augmentation of $97,650,780 in the six months from 1st April to 1st October, 1864.
This addition to our indebtedness is smaller than might have been apprehended, yet is greater than if the currency had risen in value, and thereby the expenditures had been reduced; and the large amount of taxes paid had contributed exclusively to the relief of the Treasury.
The foreign debt, consisting of a single item, is omitted; the whole
The expenditures of the current quarter, it is assumed, will be met from the following resources, viz:
The certificates of indebtedness provided by the act of 17th Feburary, 1864, did not prove as favorite an investment as was anticipated, and the amount of these securities, taken in payment by public creditors up to 1st October, is about $2,000,000 only. From the sale of bonds and loans on hypothecation of bonds, about $45,000,000 was raised, and from the new issue of treasury notes $283,000,000.
The large and rapid issue of treasury notes is the more to be regretted from the failure of the measures relied upon to sustain their value and reduce expenditures. The new notes are received by the public at a value scarcely any higher than the old; and, as a consequence, the expenses have not declined.
The currency demands the immediate and the gravest consideration of Congress. Unless a uniform and stable value can be given to the treasury notes, the effort to carry on the war through their instrumentality, must of necessity be abandoned. Acquiescence in its deplorable depreciation, is to court the ruin to which it leads. One hundred and thirty-five dollars in currency, the price obtained for one hundred dollars in six per cent. bonds, is equal to six dollars only in specie; and to sell the bonds at this rate is in reality to dispose of them at ninety-four per cent. discount; or in other words, to give a bond for one hundred dollars in consideration of the loan of six dollars.
There is not a man of property in the country who would not prefer any fair measure of taxation, rather than procure a temporary and treacherous prosperity by the sale of mortgages on his estate at this ruinous rate.
The depreciation of the currency, proceeding from redundancy, and the want of confidence in its ultimate redemption, can only be corrected by measures that shall both diminish its volume and sustain the public confidence.
The measures adopted by Congress to reduce the currency, did not combine these essential elements of success. Those who had taken the old notes, relying on the good faith of the Government, on finding them suddenly deprived of one-third of their nominal value, became alarmed and received the new notes under strong apprehensions of a repetition of the measure. At the time, too, that the currency act provided for a circulation exceeding four hundred millions of dollars,
The necessity of providing a speedy and efficient remedy for this condition of things is obvious. The bonds have to be sold for this currency; the taxes must be collected in it, and hence all the means of the Government for the purchase of supplies will consist of this medium. Admitting that the amount which may be raised from these sources, is nominally equal to the estimated expenditures, there is yet no security against such a further decline in the value of the notes as will disappoint present calculations, and add enormously to the accumulation of the public debt. The time, therefore, seems to have arrived when Congress should take measures to restore and sustain the currency, or make provision for its honorable redemption, and resort to the use of specie and bank-notes. The adoption of the last alternative, it is feared, would produce great embarrassment in the community, and the impossibility of obtaining an adequate supply of specie and bank-notes for the wants of the Government, would create the necessity for a system of universal impressments, followed by incalculable suffering and distress.
That the Government must be supplied with sufficient means to carry on the war, all are agreed. Our enemy offers us no terms short of unconditional surrender of life, liberty and property, and no choice is left us, even if we were disposed to hesitate, which we are not, but to continue the war. The adoption, therefore, of a permanent and efficient system of finance is indispensable to the full development and unconstrained use of our resources. The return to specie payments being for the present impracticable, the enquiry is whether it is possible to restore and maintain the value of the treasury notes as a currency. The accomplishment of this end is of such vast importance, that it is, of all others, that to which the resources of the country should be devoted and applied. Were it possible to anticipate the productions of future years of peace, and convert them into money for immediate use the expediency of resorting to such a measure could not be doubted. May not a near approach to it be made by devoting a portion of those future productions to the purpose of imparting to the treasury notes a high and stable value? I submit that this may be done, and respectfully propose a plan for its accomplishment.
It is an act pledging the faith of the Government against the issue of treasury notes beyond the amount authorised by the act of 17th February, 1864; exempting the notes from taxation; providing for the application of twenty per cent of the taxes annually to the reduction of that amount until peace be declared or the outstanding sum be reduced to $150,000,000; continuing the tax in kind after the war, and appropriating an ascertained proportion thereof annually to the redemption or payment of the circulation, until the whole shall be retired.
I propose that the redemption shall be made from the tithes of cotton, wheat and corn, at prices fixed by the act, namely: cotton at fifty cents per pound, wheat at four dollars per bushel, and corn at two dollars per bushel; that the notes be received after the war, from all persons liable to the tax in kind, in commutation of their tithes; and that the Secretary of the Treasury be authorised to issue certificates in exchange for treasury notes, bearing six per cent interest, secured and redeemable in the same manner and on the same terms as the notes themselves, free from taxation and receivable after the war in payment of the tax in kind; and that all notes, received into the treasury for these certificates, be cancelled.
The effect of this measure would be that, at present prices, the entire population would be interested in exchanging their productions for treasury notes. They would constitute not only a safe currency, but a profitable investment, for in the ratio of ten dollars for one, as compared with specie, the produce obtained in payment at the close of the war, would cost the following prices, viz: cotton five cents per pound, wheat forty cents per bushel and corn twenty cents. These nominally low prices would not operate to the prejudice of the agriculturalist, for his tax, being in kind, would neither be increased nor diminished by the price. It is true he would have a collateral interest in common with tax payers generally, (for of course all interests will be taxed,) in the redemption of the notes at a moderate rate. In this respect his interest would be protected by the prices stipulated by the act, which are not too low for a time of peace. But if they were, a full compensation would accrue to the tax payer in the immediate enhancement of the notes and consequent reduction of expenses. And the producer would find a complete indemnity in the sale of a bushel of corn now at four dollars, and the application of the money to the payment of a tax hereafter of two bushels.
In suggesting the three articles of cotton, wheat and corn, as a specific pledge for the redemption of the currency, no immunity from their full proportion of taxation is intended to be implied, in respect of other objects of the tax in kind, or any subjects of taxation whatsoever. These are only assigned to this particular office or function because of their peculiar adaptation thereto.
The following is an estimate of the resources to be thus applied, viz: wheat, twenty-five million bushels; Indian corn, two hundred million bushels, and cotton, two million bales. A tax of ten per cent. would yield as follows:
This amount applied annually would redeem the notes outstanding in four or five years. The credit due to this estimate may be inferred from the following summary of the crops of the Confederate States before the war, taken from the United States census of 1860:
COTTON ESTIMATED at 400 pounds per bale and 50 cents per pound; Wheat at $4 per bushel, and Corn at $2 per bushel.
The leading details of this plan or measure to reassure the public of the safety of the currency, and the redemption of it in full, will consist of the ratio in which the selected staples should be combined, and of the provision necessary to equalize the value of the postponed and preceding instalments. The combination of the staples as recommended in this report is 1-9 of wheat, 4-9 of corn, and 4-9 of cotton. The scheme recommended in another place, for the purpose of harmonizing the value of the successive instalments, is the substitution of certificates, bearing interest, for the currency, set apart by the holders, in commutation of the tax, or to purchase the tithes. After the most careful investigation I am satisfied that the measure may be successfully reduced to practice.
Under the operation of this system a sure appreciation of the currency may confidently be expected. All will discern the advantage to arise from the acquisition of treasury notes at present prices, and even foreign capital may be expected to absorb a part, for, at the rate of ten dollars for one dollar of specie, the cost of cotton would be reduced to five cents per pound. Confidence may be expected to return; for those who dread repudiation, and those who would regard the return to specie payments with equal alarm, would both be encouraged and assured. In imparting increased value and security to the treasury notes, greater reliance in the value of the funded debt would be inspired, for the expenditures would be reduced and the accumulation of debt be retarded.
Notwithstanding the waste and desolation of the war, and the amount of property in the enemy's lines, the subjects of taxation under the act of 17th February, 1864, according to the returns made to the commissioners by the assessors, under the act of 19th August, 1861, is as follows, viz:
There is an element of our national wealth, taken singly, that exhibits, in a striking view, the amplitude of our resources to meet our wants. I refer to the great staple of cotton. The
I propose an additional duty of five cents per pound on the exportation of cotton and tobacco and the duplication of the duties on imports; payment to be made in coupons of the five hundred million loan, sterling exchange and specie, as now provided by law. The price of cotton in Liverpool being about sixty cents per pound, the deduction of five cents for the tax would hardly have an appreciable effect upon its value in currency. The duty would fall chiefly on the foreign consumer, or be taken from the profits of the exporter; and an important financial advantage would be obtained at a moderate expense to the country. The increased duty on imports would be a small tax on this lucrative trade. If paid by the importer, it would be free from all objection; and if by the consumer, his ability to bear it is abundantly proven by the high price paid for goods. These measures would enhance the value and enlarge the demand for the five hundred million loan.
The expenditures for the six months, from the 1st of January to the 1st of July, 1865, with an improved currency, may be safely estimated at a maximum of $300,000,000; and for the twelve months at,
To meet these demands upon the Treasury, I propose the following scheme of taxation and loans, viz:
To raise the amount proposed by taxation, I recommend the repeal of so much of the act amending the act of 17th February, 1864, as will leave the property and income tax in full operation, without the abatements now allowed, viz: Section 1, paragraph 1, of the amendatory act of 14th June, 1864, which provides that the value of the tax in kind shall be deducted from the ad valorem tax on agricultural property; and section S, paragraph 2, of the same act, which provides that the property tax shall be deducted from the income tax. By this change the desired amount of revenue will be secured, and the prominent inequalities of taxation, now the subject of complaint, will be redressed.
The tax in kind being ten per cent., and its value in currency, $145,000,000, it follows that the productions taxed amounted in value to $1,450,000,000; and the assessed value of the property from which these productions are derived being $2,900,758,778 40, it is apparent that the gross income of $1,450,000,000 is equal to fifty per cent of the assessed value of the property. Hence, an agricultural estate of the value of $100,000, subject to an ad valorem tax of $5,000, yielded a gross income of $50,000. The tithe of this income-($5,000) paid the property tax, and left undiminished $45,000 of income. This result was the consequence of valuing the property for taxation in specie, and the productions received in payment of the tax in currency. Had the preperty been valued in the medium in which the tax was payable, the assessment would have been at least $500,000, and the tax $25,000; or had the articles received in kind been valued, as the property was, in specie, the payment would not have exceeded $2,000, and $3,000 more of tax would have been received in currency.
The inequality of taxation that resulted is made conspicuous by a comparison with investments made in Government securities. The same sum of $100,000, in eight per cent. bonds, yielding $8,000 per annum interest, paid $5,000 tax, and left a clear income of only $3,000. Capital invested in banking presents a contrast equally striking. One of the banks in Richmond, which is referred to as an example only, on a capital of $2,336,000, paid $424,400 taxes, the specie being assessed at eighteen times the value of 1860; and the amount distributed among the stockholders as income was $268,640. On $100,000 consequently, thus invested, the tax was $18,000, and the income $11,500. These inequalities give rise to grave complaints, whilst any amount of taxation equitably distributed would doubtless be cheerfully met.
The collection of a large sum in taxes is essential to the reform of the currency, and the country is in a condition the most favorable to bear the burden. The abundance of money, and high price of every species of property and supplies, would render the payment easy and free from embarrassment. The treasury will derive little aid from this source in the present year. The tax on the currency brought no revenue, operating only as a reduction of the circulation. The other taxes, with comparatively little exception, will be received in four per cent bonds. The taxes upon property and income respectively, are,
ad valorem tax on property engaged in agriculture being discharged by the credit of the tax in kind, and the income tax on other property diminished by the whole sum of the ad valorem tax. These abatements, and the payments in four per cent, bonds, result in reducing the revenue from taxation (exclusive of the soldiers' tax) to about $40,000,000.
The accompanying able report of the Commissioner of Taxes is referred to for much valuable and interesting information on this important subject.
Computing the property of the country at the present estimated value, the following is the existing rate of taxation, viz:
With this estimate of the resources of the Confederacy, the taxes proposed for the ensuing year cannot be deemed excessive. The sum of $360,000,000, reduced into specie at twenty dollars for one dollar, is only $18,000,000; and this amount, applied to the values of 1860, viz: $4,351,138,157, is at the rate of less than one-half of one per cent. And if the calculation is made in currency, viz: $360,000,000, upon an assessment of $24,656,449,551, it would amount to one and a half per cent. And when it is remembered that with the payment of the taxes quarterly, a measure which I strongly recommend, less than one-fourth of the currency will suffice for the quarter's tax, and the amount collected in any one quarter will be restored to the circulation before another becomes payable, it is apparent that the resources of the country are ample to meet the proposed increase of taxes.
It may be objected that the several measurcs combined will unduly reduce the circulation, and expose the country to the evils of a declining and
The developments attending the execution of the Currency Act of February 17, 1864, reveal clearly that the great body of the circulation is held in moderate sums by persons of limited means, in all classes of the population. The deposits held by the banks, large as they are in the aggregate, proved to be the accumulations of individual depositors in all parts of the country. The report of the depositaries, appointed for funding the old notes show that soldiers, soldiers' families and the poor generally, have been the
The measures proposed may be expected to correct this inequality, and give to those who claim our sympathy a mortgage upon our future supplies for bread at fair prices, and when the war is over the country will enjoy the satisfaction of having protected its defenders from want.
If the proposed reform should be followed by a general and large decline in prices, the result would be hailed with the liveliest satisfaction, except by those whose imprudent investments have contributed to the derangement we desire to correct. No improvement of the currency can be expected that will not be attended by an immediate decline of prices. It will, therefore, be idle to say that the reform of the currency is desired, if we are willing that existing prices should be continued, and to shrink from measures that will be attended by the results indicated, is to oppose the reform of the currency. The time for hesitation is past, and one of two alternatives must be adopted. Measures should be taken, without delay, to revive confidence in the treasurv notes and uphold their value, or a tax payable in specie and the notes of solvent banks be resorted to. In the most favorable light in which the notes can be regarded, the purchasing quality does not exceed one to seven or eight, as compared with specie; and the bonds are even lower in value, being sold at the rate of one hundred dollars in bonds for six dollars in specie. To continue such exchanges, if, indeed, for any length of time it were possible, would be ruinous. But my conviction is, that it is impossible to persevere, and unless prompt and decided measures of reform are adopted, the progress of depreciation will be accelerated, and our embarrassments become insurmountable. I would, therefore, earnestly urge upon Congress the necessity of acting with dispatch, and, by the adoption of vigorous and decided measures, restore the value of the currency and avert the calamity with which we are threatened.
To remove apprehensions of our ability to bear with convenience the increased taxation recommended, it will suffice to call attention to the amount of taxes paid this year.
Of this sum there was received in aid of the Treasury, viz:
I would respectfully recommend that all Government bonds and stocks, and loans of every description to the Government, be declared free from taxation, except upon the income derived therefrom; and that the income tax be at the same rate and subject to the same conditions as other income taxes. The policy of this measure is obvious. Under existing laws, except in the case of the five hundred million loan and the certificates of indebtedness, the income derived from Government securities, is nearly all taken back in the form of taxation. One effect is to drive the bonds abroad and create a foreign debt that will be found oppressive on the return of peace, and another is to raise a preference for other investments over Government securities. Many investments yield a larger income than simple interest, and are capable of bearing the tax; but the interest on Government loans being limited, and not susceptible of augmentation, the tax of five per cent. absorbs nearly the entire income. In the case of the four per cent. bonds the whole would be taken, and when it is remembered that this rate of interest is low, and that the loan was in a measure compulsory, this class of public creditors seem particularly entitled to the consideration of Congress. Tender regard for the just claims of those who, confiding in the honor and good faith of the Government, responded to its calls for pecuniary aid will be attended by no loss, since they who deal the most honorably with the creditor invariably borrow on the best and most economical terms.
I would particularly call attention to a class of creditors now lending their money to the Treasury at four
The tax also upon the banks deserves, in a particular manner, the careful consideration of Congress. It would be a conspicuous wrong to constrain these institutions to wind up their affairs, and a serious loss, both to the public and the Government to deprive the country of the support to be drawn from the concentrated capital they possess. This, I think, must eventually be the effect of the present tax if continued, and I recommend a modification of the law, such, in my opinion, as will give the desired relief, and leave the revenue undiminished. The assets of the banks represent the following interests:
The following plan of taxation is proposed:
The circulation of the banks on the 1st of January, 1859, was as follows, and there is no reason to suppose that it is now any less:
If limited to the five first named States, the tax would still operate on a sum of forty-three million dollars; and if the returns shall exhibit a smaller amount than this, the residue would be brought under sequestration, and contribute more
The courts having decided that, under the act of 15th February, 1862, section twenty-seven, the four per cent. bonds, issued under the act of 17th February, 1864, to reduce the currency, are receivable in payment of property sold under the sequestration laws. I would respectfully call the attention of Congress to the subject. This cannot have been the intention, and as no other bonds are thus applied, but such as are under par, I recommend the repeal of that provision of the law.
I would also direct the attention of Congress to the 7.30 notes. The payment of interest is attended with the risk of frauds, and the regulations adopted for the security of the treasury are found inconvenient to the public. For these reasons it is desirable to change the form of these obligations, and I recommend that authority be given to issue six per cent. coupon bonds in exchange for the notes. This measure would effect a saving in interest of one million three hundred thousand dollars annually, which sum capitalised is equal to a reduction of nearly twenty million dollars of the principal of the debt.
In the act of June 14, 1864, to increase the compensation of the heads of the several executive departments, and other officers and clerks of the Government, the terms used have been decided not to include the Commissioner of Taxes, and the heads of the other bureaus of the Treasury Department. It is not supposed to have been the intention of Congress to deny these officers the relief extended to others, and I suggest the early passage of an act to bring them within the meaning and entitle them to the benefits of the act of 1st June.
The third section of the act “to organize forces to serve during the war,” approved 17th February, 1864, authorizes the Secretary of the Treasury to issue bonds for the payment of the bounty provided by the act, but omits to fix a time for the payment of the bonds; and I respectfully recommend that the act be amended in that particular.
I have the honor to report that the agency of the Treasury in the trans Mississippi department has been organized and put in operation, after a protracted delay occasioned by the difficulty of communication. The same cause has retarded the receipts therefrom of statements exhibiting the result of the funding and of its other operations. Supplies of the new issue of treasury notes, of bonds and certificates of indebtedness, have been sent to that department, and there is every ground to believe that order and efficiency will soon take place, and the difficulties and embarrassments hitherto experienced there be removed.
The reports of the Chiefs of the Produce Loan Bureau and of the Treasury Note Bureau will be submitted to Congress in a separate communication.
SIR: I have the honor to refer you to the tables hereto attached, showing the estimated sum which will be realized for the year 1864, from the tax laws now in force in each of the States in the Confederacy in which it is practicable to collect taxes. The process by which these estimates have been arrived at will be seen by reference to the attached statements. By reference to table marked A, it will be seen that the total amount is $145,527,431 34. These estimates are predicated upon the returns of war-tax assessments for the year 1861. The original assessments thus taken have been increased twenty per centum, to cover such objects of taxation as were not taxable under the act of 19th August, 1861, but which are included in the general terms “real, personal and mixed of every kind and description,” as employed in the act of 17th February, 1864. To this estimate has been added the estimated value of gold and silver plate, jewels, jewelry and watches, in each State, the tax upon which is ten per cent—five per cent. more than that levied upon the other objects of taxation. Deductions have been made for regions occupied by the public enemy, and destruction of crops, &c., and these are based upon such meagre information as could be derived from my knowledge of the foothold of the enemy in the several States, and from such general items of information connected therewith as would influence the allowance of per centage.
In arriving at the amount of tax above stated, certain deductions have been allowed on account of property employed in agriculture and the credit required by law upon the income tax, where the property and effects producing the income have been taxed. It is estimated that at least two-thirds of the property of the Confederate States is employed in agriculture, and that the income tax for the
ad valorem tax.
The estimate of all other taxes (under the act of 24th of April, 1863, as amended and approved 17th February, 1864,) is based upon the collections as already returned to this office. This is done in the absence of the assessment lists, which should form the proper basis for all estimates of this character, as they alone can furnish reliable data.
These lists have been returned very late, and in many cases they have not been returned at all, and the clerical force is not sufficient for their examination, even if the clerks were permitted to remain at their duties. It is superfluous for me to say that a large number of my clerks have been in the field for weeks past, and that prior to that time they were subject to constant calls during the summer, and were out a month at a time on some occasions, consequently the lists have not been examined as they should have been.
The soldiers' fund tax, by the terms of the law, is one-fifth of all other taxes imposed upon subjects of taxation for the year 1864, and includes property employed in agriculture, without any deduction on account of tithes paid.
By statement B, herewith, it will be seen that the amount of taxes actually collected and reported to this office is $118,845,744 57. This includes the tax of 1863, and what has been collected and reported under the act of 17th February, 1864, and amendments, and the soldiers' tax act. It is impossible at this time to segregate the amount collected under each law, much less to state in what proportions it is derived from the many sources or subjects of taxation. It will not be possible to do this, or to approximate the amounts, until the lists have been received and examined, full returns made from all the States, and the books of this office for the tax year shall have been fully made up and completed. The taxes for this year, from the best information I can obtain, will all, or nearly so, be collected by the 1st of January, except, of course, the income and such other taxes of the year as are not payable till 1865.
I have endeavored to estimate the probable proportions of the tax of this year which will be collected in four per cent. certificates and currency. Inasmuch as it is to the interest of the tax-payer to use the four per cents in payment of his taxes, it is presumed that he will do so in every case in which they are receivable, and that no currency will be used when the certificates will answer the same purpose. By the terms of the law, as before stated, the soldiers' fund tax must be paid in currency of the new issue, and the estimated amount of this tax in all the States is $45,653,693 73.
Then the tax on coin, bullion, foreign exchange, &c., must be paid in coin, or treasury notes of the new issue, or of the old at a reduction of one-third. What the amount of this tax will be, I have not the most remote means of ascertaining. Besides, it is impossible to conjecture what proportion of it will be paid in coin, or what in currency, at the commutation value of coin. The presumption is, however, that much the greater portion will be paid in currency. Then,
It is impracticable to say or even to approximate with any degree of certainty the proportions which the different interests of the community will pay of the estimated taxes for this year. After full returns shall have been received, and the books of the office are made up, something satisfactory on this subject may be arrived at.
I can state, I think, with tolerable accuracy, from investigations on the subject, that the agricultural interest, in addition to the tithe, will pay about one-third of the money tax, or $48,509,143 78. The tithe estimated at the valuation placed upon it in 1863, (the market value in Confederate currency in the neighborhood where assessed,) will probably be equal to the money tax, say $145,527,431 34. The value of the property from which tithes are to be collected is estimated to be two-thirds of the value of the whole amount of property taxed under the act of 17th February, 1864, say $2,900,758,778 40. This is the estimated value of the property employed in agriculture, from which the tithe is to be collected, upon the basis of valuation of 1861, which may be regarded as a specie basis. It is estimated that this class of property has appreciated at least five-fold in Confederate currency, and by multiplying the specie value by five, the result is $14,503,793,892, its present value in currency.
I beg leave to refer to some of the inequalities in the present tax laws. The tax on gold and silver coin, moneys held abroad, and foreign credits, is five per cent. on the amount, to be paid in specie, or in currency at the rate of eighteen dollars in currency for one dollar in coin. All property (including cotton, tobacco, land and slaves not purchased since the 1st day of January, 1862) is to be assessed at its value in 1860, or upon a specie basis, and the tax on this is only five per cent., to be paid in currency. Here exists a very great inequality. A tract of land worth $10,000 in coin in 1860, and presumed to be worth the same now, only pays $500 in Confederate notes or four per cent. certificates, whereas $10,000 in gold coin pays $500 in coin or its equivalent in Confederate notes, at the rate of eighteen for one, which is $9,000.
Paragraph three, section four, act of 17th February, 1864, which levies a tax of twenty-five per cent. additional in certain cases, has been construed by the Attorney General only to include corporations and joint stock companies; and that simple companies or co-partnerships and single owners of manufacturing establishments are exempt from the tax. If the company is not a joint stock company, it is held that the act does not embrace it, no matter how great its profits may be.
It appears to me that Congress did not intend that the large number of co-partnership and individual owners of manufacturing establishments should escape this tax. Suppose two cotton mills in the same county, as frequently occurs. The one is owned by a joint stock company and the other by a simple co-partnership or by a single individual.
The present general scheme of taxation, I think a good one, and, with a few alterations, will work well and satisfactorily to the public, and produce a large amount of revenue. In all the legislation of Congress upon the subject of taxes, the agricultural interest has been too much favored. It is not so much the amount as the inequality of taxes which produces discontent and murmurings among the tax-payers. The acts of Congress now in force would raise a very large amount of revenue but for the allowance of credits, whereby one tax is cancelled by another. Thus, the farmer is assessed upon all his property and then allowed a credit upon his property tax to the amount of the value of his tithes. Other classes are taxed upon their property and allowed to deduct the ad valorem from the tax on the income derived from such property. This multiplies labor and expense without increasing the revenue.
Tax-payers complain of two heavy taxes, when in effect there is only one, for the excess of income above the ad valorem tax is all that is subject to income tax.
I would, therefore, respectfully recommend that all these credits be abolished, and that property be taxed on the basis of 1860, as it is now. Let the tax be required in specie or its equivalent in Confederate notes, at the option of the tax-payer. Let the law taxing business avocations and professions, and the income of every person, partnership and corporation remain as it is, amending as above suggested.
The merchant will then pay his property tax, his business tax, and his income tax, and the farmer and planter will pay his property tax; and his tithes, according to existing provisions, will be an equivalent for and received in full satisfaction of the tax on income derived from his property employed in agriculture.
All this may be effected by simply repealing those clauses which allow the value of the tithe to be credited upon the ad valorem tax on property employed in agriculture, and the ad valorem tax on property not so employed to be credited upon the income tax derived from such property. In my opinion, as little change in the law as practicable should be made. Tax laws should be free from doubt and permanent, and, at the same time, simple. It would be very difficult, however, to devise a simple scheme of taxation in view of the great multiplicity of objects to be taxed. The present one, though complicated, is now pretty well understood by the officers, and, in most cases, works harmoniously. Frequent changes produce confusion, dissatisfaction in the public mind, and great delay and additional expense in the assessment and collection of taxes. The amendments of the last session of Congress have thrown back the business several months, and in view of the necessary alteration of established forms, &c., has caused very great additional expense. But for such alterations, collections would have
Should the credits before referred to be repealed, and all property and effects be valued upon the specie basis, and the tax required in specie, or its value in currency, it would be necessary to reduce the rate per centum of taxation to one or two per cent., perhaps, according to the amount it might be desirable to raise by taxation.
I regret my inability to report to Congress a larger amount of collections. The causes have been already partially alluded to. Besides the delay occasioned by the amendments to the law, change of forms, etc., my office has had to contend with many difficulties and disadvantages growing out of a multiplicity of causes.
By reason of restrictions imposed in the law, it has been difficult from the start to secure competent clerks.
By the thirty-ninth section of the assessment act, no one could be appointed for duty in this office who was under forty years of age, unless he had been discharged from military service by reason of physical disability incurred therein, or found unfit for such service by a competent board of surgeons. Physical disability was therefore made a qualification by law for an appointment in this office, and the consequence is, that some of the worthy, and otherwise faithful and competent gentlemen, serving therein as clerks, are frequently unable to attend to their duties. Nearly all belong to the local forces, and those who are sufficiently healthy have frequently been called away from their duties to the field, and, since the 5th of May, have been absent most of the time from that date to the present. It is extremely difficult to find competent persons, above the age of forty-five, willing to accept these positions.
Under the most favorable circumstances it is difficult to procure the stationery and printing necessary to supply the immense number of forms, lists and tax books for assessing and collecting the taxes, and after these had been procured, at great labor and expense, such alterations were made in the laws as necessitated corresponding changes in the forms, and much of the work had to be done over again. Then the printers, postoffice clerks, etc., were called out at the most critical juncture, and for a long time it was impossible to have any printing or binding executed, or to transmit the documents after they were printed to the various State collectors for distribution. And thus the distribution of forms, and the dissemination of the various and necessary instructions were retarded, and officers at remote points were long left in ignorance as to their duties under the law. Contracts were made in Richmond with parties to furnish the tax digests for those States in which they could not be procured, and these books would long since have been completed and sent away, but for the fact that the contractors have lost their printers and binders, who have been placed in the field, and, consequently, the work is now suspended. I am powerless to devise a remedy, and, as much as I regret the delay, it will be seen that I am in nowise responsible for it. And, unless Congress should devise the means of preventing such interruptions
Owing to the difficulty of communication with the trans-Mississippi department, since the fall of Vicksburg, but little is known as to the condition or progress of the tax business in that department. But ample instructions have long since been sent to Judge Gray, the agent of the department, by which full control is placed in his hands, of the operations on that side, and the State collectors are directed to report to him, and he is directed to forward to this bureau periodical reports of their actings and doings.
Since the recapture, by our forces, of the town of Washington, N. C., the counties of Hyde and Beaufort having again fallen within our lines, the assessors and collectors for those counties were proceeding to enforce collections; but, in consequence of the ruin and destruction of property during the long occupancy of those regions by the enemy several earnest remonstrances, from highly respectable sources, were addressed to the department, against the collection of taxes in those counties, and asking a suspension of assessments and collections till after the meeting of Congress.
In accordance with directions from the department, I ordered the suspension asked till thirty days after the meeting of Congress, in order that measures for the relief of the people of those counties might be considered by that body. A suspension of collections was likewise ordered in certain portions of Culpeper county, Virginia, for similar reasons. The attention of Congress is respectfully called to the subject.
I am confident that the whole expense of assessing and collecting the taxes, including stationery, printing, books, etc., as well as the expenses of this bureau, will not exceed one per centum. I make this statement with much pride and pleasure, because I doubt if ever, in any country, before, public or private dues have been collected at such an economical rate. This fact attests the patriotism of the tax officers, many of whom serve the Government in that capacity for less than no compensation, because their expenses while employed in the discharge of their duties greatly exceed their income. The average salary of a collector is, say, $2,000 in currency, which, rated at its value in coin, or at its capacity to purchase the necessaries of life, is less than $100.
Before closing, I beg leave to call the attention of Congress to a subject which deeply concerns many of our collectors, and to recommend action for their relief. I refer to the subject of counterfeit treasury notes received in payment of taxes. The act of thirtieth January, 1864, entitled “An act to extend the provisions of an act in relation to the receipt of counterfeit treasury notes,” etc., relieved them up to the first day of January, 1864, but no further. I would respectfully recommend the passage of a similar act, extending relief to the first day of January, 1865.
Total value of real and personal property in the State of Alabama, subject to taxation under the act of February 17th, 1864, on the basis of valuation established by said act:
Total value of real and personal property in the State of Arkansas, subject to taxation under the act of 17th February, 1864, on the basis of valuation established by said act:
Total value of real and personal property in the State of Florida, subject to taxation under the act of February 17th, 1864, on the basis of valuation established by said act:
Total value of real and personal property in the State of Georgia subject to taxation under the act of February 17, 1864, on the basis of valuation established by said act:
Total value of real and personal property in the State of North Carolina subject to taxation, under the act of February 17, 1864, on the basis of valuation established by said act:
Total value of real and personal property in the State of South Carolina subject to taxation under the act of February 17, 1864, on the basis of valuation established by said act:
Total value of real and personal property in the State of Texas subject to taxation under the act of February 17, 1864, on the basis of valuation established by said act:
ESTIMATE OF TAXES assessed under the acts of April 29, 1863, February 17, 1864, and June 14, 1864, for the year 1864.
STATEMENT OF TAXES collected under the acts of Congress, April 24, 1863, February 17, 1864, and June 14, 1864, as far as reported, to 28th October, 1864.
I have the honor to transmit herewith (in duplicate) to be submitted to Congress, estimates of appropriations required for the support of the Government, for the period from January 1st to June 30th, 1865, including deficiencies.
I am, respectfully, your obedient servant,
ESTIMATES of appropriations required for the support of the Government for the period from January 1st to 30th June, 1865, inclusive, including deficiencies.
SIR: I have the honor to submit the following estimates for appropriations which will be required for the House of Representatives, for the six months ending June 30th, 1865, viz:
SIR: I respectfully submit the following estimate, showing the amount required for the expenditure of the Senate of the Confederate States, for the six months ending June 30, 1865, to-wit:
SIR: I have the honor to submit the following estimate for transmission to Congress:
To meet the “telegraphic and contingent expenses of the Executive Department,” for the six months beginning January 1, and ending June 30, 1865, there will be required an appropriation of ($30,000) thirty thousand dollars.
The salary of this officer was established by the act approved October 13, 1862, at $1,000 per annum. The act approved January 30, 1864, increased it one hundred per cent., or to $2,000. (See, in connection, act approved February 17, 1864, chapter 53, page 199.) This increase expires on the 1st of January, 1865. The amount
ESTIMATE of appropriations under the control of the Treasury Department, required from January 1st to June 30, 1865.
ESTIMATE of the amount required for the compensation of the Secretary of the Navy, clerks, and messengers in his office, from the 1st of January to the 30th of June, 1865.
ESTIMATE of the amount required for the Incidental and Contingent Expenses of the Navy Department from the 1st of January to the 30th of June, 1865.
ESTIMATE of amount required under the head of Pay of the Navy, for the the half year ending on the 30th day of June, 1865.
NOTE.—As there will be in the treasury on the 1st of January next a balance of former appropriations for “pay of the navy” of about one million of dollars, the sum of six hundred and forty seven thousand three hundred and eighty-four dollars and seventy-five cents of the estimate only will be required.
ESTIMATE of amount required under the head of Provisions, Clothing and Contingencies in Paymasters' Department, for half year ending on the 30th day of June, 1865:
ESTIMATE of the Amount required under the head of Ordnance and Ordnance Stores for the Navy, from January 1st to June 30, 1865.
ESTIMATE of the Amount required for the Const uction of Iron-Clad Vessels in the Confederate States, including amount necessary to complete those now under construction, from the 1st of January to the 30th of June, 1865.
ESTIMATE of the Amount required for repairs of Vessels from the 1st of January to the 30th of June, 1865.
ESTIMATE of the Amount required for the Equipment and Stores of Vessels, including wear and tear, from January 1st to January 30th, 1865, inclusive.
ESTIMATE of the amount required under the head of “Contingent Enumerated,” from January 1st to June 30th, 1865, inclusive, for the following purposes, viz:
Freight and transportation, printing and stationery, advertising, models and drawings, repair of fire engines and hose, maintenance of horses and oxen and drawing teams, carts, lumber wheels and the purchase and repair of working tools, postage on public letters, fuel, oil and candles for navy yards and shore stations, pay of watchmen and incidental labor not chargeable to other appropriations, wharfage, dockage and rent, travelling expenses of officers and others under orders, funeral expenses, store and office rent, commissions and pay of navy agents and clerks, pay of naval storekeepers and clerks, flags, awnings and packing boxes, books for libraries of vessels, provisions and other expenses of recruiting, apprehending deserters, per diem pay of persons attending courts martial, courts of inquiry and other services authorized by law, pay of judge advocates, pilotage and tonnage of vessels, and assistance to vessels in distress, and for bills of health and for quarantine expenses.
ESTIMATE of the amount required for fuel for steamers, stations and navy yards from January 1st to June, 30th, 1865, inclusive:
ESTIMATE for Sub-marine Batteries from January 1st to June 30th, 1865, inclusive:
ESTIMATES of the amount required for Medical Supplies and Surgeons' Necessaries from the 1st of January to the 30th of June, 1865.
OF ESTIMATES of the Navy Department for six months, from the 1st of January to the 30th of June, 1865, inclusive:
Fourteen million five thousand one hundred and thirty-four dollars and seventy-five cents.
APPROPRIATIONS required by the Department of State for the six months ending June 30, 1865:
SIR: I have the honor to submit the following estimates of expenditures for this Department, from the 1st day of January, 1865, to the 30th of June, 1865, inclusive:
SIR: Since the estimates of the 13th inst., for the expenditures of this Department, were sent to the Secretary of the Treasury, I have ascertained that there will be a deficiency in the appropriation for the period ending 31st December, 1864. I have, therefore, the honor to submit the following estimates to supply the deficiency for the year ending 31st December, 1864: