[Inclosure No. 6.]

C. S. ENGINEER DEPARTMENT, SOUTH CAROLINA,

Charleston, S. C., December 24, 1864.

His Excellency Governor A. G. MAGRATH,

State of South Carolina:

GOVERNOR: I have the honor to address you in relation to the means of supplying labor for the defenses. I have noticed the recent act of the Legislature on the subject, which will give much satisfaction generally; but at this moment, before it can be put iinto successful operation, I thought it would be well to anticipate our wants, and if you could not through the agent of State promulgated some call to provide labor which you know is now and will be needed. The regular call is made in January, but its production will not be adequate to the extended and new lines we maay be called upon to adopt. He had better have a surplus than too few. We can supply 3,000 and more. With a view to the interest of the country I have presumed to address you on this subject.

Very respectfully, your obedient servant,

W. H. ECHOLS,

Major and Engineer.

TREASURY DEPARTMENT,

January 16, 1865.

Hon. F. S. LYON,

Chairman:

SIR: I have given the most anxious consideration to the suggestions in favor of reducing the rates of taxation proposed, and have with much regret to express my entire conviction that it will be impossible to make any abatement. The result of imposing 10 per cent, ad valorem tax upon agricultural property, and crediting the tax in kind at the neighborhood value, I feel persuaded would be the simple receipt of the tax in kind and nothing more. The value of the produce received last year is estimated at schedule prices at $145,000,000, yet the whole credit given, both for the tax in kind against ad valorem tax, and (on other property) for the ad valorem tax against the income tax, was only $128,787,245, showing that the tax in kind exceeded in value the sum necessary, even at schedule rates, to offset and discharge the ad valorem tax. The total value of taxable property is $4,351,000, as stated in your calculations; but from this assesed value large deductions were made for the partial occupation of the territory of the different States by the enemy. I refer to Mr. Commissioner Allan's report annexed to the report from this Department of November 7. The sum total of the reductions thus made was about 25 per cent.

The value of agricultural property was

estimated at. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,900,000,000

Deduct 25 per cent. . . . . . . . . . . . . . . . . . . . . . . . . . . 725,000,000

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2,175,000,000

10 per cent, tax would be. . . . . . . . . . . . . . . . . . . . 271,500,000

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Value of the tax in kind at schedule prices. . 145,000,000

Add 50 per cent. for new mode of valuation. . . 72,500,000

This calculation shows that an advance of only 50 per cent. in the valuation of the tax in kind would suffice to extinguish by the proposed credit the whole sum of the 10 per cent. ad valorem.