the Treasury has relinquished the supply of cotton to this Department, for it was always a matter of embarrassment to settle the prices to be charged for the cotton and the disposition to be made of the funds abroad. This would have been still more untoward when it becomes necessary, under the contract with your brother and his associates, to keep each venture separate, and have accounts entered with commercial accuracy.
Heretofore whatever error or mischarge wa made caused no loss to the Government, but only an undercharge for or against one of the departments or bureaus. The thing is altogether different when the question is between third parties and the Government. You must therefore have an accurate ascertainment of the cost of your cargoes in cotton. Of the purchases made by yourself you can, of course, have no doubt; and in regard to any cotton heretofore purchased by Mr. Memminger and supplied, the cost at Charleston of similar cotton will have, I suppose, to be taken. In respect to the purchases hereafter to be made, we shall have rendered you the cost as paid by the Treasury agent purchasing, with the addition of the transportation and other incidental expenses.
I have directed to be in full preparation the several bureaus of Ordnance, Subsistence, and Quartermaster's to purchase through the Treasury agents without delay as large quantities of cotton as they think will be necessary to meet their contracts or exchange for the supplies they will need. They have been advised, as they can command transportation, to purchase cotton at more distant points, where it is cheaper, and have it forwarded to convenient points for transfer to Wilmington and Charleston. On conference with Mr. Memminger I found he did not conceive himself and his associates, to be admitted free of duty, though I thought I had distinctly explained to him this feature of the contract. This will compel this Department, as I had not expected and do not recognize any necessity for (since to pay to one Department what is remitted by another is idle, so far as the common Government is concerned), to pay to the Treasury the amount of the duties on such imported goods of Crenshaw & Co. I have, however, obtained from Mr. Memminger instructions to the collector of Charleston to merely charge the duties on such goods against this Department and report the amount. So, as far as your brother and his associates are concerned, the effectd there will only be another distinct manifestation of the purpose of this Department to maintain full faith with its contractors.
Upon the goods come in you have already, I believe, been fully instructed as to the officers to whom you are to submit the selection from your brother's portion of the cargo, of desired by the Government, and to whom you are to hand over the stores for the Government. If you are at any loss, confer with the agent of the Department, Mr. Seixas, with whom I hope you will preserve a cordial understanding, and who can inform you of the disposition he makes of the stores brought over in Government vessels.
I will endeavor to have the agents of the Treasury who may purchase for this Department instructed to furnish cotton for your steamers on requisition from yourself, and will send the letters you desire to the commanders at Wilmington and Mobile, as well as a general recognition of your agency, with a direction that all reasonable facilities be afforced you by officers of the Government in the execution of your brother's contract with this Department.