enemy's strength, movements, and, if possible, his future plans. He suggests that you spare neither trouble nor expense, however great, in the pursuit of this object, and that you send the best men you can find - men upon whom you can rely for veracity and good judgment - to get information for you. Address the general at Shreveport. The commanding general suggests the advantage of sending citizens as spies to remain within the enemy's lines, and authorizes you to meet all the expenses necessary for getting information in this way.
Very respectfully, your obedient servant,
Lieutenant and Assistant Adjutant-General.
Richmond, January 4, 1864.
His Excellency JEFFERSON DAVIS,
SIR: I herewith communicate to you in writing the facts which I verbally stated to you a few days since. The order issued by the Secretary of War, under your direction, on the 27th January last, requiring all military restrictions upon the commerce across the Rio Grande to be removed, was never authoritatively made known in Texas, and the fact that such an order had been issued was not ascertained by the people of that State until about the month of May.
I arrived in Western Texas about the middle of June, and found that a few of the planters were sending forward portions of their crops of cotton to exchange for necessary supplies. This continued until about the middle of July, when two cargoes of army goods arrived at Brownsville. These goods were to be paid for in cotton, and there was no cotton at Brownsville with which to make payment. The fact was communicated to Lieutenant-General Smith, who issued an order to impress a sufficiency of cotton to pay for the goods. This order was sent to Brigadier-General Bee, in command on the Rio Grande, for execution. General Bee did not impress cotton and pay for the goods, but entered into an arrangement with merchants and holders of cotton at Brownsville, that they should advance 20 per cent, of their stocks of cotton on hand, and that he would establish an impressment tariff of 20 per cent. upon all cotton thereafter arriving. This tariff was immediately established and has been kept up until I left Texas in November last. It had the effect of stopping at once the exportation of cotton by the planters, and the deprivation of the people of all supplies except at the price of speculators who had a monopoly of the trade. The impressment tariff accomplished the same results as the prohibitions which were ordered to be rescinded by the order of the Secretary of War.
As a part of this same system a number of persons, some 30 or 40, mostly Jews, Yankees, and foreigners, about the time the original military prohibitions were issued, obtained contracts to import military supplies, which contracts always contained a stipulation of the privilege to purchase and export cotton. This privilege to speculate in cotton was the real subject of the contract; the furnishing of supplies was but an incident. While all speculated in cotton, I have learned that very few of them ever furnished the supplies contracted for. Those favorites thus acquired a monopoly of the cotton trade of Texas. They carried the cotton to the Rio Grande and sold it