country, at rates not lower than par, for sums of five hundred, one thousand, and five thousand dollars, or of one hundred, five hundred, and one thousand pounds sterling, not exceeding in the aggregate one hundred millions of dollars, or, if expressed in the currency of Great Britain not exceeding twenty millions of pounds sterling. He proposes further that these bonds or certificates be made redeemable at the pleasure of the government after a period not exceeding thirty years after a common date, not later than the first day of January, 1862, and bear an interest not exceeding seven per cent., payable in London, or at the treasury of the United States, with exchange at such rate as will make the payment equivalent to payment in London. If the ample provision already recommended for the punctual payment of interest and final redemption of the principal be made by Congress, the Secretary entertains a very confident expectation that it will be found practicable to negotiate a very considerable part of this loan, if not the whole, in our own country at favorable rates, and that whatever part, if any, may be wanted from capitalists in other countries will be readily obtained. For whatever sums may be needed to supply the full amount required for the service of the fiscal year, and as an auxiliary measure to those already proposed, the Secretary recommends that provision be made for the issue of treasury notes for ten, twenty, and twenty-five dollars each, payable one year after date, to an amount not exceeding in the aggregate fifty millions of dollars. These notes should bear interest at the rate of three and sixty-five hundredths per cent., and be exchangeable, at the will of the holder, for treasury notes or exchequer bills, payable after three years, bearing seven and three-tenths per cent. interest; or, should it be found more convenient, they may be made redeemable on demand in coin, and issued without interest. In either form, treasury notes of these smaller denominations may prove very useful, if prudently used in anticipation of revenue certain to be received. The greatest care will, however, be requisite to prevent the degradation of such issues into an irredeemable paper currency, than which no more certainly fatal expedient for impoverishing the masses and discrediting the government of any country can well be devised. In connexion with the general subject of revenue, the Secretary thinks it his duty to invite the attention of Congress to the coudition of foreign commerce, and of the commerce between the States as affected by the existing insurrection. At the ports of several States of the Union the collection of lawful duties on imports has been forcibly obstructed and prevented for several months. This condition of affairs, and the admission of foreign merchandise into those ports without payment of duties to the United States, have given opportunity to many frauds on the revenue, and must, necessarily, occasion great and harmful disturbance of the regular commerce of the country. It is the province of Congress to apply the proper remedies for these evils; and the Secretary begs leave to suggest that proper remedies may be found in closing the ports where the collection of duties is so disturbed, or by providing for such collection on shipboard, or elsewhere beyond the reach of such obstructions. Every independent nation exercises the right of determining what ports within its territorial limits shall be, and what ports shall not be, open to foreign commerce; and nothing can be clearer, where one or more ports may be temporarily in the possession of insurgents against the government, than that suitable regulations may be prescribed by the proper authority to guard the revenue against diminution, by adequate provision for its collection elsewhere than within the port, or for depriving the port itself of its character as a port of entry or delivery until the insurrection shall be suppressed. Great inconvenience and damage to the commerce among the States have also arisen from the same general cause. To mitigate these evils, and to prevent, as far as possible, the perversion of commerce between the States into an agency for the supply of the insurgents with means for maintaining and extending the insurrection, the Secretary issued the two circular orders to collectors, of which copies are herewith submitted to Congress. In framing these orders, the Secretary was necessarily much embarrassed by the absence of any law regulating commerce among the States, and by the necessity of conforming them to conditions of hostility created by the insurrection. These conditions, under certain circumstances, would make all commerce illegal; while, under other circumstances, they would only make unlawful the commerce carried on directly with insurgents. To remove embarrassment, legislation is required; and the Secretary respectfully recommends a suitable enactment giving to the President the power to determine by proclamation or other notification within what limits an insurrection has obtained, for the time, controlling ascendancy, and must, therefore, be regarded as attended by the effects of civil war in the total suspension of commerce, and to establish by license such exceptions to that suspension as he may deem expedient and practicable. Such an enactment should also provide suitable penalties and forfeitures for attempts to carry on unlicensed commerce with insurgents or places declared to be in a state of insurrection. With a view to a clearer understanding of the views expressed in this report, and for the purpose of promoting the despatch of the public business, so important at this juncture, the Secretary has caused to be prepared, and begs leave most respectfully to submit to the consideration of Congress, as plans which seem to him judicious for improving and increasing the revenue, the draughts of three bills: one to provide revenue from imports, and for other purposes; another, further to provide for the collection of duties on imports, and other purposes; and another, to authorize a national loan, and for other purposes. In compliance with the law on that subject, he also transmits detailed statements of the several negotiations for loans since the last annual report from the Treasury Department, and also a statement showing the gradual increase and present condition of the public debt. The Secretary is fully and painfully aware that in preparing and submitting this report he has labored under great and peculiar disadvantages. He has but recently assumed the charge of the vast and complicated concerns of his department, and he is deeply conscious 16 REPORT OF THE SECRETARY OF THE TREASURY. how imperfectly he is qualified by experience, by talents, or by special acquirements, for such a charge. He understands, also, better, perhaps, than any one outside can understand, the difficulties incident to the task of which he has attempted the performance-difficulties always considerable, but now augmented and multiplied beyond measure by the criminal insurrection which deranges commerce, accumulates expenditures, necessitates taxes, embarrasses industry, depreciates property, cripples enterprise, and frustrates progress. He has simply endeavored, under these perplexing circumstances, to meet the case just as it is; to set forth plainly the actual condition of the public finances; and to explain the means and measures by which, in his humble judgment, the evils of the existing situation may be mitigated and finally removed. The energies of a great people will, as he firmly believes, surmount all the troubles and calamities of the present time, and, under the good hand of the God of our fathers, out of these very troubles and difficulties build a future which shall surpass the whole glorious past in the richness of its blessings and benefits. All which he respectfully submits to the indulgent 'consideration of Congress. Hon. HANNIBAL HAMLIN, Vice President of the United States, S. P. CHASE, Secretary of the Treasury. and President of the Senate. INDEX TO REPORT ON THE FINANCES. Page. 1 The Secretary's Report Statement No. 1, showing the amount of the public debt of the United States on Statement No. 3 exhibits the schedule of bids for a loan of $3,009,000, under act Statement No. 5 exhibits schedule of bids for loan of $7,310,000, under act of February 8, 1861, with the rate per cent., amount accepted, and amount rejected.... Statement No. 6 exhibits a schedule of bids for United States treasury notes amounting to $1,864,000 under act of February 8, 1861, and the notice of May 11, 1861. Statement No. 7 exhibits schedule of offers for $1,710,650 United States treasury notes awarded by the Secretary of the Treasury under the act of June 22, 1861, during the fiscal year ending June 30, 1861 Statement No. 8 exhibits list of public creditors to whom treasury notes were issued, and the amounts thereof, under act of June 22, 1860, during the fiscal year ending June 30, 1861.... Statements Nos. 9 and 10. Circulars to officers of the customs in reference to the shipment or transportation of munitions of war and other articles to persons or places under insurrectionary control. Statement No. 11. A bill to authorize a national loan, and for other purposes--Statement No. 12. A bill further to provide for the collection of duties on imports, and for other purposes Statement No. 13. A bill to provide revenue from imports, and for other purposes. Ex. Doc. 2-2 |