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CONFEDERATE STATES OF AMERICA, ^ 
 
 Treasury Department, ^ 
 
 Richmond, October 15tli, 1861. ) 
 
 The Commissioners Appointed to Receive Subscriptions to the 
 Produce Loan ; 
 
 Gentlemen : 
 
 Enquiries have been made from various quarters 
 
 1. Whether during the continuance of the Blockade, ef- 
 forts shouhl be made to procure further subscriptions. 
 
 2. Whether the Government will authorize promises to 
 be held out of aid to the planters, as an inducement to such 
 further subscriptions. 
 
 The first inquiry seems to imply a misundei^gtanding of 
 the scheme of the subscriptions. Many persons have sup- 
 posed that the Government was to have some control of 
 the produce itself; others that the time of sale appointed by 
 the subscription, was to be absolute and unconditional. The 
 caption at the head of the lists, when examined, will correct 
 both these errors. The subscription is confined to the pro- 
 ceeds of sales, and contains an order on the Commission mer- 
 chant or factor of the planter to pay over to the Treasurer 
 the amount subscribed, in exchange for Confederate Bonds. 
 The transaction is simply an agreement by tne planter to 
 lend the Government so much money ; and, in order to com- 
 plete the transaction, a time and place are appointed when 
 and where the parties may meet to carry it out. The im- 
 portant point is, that it shall certainly be completed at some 
 time, and that is secured by the engagement of the planter. 
 Whether that time be December or June is simply a ques- 
 tion of convenience, and works no injury to either party. 
 The Government is sure of the eventu' 1 payment, and de- 
 rives from that certainty so much credit; and it loses noth_ 
 ing, because it gives its bond only when the money is paid. 
 
It is obvious, therefore, that the subscriptions are quitt 
 valuable to the Government during the blockade, as afte^ 
 The blockade simply suspends the completion of the eng 
 ment. It becomes the interest of both parties to Avait f 
 good price, and the Government will readily consent i 
 postponement of the sale. 
 
 You jjcrceive, therefore, that it is desirable to continue 
 your exertions to increase the subscriptions ; and you arc 
 authorized to say that the Government will consent to a 
 reasonable extension of the time appointed for sales. 
 
 2. The next inquiry is as to a promise of material aid 
 from the Government to the planters. 
 
 In answ^ering this enquiry, I am to speak in advance of 
 any action of Congress. What that body may see fit to do, 
 it is not for me to determine. I can express merely the 
 views of this Department, and these must govern your ac- 
 tion, until r;iversed by a higher authority. It would be a 
 sufficient answer to the enquiry, to say, that the action of the 
 Government is settled by the Constitution. No power is 
 granted to any Department to lend money for the relief of any 
 interest. Even the power of Congress in relation to money 
 is confined to borrowing, and no clause can be found which 
 would sanction so stupendous a scheme as purchasing the 
 entire crop Avith a view to aid its owners. But it may be 
 said that the Constitution of the Provisional Government 
 may be altered by Congress, and that it is the duty of this 
 Department to prepare the way for such alteration, if, in its 
 judgment, the financial necessities of the country demand 
 the change. 
 
 I am not disposed, then, to close the enquiry with the 
 abrupt answer thus made by the Constitution ; aAd will 
 proceed to consider the subject upon its intrinsic merits. 
 
 Two plans of relief have been proposed. The one is that 
 the Government should purchase the entire crop of the coun- 
 try ; the other that an advance should be made of part of 
 its value. In either case the payment is to be made by the 
 issue of Treasury notes, and therefore, if Ave put aside for the 
 
present, the many and serious objections to tlie possession, '-^ Caj/ 
 transportation and management of tlie crop by the Govern- 
 ment, it becomes simply a question of amount. To purchase 
 the whole crop would require its whole value, less the amount 
 of the subscriptions made to the Government. If we estimate 
 the Avhole crop of cotion at 200 millions and the subscriptions 
 at 50 millions, the purchase Avould then require 150 millions 
 of Treasury notes, and, if to this sum be added the amount 
 of values for other agricultural products, which would cer- 
 tainly claim the same benefit, the sum required would proba- 
 bly reach 1 75 millions. 
 
 The amount called for by the other plan of making an ad- 
 vance, would depend upon the proportion of that advance. 
 Few of the advocates of this plan have put it lower than 5 
 cents per pound on cotton, and at the same rate upon other 
 produce. It may, therefore, be very fairly set down at 
 about one hundred millions. 
 
 If Ave consider first, the least objectionable of these 
 plans, it is certainly that which requires the smaller sum; 
 and if this be found impracticable, the larger must of neces- 
 sity be rejected. Our enquiry, then, ma}" be narrowed doAvn to 
 a proposal that the Government should issue 100 millions of 
 Treasury notes, to be distributed among the planting com- 
 munity upon the pledge of the forthcoming crop. 
 
 The first remarkable feature in this scheme is, that it pro- 
 poses that a new Government, yet struggling for existence, 
 isliould reject all the lessons of experience, and undertake 
 that whicli no Government, however long established, has 
 yet succeeded in effecting. The " organization of labor" 
 has called forth many ingenious attempts, both speculative 
 and practical, among well-established Governments, but al- 
 ways with disastrous failure. With us, however, the exper- 
 iment is proposed to a new Government, which is engaged in 
 a gigantic war, and which must rely on credit to furnish 
 means to carry on that war. Our enemies arc in possession 
 of all the munitions and work-shops which have been col- 
 lected during forty-five years of peace — their fleets have 
 
been built up at our joint expense. With all these on hand, 
 they yet arc obliged, to expend nearly ten millions of dollars 
 per week to carry on the war. Can we expect to contend with 
 them at less than half that expenditure ? Supposing that it 
 may require 200 millions of dollars ; then the proposal is 
 that at a time when we arc called upon to raise this large 
 sum for the support of Government, we shall raise a further 
 sum of 100 millions for the benefit of the planting interest. 
 
 For it must be observed, first, that the Government re- 
 ceives no benefit whatever from this advance. The money 
 is paid to each individual planter, and in exchange the Go- 
 vernment receives only his bond or note — or, if the cotton 
 be purchased, the Government receives only certain bales of 
 cotton. That is to say, the Government pays out money 
 which is needful to its very existence, and receives in ex- 
 change planters' notes or produce, which it does not 
 need and cannot in any way make use of. 
 
 It must be observed, in the next place, that Treasury 
 Notes have now become the currency of the country. They 
 are, therefore, at present, the. measures of value. In this 
 view it is the duty of the Government to limit their issue, 
 as far as practicable, to that amount which is the limit of its 
 currency. Every person acquainted with this branch of 
 political science, is aware that if the currency passes this 
 point, it not only becomes depreciated, but it disturbs the 
 just relations of society, precisely as though an arbitrary 
 authority should change the weights and measures of the 
 country. If the currency of a country should be suddenly 
 extended from one hundred to two hundred millions of dol- 
 lars, that, which was measured by one dollar is now mea- 
 sured by two, and every article must bo rated at twice its 
 f(U"mer price. Of course all contriicts are disturbed. 
 The debt incurred ])efore the increase is dischnrged by 
 paying one-half its former value ; and each article pur- 
 chased must be paid for at double its former price. The 
 Government, tVoiii the necessities of war, is the Inrgest of 
 all i)urchasers, and thus, by a kind of suicidal act, compels 
 
itself to pay two dollars for Avliat one would have formerly 
 purchased. And, at this rate of advance, two hundred mil- 
 lions of dollars can effect no more, than one hundred mil- 
 lions of dollars would have effected before ; or, in other 
 words, one hundred millions of dollars are actually sunk in 
 the operation. 
 
 Such a condition of the currency, the Government has 
 anxiously endeavored to guard against. The war tax was laid 
 for the purpose of creating a demand for Treasury Notes, and 
 a security for their redemption. Their rcdundanc}^ has been 
 carefully guarded against by allowing them to be funded in 
 eight per cent bonds. If necessity shall compel the Gov- 
 ernment to issue for the defence of the country, and to keep 
 out two hundred millions, it is plain that every accession 
 must impair and may defeat all these precautions. 
 
 If the Government should undertake, for the sake of pri- 
 vate interests, so large an increase of issues, it may hazard 
 its entire credit and stalnlity. The experiment is too dan- 
 gerous, and relief for the planters must be sought in some 
 other direction. And m;iy not that remedy be found ? 
 
 In the first place, let tlie planters immediately take mea- 
 sures for winter crops, to relievo the demand for grain and 
 provisions. Let them proceed to divert part of their labor 
 from cotton, and make their own clothing and supplies. — 
 Then let them apply to the great resource presented l)y the 
 money capital in banks and private hands. Let this capital 
 come forward, and assist the agricultural interest. Hereto- 
 fore the l)anks liave employed a large part of their capital 
 in the purchase of Northern exchange. Let them apply this 
 portion to factors' acceptances of planters' drafts secured by 
 pledge of the produce in tlie planters' hamls. An extension 
 of the time usually allowed on tliese drafts, would overcome 
 most of the difficulties. This extension could safely reach 
 the probable time of sale of the crops, inasmuch as the sus- 
 pension of specie payments throughout the entire Confede- 
 racy, relieves each bank from calls for coin. The banks are 
 accustomed to mana"-e loans of this character, and will con- 
 
6 
 
 duct the operation with such skill, as will make them 
 mutually advantageous. The amount of advance asked from 
 the banks, would be greatly less, than if advances Avere oifer- 
 ed by the Government ; and all the abuses incident to Gov- 
 ernment agencies, would be avoided. 
 
 It seems to me, therefore, that it is neither necessary nor 
 expedient that the Government should embark upon this dan- 
 gerous experiment It h far better that each class of the 
 community should endeavor to secure its own existence by 
 its own exertions, and if a'l oifcrt be at once made by so 
 intelligent a class as the planters, it will result in relief. 
 Delay in these efforts ocoasion^d by vague expectations of 
 relief from Government, which cannot be rc.lissd, may de- 
 feat that which is yet practicable. 
 Respectfully, 
 
 Your obedient servant, 
 
 C. G. MEMMINGER, 
 
 Secretary of the Treasury. 
 
INSTRUCTIONS FOR THE AGENTS FOR COE- 
 LECTINQ SUBSCRIPTIONS TO THE PRO- 
 DUCE LOAN. 
 
 CONFEDERATE STATES OF AMERICA, j 
 
 Treasury Department, > 
 
 Richmond, January 3rd, 1862. ; 
 
 The following Instructions are issued for the gui- 
 dance and direction of the Agents for collecting sub- 
 scriptions to the Produce Loan : 
 
 1. The General agents will immediately on re- 
 ceipt of the Lists of Subscriptions from the Register 
 of the Treasury, appoint a subordinate Agent at each 
 place in the State in which he is appointed, where 
 subscriptions are to be paid, (other than the place of 
 his own residence,) and shall report the same for the 
 approval of the Secretary of the Treasury, and shall 
 furnish such Agent with Lists of the Subscriptions 
 payable at such place. 
 
 2. At the time appointed for the sale of any pro- 
 duce, or whenever such sale shall take place, the 
 Agent shall apply for the proceeds due under the 
 subscrijDtion, and may receive the same in coin, Treas- 
 ury Notes, or approved Foreign Bills of Exchange 
 drawn against the sale, and taken at the current mar- 
 
"ket Tcatc ; and for the said proceeds, shall deliver to 
 the subscriber a receipt exchangeable for Bonds or 
 Stock, to be issued under the Act of August, 1861, 
 for such period beyond live years as the subscriber 
 may select ; and if the particular period shall have 
 been exhausted, the nearest remaining will be fur- 
 nished instead. 
 
 3. Each sub-Agent will report and pay weekly to 
 the General Agent of his Division, or to such Assis- 
 tant Treasurer or Depositary as he may direct, all 
 moneys collected. 
 
 4. The General Agents will report weekly to the 
 .Secretary of the Treasury, and at same intervals de- 
 posit all moneys received with the nearest Assistant 
 Treasurer or Depositary. 
 
 5. The General Agents will receive from the Treas- 
 urer the Bonds or Certihcates of Stock called for by 
 the receipts, and will, with the aid of their sub-Agents 
 .be the medium to exchange the same with the hold- 
 ers of the receipts. 
 
 6. The compensation of both General and sub- 
 Agents shall be a brokerage at the following rates ; 
 but no brokerage shall be charged by the General 
 Agent on moneys paid over by the sub-Agents : 
 
 RATES OF BROKERAGE COMMISSIONS TO BE ALLOWED. 
 
 On all sums of $100,000 and under, one-half of one 
 per cent.; on all sums over $100,000, and less than 
 $500,000, one-fourth of one per cent, additional ; on 
 all sums over $500,000, and less than $1,000,000, 
 one-eighth of one per cent, additional ; and on all sums 
 over $1,000,000, one-sixteenth of one per cent, addi- 
 ,tional, until the whole compensation of any one Agent 
 
shall reach $3,000, beyond which, no charge shall be 
 allowed. 
 
 7. All Agents shall have authority to receive addi- 
 tional subscriptions, and are earnestly requested to 
 take all measures in their power to procure the same ; 
 and they will be furnished with blank Subscription 
 Lists for that purpose. 
 
 8. Whenever a proposal is made to subscribe Ar- 
 my supplies in kind, the Agent to whom it is made 
 shall report the same to the nearest Quartemaster or 
 Commissary, and upon a certificate of the value as 
 adjusted by such officer, and that the article has been 
 received, the said Agent shall issue a receipt for the 
 amount so certified, and report the same to his prin- 
 cipal, or to this Department. 
 
 C. G. MEMMINGER, 
 
 Secretary of the Treasury. 
 
ADDITIONA[. [NSTRUCTIOXS TO PRODUCE LOAN / 
 
 AGENTS. 
 
 Treasury Department, } 
 March 1, 1862. \ 
 
 T\w following' are additional instructions to agents for col- 
 lecting subscriptions to the Produce Loan : 
 
 1. All agents shall transmit to the Secretary of the Trea- 
 sury, from time to time, the original lists of subscriptions to 
 the loan, after having taken co])ies for their own use. They 
 shall also report every case of increase or diminution of sub- 
 scriptions, whethei' made for the purpose of making the 
 amount a multiple of $ 50 00, wliich is the lowest denomina- 
 tion of bonds issued, or for any other purpose. 
 
 2. The brokerage commissions allowed to agents must not 
 be retained out of tlie subscriptions collected by them^ but 
 will be i)aid quarterly \)y the Ti'easury Dejjartment, the sev- 
 eral quarters ending on the 31 st of March, the oOth of June, 
 the oOth of September, and the olst of December respec- 
 tively. At the end of each quarter the agents shall i-cnder 
 an account showing the amount collected during the quarter, 
 together with the commissions charged tliereon, and the said 
 •account, when approved by the Secretary of the Treasury, 
 •will be referi'ed to the accounting officers of the Treasury for 
 
 settlement. 
 
 The accounts of sub-agents must be certified by the general 
 agents and transmitted' by them. 
 
 3. The general agents will transmit to the Secretar}'^ of the 
 Treasury, with their own reports, copies of the weekly reports 
 of then* sub-agents. 
 
 (Signed,)* r. a. MEMMINaER, 
 
 Scrre/nri/ of Ihe Treasury. 
 
Hollinger Corp. 
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