War of the Rebellion: Serial 127 Page 0698 CORRESPONDENCE, ETC.

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the citizens to such State, less 10 per cent. thereon, it shall be the duty of the Secretary of the Treasury to notify the same to the several tax collectors in such States, and thereupon their authority and duty under this act shall cease.

Should the State determine to pay the amount of taxes that may be assessed, as provided in the act of Congress, by the 1st day of April next, the ways and means of doing so should be determined on at as early a day as practicable. This proposition made to the States by the Confederate Government presents for your consideration a very grave question, and one which is by no means free from difficulties. The deduction of 10 per cent. from the gross amount of taxes assessed is a strong inducement for the State to avail herself of the benefit of the act. In addition to this, our people would be relieved from the calls of the Confederate tax collector, which is no ordinary consideration. This proposition on the part of the Confederate States is not an invasion of the rights of the States, as some have supposed, but is rather a concession to the States, as it permits them to do that which they have no right to do without the consent of the Confederate Government. The argument on the other side of this question, both as to principal and policy, presents very serious difficulties. The rights and powers of the States and of the Confederate Government are plainly and distinctly marked out, and it is always safest and best for each Government to exercise those powers and perform those duties which legitimately belong to it even though there be no constitutional difficulty in the way. The State should never concede to the General Government the exercise of powers not delegated in the Constitution, and they should nevses of absolute necessity, consent to exercise powers or to perform duties which do not properly belong to them. As a general rule it is dangerous in its tendencies, and precedents of this character are to be avoided. The collection of this tax by the State would be an onerous and unpleasant duty, as it imposes upon the State the necessity of enforcing the laws of the Confederate Government against her own citizens, provided it should become necessary to do so. Again, if the State determines to pay the tax to be levied by this act, by the collection of the money from the tax-payers, it will be onerous and oppressive, as the State and Confederate tax must both be collected at the same time, and will amount, according to the best estimate I can make, to about $2,300,000 in the aggregate, about three times the amount of the present States tax. After the most thorough investigation of this question I conclude that the States ought not to pay this tax if to do so it be necessary to collect the amount from the people by the 1st of April next. But if the General Assembly in its wisdom can devise a plan by which it can be paid without collecting it from the people in the present condition of the country, I recommend tat it be done. There is no financial measure that would extend greater relief to our people. It may be that this important object can be effected by suspending for the present the appropriations for education purposes and all others not indispensable for maintaining the State government by the aid of the banks, the sale of State bonds, and the issue to some extent of Treasury notes. With these suggestions I submit the question for your consideration.

BANKS.

Under the provisions of an act approved February 2, 1861, entitled "An act to legalize the suspension of specie payments by certain