Year: 1865




The following important circular relative t.
/ Southern trade, was issued by the Secretary o
the Treasury


TREASURY DEPARTMENT, Sept. 1S, 1865.


In the circular issued by this department on
June II 1865, reference was made to the Pro
vision contained 10 section 46, of the internal
| Revenue Act of June 80, 1864, conferriLg up
on the Secretary OF the Treasury discretionary
! POWER in regard to the assessment, levy, time
| and manner OF collection of taxes in the States
lately in rebellion.


Under the authority given by that section it
was then stated that the Department, without
waving in any degree the rights the Govern,
ment in regard to taxes heretofore accruing,
would not insist al. present upon their payment,
50 far as they were payable prior to the estab-
lishment of collection district embracing the
territory IN which the tax payer resided. 1t
was further provided that manufactured articles
found in the hands of purchaser, which were
satisfactorily shown to have passed from the
manufacturer before the establishment of the
district, should not be subject to tax, unless
transported beyond the limits of the State lately
In lnsurrectlon No exception as then made
in favor of articles which had remained in the
possession of the manufacturers, and thus be-
come liable to the, tax imposed by the existing
law.


The Department, preferring to test the prac-
teal workings Of the regulation before exercis-
ing its power Of modification in this important
particular, representations since made relative
to the hardship of this discrimination between
manufacturer and purchaser, have been corrob-
GRATED by careful inquiry, and induce the con-
victlon that a further exemption is justifable
and advisable.


1t is found that considerable quantities of
manufactured products have been retained by
the manufacturer in his own hands as the safest
mode of investing his property, until the return
OF peace; that this retention was determined on
and carried out without the knowledge or oppor-
tunity of knowledge Of the law suhjecting this
property to heavy taxation on sale, and that
large part OF the manufactures so retained hav
ing been much deteriorated in value by the
lapse of time and want of proper attention,
would not sell for sum equal to the tax


A state of things so destructive to the useful
ness Of property and to the prosperity of the
manufacturing classes is as adverse to The integ
rity of the Government as to those ofIthe COM
munity. For these reasons it is hereby ordered
that all articles, in whatsoever hands found,
which can be shown to the satisfaction of the
Assessor to have been manufactured before the
establishment of the district, shall be held free
from the present assessment or collection of tax,
unless transported beyond the limits of the
States lately in instruction.


Manufacturers of articles liable TO seizure for
want Of inspection marks will present to the
Assessor evidence that such articles were manu-
factured prior to the establishment of the dis
trict and she Assessor, if satisfied, will cause
such articles to be SO marked US to be identified
and sold without liability to seizure.


All articles transported beyond the limits of
the States lately in insurrection will be subject
to the tax due under the law iu force at the
time they were manufactured.


(Signed) H. MCCULLocH,


Secretary Of the Treasury.