War of the Rebellion: Serial 128 Page 0601 CONFEDERATE AUTHORITIES.

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importing business, to which, under the blockade and in the exceptional circumstances of the war, the Department was forced to resort.

I have no disposition to change this arrangement or become the exclusive owner, for the Department, of the ships either purchased or contracted for under youre, therefore, appreciating your offer, I am pleased that Mr. Mason advised against your acting upon it, and I prefer you should continue to give your experience, energy, and judgment to the conduct of a business in which, I hope, with reasonable profits to yourself and your associates, you will be enabled to render valuable service to the cause of your country. My only difficulty on this whole subject results from my inability to give the prompt aid I desire and expected in the purchase of the steamers you have contracted for. I had full reason to believe that funds to meet the portion of expenditure required from this Department could be readily furnished in sterling by the Treasury Department; but subsequent events make this now very doubtful. With adequate time the shipment of cotton would, of course, meet the engagements; but without aid from the Treasury that resource will not be available in time. I can only promise on this point that I shall be prompt to use such available funds as the Treasury Department can put at my command (beyond the actual needs to keep up our supplies for our Army), as well as the proceeds of the cotton I shall urge forward to meet your contracts. If these fail I must either rely on you to negotiate funds or allow the sale of some of the steamers being built. I consider this Department strictly responsible and bound to provide funds for only the half of the last three steamers to be delivered, as it has advanced for the Navy Department on the first two enough to pay for its interest in the third. You will readily perceive this; but still I shall endeavor to facilitate the payment of all the contract ostensibly calls for from this Department.

In the purchase of supplies you will be strictly instructed. At present you will have full employment in purchasing and bringing over subsistence stores and such quartermaster's stores as Major Ferguson may have secured orders for. As ordnance stores of all kinds require special knowledge and inspection, they will sent forward by Major Huse, to be shipped from the islands in Government steamers. This arrangement is recommended by the further consideration that such stores are contraband of war, and it is not desired to expose the Collie steamers to the additional risk, when not absolutely necessary, of carrying contraband.

I have had, however, with both of your brothers the distinct understanding that whenever necessary even contraband-and at any time Government freight at the island requiring transportation-will be taken by the Collie steamers. In such event the 2 1/2 per cent. commission, on what should have been your purchases, will be remitted out of the corresponding commission on the cotton furnished by the Department. With the above exception, I except the business to be conducted by you and your associates on the basis of a separate mercantile business. The cotton will be furnished by the Department at fair market rates; will be shipped, sailed, delivered, and sold under your charge; expenses and the cost of return cargo deducted, and the balance applied to steamers, if anything be due thereon, or otherwise the Department's share paid over to the depositary of the Treasury in London to the account of the Department. Account will be kept and rendered of each voyage or venture.