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 Duke University Libraries 
 
 Report of the m 
 Conf Pam #487 
 
 DTTD7DS1EX 
 
r 
 
 REPORT 
 
 OF THE 
 
 MAJORITY OF THE fOMiMITTEE 
 
 ON 
 
 STATE ENDORSEMENT 
 
 OP THE 
 
 cojvfederjite debt. 
 
 BOUGHTON, NISBET &. BARNES, State Priktem 
 
 (MILLIDOEVILLE, GA. 
 
 1863. 
 
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 [Ordered 200 copies for House and 100 for Senatt. 
 
 The Special Committee to which was referred so much 
 of the Message of his Excellency the Governor, with the 
 accompanying documents, as relates to "State endorsement 
 of the Confederate debt," have had the same under consid- 
 eration, and a majority of the committee make the follow- 
 ing 
 
 REPORT. 
 
 Tlie currency of the Confederate States consists almost 
 exclusively of notes issued by the Confederate Govern- 
 ment, and is rapidly depreciating from excessive issue. — 
 It is liable to depreciation of another kind, and from anoth- 
 er cause, which is perhaps more pernicious than the other. 
 The fact cannot be concealed that there is a distrust of the 
 ability of the Confederate Government to redeem the notes, 
 which have been and may be issued. 
 
 The depreciation arising from excessive issue contributes 
 to the depreciation of the other kind to which allusion 
 has been made. The remedy for the first is to reduce the 
 circulation, but that alone will be no remedy for the other. 
 If the amount of notes in circulation should be reduced 
 by being funded in interest bearing bonds, so that the cir- 
 culation shall approximate tli*^ amount required by the bus- 
 iness of the country, the depreciation from a distrust of 
 the solvency of the Government will not be removed ; for 
 funding the notes will merely change the form of the in- 
 debtedness, but will not reduce its amount, nor make its 
 payment more certain and secure ; on the contrary it will 
 be increased to the extent of the interest which the bonds 
 will bear. Though funding the notes may, to some extent, 
 remedy the depreciation from excessive issue, it will not 
 prevent the other depreciation alluded to, and which is the 
 most hurtful of the two. There may be a redundancy in 
 bonds, as well as in notes, for capitalists will be as unwilling 
 to hold the bonds as they are the notes, when they distrust 
 the ability of the government to meet its liabilities. Be- 
 ing thrown upon the market in hrge amounts from an ap- 
 prehension of their ultimate failure, depreciatioQ must ne- 
 cessarily ensue, 
 
4 
 
 To remove depreciation from excessive issue, funding of 
 the notes is recommended. That may prove an effectual 
 remedy for the first evil complained of in the currency, 
 but it is only one step towards sustaining the credit of the 
 notes. Something more is necessary or that step will be 
 unavailing. 
 
 It has been suggested that to make them a legal tender 
 in payment of debts would have the efiect to sustain their 
 credit, but that would neither reduce the volume of cir- 
 culation, nor remove the apprehension of the ability of the 
 Government to redeem its notes. They are promises to 
 pay money, and to make them a legiil tender would not 
 change the contract, or release the Government from its 
 obligation to redeem them when they'fall due; if it veould, 
 the eflc-ct would be practical repudiation. 
 
 Taxation is also recommended as a remedy for the evil 
 complained of. Taxatioti is necessary and should be re- 
 storted to, but that alone will not accomplish the object. 
 It would simply reduce the circulation, for the time being, 
 the amount of the taxes paid, and no more ; but in time of 
 war, and when, as in the case of our Government, the ex- 
 penses are met almost exclusively by the issue of Treasu- 
 ry notes, the annual tax, which may be levied, will be in- 
 sufficient for the wants of the Government, and therefore 
 ineffectual to reduce the amount of notes in circulation 
 to the usual and proper level of the currency. Taxation 
 is necessary, and in conjunction with other measures, will 
 have a beneficial effect. But the great; necessity which is 
 upon us, is to give credit to the Governtnent issues; and 
 to sustain it, something is necessary besides retiring the 
 circulation, and changing the form of the indebtedness. — 
 What is wanting is confidence; an abiding confidence that 
 the notes and principal and interest of the bonds will be 
 paid. 
 
 How is this confidence to be inspired? In the first place, 
 by a strict observance of good faith ; by avoiding repudia- 
 tion, and everything leading to it. 
 
 Secondly, by providing the means, as far as practicable, 
 for the payment of the interest of the public debt, and a 
 fund for its ultimate redemption. Such a fund should be 
 accumulated gradually, and applied in extinguishnVent of 
 the debt, as its accumulation may justify. And to remove 
 the danger which now threatens the public credit, .and to 
 insure confidence, in the third place, the States of the Con- 
 federacy should come to the aid of the Government, and 
 support its credit by endorsement of its bonds. 
 
 Credit is the main, and ind^i'A the sole, dependence of 
 our (iovernroeot fgr the means of defence in the w?ir with 
 
5 
 
 the United States. Under present circumstances, no reve- 
 nue can be raised from duties on importations, or if any, 
 it will be inconsiderable in amount. Taxation cannot 
 raise the means rendered necessary by the war in which 
 we are engaEred. 
 
 Wars are expensive. The most wealthy nations are com- 
 pelled to resort to loans and extraordinary means to raise 
 •money in time of war. The ordinary revenues of no coun- 
 try in such a time are sutticient for its wants. 
 
 Our Confederate Government, just struggling into exis- 
 tence, cannot be expected to be exempt from the lot com- 
 mon to all nations. Credit is the chief reliance of all, of 
 the wealthiest as well as the poorest, nations, to meet the 
 expenses necessarily incurred by war. 
 
 The only resource of our Goveriiment in the present 
 emergency consists in the issue of notes promising to pay 
 money. The necessities of our country re(|uire the daily, 
 and constant issue of such notes. It is a duty due to the 
 people, who are the holders of these notes, to protect them 
 against depreciation. Patriotism demands that their credit 
 be sustained. If that be destroyed our means of defence 
 will be gone, and submission to an odious despotism, or 
 subjugation by it. will be the inevitable result. These notes ' 
 con.^titute thd debt incurred by the Government in defence 
 of the people of the Confederate States, and the people of 
 the States must pay the debt. 
 
 Loans of money cannot be obtained with which to pros- 
 ecute our defence. Our Confederate Government is yet un- 
 recognized by Foreign Governments, and it cannot be ex- 
 pected that foreign capitalists will loan money to a Gov- 
 ernment, whose independence and existence among the na- 
 tions of the world have not been established. Loans can- 
 not be obtained from our own people, for the reason that 
 they have but little active capital, and nothing like an 
 amount fiufficient for the purposes ©f government in tin)e 
 of war. 
 
 Necessity then compels the issue of notes promising to 
 pay money, and in large amounts. We are tngaged in a 
 war of gigantic proportions, and our necessities and expen- 
 ditures correspond with the magnitude of the war. Why 
 should not the States guarantee the payment of the debt 
 thus incurred in their behalf? 
 
 The States by their secession from the United States in- 
 duced the war, which is now upon us — it is a war in de- 
 fense of the right of secession — and the right of the States 
 to hold their property in peace and security. Who must 
 and will bear the expenses of this war, but the people of 
 the State ? The means must come from their pockets, 
 whether the debt be paid by tjie States, or the Confederate 
 
Government, and whether the money for the payment of the 
 jjublic debt be raised by taxation, or by duties on importa- 
 tions, the people are and will be the payers in both cases. 
 If direct taxation should be resorted to by the Confederate 
 Government, there will be no property subject to taxation, 
 bnt that owned and possessed by the people of the States. 
 The Confederate Government has no ooniniunity, no people, 
 but the people of the States. Neither territorially, nor as a 
 body politic, is there any such nation or people, as the Con- 
 fiederate nation. There are Confederate States, or States 
 confederated, and the people of each is a distinct, seperate, 
 sovereign community. 
 
 The Confederate Government is the agent of these Con- 
 federate States, and is as much their government, as are 
 their respective State governments. The government of 
 the Confederate States is the government of the people of 
 Georgia to the extent of the powers granted, as well as 
 their own State government. Both are the agents of the 
 sovereign people of the State for specified purposes, and 
 her people are as much bound to maintain one in the legit- 
 imate exercise of the powers granted, as the other. There 
 is an obligation upon them to support both. They are bound 
 to support their State government, and are just as much 
 bound to contribute their share to the support of the other. 
 
 Now if the Confederate Government has incurred, and is 
 incurring a heavy debt, as the agent of Georgia, and her co- 
 States, and in their defense, why should not each bear her 
 proportionate share of that debt 't What satisfactory ob- 
 jection can be urged against it? Will it be said that the 
 debt was incurred by the Confederate Government, and 
 therefore that government should pay it ? The answer is, 
 the Confederate Goverument inctirred it for the benefit of 
 the people of the St ites, and as their agent, and the means 
 of payment, if it shall ever be paid, must come from them. 
 ThL*y can come from no where else. AVhy not then let the 
 States indorse the debt, which their people must ultimately 
 pay ? It may be said that this is tantamount to a man's in- 
 dorsing his ovrn note. The cases are not strictly analogous. 
 It wouldhe more proper and correct to say, that it would 
 be the principal recognizing and indorsing the act of his 
 agent. In such a case the validity of the act of the agent 
 would be placed beyond dispute. So in the case under con- 
 sideration. Let the States indorse the payment of the Con- 
 federate debt, it will be equivolent to an indorsement of the 
 acts of their agent, and assuming a liability which their 
 agent incurred in their behalf, and for their benefit. 
 
 And the great controlling reason is that the effect of such 
 indorsement will be tp strengthen the credit of the Couf^jd- 
 
erate bonds and notes, but without their credit may suffer 
 material injury, and with its loss, if that should unfortu- 
 nately occur, we lose everything valuable in this life — cred- 
 it, property, liberty, independence — all will be buried in 
 one common grave. When this credit is gone, with it will 
 go our means of defense — when we lose our means of de- 
 tiense, subjugation, or submission will follow. To avert so 
 dire a calamity, every eflbrt, and all means should be used 
 to sustain the credit of the Confederate Government. 
 
 To this end, and for this purpose, we think the measures 
 indicated in the following resolutions indispensably necessa- 
 
 1. Resolved by ihe General Assembly of t/tr Sfate oj Georgia^ 
 That it is expedient for the purpose of sustaining the cred- 
 it of the Confederate Government, that the several States 
 of the Confederacy should guarantee the payment of such 
 bonds as may be issued by the Government of the Confed- 
 erate States for funding the Treasury notes now in circu- 
 lation, and hereafter to be issued, each State guaranteeing 
 her respective proportionate share of the amount of bonds 
 80 issued, according to her representation in the Confeder- 
 ate Congress, omitting in the calculation the States of Ken- 
 tucky and Missouri. 
 
 2. Rsolved, That in the opinion ©f this General Assem- 
 bly, it is the duty of the Confederate Congress to raise by 
 taxation annually an amount sullicient to pay the interest 
 on the bonds issued by the Confederate Government, as it 
 falls due, and to create a sinking fund upon such plan as 
 may be adopted by Congress lor the gradual and ultimate 
 extinguishment of the public debt. 
 
 The Committee also report by bill. 
 
 All which is respectfully submitted, 
 
 E. G. CABANISS, 
 GEO. S. BLACK, 
 J. A. S. LEE, 
 L. N. WHITTLE, 
 MII^TGN A. CANDLER, 
 B. B. MOORE, 
 GEO. T. BARNES, 
 From the Committee of the House. 
 
 D. A. VASON, 
 From the Committee of the Senate. 
 
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