June 12, 1863, The Charleston Mercury
The Richmond Examiner, in alluding to the condition of our currency at the present time, says that it is believed with apparent reason to be now at the worst; that is to say, the greatest amount of it that has ever been, and will ever be, outstanding, is in the hands of the people at the present time. In the next month the Tax Bill goes into effect, and before the 1st of August, all the notes that were issued before the 1st of December last must be withdrawn from the currency, and funded in seven per cent bonds. The condition will then be altered.
From the organization of the Government up to this time, the volume of the currency has been perpetually increasing. All the expenses of the Government during this war have been paid by continual issues of notes, and all of these, with the exception of that comparatively insignificant sum called in by the first funding law, are at this moment on the country. No wonder that our currency is depreciated. The sponge of credit has been exhausted, by being squeezed always, without the slightest replenishment. The legitimate income of a Government is derived from taxation; the money it gets from that source is its own; and can be spent without the fear of consequences. But the Confederate Government has not yet seen the first cent from that source – that is to say, it has never had a cent which it might consider its own. It has been spending promises to pay.
The operation of the tax and funding laws will, it is hoped, absorb an amount of currency sufficiently great to bring the relative values of gold and notes to what they were at the time those Acts were passed by Congress. The depreciation will thus be arrested, and the plan of taxation in kind hereafter to be pursued will finally redeem the currency.