States Guaranteeing Confederate bonds.
The telegraph Monday
announced that the Legislature of South Carolina has unanimously pledged the faith and funds of that State to the redemption of its quota of the Confederate
The following is the report upon which the bill passed was based:
The Committee of Ways and Means, to which was referred the resolution to inquire into the expediency of offering to the Confederate Government to guarantee its bonds for the proportionate share of the State of South Carolina
, according to the basis of the late war tax, to the amount of one hundred millions of dollars, beg leave respectfully to report unanimously that they have had the same under consideration, and agree in the principle of the resolution, but propose that the amount be changed from one hundred to two hundred millions of dollars.
The large and increasing circulation of Confederate Treasury notes demands a remedy.
The amount already in circulation is much greater than even in time of peace is necessary for our internal and foreign commerce.
In the present state of affairs a smaller amount is needed than is then.
The consequence is that our citizens and Government have to give prices so greatly enhanced as to be a matter of great detriment to the public.
Our individual citizens are already suffering greatly; and the Government
not only suffers with them now, but lies under the further liability of having to give its obligations at the current prices in securities which must finally be redeemed in gold
Attempts have been made by the Confederate Government to reduce this circulation by funding portions of it in Confederate bonds.
The extent, however, to which these have been taken has, from various reasons, been very limited.
A portion of the hundred million loan yet remains to be issued.
This arises from the want of ability to take it up on the part of our citizens as is readily seen from the large surplus of circulation above referred to. More than this, other securities, and especially those of the States paying a lower rate of interest, are extensively sought after, and are bringing high premiums.
The object of this endorsement would be, so far as the State of South Carolina
is concerned, to give the Government
all the advantages to be obtained by uniting State security to that offered by the General Government
It is hoped that the other States of the Confederacy
will unite with us in so doing; but it is eminently proper that South Carolina
should take the lead in this kind of expression of full confidence in the final success of our Government.--Yet it is proper, in so doing, that she should secure for herself and her citizens, and not for them alone, but for all other States and their citizens which shall concur with us in this act, the right to obtain bonds thus endorsed, provided the bids they make are equal to those of any others.
In order to secure the largest price, also, and to give the country a fair opportunity to invest in these securities, they should be offered by public advertisement to the highest bidder, in such portions and at such times as the Confederate Government may deem best.
A further reason which has governed the committee is that the General Government
is constantly in need of foreign exchange.
At present this must be bought at two hundred per cent premium, or three hundred dollars must be given in this country for one hundred dollars in England
If our Government should offer bonds abroad they would be met by the declaration that, from the very nature of our Government, it is liable to be broken up by the action of the States, in like manner as has been done in the separation from the United States
of the States now forming this Confederation.
Not only this, our Government is, by persons abroad, still looked upon as an experiment which may prove a failure.
But the States are regarded as permanent, and their existence, under all circumstances, considered as certain.
An obligation, therefore, given by a State, either directly or indirectly, possesses abroad an actual value.
It is manifest that rules of Confederate bonds, with State endorsements, will therefore not only be possible, but may be made at prices that will secure exchange on terms far more advantageous to the Government
than the present or probable future rate of exchange will make possible, and a portion of the bonds thus endorsed could be profitably used in this way.
It is upon these grounds that the Committee
approve the principle of the resolutions.
They have, however, owing to the large amount of surplus circulation to be absorbed, as well as the future demands of the Government
thought best to recommend a larger sum than was stated in the resolutions.
The sale of one hundred millions of dollars would not be adequate to retire more than two hundred millions of Treasury Notes, and would leave two hundred and thirty millions still in circulation.
Thirty millions of dollars, with the issues constantly making by the Government
, and the bills of our Banks
still in circulation, would be abundant for the necessities of trade.
This would be accomplished if, with the two millions of endorsed bonds four hundred millions of currency could be absorbed and this is extremely probable.
The Committee beg leave to report by bill.
James P. Boyce
, for the Committee