The receipts were derived as follows:

Customs$1,437,399
War-tax10,539,910
Miscellaneous1,974,769 $13,952,079
Loans, bonds, February, 1861 15,000,000
Bonds, August, 186122,613,346
Call certificates, April, 186137,515,200
Treasury notes, April, 186122,799,900
Demand notes, August, 1861187,130,670
One and two dollar notes846,900
Due banks2,645,000$288,551,016
Total receipts$302,503,096

Such was the result presented by the Treasury of a Government that had been in existence only eighteen months. It commenced that existence without a treasury, and, without the sinews and the munitions of war, was in less than two months invaded on every side by an implacable foe. Its ways and means consisted in loans and taxes, and to these it resorted. On February 28th I was authorized by Congress to borrow, at any time within twelve months, fifteen million dollars, or less, as might be needed. It was to be applied to the payment of appropriations for the support of the Government, and for the public defense. Certificates of stock or bonds, payable in ten years at eight per cent. interest, were issued. For the payment of the interest and principal of this loan a tax or duty of one eighth of one per cent. per pound was laid on all cotton exported. On March 9th an issue of one million dollars in Treasury notes of fifty dollars and upward was authorized, payable in one year from date, at 3.65 per cent. interest, and receivable for all public debts except the export duty on cotton. A reissue was authorized for a year. On May 16th a loan of fifty million dollars in bonds, payable after twenty years at eight per cent. interest, was authorized. The bonds were "to be sold for specie, military stores, or for the proceeds of sales of raw produce or manufactured articles, to be paid in the form of specie or with foreign bills of exchange." The bonds could not be issued in fractional parts of a hundred dollars, or be exchanged for Treasury notes or the notes of any bank, corporation, or individual. In lieu of any amount of these bonds, not exceeding twenty million dollars, an equal amount of Treasury notes, without interest, in denominations of five dollars and upward, was authorized to be issued. These notes were payable in two years in specie, and were receivable for all debts or taxes except the export duty on cotton. They were also convertible into bonds payable in ten years at eight per cent. interest. On August 19th another issue of Treasury notes, amounting with those then issued to one hundred million dollars, was authorized. They were of the denominations of five dollars and upward. They were receivable for the war-tax and all other public dues except the export duty on cotton. These notes were convertible into twenty-year bonds, bearing eight per cent. interest, of which the issue was limited to one hundred million dollars. Thirty millions were to be a substitute for the same amount, authorized by the act of May 16, 1861. These bonds could be exchanged for specie, military and naval stores, or for the proceeds of raw produce and manufactured articles. On December 19th ten million dollars in Treasury notes were issued to pay the advance of the banks. On December 24th an additional issue of fifty millions of Treasury notes like those of the act of August 19th was authorized. An additional issue of thirty millions of bonds was also authorized. On April 12, 1862, an issue of Treasury notes, certificates of stock and bonds, as the public necessities might require, to the amount of two hundred and fifteen millions, was authorized. Of these, fifty millions in Treasury notes were issued without reserve, ten millions in Treasury notes retained as a reserve fund to pay any sudden or unexpected call for deposits, and one hundred and sixty-five millions certificates of stock or bonds. Bonds to the amount of fifty million dollars, payable in ten years at six per cent. interest, were authorized and made exchangeable for any of the above Treasury notes. All these notes and bonds were subject to the same conditions as those of the acts of August 19 and December 24, 1861. On April 17th five millions of Treasury notes were authorized to be issued in denominations of one and two dollars, which were receivable for all public dues except the cotton duty. An amount of Treasury notes bearing interest at two cents per day on each hundred dollars, as a substitute for as much of the one hundred and sixty-five millions of bonds authorized, was also authorized to be issued. On September 19, 1862, three million five hundred thousand dollars in bonds was authorized to be issued to meet a contract for six iron-clad vessels of war. On September 23, 1862, the amount of Treasury notes under the denomination of five dollars was increased from five million to ten million dollars, and a further issue of bonds or certificates of stock, to the amount of fifty million dollars, was authorized.

On March 23, 1863, an effort was made to remove from circulation some of the issues of Treasury notes by funding them. For this purpose it was provided that all Treasury notes, not bearing interest, issued prior to December, 1862, should be fundable in eight per cent. bonds or stock during the ensuing thirty days, and during the succeeding three months in seven per cent. bonds or stock, after which they ceased to be fundable. All Treasury notes not bearing interest, and issued after December 1, 1862, until ten days after the passage of the act, were made fundable in seven per cent. bonds or stock during the ensuing four months, and afterward only in four per cent. thirty years bonds. Call certificates were made fundable in thirty years bonds at eight per cent., and all outstanding on the ensuing July 1st were deemed bonds at six per cent., payable in thirty years. A monthly issue of Treasury notes, without interest, to the amount of fifty million dollars, was also authorized. These were made fundable during the first year of their issue in six per cent. thirty years bonds, and after the expiration of the year in four per cent. thirty years bonds. The further issue of call certificates was suspended; but Treasury notes fundable in the six per cent. bonds might be converted, at the pleasure of the holder, into such certificates at five per cent. interest, which were reconvertible into like notes within six months, or afterward exchanged for thirty years six per cent. bonds. Treasury notes fundable in four per cent. bonds were convertible in like manner at four per cent. All disposable means in the Treasury were to be applied to the purchase of Treasury notes, bearing no interest, until the amount in circulation did not exceed one hundred and seventy-five millions. The issue of five million dollars, in notes of two dollars, one dollar, and fifty cents, was also authorized. It was further provided in this act that six per cent. bonds, as above mentioned, might be sold to any of the States for Treasury notes, and, being guaranteed by any of the States, they might be used to purchase Treasury notes. The whole amount of such bonds could not exceed two hundred million dollars. Treasury notes so purchased were not to be reissued. The issue of six per cent. coupon bonds to the amount of one hundred million dollars, which were to be applied only to the absorption of Treasury notes, was also authorized. The coupons were payable either in the currency in which interest on other bonds was paid, or in cotton certificates pledging the Government to pay the same in cotton of New Orleans middling quality, delivered at the rate of eight pence sterling per pound.

An important measure was adopted on February 17, 1864, the object of which was to reduce the currency and to authorize a new issue of notes and bonds. All Treasury notes above the denomination of five dollars, and not bearing interest, were, if offered within a short period, made fundable in registered twenty years bonds at four per cent. At the same time a new issue of Treasury notes was authorized, and made receivable for all public dues, except customs duties, at the rate of two dollars for three of the old. The issue of other Treasury notes, after the 1st of the ensuing April, was prohibited.

To pay the expenses of the Government an issue of five hundred million dollars in six per cent. bonds was authorized. For the payment of interest the receipts of the export and import duties, payable in specie, were pledged.

A review of this statement of the legislation of Congress will clearly present the financial system of the Government. The first action of the Provisional Congress was confined to the adoption of a tariff law, and an act for a loan of fifteen million dollars, with a pledge of a small export duty on cotton, to provide for the redemption of the debt. At the next session, after the commencement of the war, provision was made for the issue of twenty million dollars in Treasury notes, and for borrowing thirty million dollars in bonds. At the same time the tariff was revised, and preparatory measures taken for the levy of internal taxes. After the purpose of subjugation became manifest by the action of the Congress of the United States, early in July, 1861, and the certainty of a long war was demonstrated, there arose the necessity that a financial system should be devised on a basis sufficiently large for the vast proportions of the approaching contest. The plan then adopted was founded on the theory of issuing Treasury notes, convertible at the pleasure of the holder into eight per cent. bonds, with the interest payable in coin. It was assumed that any tendency to depreciation, which might arise from the over-issue of the currency, would be checked by the constant exercise of the holder's right to fund the notes at a liberal interest, payable in specie. The success of this system depended on the ability of the Government constantly to pay the interest in specie. The measures, therefore, adopted to secure that payment consisted in the levy of an internal tax, termed a war tax, and the appropriation of the revenue from imports.

The first operation of this plan was quite successful. The interest was paid from the reserve of coin existing in the country, and experience sustained the expectations of those who devised the system.

Wheat, in the beginning of the year 1862, was selling at one dollar and thirty cents per bushel, thus but little exceeding its average price in time of peace. The other agricultural products of the country were at similarly moderate rates, thus indicating that there was no excess of circulation. At the same time the premium on coin had reached about twenty per cent. But it had become apparent that the commerce of our country was threatened with permanent suspension by reason of the conduct of neutral nations, who virtually gave aid to the United States Government by sanctioning its declaration of a blockade. These neutral nations treated our invasion by our former limited and special agent as though it were the attempt of a sovereign to suppress a rebellion against lawful authority. This exceptional cause heightened the premium on specie, because it indicated the exhaustion of our reserve, without the possibility of renewing the supply.