War of the Rebellion: Serial 127 Page 0864 CORRESPONDENCE, ETC.

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present necessity is not for an increase of powder mills, but for a supply of the material for the manufacture of gunpowder. The mills now in existence, and which could be readily put to work, far exceed in their capacity to manufacture our ability to supply the requisite material. Yet under the operation of this bill it would follow that any one who should propose to establish a powder mill upon unobjectionable locality, and that he had invested one-fourth the capital to be employed, would be entitled to claim an advance equal to 50 per cent. of that amount for a work which the Government did not require, and which, as there is no limitation of time for the fulfillment of his contract, could not be pronounced visionary or impracticable. The power already exists to make advances equal to 33 1/2 per cent. on contracts for arms or munitions of war, and experience has not shown that any large advance is necessary to stimulate the undertaking of such contracts; on the contrary, it has not yet been found necessary in a single instance to make advances to the full amount now permitted by law. The requirement of the bill that liberal profits shall be granted and an extraordinary advance be made, coupled with the absence of any Executive discretion to refuse any contract proposed for the supplies mentioned in the bill, would inevitably expose the Treasury to heavy drafts from the class of speculating contractors.

I regret that these features of the bill compel its return, as soon of its provisions would be valuable adjuncts to existing legislation in enabling the Government to aid in the establishment of manufactures of arms and the creation of artificial saltpeter beds.

JEFFERSON DAVIS.

[Inclosure.]

AN ACT to encourage the manufacture of small-arms, saltpeter, and of gun-powder within the Confederate States.

SECTION 1. The Congress of the Confederate States of America do enact, That every person who shall propose to establish, put in operation, and carry on a manufactory of small-arms within the Confederate States for making small-arms suitable for the Army of the Confederate States; and every person who shall propose to establish, put in operation, and carry on a manufactory of gunpowder within the Confederate States suitable as ammunition for the Army of the Confederate States; and every person who shall propose to establish, put in operation, and carry on a manufactory of saltpeter within the Confederate States, who shall submit to the Secretary of War his proposal or proposals, in one or more of these respects, with a statement of the amount proposed by him to be so invested in said undertaking or undertakings and of the extent and plan of his undertakings, and who shall produce satisfactory evidence to the Secretary of War that he has actually expended in the prosecution of the proposed work one-fourth of the capital proposed to be invested therein, shall be entitled, unless the Secretary of War deem such work visionary or impracticable, or at point too remote for the advantage of the Confederacy, to receive at such times and in such amounts as may be required for the construction and operation of such works, as an advance from the Treasury, a sum equal to 50 per cent. on the amount proposed by him to be invested, to be repaid, without interest, to the Confederate States, from the first merchantable article manufactured, at such price as shall be agreed upon and stipulated for the other contracting party, said price to be such as shall be sufficient