Jefferson Davis, The Rise and Fall of the Confederate Government

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“ [425] to their respective numbers, which shall be determined by adding to the whole number of free persons—including those bound to service for a term of years, and excluding Indians not taxed—three fifths of all slaves.” According to the received construction of the Constitution of the United States, which had been acquiesced in for sixty years, taxes on lands and slaves were direct taxes. In repeating, without modification, in our Constitution this language of the United States Constitution, our convention necessarily seems to have intended to attach to it the meaning which had been sanctioned by long and uninterrupted acquiescence—thus deciding that taxes on lands and slaves were direct taxes. Our Constitution further ordered that a census should be made within three years after the first meeting of Congress, and that “no capitation or other direct tax shall be laid, unless in proportion to the census or enumeration hereinbefore directed to be taken.”

So long as there seemed to be a probability of being able to carry out these provisions of the Constitution fully, and in conformity with the intentions of its authors, there was an obvious difficulty in framing any system of taxation. A law which should exempt from the burden two-thirds of the property of the country would be as unfair to the owners of the remaining third as it would be inadequate to meet the requirements of the public service. The urgency of the need, however, was such that, after great embarrassment, the law of April 24, 1863, above mentioned, was framed. Still, a very large proportion of these resources was unavailable for some time, and, the intervening exigencies permitting of no delay, a resort to further issues of treasury notes became unavoidable.

The foreign debt of the Confederate States at the close of the war was twenty-two hundred thousand pounds. The earliest proposals on which this debt was contracted were issued in London and Paris in March, 1863. The bonds bore interest at seven per cent per annum, in sterling, payable half-yearly. They were exchangeable for cotton on application, at the option of the holder, or redeemable at par in sterling, in twenty years, by half-yearly drawings, commencing March 1, 1864. The special security of these bonds was the engagement of the government to deliver cotton to the holders. Each bond, at the option of the holder, was convertible at its nominal amount into cotton at the rate of sixpence sterling for each pound of cotton—say four thousand pounds of cotton for each bond of a hundred pounds, or twenty-five hundred francs; this could be done at any time not later than six months after the ratification of a treaty of peace between the belligerents. Sixty days after the notice, the cotton was to be delivered, if in a state of peace, at the ports of