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CONFEDERATE STATES OF AMERICA, j 
 Tteasury Department, > 
 
 Richmond, November 20th, 1S61. ) 
 
 Hon. Howell Cobb, 
 
 President of Congress : 
 
 Sir : I have the honor to submit the following report of 
 the condition of this Department : 
 
 The receipts at the Treasury from all the various sources 
 of income up to the 16th of November are as follows : 
 
 From Customs, .... 949,612 84 
 
 Miscellaneous sources, ... 792.777 90 
 
 Export duty on cotton. - - - 1.311 65 
 
 Loan of February 28th, 1861, - 14,989.726 65 
 
 Loan of May and August, - - 3,053,300 00 
 
 Treasury notes under Act of March 9, 2,021,100 00 
 
 " " " May 16, 17.347.955 00 
 
 " August 19, 12,830,400 00 
 
 Interest and premium, ... 33,963 67 
 
 52,020,147 71 
 Temporary loan from Banks, - - 9,850,576 68 
 
 $61 ,870,724 39 
 
 The expenditures and outstanding warrants are as fol- 
 lows : 
 
 For civil, &c, - - 1,745,670 18 
 " war, - - - 66,018.740 03 
 " navy, - - - 2,902,305 55 §70,666,715 76 
 
 Balance not yet paid, - - - $8,795,991,37 
 
 This balance exists in the form of Treasury warrants 
 which are in transitu, and will be paid by issues of Treasury 
 notes, whenever they are presented. 
 
This large amount of warrants in transitu arises from the 
 fact that the payments arc all made by Treasury notes is- 
 sued at one point, and their transmission to distant places 
 consumes much time. This difficulty will be diminished 
 whenever the number printed shall be sufficient to exceed 
 the daily requisitions. They can then be forwarded on de- 
 posit to the various Assistant Treasurers and Deposita- 
 ries. 
 
 The amount set forth in the receipts, as borrowed from 
 Banks, embraces two items. The first consists of the balance 
 due the banks, on the loan of their notes, made in advance of 
 the issue of Treasury notes, and reported at the last session 
 of Congress. The second item Avas taken up under the fol- 
 lowing circumstances: Long before the passage of the Act 
 of last session, directing the issue of an additional number 
 of Treasury notes, this Department attempted at each of the 
 principal cities in the Confederate States to make arrange- 
 ments for preparing them. A contract was made in New 
 Orleans in May last, and inducements were offered to others 
 to import facilities. An active agent was also sent by the 
 Department to bring on workmen and machinery. But, 
 with every exertion, it was found impossible to meet the re- 
 quisitions upon the Treasury. These requisitions so far 
 exceeded the supply, that on the 24th October, the supply 
 of notes fell behind the requisitions by the sum of $11,- 
 892, S 15.98. The daily requisitions upon the Treasury 
 continued to exceed the supply by nearly 50 per cent., and 
 the difficulty, therefore, became greater every day. The 
 only relief expected was from a further supply of printers 
 and presses, which could not be had, for at least four or five 
 weeks. The arrearages covered the pay of troops and their 
 subsistence, and threatened serious injury to the credit of 
 the Treasury and to the public interest. Under these cir- 
 cumstances, it was deemed best to accept the tender of Ten 
 Millions of their notes, which the banks of South Carolina 
 and Georgia had made at an interest of five per cent., on a 
 previous occasion, when delays in preparing engraved notes 
 were expected. The arrangement made with the banks, was 
 a return of the amount as soon as Treasury notes could 
 be prepared ; so that the interest to be paid by the Treasury, 
 will be relieved at the earliest practicable time, and is amply 
 compensated by the relief of pressure to that extent upon 
 the Treasury. This relief may be measured by the fact, 
 that, notwithstanding all the efforts since made to increase 
 
3 
 
 the supply of Treasury notes, there is now a large arrear of 
 requisitions lying over — amounting to about five-and-a-half 
 millions of dollars. 
 
 The loan taken from the banks appeared to me to be in 
 substance, though not in form, the same as that authorized 
 by law, and at a less rate of interest. The law authorizes 
 any holder of Treasury notes, to fund those notes in 
 Bonds at 8 per cent., payable in two years, and these 
 Bonds are re-exchangeable at the will of the holder 
 for Treasury notes. The Bank notes borrowed were used 
 in payment of public dues as a substitute for Treasury notes, 
 and if an exchange had taken place instead of a substitution, 
 the Treasury notes could immediately have been funded in 
 bonds or stock at 8 per cent. The transaction which ac- 
 tually took place effects the same result, excepting that it is 
 at a less rate of interest; and I respectfully ask its sanc- 
 tion by Congress. I have the satisfaction to add that our 
 efforts to procure at home the notes and paper have raised 
 up three home manufactories of bank note paper, and an es- 
 tablishment for engraving bank notes. 
 
 The preliminary arrangements for the collection of the 
 war tax have been made, according to the directions of the 
 law. Chief Collectors have been appointed in all of the 
 States, and the States divided into Districts. It has been 
 found that the limited compensation allowed to the District 
 Collectors has compelled the districts to be made smaller 
 than is desirable. It would have been better to increase the 
 allowance, particularly in cities, and give the collector a 
 larger jurisdiction. It is a subject of doubt whether the 
 salary of the Chief Collector was intended to include office 
 hire and all contingencies. I have interpreted the law as 
 including within the salary every expense except books, sta- 
 tionery, advertising, postage, and the like. 
 
 On examining the clause relating to the tax on money, it 
 will be found that a doubt is created as to the extent of the 
 exception. Congress intended, unquestionably, to tax cash on 
 hand and on deposit, and I think that intention is expressed by 
 the act. But the failure to insert a semicolon, and the use 
 of the conjunction " and," has given occasion to interested 
 parties to raise a question, and to claim that the conjunc- 
 tion places the cash among the excepted, instead of the taxed 
 property. It would be well to settle the question by a 
 clause in any supplementary act which may be passed. 
 
 The great extent of our country, together with the con- 
 
dition of tho times has rendered it impossible to comply 
 with the requisitions of the act fixing a time for making as- 
 sessments. This time was fixed at as early a day ;is tho 
 first Monday in November, chiefly with the view to enable 
 the State Legislatures to determine whether they would as- 
 sume the payment of the tax. But it has been found im- 
 practicable to accomplish this end within the time. I re- 
 commend, therefore, that the time for making the assessment! 
 ■:tendcd to the first day of January next. This will in- 
 volve an extension of time for the subsequent proceeding, 
 but it will not affect the date at which the collection of tho 
 tax is directed to be made 
 
 The Treasury notes issued under the act of May 16th, 
 1861, amount to nearly twenty millions, and the authority 
 given by that act is exhausted. One of the provisions of this 
 act was an experiment, which has been found to work well. It 
 allowed these twenty millions of notes to be funded in ten 
 year bonds or stocks, which should be re-exchangeable for 
 Treasury notes. A large amount of these notes have been 
 thus funded, and the bonds and stock are quite in demand. 
 Almost the entire loan first taken from the banks has been 
 funded by them in this stock, and it seems to me advisable 
 to extend the privilege to all the Treasury notes allowed by 
 law. The act of May 1 6 gives the privilege to the two year 
 Treasury notes issued under that act, and, until the experi- 
 ment was tried, it was not deemed advisable to include the 
 issue under the act of August 19. It has since been found 
 that the Treasury notes have derived additional currency 
 from the freedom with which they can be converted into 
 an interest bearing security, which, at any moment, can 
 be reconverted into currency. The advantage to these se- 
 curities is so great that I think they could be made to bear 
 a less rate of interest. I recommend, therefore, that the 
 holders of any issue of Treasury notes be authorized, under 
 such regulations as may be issued by the Secretary of the 
 Treasury, to fund them in bonds or stock bearing a rate of 
 interest not exceeding 7 per cent., which bonds or stock 
 shall be re- exchangeable for Treasury notes. It seems to 
 me probable, that 6 per cent, interest will be sufficient for 
 these securities, and I propose to try that rate ; but, as it 
 may not prove so, it would be well to give the power to 
 issue at 7 per cent. I Avould prefer attempting the lower 
 rate for another reason. It is desirable to hold out induce- 
 ments for investment in the permanent funded debt. A 
 
difference of two per cent, interest would furnish that in- 
 ducement; but so long as the convertible bonds bear an in- 
 terest nearly the same as the permanent, the former will be 
 preferred, and will bring a higher market price. Still, as 
 there is some uncertainty what difference is requisite to effect 
 this result, I respectfully recommend, that a discretion be 
 confided to the Secretary of the Treasury on this point. 
 
 The whole fifteen million loan of February 28, 1861, has 
 been taken up. Upon the loan of August 19th, a large 
 amount has been subscribed from the proceeds of the sale of 
 produce. As the value of the produce is uncertain, no ab- 
 solute estimate can be made of the avails of the proceeds. 
 Reasonable conjecture rates the amount at between forty 
 and fifty millions. 
 
 The Treasury notes already issued amount 
 
 in the whole to, - - - -$32,199,455 00 
 
 The bonds exclusive of the loan of Feb. 28, 3,053,300 00 
 
 The amount of temporary loan from banks, 
 
 for which Treasury notes must be issued, 9,850,576 68 
 
 And the balance of Treasury warrants out- 
 standing, for which Treasury notes must 
 also be issued, is, - 8,795,991 37 
 
 Total, - - - 53,899,323 05 
 Which being deducted from amount authori- 
 zed, say, 100,000,000 00 
 
 Leaves authority to issue only, - - $46,100,676 95 
 
 This sum being not more than the amount probably requir- 
 ed for the bonds for the Produce Loan, it is clear that authori- 
 ty must be given for extending the issue' of Treasury 
 notes. The amount of this increase must be determined by 
 the period which Congress shall see fit to provide for. This 
 period, it seems to me, must extend at least to April next, 
 because the new Congress could scarcely make new arrange- 
 ments before that date. The expenditures for the last two 
 months have averaged about 20 millions per month. At 
 that rate, from 1st November to 1st April will require one 
 hundred millions for current expenses. It is not probable 
 that any considerable amount will be realized within that 
 period from the Produce Loan ; and, therefore, the whole 
 sum must be raised by Treasury notes. 
 
It ii thai the existing laws only au- 
 
 thorize a further issue of both bonds and Treasury notes to 
 about forjty-six millions, and that the Produce Loan will 
 probably exhaust this amount. 
 
 Authority is, therefore, required to issue bonds for fur- 
 ther loans, to be subscribed by the citizens, or to be used in 
 the purchase of army supplies, and the amount of these 
 bonds added to the one hundred millions additional for 
 Treasury notes, will furnish theextenl of additional authori- 
 ty required of Congress. When these Treasury notes shall 
 have been used, the whole issue of Treasury notes :vill amount 
 to about one hundred and fifty-four millions. It is hoped that 
 a considerable portion of these notes will be funded, and in 
 that way reduce the amount of circulation, and to that end, 
 it is advisable to make the funded debt as secure and as 
 acceptable to the public as may be practicable. 
 
 I propose to issue the bonds and stock authorized by the 
 act of August 19, upon the plan suggested by Mr. Holmes, 
 of South Carolina, and adopted by the city of Charleston. 
 The principle of the plan is the semi-annual payment of a 
 part of the principal, and the appropriation of a fixed 
 amount sufficient to pay the whole interest, together with 
 the portion of principal proposed to be paid off. Every 
 year the amount required for interest becomes less, and 
 adds to the amount applicable to the principal. 
 
 It will be seen that, by this method, the entire debt can 
 be extinguished in twenty years, by raising annually the 
 interest and one-twentieth of the principal. I have as- 
 sumed that after the expiration of two years from the first 
 January ensuing, payments of principal may be com- 
 menced ; and as the law limits the bonds to twenty years, 
 I propose to issue them in semi-annual periods, extending 
 over eighteen years, from first January, 1864, and paying 
 semi-annually one-thirty-sixth of the principal. 
 
 It seems to me that the varying periods at which the 
 bonds become payable will recommend them to the public, 
 and especially to the subscribers to the Produce Loan. In 
 time of peace the distant bonds would be preferred ; but I 
 think that at this time the short bonds will be in great- 
 est demand. Every subscriber to the produce loan who has 
 debts to pay will prefer the short bonds, as they may be 
 made available for that purpose. So, too, persons funding 
 Treasury notes will probably prefer short bonds. More- 
 over, the different dates will suit guardians, trustees, and 
 
other persons, who make investments with a fixed purpose, 
 and it is believed, therefore, that this plan will suit the 
 wants of all, better than any other ; while the advantage to 
 the Government, in having its debt gradually and steadily 
 diminished, is a full compensation for the additional expense 
 and inconvenience of such an issue. 
 
 As soon as the estimates of additional appropriations re- 
 quired by the various departments shall be received, I shall 
 submit the further financial estimates and recommendations 
 which they shall call for. 
 
 I have further to report that under the provisions of the 
 act of Congress, an Assay Office has been established at 
 Dahlonega ; and that no application has yet been made for 
 the office at Charlotte. 
 
 I have, also, to report that under the provisions of the 
 act of February 28th, 1861, I have extended the ports of 
 delivery at Memphis and Nashville into ports of entry ; 
 and for the convenience of disbursing officers in Tennessee, 
 Kentucky, Arkansas, Mississippi and Missouri, I have, un- 
 der the provisions of the act of Congress of 6th August, 
 1846, made the Collectors of these ports depositories of 
 public moneys. 
 
 All which is respectfully submitted. 
 
 C. G. MEMMINGER, 
 
 Secretary of Treasury. 
 
Statement exhibiting the Receipts and Expenditures of the Gov* 
 ernment, from its Organization to, and including, Nov. \6th, 
 1861: 
 
 Receipts to June 30, 186] >vc: 
 
 From Customs, - - $797,960 43 
 
 Miscellaneous sources, - 0:29,165 51 
 Subscriptions to Loan of Feb'y 
 
 28, 1861, - - - 7,450,749 65 
 
 Interest on ditto., - - 1,044 57 
 
 Premium on ditto., - 4,187 62 
 
 Treasury Notes issued under 
 
 act of March 9th, 1861, - 1,116,400 00 
 
 $9,999,507 78 
 
 Receipts from July 1st to Nov'r 16th, 1861, in- 
 clusive, as per statement furnished by the 
 Treasurer: 
 
 From Customs, - - - 151,652 41 
 
 Export duty on Cotton, - 1,311 65 
 
 Miscellaneous sources, - 163,612 39 
 Subscription to Loan of Feb'y 
 
 28, 1861, - - - 7,53S,977 00 
 Subscription to Loan of May 
 
 16, 1861, - - - 2,702,100 00 
 Subscription to Loan of Aug't 
 
 19, 1861, - - - 351,200 00 
 
 Temporary Loan from Banks, 9,850,576 68 
 
 Interest on Loans, - - 27,563 14 
 
 Premium on Loans, - - 1,168 34 
 Treasury Notes issued under 
 
 act of May 16, 1861, - 17,347,955 00 
 Treasury Notes issued under 
 
 act of August 19, 1861, - 12,830,400 00 
 Treasury Notes issued under 
 
 act of March 9, 1861, - 904,700 00 
 
 51,871,216 61 
 
 Total receipts, - . - $61,870,724 39 
 
Statement — Continued . 
 
 Expenditures to Sept'r 30, 1861, inclusive : 
 Civil, Miscellaneous, Foreign Inter- 
 course and Public Debt, - - $ 1,506,548 72 
 War, .... 39,507,440 10 
 Navy. - 1,962,928 79 
 
 Expenditures from October 1st to November 
 16th, 1861, inclusive, as per statement fur- 
 nished from office of the Secretary of the 
 Treasury : 
 Civil, Miscellaneous, Foreign Inter- 
 course and Public Debt, - 239,121 46 
 War, .... 26,511,299 93 
 Navy, - v - - 939,376 76 
 
 42,976,917 61 
 
 Total expenditures. 
 
 27,689,798 15 
 $70,666,715 76 
 
 CONFEDERATE STATES OF AMERICA, 
 
 TREASURY DEPARTMENT, 
 Register's Office, Nov'r 19, 1861. 
 
 ROBERT TYLER, 
 
 Register. 
 
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