The state of the public finances is such as to demand your earliest and most earnest attention. I need hardly say that a prompt and efficacious remedy for the present condition of the currency is necessary for the successful performance of the functions of government. Fortunately the resources of our country are so ample and the spirit of our people so devoted to its cause that they are ready to make any necessary contribution. Relief is thus entirely within our reach if we have the wisdom to legislate in such manner as to render available the means at our disposal.
At the commencement of the war we were far from anticipating the magnitude and duration of the struggle in which we were engaged. The most sagacious foresight could not have predicted that the passions of the Northern people would lead them blindly to the sacrifice of life, treasure, and liberty in so vain a hope as that of subjugating thirteen independent States inhabited by many millions of people whose birthright of freedom is dearer to them than life. A long exemption from direct taxation by the General Government had created an aversion to its raising revenue by any other means than by duties on imports, and it was supposed that these duties would be ample for current peace expenditure, while the means for conducting the war could be raised almost exclusively by the use of the public credit.
The first action of the Provisional Congress was therefore confined to passing a tariff law, and to raising a sum of $15,000,000 by loan, with a pledge of a small export duty on cotton to provide for the redemption of the debt. At its second session war was declared to exist between the Confederacy and the United States, and provision was made for the issue of $20,000,000 in Treasury notes, and for borrowing $30,000,000 on bonds. The tariff was revised and preparatory measures taken to enable Congress to levy internal taxation at its succeeding session. These laws were passed in May, and the States of Virginia, North Carolina, Tennessee, and Arkansas having joined the Confederacy, the Congress adjourned to meet in the city of Richmond in the following month of July.
Prior to the assembling of your predecessors in Richmond at their third session, near the end of July, 1861, the President of the