The purchases of cotton thus far reported by the agents amounts to 69,507 bales, costing $4,474,400. These purchases at the present moment have probably reached 250,000 bales, including those of which reports are on the way. In order to dispose of the cotton two forms of certificates have been devised. By one the specific parcel of cotton is identified and disposed of; by the other the Government obligates itself to deliver certain quantities at certain points at a fixed price. By the advice of our ministers abroad some of the latter certificates, covering about 30,000 bales of cotton, have been placed as an experiment in the foreign markets, but sufficient time has not elapsed to hear from them. The details of this branch of the Department are set forth in the report of the clerk in charge, to which your attention is invited. The important and responsible duties intrusted to this clerk render it proper that his office should be placed on a level with other branches in the Department. I would therefore respectfully recommend that the office be raised to the grade of a chief clerkship. The collated returns of the war tax have not been completely made in all the States. The report of the chief clerk in charge of this Bureau is so full and distinct upon the several points to which attention is due that I cannot do better than refer you to a copy thereof, which is herewith presented. The question that has arisen between the Governor of Tennessee and the Department is a mere question of estimate; but as it involves a large um, the Secretary would respectfully ask the direction of Congress as to some proper mode of adjusting the difference. The liberal manner in which the State has acted under the circumstances may induce Congress to adopt an estimate which the Secretary would not feel himself empowered to accept. The suspension of the collection in several parts of other States is also submitted specifically to the attes in order that further instructions may be given. In relation to the State of South Carolina, it should be remarked that the Governor has directed the tax to be collected by the State tax collectors wherever practicable and the amount to be paid over to the Confederate Government. The legislation which will be required to carry into effect the several matters recommended in this report is the following:
1. An act limiting the period for funding the Treasury notes bearing date prior to the 1st of December, 1862.
2. Authority to issue a sufficient amount of Treasury notes to pay the appropriations required for the support of the Government to the 1st of July next.
3. Authority to issue bonds and stock sufficient to fund the notes already issued, entitled to be funded at 8 per cent., and those hereafter to be funded at 7 per cent.
4. A call upon the States to guarantee the war debt upon a plan to issue 6 per cent. bonds payable in installments in twenty-five years upon the plan of the $100,000,000 loan.
5. A modification of the loan act of April, 1862, by reducing the time to five years within which the Government may redeem the bonds.
6. A war tax upon property and income.
7. The appropriation act.
8. The organization of a bureau in charge of the issue of Treasury notes.
9. Increase of the salaries of the assistant treasures and depositaries and their clerks.
All of which is respectfully submitted.
C. G. MEMMINGER,
Secretary of the Treasury.