The Montgomery advertiser., 1902-01-26

ing the circulating medium. but the diffi- cuity or floating bonds and the impossi- plllty or deriving any revenue from tax atlon soon drove the authorities. to a larger reliance on forced loans in the shape of non-interest bearing notes. Be- fore the beginning of 1862 the government was irretrfevably committed to paper money policy which became the chief support of it's treasury The total ex- penses of the year were $165, ,000, GOO; the receipts $139, 900, 900. Of these receipts 76 per cent. were derived from the issue of treasury notes and g per cent. from the issue of bonds.
 It is a startling fact. probably hereto fore frequently mentioned. but brought that during the entire four years of war the Confederacy had but $27,0O0, 900 of spe- cie. of which $15OO0,000 was the amount of the loan heretofore alluded to, over $6,0O0000 the proceeds of the Erlanger loan. and the balance that seized from the Federal government.
 More and more the revenue reliance was placed upon issues of treasury notes, and at the close of 1862 these con stituted S2 per cent. of the total Con federate debt. which amounted at that time to over $567, 100000. Lenders were more ready to accept these notes than circulation. But as prices rose, appropri-
 auons grew correspondingly, and the issue of more notes to meet increased expenses set in operation an endless chain of evil.
 It was a necessary evil. Taxation would not suffice. Professor Schwab shows that of the enormous sum of $6Ol,- 000,0 900 to which the receipts of the gov ernment had been swollen during the first nine months of 1863, only a paltry $5,OOO.O00 had been secured by taxation, that is by all of the direct taxes and by export and import duties. Over $442,OO0- GOO was raised by issuing notes nearly all of which bore no interest, and $153, 100000 by floating bonds. Congress had to face a truly appalling financial condition when it assembled for the winter session of lS63-64. The public debt amounted by January i, 1864, to $1,221, 900 900, and the estimates called for $l,50OOOO,OOO to be provided during the year. The Secretary pointed out the failure of the taxation system, but he did not present practical plan for increasing the revenue by thls means save to propose drastlc tax really aimed at making 1t advantageous to the people to hold bonds, to the in terest payment of which the tax was to be primarily devoted.
 By the middle of the year the Secretary (Memminger) had made up his mind that compulsory funding of notes was the only way by which the government could escape from the dilemma resulting from redundant currency, and an inability to add otherwise, effectually, to the al- ready heavy debt, He proposed the issue of $2OO OO0 in notes. In substitution for that amount of old ones with the pledge that the government would not increase Iho iSsue' IL IS lo pe noleo tndI slHllleA devices were adopted during the Ameri- can and French Revolutions, and that when the measure came before Congress its report was so similar as to suggest that it might have been copied from that of the Continental Congress. The dis cussion which ensued in the country and in Congress was heated in the extreme. At length the famous Funding Act'' was passed February r. 1S64-"An act to re- duce the currency and to authorize new issue of notes and bonds''-Which aimed to reduce the outstanding circulation of