Tarn, 
 
 Duke University Libraries 
 
 Communication o 
 
 Conf Pam #362 
 
COMMFNTC^TION OF SECRETARY OF TREASURY. 
 
 TuEASURY Department, C. S. A. | 
 
 Richmond, Februray 20, 1865. \ 
 
 Hon. Thos. S. Bocock, Speaker of 
 
 the House of KeprcHenUvtivos: 
 
 Sir- 1 have the honor to transmit hcrewitli a copy of the report 
 made to this Department, uTider date of December 26th, 1864, by 
 the A^ront of the Treasury in the Trans Mississippi Department. 
 
 I recommend the passage of an Act to repair tlie defects and 
 render complete the orcranization of the Agency, in accordance 
 with the snggessions of Hon. P. W. Gray, Agent. 
 
 Very respectfully, 
 
 G. A. TRENHOLM, 
 Secretary of Treasury. 
 
 COMMUNICATION OF THE TREASURY AGENT. 
 
 C. S. Treasury Agency, T. M. D., ( 
 Marshall, Texas, Dec. 26, 1864. \ 
 
 Hon G. A. Trenholm, Secretary of ^ Tr„ 
 
 the Treasury, Richmond, Va. 
 
 Report of the operations of this Agency, desired by you in your 
 letter of 29th September last, has been necessarily delayed by the 
 press of business engaging my attention. 
 
 In March last, I received my appointment as Agent, at Kich- 
 mond Va. As speedily as practicable, I made my way across the 
 Mississippi, and through the enemy's lines in Louisiana, arriving 
 inlTexas early in April. Immediately upon my arrival, such instruc- 
 tions were given to Treasury officers as were deemed necessary un- 
 
 der the currency and tax acts. , ,^ . r ^u^ Tr-ono 
 
 After conference with the Military Commander of the Irans- 
 Mississippi Department, according to instructions, it was deemed 
 advisable to establish this Agency at Marshall, as a P'^int within 
 reasonable distance from his headquarters Notice was given that the 
 Acencv would be organized on the 1st July. Meantime my whole 
 attention was given to the necessary arrangements lor the work 
 
 Great difficulty was experienced in procuring even a small quantity 
 of stationery and blank books, at enormous prices, ^o building 
 
for offices could be procured at Marshall, until an old dilapidato<l 
 Academy, extremely inconveniert at best for the transaction of 
 business, could be repaired by mechanics detailed by the military 
 authorities. 
 
 The same aid was necessary to procure even a few tables and 
 desks, which had to be made, and the supply of tlieni has been very 
 limited. The need of blank forms, and the Regulations of the 
 De))arfment for the transaction of business in the difierent branches, 
 was attempted to l)e supplied by enquiry of the different officers for 
 them. Few could be found, because the officers themselves had not 
 been supplied with them: but a supply of such as were procured, 
 was printed under my direction. 
 
 The few clerks transfeired from Richmond, were only informed 
 of the special duties pertaining to the offices in which thev had been 
 engaeed No one familiar with the general routine of business in the 
 department was sent, as was promised nie by your predecessor, when 
 1 agreed to accept the office on that assurance. In consequence, 
 there was grcdt inconvetiience suffered, delay has ensued and errora 
 committed. 
 
 There was also difficulty in ensraging the services of clerks of 
 any kind, for the small compensation allowed by law, under the 
 limitations imjjosed by the regulations of your predecessor. 
 
 The ("omjitrollor. Hon. T. II. Kennedy, rf.j)orted his arrival at 
 Marshall the I'Jth of May. The Auditor, Major D. F. Shall, ariived 
 on the 1 8th .July. He did not receive his commission until about 
 the first of that month, it having been miscarried. 
 
 Yet the Agency may be considered as having born organized for 
 business on the first day of July, and its regular transactions, re- 
 ports and acc< unla date from that day. 
 
 The indefmiterirss of the act of Congress providing for this 
 Agency, and of the regulations of the Secretai-y, defining the pow- 
 ers of the Agent, left it in doulit whether the functions of the 
 Agency were to be assimilated in all re.spect8 to those of the Trea- 
 sury Department, or whether the Agency was to be regarded main- 
 ly as a medium for the transmission of returns, accounts, <tc., to 
 Richmond. JJcrce no thorough system, such as exists in the Trea- 
 sury Department, has been completed. With your ojqirobation, 
 however, it is now designed to assimilate the operations heie in all 
 respects to those of the Department at Richmond, as is believed 
 was the intention of Congress in providing for the establishment 
 of the Agency. I am satisfied it is only in this way that it can be 
 made effective and useful. 
 
 In consequence of the want of this system, and becnuse the De- 
 positaries have been pressed with business, under the currency act ; 
 and in many instances have been poorly supplied with clerical assis- 
 tance, and even with the stationery necessary to make their full re- 
 turns, I am unable to make as satisfactory a report of the receipts 
 of public moneys as is desirable. 
 
 Ab nearly as I can astertain from the returns of the various Trea- 
 

 surj olficcrs, the followiu<j:; have been the amounts received or col- 
 lected from all sources to the 1st October, and reported to this 
 Agency, viz : 
 
 Four per cent, bonds, under act of l7th Feb., 1864, $46,469,100 00 
 Four per cent, bonds, by States, under act 14th June, 
 
 1864, 413,500 00 
 
 War Tax, 5,768.457 42 
 
 Sequestration fund, 1,366,012 95 
 
 Military exemption fund, 10,000 00 
 
 Customs, 56,278 51 
 
 Export duty on cotton, 9,0l2 15 
 
 Light house money, 130 15 
 
 Tax on currency since 1st July, 649,175 34 
 
 Repayments by disbursing officers 32,173,865 32 
 
 Treasury notes, new issue, from Richmond, 8,000,000 00 
 
 $94,915,621 84 
 
 Expenditures up to the same date have been as follows, viz : 
 
 War Department, $5,950,000 00 
 
 Navy Department, 156,000 00 
 
 Civil and miscellaneous, including customs, 314,972 27 
 
 $6,420,972 27 
 
 Balance in the Treasury, $88,494,640 57 
 This balance consists of the following, viz : 
 
 New issue notes, $1,255,486 07 
 
 Old issue Treasury notes, 74,383,652 69 
 
 Drafts drawn at Richmond, 12,790,000 00 
 
 Coin and coupons, 05,510 81 
 
 $88,494,649 57 
 
 To this apparent balance should be added the balances in the hands 
 of Depositaries on the 30th of June last, excepting the sum of 
 $45,556,700, which was received by them before that date, for fund- 
 ing in bonds, under the act of 17th February last, and is included 
 in the foregoing statement. 
 
 The amount of old issues of Treasury notes deposited for four 
 per cent, bonds, under act of 17th February and l4th June, 1864, 
 up to October, 1864, was $47,040,401 00 
 
 The amount deposited for exchange of issues under 
 
 same acts, and the same date, was 1,887,522 00 
 
 Making a total of the old currency retired to that 
 
 date of . $48,927,923 00 
 
• 4 
 
 Since that date there has ])een deposited for exchange of issues 
 the sum of $5,497/218 00 
 
 And for fundin;^- in l»ond.s. under t^aid act^5, the sum of 369,345 00 
 Making a total of old currency retired to this date $54,794,486 00 
 Statements are herewith sulimitted, showing the transactions 
 above set forth, moi'C in detail. 
 
 It is almost impossible to make a reliable estimate of the amount 
 of old currency outstanding on the 1st October. As a mere sur- 
 mise, I should say about lit'ty millions of dollars. 
 
 In July last there was received from the Register eighteen mil- 
 lions of coupon bonds, issued under the act of February '20th, 18G3, 
 viz: Eight per cent bonds, 9,000,000 00 
 
 Seven " " 9,000,000 00 
 
 These bonds have been distril)uted, a-* far as lequired, to Deposi- 
 taries and Produce Loan Agents, to redeem tiic certiticates issued 
 by the former, for deposits for funding in bonds, under the funding 
 acts of 1863, and by the latter for purchases of cotton. 
 
 Much of my time and attention has been occupied in representing 
 the Commissioner of Taxes, supervising the execution of an intricate 
 and compleie system of taxation, extremely ditlicuU of execution. 
 The unequal effects of the discriminations made r)y these laws, have 
 produced great dissatisfaction. 
 
 The efforts to reach speculators and extortioners have failed to 
 attain their purpose, but in many instances operate harshly on 
 classes whose interests ought to be protected rather than taxed. 
 The taxation of bonds and securities of the government has ope- 
 rated most unjustly in this aepariment, where, until recently, large 
 amounts due in bonds had not been paid, but only certiticates were 
 held for them, on which the interest had not been generally paid. 
 The tax on coin, bullion, ttc, to be paid in kind or in Treasury 
 notes at their relative value to coin, to be fixed Ity the commission- 
 er, is an odious discrimination, accomplishing little good, while its 
 iroral effect is highly injurious ; because it creates the impression 
 that thereby the government depreciates its own currency. iSuch a tax 
 ought to be uniform with others payable only in kind, or else levied 
 at a higher rate, payable in currency. 
 
 The provision allowing credit to planters on their property or 
 capital tax, lor the value of their income or tithe tax, operates favor- 
 ably to those who have been prosperous, while those who have been 
 unfortunate or driven from their farms by the enemy are required 
 to ])ay the full money tax on their property, is manifestly unjust. 
 
 The State collectors have been diligent in tiieir duties, though, 
 from the depreciation of the cunency, it has been so arduous a task 
 that nothing Imt their patiiotic sense of duty has induced them to 
 continue. 
 
 The work of assessing and collecting was put in execution in 
 Texas and West Louisiana l)y the elVicicnt Chief Collectors in Sep- 
 tember, ft has been delayed in Arkansas by the want of necessa- 
 ry stationery. 
 
The excellent State collector of that State at length succeeded in 
 procuring a supply, and is now pushing forward the work as speed- 
 ily as can be expected. 
 
 The amount reported to have been collected for taxes, i3 chiefly 
 of those due under the Tax Act of 18G3, The additional taxes 
 leried in February and June, 1864, arc now being collected, and 
 will absorb a large amount of certificates for bonds and old issue 
 currency. It is estimated that the taxes which will be realized un- 
 der these acts will exceed twenty-five millions of dollars. 
 
 Under the Currency Act of February, much the larii^est portion 
 of Treasury notes lundcd for bonds prior to 1st July, was in the de- 
 nomination of one h'undred dollars. The object of the people in 
 funding seems to have been merely for the purpose of paying their 
 taxes with the certificates. 
 
 The effect of the provision allowing this procedure has been 
 merely to throw a vast labor on the Treasury officers in receiving 
 the notes and issuing certificates in inconvenient amounts for use 
 in paying taxes, and thus complicating accounts and embarrassing 
 the tax officers in receiving the certificates given for the notes, 
 while the same end could have been attained by allowing the notes 
 themselves to be received for taxes, prior to a given date. The 
 process has caused great labor, expense and complication, and pro- 
 duced inconvenience and dissatisfaction without corresponding ben- 
 efit to the government. 
 
 The provision of the C/Urrency Act, taxing the Treasury notes 
 and requiring exchange of issues, (in other words demonetizing the 
 currency) has been attended wilh equal inconvcniei ce and labor, 
 and great dissatisfaction has been produced by the delay in produ- 
 cing the new Treasury notes for exchange. Of new issue notes, 
 the whole amount received to this date, has only been sixceen mil- 
 lions out of the large sum of two hundred and eighty-three millions, 
 reported to have been issued from the Treasury. The demand in the 
 department for the necessary disbursments for the military service, 
 has absorbed nearly all that has been issued west of the Mississippi. 
 
 in consequence of delay in sending forward funds needed last 
 year, a large accumulation of indebtedness prior to the 1st July, 
 estimated by the Commanding General of the department to amount 
 to the sum of $66,333,099, on the 30th September. Twenty mil- 
 lions of old Treasury notes was received by depositaries in 
 April and May, but very little of it could be used in payment of 
 debts, the lime for the tax on curreticy being near at hand, and the 
 creditors consequently unwilling to receive them. The pay of the 
 army was in arrear for over twelve months, and other branches of 
 the service at a stand for want of funds. 
 
 Military requisitions have been therefore necessarily met in prefer- 
 ence to the claims of the people for exchange. They have been com- 
 pelled to receive certificates for exchange, redeeir;able when the new 
 notes ehould be received, until which time they must be unproductive 
 capital in their hands. 
 
The recent ariival of a supply of the six per cent, non-taxable 
 bonds, of the five hundred million loan, has enabled me to offer a 
 means of investment which has been ])romptl}' availed of to a consid- 
 erable extent, at a premium of fifty per cent, in new currency, or its 
 equivalent in old, witli the accrued interest added. In order to re- 
 lieve those who could not afford thus to invest io bonds.and who need- 
 ed their money to pay their taxes, I felt it my duty to authorize the 
 tax collectors to receiv^c these certificates for exchange in i)ayment of 
 taxes, as cash in the currency which they represent. I am aware of 
 the serious objections to this step, but I deemed it wiser to encoun- 
 ter them than to impose unjust burdens upon a people who had so 
 patiently acquiesced in themeasuresrcquiring them to receive these 
 certificates in lieu of the Treasury notes promised and due them. 
 Either the collection of the taxes due from parties holding such 
 certificates ought to be suspended until the government shall be 
 able to redeem tliem, or else the certificates themselves should be 
 received. This arrangement has been generally approved, and has 
 afforded much relief, thus preventing cause of complaint. 
 
 1 would respectfully call your attention to the necessity of amend- 
 ments to the laws providing for the organization of this agency. 
 
 iBt. There is no provision for a Treasurer, to whom the accounts 
 of the several depositaries should be rendered, and under whose 
 directions they should act. Such an office should be created as a 
 Bureau of the Agency, that its operations may be harmonious and 
 corres-pondent with those of the Treasury proper. The substitution 
 of a depositary for this purpose, oven if sanctioned by law, is but 
 an inconvenient arrangement. 
 
 2d. The functions of^ the Agent are too much diversified for one 
 person. As now constituted, the Agent has not only to superintend 
 and direct as the representative of the Secretary of the Treasury, 
 but personally to perform duties which, at Richmond, are divided 
 among various fmreau officers. Each of these should be placed un- 
 der a seperate head, with a salary annexed adequate to compensate 
 officers of ability to understand and control them, corresponding to 
 the similar offices at Richmond. 
 
 3d. No provision has been made to meet the contingency of a 
 vacancy from death or resignation, or inability to perform the du- 
 ties of the oilice from sickness or absence. The same defect exists 
 in the cases of tiie offices of Ccmptroller and Auditor. 
 
 The act cstablis-hing tlie Bureaux of Comptroller and Auditor 
 also needs amendment The (Jaiuptroller's duties correspond with 
 those of the similar office at Richmond, yet no provision is made 
 that he shall have custody of the bonds of officers acting in these 
 states — nor that he may direct suit in cases of defalcation. He 
 ought to bo authorized to act to the same extent as the Comptroller 
 at Richmond. 
 
 Tl'.e Auditor is required by the act to perform the duties of each 
 of the Auditor's offices at Richmond, including the adjustment of 
 rostoffice accounts. Yet no provision is made that ho may adminis- 
 
ter oaths when necessary in the discharge of his duties. He is also 
 required to act as Register of the Treasury; but the regulations of 
 the Secretary require bonds to be sent to and placed in custody of 
 the Principal Depositary, who is also required to endorse and. dis- 
 tribute them. It would seem more appropriate that these bonds 
 should be placed in custody of the officer acting as Register, and be 
 distributed and endorsed by him. 
 
 Moreover, the duties of Register ought not to be performed by 
 an officer burdened with the duties imposed on the Auditor, but by 
 a distinct Bureau, or division, with a competent and iosp")U'-<il)lo 
 officer at its head. 
 
 1 submit herewith reports from the Comptroller and Auditor, 
 showing the operations of their offices; and specially recommend to 
 your consideration their statements of the diffi(ulties attending the 
 settlement of accounts for moneys advanced to officers from the 
 Treasury at Richmoid, and which originated belore the organiza- 
 tion of this Agency. 
 
 I am, very respectfully, vour obedient servant, 
 
 (Signed) * P. VV. GRAY, 
 
 Agent Treasury T. M. D. 
 
pcnmailipe* 
 
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