Some of these difficulties can only be overcome by time and an improved condition of the country upon the restoration of peace, but others may be remedied by legislation, and your attention is invited to the recommendations contained in the report of the head of that Department.
The condition of the Treasury will doubtless be a subject of anxious inquiry on your part. I am happy to say that the financial system already adopted has worked well so far, and promises good results for the future. To the extent that Treasury notes may be issued the Government is enabled to borrow money without interest, and thus facilitate the conduct of the war. This extent is measured by the portion of the field of circulation which these notes can be made to occupy. The proportion of the field thus occupied depends again upon the amount of the debts for which they are receivable; and when dues, not only to the Confederate and State governments, but also to corporations and individuals, are payable in this medium, a large amount of it may be circulated at par. There is every reason to believe that the Confederate Treasury note is fast becoming such a medium. The provision that these notes shall be convertible into Confederate stock bearing 8 per cent interest, at the pleasure of the holder, insures them against a depreciation below the value of that stock, and no considerable fall in that value need be feared so long as the interest shall be punctually paid. The punctual payment of this interest has been secured by the act passed by you at the last session, imposing such a rate of taxation as must provide sufficient means for that purpose.
For the successful prosecution of this war it is indispensable that the means of transporting troops and military supplies be furnished, as far as possible, in such manner as not to interrupt the commercial intercourse between our people nor place a check on their productive energies. To this end the means of transportation from one section of our country to the other must be carefully guarded and improved. And this should be the object of anxious care on the part of State and Confederate governments, so far as they may have power over the subject.
We have already two main systems of through transportation from the north to the south — one from Richmond along the seaboard; the other through Western Virginia to New Orleans. A