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 Duke University Libraries 
 
 Special report 
 Conf Pam #391 
 
SPECIAL REPORT 
 
 OF THE SECRETARY OF THE TRP^ASURY ON THE 
 SUBJECT OF THE I^INANCES. 
 
 Treasury Department, C. S A., 
 
 Richmond, January 9th. 18G5. 
 
 Hon. T. S. BococK, Speaker of the House of Representatives : 
 
 Sir :— In the report made to Con.iijrcs^i on the 7th of November, 
 the nrreor of ijidrblednoss wns estimated to i^avr l)ecn $114.000 000, 
 on the 1st of July, 18G1, at the commencement of the lialf year. 
 The close of that ))eriod on the MLst of Decenihor, exhibited, by the 
 sum of the requisitions rcniainino; unsatisfied, that the estimate re- 
 ferred to was too low. 
 
 The appropriations made by Congress for the six months, from 
 1st July to 31st December, 18G4, and the paymentR made in pur- 
 suance thereof, are exhibited in the following table : 
 
 Anminta appro- 1 ^"'7"' IL''^"*'^'-''- balance pajnl.lein' ^ . ., 
 
 War Departnifiii, :!:.S,l!7,7(t() 00| 6'2,738,fiC7 0(t 
 
 Navy '• lu,'i2(»,:;il2 7.")' 370,000 00 
 
 Treasury " j_ lir>,31f)^lir) .Mj 5,T1 8,796 82 
 
 '29i,fl3i),ll:! 00 
 9,S44 302 75 
 
 :i2ri,129,734 94 
 
 827,S(y^90f) 18 
 
 1-'!.597,ri45 S2 
 
 25,7Ul,9:i6 13 
 
 "801^200 :!S7 18 
 
 Total appropriations $525,129,784 94 
 
 Amount paid 367,250,387 13 
 
 Excess $42,120,652 19 
 
 Amount appropriated for Trans- Mississippi De- 
 partment, $68,833,363 32 
 Remitted Treasury notes from June 
 
 3d to Nov. 23d, 1864, $20,000,000 
 
 " G per cent, non-taxable bonds 
 
 from July 21 to Nov. 9, '64, 6,000,000 
 '* 4 per cent, loan from July 
 
 21 to Nov. 9, 1864, 9,000,000 
 
 » certificates of indebtedness. 12,000,000 47,000,000 00 
 
 Balance to be remitted, $21,833,363 32 
 
 The requisitions remaining unsatisfied at the close of the year 
 amount to $183,000,000 
 
Deduct the sum included in the eatimatcs of November 
 7, as above stated, 1 14,000,000 
 
 Excess of indebtedness over the previous estimate, $09,000,000 
 The several liurcanx of the War Department report 
 an additional indebtedness, not embraced in the re- 
 quisitions, of 184,682,292 
 Gen. E. Kirby Smith reports the iadebtcdness in the 
 
 Traus-Mis&issippi Department at 60,000,000 
 
 $313,682,292 
 
 To this a^nount must be added the sum of $^^3,000,000, for an 
 ascertained deficiency in tlie nett value of the tax in kind. It was 
 estimated in the report of November 7th, at $145,000,000, and 
 credit was given for this amount in estimating the resources of the 
 approaching' year. It apj)ears that tlie value of $62,000,000, derived 
 licm this source by the Commissary Dcjiartment, constitutes the 
 whfde ueto products of tlie tax; the value of the poriion assigned 
 to the (^uai teriiiaster'a Department, irf absorbed by the expenses 
 JncidniL to ihe collection and transportation of the su])})lios, which 
 are defrayed by that department 
 
 The 8iim ( f these new demands and for which additional provi- 
 Hion niusL now be made, is $396,68-2,292. The character of the 
 (lel>t is such that the payment cannot be neglected, or even post- 
 potiod, without danger of seriously embarrassing the operations of 
 ihe \\'ar Dejtartuicnt. it is for supplies obtained in all parts of 
 tiic country, and delivered u])on the credit and good faih of the 
 government The citizens by whom they were furnished, however 
 niimci'ous, arc yet but apart of our jaopulation. They must be in- 
 capable, and wcuhl naturally be unwilling, long to sustain so un- 
 ('i]nal a l)urthen. The ellcct is that of a tax unjustly thrown up- 
 on a few, instcail of being equally shared l)y all; and a sense of 
 ill jury will combine with the pecuniary burth^^n, to discourage the 
 <ielivery of fiatwre supplies. The i»romj)t.c8t measures of relief, 
 therefore, are demanded l)y every consideration of justice and 
 policy ; and J earnestly recommend tiic matter to the immediate 
 consideration of Congress. 
 
 J have looked in vain for some source, upon which we might draw 
 for tljcse extraordinary demands, in lieu of taxation ; no other 
 alternative presents iiself. 
 
 Dut however burdensome so large an addition to the taxe» may 
 be fouad, it will yet bear with less severity upon the whole body 
 of tax j)ayers, than upon the smaller number, by whom it is now 
 sustained. Regarded in this view, it resolves itself into a question 
 of distributing and equalizing a tax already paid by the people. 
 J jiropose, therefore, that the required sura be chiefly derived from 
 taxation; that the present scheme of taxation be adhered to, with the 
 amendments recommended in my report of November 7th ; and 
 
that 100 per cent, be added to the e^ isting rates ; and in the an- 
 plication thereof to the tax in kind, that it be assessed upon the 
 value of the same, and be paid in treasui-j notes. 
 
 The additional revenue that will be raised by this means mav 
 be estimated at $360,000,000, leaving a deticiency to be obtained 
 from other sources, of $36,000,000. This amount may be raised 
 from the ealo of cotton. 
 
 The reluctance with which I recommend so great a weio-ht of 
 taxation, is overcome only by the momentous character of the oc- 
 casion that demands it. I feel no little encouragement, however 
 trom the reflection, that great as these demands are, they are at 
 
 l^»AAnnnni^'^.'''°'^^'°'^^^'^ ''-^ ^^^ ^^^"^ «^ ^"^ pPOduCtionS. If 
 
 1720,000.000 of taxes are to be collected from the people it is be- 
 cause $720,000,000 are to be paid to them for supplies. ' The ex- 
 penditures denote the sum of the productions applied to the public 
 defence; taxation is the machinery liy which the general contribu- 
 tion is distributed and equalized. 
 
 Nor should the depreciation of the currency be lost sight of in 
 esitmatmg the weight of the burthen. The sum stated is barclv 
 eciual to $20,000,000 in a sound currency. If we had the option of 
 another choice, it seems doubtful if we should forego the advantage 
 of a mode of payment so cheap. Nothing is so low in value, or so 
 easy of acquisition, as the medium in which the tax is demanded 
 and not to defray the expenditures in the present currency, I)ut 
 tund them for payment in specie at a future day, if that were prac- 
 ticable, would be to disregard the obvious su<rgestions of nru- 
 deace. " ' 
 
 I venture, too, with great respect, to suggest, that the coura'^e 
 and resolution by which a present sacrifice is made, to ward of^'a 
 distant, but formidable danger, is an exercise of wisdom as well as 
 of virtue. The occasion seems to demand such a sacrifice at our 
 hands ; and having an abiding confidence in the righteousness of our 
 cause, and in the intelligence and virtue of our people, I fearlessly 
 recommend the measures demanded for the defence of our honor 
 and the preservation of our rights. ' 
 
 While these measures hold out the promise of an adequate amount 
 of revenue for the eventual extinguishment of the arrcar of debt 
 and for the payment of the current expenditures, they afford no re- 
 lief for our present necessities. Their early adoption, however 
 will inspire confidence in the resources of the trovernment, and en- 
 courage temporary loans in advance of the revenue. 
 
 To promote the early liquidation of the arrcar of debt, I recom- 
 mend that the certificates of indeljtcdness, authorized by the Act of 
 17 th February. 1864, be made receivable in payment of the 100 
 per cent, additional tax recommended in this report, and that they 
 be taken in payment without interest, but at tlie rates of $10.", for 
 $100. 
 
 1 would respectfully urge, too, the passage of the l)ill for the 
 
angDientation of the export ami import diitie?, to encourage and 
 promote the sale of the live linndi-ed million loan. 
 
 A" an additional measure for tlie convenience of the Treasury 
 and < f tlie |»ul>lic, I recommend that antliori'yhe fri^en to this l^e- 
 partinent to e>^taldish an ollicc of Deposit. i!i connection with t^e 
 Treiieiny. Throntrh its intrnmcntality. the fame sum maj be made 
 repeatedly to perform the fuiiction of payment, and both by the 
 performance of this manifold duty, and by its withdrawal from the 
 channels of speculation, to contribute in arresting the progress of 
 depreciation. 
 
 Thi.« office should be kept separate from the Trea?ury proper: it 
 should receive on deposit the current fur.ds of those having rela- 
 tions and transactions with the government, and thot^e of the public 
 generally, and pay the same out upon the che<"ks of depositor?. 
 And it should be authorized to deposit in the Treasury, returna- 
 ble at call, not more than two-thirds of the deposits. 
 
 G- A. THEN no LM, 
 
 Secretary of the Treasury. 
 
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