In conformity with the requirement of Congress, I have endeavored to procure information from the various State Governments in regard to the value of the property, the revenue system, and the amount collected during the last fiscal year in each of the Confederate States. The revenue system adopted in the several States is so difficult that it is impossible to reduce it into one form. Even the valuation of lands in some of them is made upon an arbitrary rule, without reference to their real value. Some of the States levy a poll tax on each slave; others value them, and impose an ad valorem tax. The subjects of taxation in each State are so various that they can be classified only by rejecting all except the principal items, which are set forth in the accompanying schedule. I have, therefore, concluded that I would best promote the design of Congress by ascertaining as nearly as possible the value of the general items thus classified, and leaving out the various subjects of which no return is made in many of the States. I have accordingly caused to be compiled a table exhibiting the value of the principal subjects of taxation in the several States.

It is proper to add that many of these results are only approximations. In South Carolina no return of the value of lands has been made since 1840, and I have assumed an increase of 75 per cent. on that valuation as the present value. Neither is there in several other States any valuation of negroes, and in others where negroes are valued, only those within certain ages are included. I have, therefore, been obliged to resort to the census for the number, and to assume a general standard of valuation, which is set down at say $600 per head.

The property set down under the head of merchandise is also irregular. In some of the States the stock of merchandise on hand is valued, and in others the sales only are returned; and in others again, the sales are distributed into sales by auction, by private venders, and under license. It appears evident from this statement that Congress will not be able to adopt a plan of taxation resting upon the revenue system of the States, but will be compelled to adjust for itself a scheme.

If a proportion were established by which the relative amount to be paid by each State could be adjusted, then a simple per centage upon the last tax paid by each State would offer the simplest of all modes of rating the tax. The State machinery could then be invoked, and the subjects of taxation having already been adjusted according to the wishes of each State, the tax would assume the form to which its citizens had already been accustomed. Under the permanent Constitution the ratio for the payment of direct taxes is adjusted in proportion to numbers, and if that ratio be applied by Congress to the tax now to be raised under the Provisional Government, it will then only be requisite to ascertain the amount of tax to be raised.

It is feared, however, that a direct tax raised upon this basis will impose too heavy a burthen upon those States which are least able or willing, under existing circumstances, to pay large sums. The Provisional Constitution leaves Congress free to levy taxes in any mode which may be deemed expedient, and I would respectfully suggest the expediency of raising the amount required by an ad valorem tax upon property.

We have not in our possession the returns of the last census; but from a general statement made by the Secretary of the Treasury of the United States, it appears that the gross value of property in the States of this Confederacy is $5,202,176,109. A tax of only fifty cents on each hundred dollars of property would raise twenty-six millions of dollars. This, of course, includes property of all kinds, and if, in each State, distinct returns has been made upon the same basis, there would be little difficulty in assessing the tax. But, as has already been stated, no such returns exist, and the attempt to procure them would, in those States where they have never been made, produce much vexation and discontent. A better course would seem to be to disregard all minor subjects of taxation, and impose the tax by a per centage upon those articles which are generally owned in all the States, and are considered by us as proper to be taxed.

The schedule herewith furnished gives sufficient information to attain this end. It brings within the scope of the taxing power property valued at $4,632,160,501, leaving out about six hundred millions as the value of non-enumerated articles. As this last amount includes articles which are probably distributed in equal portions over the different States, no inequality or injustice will result from leaving it free of tax; and it simply remains to ascertain the amount of tax required for the use of the Government, and to create the machinery requisite to collect it. This machinery need not be different from that used by the State Governments, unless some of their laws forbid the use of their State officers. It is only necessary to appoint assessors and collectors in the various districts in the manner indicated by previous acts of Congress. In respect to the amount of tax to be raised, the events which have occurred since the adjournment of Congress require a larger sum than was then supposed. At least twenty-five millions of dollars ought to be raised for the wants of the Government, and to sustain its credit in taking up the loans which will become necessary. There should be a supply of means abundantly sufficient to pay the interest and part of the principal of such loans at stated periods. To raise this amount, a tax of fifty-four cents per cent. on the property set forth in the schedule will be sufficient. The property selected for such taxation is classified under the following heads: 1.—Slaves.2.—Real Estate.3.—Merchandize.4.—Bank Stocks.5.—Railroad and other Stocks.6.—Money at Interest.

It is not improbable that Congress may prefer that differences should be made in the rate assessed upon these various items.

1. As to slaves. These constitute the chief item of value in Southern property, and may themselves be considered as indicating an ability in the owner to pay. They never belong to persons who do not own other property; and inasmuch as the scheme of taxation recommended exempts much of this other property, the amount assessed upon slaves may properly be so much larger. The origin and character of the war in which we are engaged would seem to make this species of property more particularly bound for its support. I assume, therefore, that it can bear the highest rate of tax.

2. Real estate offers the next great subject of taxation. This naturally divides into town lots and country property. The former are in many of the States subject to a higher rate of taxation; and in time of war the reasons for this increase are quite as strong as in time of peace. It is not practicable, however, to present a separate estimate of town property, because in four of the States no separate return is made of town lots. If it be deemed expedient, therefore, to vary the rate of taxation, the product of the tax will be conjectural. The possession of land is not as distinct an indication of ability to pay, as the ownership of negroes. Much of it is unproductive, and where it is cultivated by the owner himself, a state of war calls him away from its cultivation. It would seem proper, therefore, to exonerate proprietors under a certain amount from the tax.

The ownership of a town lot is, however, generally a better indication of ability to pay, than the ownership of mere land. The amount of taxes usually paid by towns for mere corporation purposes, clearly exhibits that ability; and when we consider the exposure of towns to the dangers and casualties of war, and the inducements they offer to the invading army, it seems proper that they should bear a heavier burden than the country at large.

3. For somewhat similar reasons, merchandise on hand for sale in the hands of merchants, should pay an increased rate of taxation. The merchant, too, has the ability to relieve himself by casting the tax upon the consumer. It will be necessary to assess the tax on the stock on hand at the time of the assessment, in order to attain the same basis of valuation. The want of proper returns makes it difficult to set down in figures the probable amount of the proceeds of this tax; and besides this, the merchandize now for sale in the country, is probably greatly less in quantity than at any period referred to in the tables.

4. The remaining items of stocks and money at interest, present a subject more difficult to deal with. Many of the railroad and canal stocks produce but little revenue to the owners, and yet of all the items of property within a country, the stocks and money at interest depend most upon the stability and good faith of the Government. The owners have nothing in possession but script or some instrument in writing, which, through the instrumentality of Government, secures to them values which extend to millions of dollars. It seems highly proper, therefore, that when the existence of the Government is threatened, these stocks should contribute to the common defence an amount equal in proportion to the visible landed property of the country; and, for the same reason that the tax on land is laid upon the capital instead of the income, it is proper that it should be laid upon the capital stock of these corporations.

On the other hand, it is to be considered that the banks and railroad companies have in general exhibited a spirit of liberal and generous patriotism. The railroad companies have been content to work for the Government at half price, and to take pay in Confederate Bonds. The banks have offered their means and credit freely to the country, and are entitled to the kindliest considerations of the Government. The stocks, therefore, of these various corporations should be put on the same footing with the general property of the citizens.

The only additional aid which I can offer to the deliberations of Congress, is contained in the tables herewith submitted, which show the difference produced in each State, as one or the other mode of assessing the tax, may be adopted.

All of which is respectfully submitted.