The new Tax Act attempted to provide revenues which should not be paid in depreciated currency. With no bullion to speak of, the Confederate Congress could not establish a circulating medium with even an approximation to constant value. Realizing this situation, Memminger had advised falling back on the ancient system of tithes and the support of the Government by direct contributions of produce. After licensing a great number of occupations and laying a property tax and an income tax, the new law demanded a tenth of the produce of all farmers. On this law the Mercury pronounced a benediction in an editorial on The Fall of Prices, which it attributed to "the healthy influence of the tax bill which has just become law."*
* The fall of prices was attributed by others to a funding act, --one of several passed by the Confederate Congress--which, in March, 1863, aimed by various devices to contract the volume of the currency. It was very generally condemned, and it anticipated the yet more drastic measure, the Funding Act of 1864, which will be described later.
Had these two measures been the whole program of the Government, the congressional session of the spring of 1863 would have had a different significance in Confederate history. But there was a third measure that provoked a new attack on the Government. The gracious words of the Mercury on the tax in kind came as an interlude in the midst of a bitter controversy. An editorial of the 12th of March headed "A Despotism over the Confederate States Proposed in Congress" amounted to a declaration of war. From this time forward the opposition and the Government drew steadily further and further apart and their antagonism grew steadily more relentless.