The Sun.
London, England, 1865-12-23 00:00:00

THE SOUTHERN STATES.

In view of the recent and 'present condition of the
Southern States, the Secretary recommends:—
First. That the collection of internal revenue taxes
which accrued before the establishment of revenue offices
in the States recently in rebellion be indefinitely post-
poned.
Second. That all sales of property in those States,
under the direct tax law, be suspended until the
States shall have an opportunity of assuming (as was
done by the loyal States) the payment of the tax assessed
upon them.
Third. That all transactions in such States, which may
be invalid by the non-use of stamps, be legalised as far as
it is in the power of Congress to legalise them.
What action, if any, should be taken for the relief of
persons in those States, whose property has been
under the direct law tax, and is now held by the Govern-
ment, it will be for Congress to determine. The Secre-
tary is decidedly of the opinion that liberal legislation in
regard to the taxes which accrued prior to the suppression
of the rebellion will tend to promote harmony between the
Government and the people of those States, will ultimately
increase the public revenues, and vindicate the humane
policy of the Government.
THE RECIPROCITY TREATY.

The Reciprocity Treaty with Great Britain will expire
on the lith et March next, and due notice of this fact has
been given by circulars to the officers of customs on the
northern frontier.
There are grave doubts whether treaties of this cha-
racter do not interfere with the legislative power of Con-
gress, and especially with the constitutional power of the
House of Representatives to originate revenue bills ; and
whether such treaties, if they yield anything not granted
by our general revenue laws, are not in' conflict with the
spirit of the usual clause contained in most of our com-
mercial treaties, to treat each nation on the same footing
as the most favoured nation, and not to grant, without
an equivalent, any particular favor to one nation not
conceded to another in respect to commerce and naviga-

tion.
It appears to be well-established that the advantages of
this treaty have not been mutual, but have been in favor
of the Canadas. Our markets have been strong, exten-
sive, and valuable—theirs have been weak, limited, and
generally far less profitable to our citizens. The people
of the Canadas and Provinces have been sellers and we
buyers of the same productions for which we are often
forced to seek a foreign market. It is questionable, in
fact, whether any actual reciprocity, embracing many of
the articles now in the :treaty, can be maintained in
the two countries. Even in regard to the fisheries, it is
by no means certain that, instead of equivalents having been
acquired under the treaty, more than equal advantages
were not surrendered by it. But, whatever the facts may
be, this subject, as well as that of intercommunication
through rivers and lakes, and possibly canals and rail-
roads, are proper subjects of negotiation, and their im-
portance should secure early consideration.
NATIONAL BANKS.

The national banking system was designed not only to
furnish the people with a sound circulation, but one of
uniform value ; and this is not likely to be fully accom-
plished until the banks, by compulsion, of their own volun-
tary act, keep their notes at par in the principal money
markets of the country.
The establishment of the national banking system is one
of the great compensations of the war—one of the great
achievements of this remarkable period. In about two
years and a half from the organisation of the first national
bank the whole system of banking under State laws has
been superseded, and the people of the United States have
been furnished with a circulation bearing upon it the seal
of the Treasury Department as a guarantee of its sol-
vency. It only remains that this circulation shall be a
redeemable circulation ; redeemable not only at the coun-
ters of the banks, but at the commercial cities, to make
the national banking system of almost inconceivable bene-
fit to the country.
The present law limits the circulation of the national
banks to three hundred millions of dollars ; and it is not
probable, when the business of the country returns to a
healthy basis, that a larger paper circulation than this
will be required. Indeed it is doubtful whether a larger
circulation can be maintained on a specie basis. Should
an increase, however, be necessary, it can be provided for
hereafter. It is, perhaps, unfortunate that a greater re-
striction had not been placed upon the circulation of the
large banks already organised, in view of the wants of the
Southern States. It is quite likely, however, that the an-
ticipated withdrawal of a portion of the United States
notes (not to speak of the effect of the restoration of specie
payments) will so reduce the circulation of the Northern
banks as to afford to the South, under the present limita-
tion of the law, all the paper currency which will be re-
quired in that quarter.