War of the Rebellion: Serial 127 Page 0877 CONFEDERATE AUTHORITIES.

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to this it was also determined to adopt in such contracts as might be made a sliding scale by which flour should rise with any anticipated rise in the price of wheat, thus guaranteeing the contractor against loss and guarding the Government against applications for relief-a most fruitful source of corruption. The price of flour under this policy was fixed upon the price of wheat at $1 per bushel, at which the Government stipulated it should commence in this market. If this course has produced discontent it was because it was not understood, or because parties who had wheat to sell could not comprehend that a very abundant article must rate low in the market, whilst articles of as much relative consumption but of absolute scarcity should command far greater prices. This policy of the department has been somewhat interrupted by speculation, though that is now believed to be subsiding, but it was mainly thwarted by the want of money and transportation, with which at command it could have made large purchases before the rise in flour took place.

The only large contract the department has made been with Messrs. Haxall, Crenshaw & Co., a copy of which is herewith transmitted, marked D,* and the officers and agents of this department have been instructed to observe its principles in their own similar transactions. As this contract has been the ground of much unjust animadversion upon the department and the contractors, it may not be amiss to state, in justice to the propriety of its selection and their liberality, that where they had an admitted right to a compensation of $6. 76 per barrel they voluntarily remitted 26 cent per barrel, or $6,500 of their claim. a

The only agents to purchase flour that it has been thought necessary to appoint are Mr. James M. Ransom, of the county of Jefferson, Va., and a party (whose name is not known because it has been very recently determined on, and has been intrusted, for special reasons, to Major B. P. Noland) for the county of Loudoun. Both these parties have received or will receive instructions from the post commissary at Manassas, to whom full authority has been given in the premises. The other purchases of flour have all been made through regular commissaries.

The amount of flour purchased up to this time will be found in turchases, sent herewith. + A resolution passed by Congress at its last session directed the erection of bakeries to furnish "well-baked bread" to troops in the field, or in lieu of that, that contracts might be made for the supply of such bread. Such bakeries have been erected wherever practicable or where the Army Regulations did not provide for the case. But it was found necessary to procure a bakery in which hard bread should be prepared, an ample supply of that being represented as indispensable; and though these representations were not concurred in, yet it was deemed proper to meet this requisition, and accordingly, it being impossible to contract

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a This contract, as will appear from paper marked D,* was for 25,000 barrels at $5. 25 per barrel absolutely, and 25,000 additional at the same price, and an advance at the rate of 50 cents per barrel of flour for each 10 cents per bushel rise in wheat, if the Commissary-General should think the rise reasonable.

Two other contracts had been previously made, each for 20,000 barrels, at $5 per barrel; one of them with Scott & Langhorne, of Lynchburg, and one with Mr. Warren Slaughter, of Fredericksburg. These were the first contracts made. Had money been available a year's supply would have been attempted to be bought.

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*Omitted.

+Not found.

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