1st. The following-named States will constitute separate purchasing districts, and the officers herein designated will have, respectively, in each the exclusive control, in person or through subordinates, of all purchases of supplies needed by this department:
1. Virginia, Lieut. Col. L. Smith, Richmond.
2. North Carolina, Maj. W. W. Pierce, Raleigh.
3. South Carolina, Maj. Hutson Lee, Charleston.
4. Georgia, Maj. I. T. Winnemore, Augusta.
5. Alabama, Maj. J. L. Calhoun, Montgomery.
6. Mississippi, Maj. L. Mires, Jackson.
7. Florida, Maj. H. R. Teasdale, Lake City.
8. Louisiana, Maj. G. W. Grice, Alexandria.
9. Texas, Maj. S. Hart, San Antonio.
10. Arkansas and Missouri, Maj. J. B. Burton, Little Rock.
11. Tennessee and Kentucky, Maj. James Glover, Knoxville.
2d. It shall be the duty of these principal purchasing officers to establish, and from time to time regulate, the prices at which army supplies are to be bought, and to confer with each other so as to secure, as far as practicable, uniformity therein, making due allowances for differences of locations and other circumstances. They will require from their subordinates monthly reports, showing the quantity of supplies purchased or manufactured by them, what thereof has been issued, and the residue on hand. A summary of these, together with a similar statement of his own operations, will be forwarded monthly by the chief officer to the Quartermaster-General, and the same will be accompanied by general remarks, showing what supplies, either manufactured or in the raw material, he may have in excess beyond his future wants,' so that they may be transferred elsewhere when needed. The average cost of each article of supply will also be stated.
3d. Quartermasters stationed at the various posts within either of said purchasing districts will be the subordinate purchasing officers therein, and, before buying supplies or contracting therefor, they will confer with the principal officer, and conform to such general or specific instructions as he may give respecting the price, quantity, or quality of the supplies to be bought.
4th. Main depots of supplies will be established at Richmond and Staunton, Va., Raleigh, N. C., Columbus, Atlanta, and Augusta, Ga., Huntsville and Montgomery, Ala., Jackson, Miss., Alexandria, La., Little Rock, Ark., Knoxville Tenn., San Antonio, Tex., or elsewhere, as may hereafter be indicated. These will not be subject to the orders of commanding generals, but will be under the exclusive control of the Quartermaster-General, and issues therefrom will be made only on requisitions approved by him. Minor depots may be established by the principal purchasing officers at such other points within their districts as the necessities of the service may require, and their locations will be reported from time to time to this office.
5th. The chief quartermaster of each separate army will draw supplies <ar35_755> as far as may be practicable from the established depots of stores, and will make purchases thereof in the military department within which the army operates only when circumstances render that course absolutely necessary. He will then, whether acting in person or through subordinates, confer, if possible, with the principal purchasing officer of the district within which he may be, and use every precaution to avoid competition.
6th. Forage and fuel purchased in the vicinity of an army are excepted from the above restriction. These can be best provided on the spot to the extent that the country affords them, and by the field quartermasters, and the chief quartermaster will be careful to see that the same are procured and paid for in accordance with the instructions issued by the War Department. Forage should always be drawn, when circumstances permit, from regions in advance of our armies, and those most exposed to the enemy. Field quartermasters may also purchase, under the direction of the commanding officer, supplies of any character issued by this department from a region of country occupied temporarily by the forces of the Confederate States, and where no system of purchase is in operation.
7th. When special agents shall be sent out by the Quartermaster-General to obtain supplies, they will be instructed to report to the principal officer of any district into which they may go, and confer with him, to avoid competition.
8th. All officers of this department will endeavor to avoid competing in prices with commissaries in the purchase of corn, or with ordnance officers in the purchase of hides, leather, harness, &c. They will re port also to this office all cases of unnecessary competition brought about by the action of any officer or agent of either of the bureaus referred to.
9th. No officer of this department will send an agent to a foreign country, nor will they visit or send to a seaport town of this Confederacy to buy supplies imported from abroad. The latter purchases will be made always by the post quartermasters, on instructions received from this office or from the principal purchasing officer of the district. When such supplies are removed for speculation after being rejected by the post quartermaster on account of price, they will not be purchased elsewhere.
10th. No purchasing officer will ever go into another district to buy supplies, but will procure the same, when it may be necessary, through the local officers therein.
11th. Any officer of this department who holds an executory contract for army supplies in another purchasing district than that in which he is stationed, shall transfer the same, upon the receipt of this circular, to the principal purchasing officer of the district where such contract is to be executed. Field quartermasters, regardless of their location, will make a similar transfer of all contracts except such as come within section 6 of these instructions.
12th. The foregoing rules will not be taken to interfere with the operations of Maj. F. W. Dillard, as heretofore charged with the receipt of hides from the Commissary Department, and the manufacture of shoes therefrom. He will continue to have the exclusive control thereof in the States of Tennessee, Georgia, Alabama, and South Carolina, and all quartermasters within those States will dispose of hides received from commissaries as he may direct; nor will they interfere with those of Maj. Charles S. Carrington, who will act independently, as heretofore, in providing forage for the armies of Virginia and North Carolina. <ar35_756>
13th. Purchasing officers will employ agents only under authorities, general or special, derived from this office. The authorities heretofore given must be renewed immediately; and in submitting applications for the retention of old agents, their names, the date of the authority under which they were employed, and the rate of their compensation will be stated. When authority is asked and granted to employ new agents, whose names have not been furnished in advance, a report thereof shall be made promptly, stating who are so engaged and at what compensation. In every case such facts will be set forth as go to show the necessity for the proposed services, and the application will be forwarded through the principal officer of the district for his approval or remarks. All officers will furnish their agents with written evidence of the agency showing the object and extent thereof; and when such agency is discontinued, the evidence mentioned will be taken in and the fact reported to this office. Every officer will be careful to settle up the transactions of his own agents.
The observance of the foregoing is important in restraining abuses, decreasing the number of employes from civil life, and leading to the detection of impostors speculating in the name of the Government.
14th. All quartermasters will be held to strict accountability for any departure from these instructions, and department commanders and other subordinate officers are prohibited from employing field quartermasters or agents in making purchases in violation of the same.
To limit the number of employes in this department, and their compensation, all officers thereof will be careful to conform to the following rules:
To troops in the field the allowance shall be--
1st. To each regimental or battalion quartermaster, in addition to the quartermaster-sergeant, one wagon-master, and, when the same shall be necessary, one clerk; both to be detailed from the command.
2d. To each brigade quartermaster or quartermaster attached to a division, one wagon-master, and, when the same shall be necessary, one clerk; both to be detailed from the command.
3d. To all commissary, ordnance, and quartermaster's trains, one wagon-master for every ten teams, either hired or detailed; and, if hired, wages not to exceed $50 a month. When these trains exceed in number fifty teams, a superintending wagon-master for the whole will be allowed, at a compensation not exceeding $75 a month.
4th. The number of employes at stations and depots will be regulated specially by this office, with reference to the necessities of each case. Officers thereat will apply in all cases to the Quartermaster-General for authority to retain old employes or engage new ones. These applications will be made in accordance with the provisions of preceding section No. 13, in respect to the employment of agents by purchasing officers, and, when forwarded by officers in the field, will come through the chief quartermaster of the army to which they are attached.
5th. No quartermaster serving with troops, or at a depot in the field, will be allowed to employ agents, and all authorities heretofore granted are revoked.
6th. No application should embrace the name of a civilian as clerk, unless he was employed by a quartermaster, under the sanction of this office, prior to the act of Congress of February 16, 1862. In no case will the compensation of a clerk from civil life exceed the sum of $1,000 per annum.
7th. All reports called for by this circular shall be distiller, from the monthly returns of "Persons and articles hired."
A. C. MYERS,
COLONEL: I have the honor to report the number of arms in hands of troops of this army consists as follows:
Infantry:
Smooth-bore percussion muskets 11,869
Rifled arms of different calibers 19,942
Total with infantry 31,811
Cavalry:
Smooth-bore percussion muskets 1,363
Rifles of different calibers 4,649
Carbines of different calibers and musketoons 1,469
Double-barreled guns 773
Pistols (Colt's pattern) 1,566
Pistols (percussion single-barreled) 42
Total with cavalry 9,862
Grand total in hands of army 41,673
The field artillery consists of--
12-pounder light guns 16
6-pounder guns 40
12-pounder howitzers. 40
Rifled guns, caliber 3.80-inch, taken at Murfreesborough 7
Rifled guns, caliber 3.68-inch, iron, taken at Murfreesborough 2
Rifled guns, caliber 3.30-inch 2
Rifled guns, caliber 3-inch (iron) 11
Rifled guns, caliber 2.90-inch (iron Parrott) 6
Ellsworth's breech-loading 1
Total 125
Independent of the above number of small-arms in hands of troops, 2,166 arms of different calibers are at Tullahoma Depot, and 2,040 arms of different calibers are at Chattanooga Depot. Six hundred of these arms were ordered to be issued to Colonel Avery' regiment of cavalry.
The arsenal at Atlanta, I am informed by the Ordnance Bureau, is exclusively adapted to repair arms and furnish supplies for this army. Five hundred arms are weekly repaired at that arsenal.
The ammunition is supplied to infantry--140 rounds to each man-- 40 of which is carried in cartridge-boxes and 100 on regimental wagons, in charge of ordnance sergeants, under the superintendency of ordnance officers of each brigade. The ammunition supplied for the Enfield rifles was found in few instances rather too large. When guns become fouled, after 15 or 20 rounds, it is difficult to lodge the bullet home. The deficiency was reported to the Ordnance Bureau, at Richmond, and new supplies are now coming, and exchanges will be made.
The arms, accouterments, and ammunition in the hands of troops on the march are carelessly wasted On the way from Murfreesborough t,, this place, nearly four thousand arms were lost. The stoppage of payments on muster-rolls is no means to correct the evil, and unless stringent orders be enacted making commanders of companies directly responsible for the negligence, the evil cannot be corrected. The cavalry is supplied, from time to time, as the necessities may occur, with regard that 40 rounds are in the hands of every man. The cavalry under command of General Van Dorn is supplied with 60 rounds, in addition to 40 with the men. The cavalry under command of General Wheeler is supplied with 40 rounds; 60 more will be supplied as soon as received. I have notice of their coming to this place from Richmond Arsenal.
The artillery is supplied with a number of rounds contained in caisson and limber-boxes of each piece. Besides these, 50 rounds to each piece is to be kept in reserve in Chattanooga Depot.
The supplies of ammunition for rifled guns are limited, by reason of the different caliber of these guns taken from the enemy. The application was made to the commanding officer of Atlanta Arsenal for it.
The scarcity of leather will not permit full supplies of infantry accouterments and artillery harness; the last, being made from rather inferior articles and not properly taken care of, are in a short time broken, and those now in service should be replaced in course of a few months.
The ammunition for artillery is supplied of good quality and well prepared. The Borman fuses are preferable to paper, as the first is surer to explode projectiles. The difficulty of premature bursting can be avoided by careful cutting. It is ascertained that during engagements the men often cut them through.
General Orders, No. 67, Paragraph IV, series 1862, provides that no able-bodied men will be separated from their regiments and detailed for duty in the ordnance department, &c. The duty of the department is such that an invalid is of no service, and it being impossible to obtain the services of competent mechanics, our only resource is to detail them from the army.
I am informed, from Ordnance Bureau, of the scarcity of lead.
The commanding general of this army has instructed me to procure 12-pounder light guns and exchange them for 6-pounder and 12-pounder howitzers, now in the service. I applied to Colonel Gorgas for them. Two batteries of such guns are ordered to be sent to this army. The balance will be forwarded as soon as they can be procured.
The usual 6-pounder and 1.2-pounder howitzers are complained of as too heavy for the use of cavalry. General Bragg ordered me to make an effort to furnish the cavalry with lighter guns--similar to those used by horse artillery-during the Mexican war. I reported the case to the Ordnance Bureau, and received answer that such guns cannot be furnished at present. The commanders of cavalry require rifled guns, and, as far as practicable, they are supplied to them of the lightest weight.
Very respectfully, your obedient servant,
Wagons.
Corps or division:
Polk's Corps 890
Hardee's corps 753
Wheeler's corps 284
District of Tennessee River 41
General supply train 308
Total 2,276
Aide-de-Camp to the President, Atlanta, Ga.:
COLONEL: In answer to your communication of yesterday, I have the honor to make the following reply:
1st. That I have no enlisted men in my employ.
2d. I have but one non-enlisted clerk in my office (James Pryor, aged twenty-five years), and he has placed a substitute in the field. F.M. Johnson, also non-enlisted, aged about forty-one years, is in my employ as a purchasing agent of quartermaster's suppliers. I pay each $1,000 per annum.
My authority for the employment of these assistants exists in a general order of the Quartermaster. General to get up clothing, shoes, &c., for the army. With the assistance of these gentlemen, I expect to obtain material to manufacture per annum---
Jackets or roundabouts 130,000
Pairs pants 130,000
Shirts 175,000
Pairs drawers 175,000
Pairs shoes 130,000
Previous to the past month I have employed one clerk and three buyers, and may again find it necessary to increase the number of purchasing agents.
In this connection I have the honor to hand you the inclosed copy of a letter addressed by me to the Quartermaster-General, March 26, presenting more fully the details of my department.
Very respectfully, your obedient servant,
Quartermaster-General Richmond, Va.:
DEAR SIR: In answer to your inquiries as to "the amount of clothing I can supply by the 1st of April, 1864," made in your letter of the 12th instant, which only reached me on the 22d, I have to say that there is now on hand ready made for the army---
Jackets or roundabouts, woolen 25,000
Pairs pants, woolen 15,000
Cotton shirts, made and in hands of makers 65,000
Cotton drawers 30,000
Blankets 2,000
Pairs shoes 4,000
Wool hats: 3,800
Contracts for supplies, which I think reliable, will produce as follows, by the 1st of April, 1864. I put down that on hand in a line next to its kind to be supplied:
Cost and pants goods on hand (woolen) yards 90,000
Wool jeans under contract do 135,000
In all 225,000
Cotton shirting and osnaburgs on hand yards. 193,000
Cotton shirting and osnaburgs and ducks, contracts for, and, I think, reliable yards. 1,715,200
In all 1,908,200
Military buttons on hand gross. 2,700
Military buttons to be delivered by 1st of April, 1864 do. 5,000
In all 7,700
Flax (patent) thread on hand pounds. 2,700
Spool cotton thread on hand dozen. 2,000
Leather on hand pounds. 120,000
Wool, mostly in hands of factories do. 105,000
This department can manufacture (if material can be had to keep up to full work until April 1, 1864)---
Jackets 130,000
Pairs Pants 130,000
Pairs Drawers 175,000
Shirts, cotton 170,000
Pairs shoes 130,000
The clothing ready made, material on hand and contracted for, which I think reliable, will produce---
Woolen jackets 65,000
Pairs woolen pants 65,000
Pairs cotton drawers 175,000
Cotton shirts 175,000
Pairs shoes 45,000
If I can be as successful as last year in accumulating woolen material for uniforms, the supply will be equal to the capacity of the department, say, including what is on hand, I can supply 130,000 woolen jackets, 130,000 pairs woolen pants, and, if successful in getting leather, <ar35_767> 100,000 pairs shoes. We can supply 175,000 pairs cotton drawers and 175,000 cotton shirts.
I am limited to a small district for getting leather, and so in most of goods, but think the Quartermaster-General may rely pretty much upon the above figures.
All of which is most respectfully submitted.
Aide to the President, Richmond, Va.:
COLONEL: As suggested by you on your tour of inspection through this depot a few days since, I beg to inclose herein a statement showing the quantities and kinds of clothing made at this depot during the last two quarters, with the average cost of each garment. No part of this clothing is made under contract; the material is purchased by myself and agents; the woolen goods is nearly all made from wool furnished to the factories by myself. The material is issued to the tailors and cut into the required garments, under the immediate supervision of the superintendent, after which the cut garments pass into the hands of the trimmers, who supply the necessary trimmings and pass them to the inspectors, by whom they are issued to the seamstresses, and charged up against them by a clerk whose special duty it is to keep the accounts against the female operatives employed in sewing. The number of ladies engaged in sewing for this depot is usually about three thousand, composed mostly of women whose male supporters are absent with the army.
To accomplish all this work only twenty-seven men are employed, of whom are one superintendent, two clerks, two inspectors, two trimmers, and twenty tailors. I feel satisfied that more work cannot be done for the number of men engaged, and I am always ready for a comparison of the quality of clothing produced in this depot with that at any other, and I think no depot in the Confederate States can produce clothing cheaper.
It is proper to remark that the number of garments made at this depot could be increased at least 33 per cent. if I could command a greater supply of woolen goods or the wool from which to make it. If I could be authorized to employ agents of my own selection to visit Texas this spring and summer, for the purpose of purchasing and bringing out wool, I would pledge myself to increase the quantity of clothing from this depot as above stated.
The manufacture of shoes for the army I consider as the most important in connection with the clothing department. The shoe factory in my charge here has only been in operation about thirty days, but I am satisfied it will soon realize my expectations. I have now on hand leather sufficient to make about 40,000 pairs shoes, all which was purchased by my agents in Middle Tennessee, and was all paid for at reasonable prices. Not a pound was impressed, the people selling it freely at a price not exceeding one-half the market price in this section.
The great difficulty in the manufacture of shoes in the South heretofore <ar35_768> has been the scarcity of upper leather. This difficulty I have obviated by procuring, after great labor and many disappointments, a splitting machine by which any kind of leather can be rapidly and economically converted into upper leather, and, in case of thick leather, two sides can be made out of one. This machine, in connection with the labor of five men, will supply upper leather sufficient to make 500 pairs shoes per day. Indeed, no part of this shoe factory is more deserving of consideration than this, as without it I should find it simply impossible to keep the establishment supplied with upper leather, and, in addition, I find it a great economy. The sole leather to be used in making shoes is first cut into strips the width of which is the exact length of the shoe sole; these strips are cut in a machine called the "stripper," where a long knife severs the leather at one blow. The strips are then passed to the rolling machine, where they are passed through strong rollers, which compresses the leather and saves the labor of hammering out the leather on the last.
After being rolled, the strips of leather are passed to another machine, called the sole-cutter, a small machine worked by one man, which will easily cut 900 pairs soles per day, and that also at a great saving of leather when compared with the old plan of cutting by hand. The soles are all cut the exact size needed, and are paired off ready for issue to the shoemakers.
The uppers are cut by hand, but are closed or sewed by sewing-ma-chines, which also saves the employment of a number of hands, and hence assists to reduce the cost of the shoe. The soles and uppers are then issued to the shoemakers to put together and finish.
This factory with its machinery can employ 100 shoemakers, in addition to the leather finishers and men attending the machines. At present I have only 33 shoemakers, and the machines are not kept at work more than one-third the time.
I find great difficulty in doing efficient work with the class of men detailed to me from the army. Under the orders of the Secretary of War, only such men can be detailed who are unfit for field duty, and, in their anxiety to be detached, many represent themselves as shoemakers who are really only cobblers, and thus much valuable and scarce material is wasted.
I take great interest in this shoe factory, and know that valuable service can be rendered by it to the Government if once filled with competent mechanics.
If the President will issue a special order allowing me to have detailed from the Army of Tennessee 60 shoemakers and 2 leather finishers, such as I may select without regard to their physical condition, I will pledge myself to make 500 pairs shoes per day at less cost and of equal quality with any produced in the Confederacy.
As you have seen the establishment, may I ask, colonel, that you lay this matter before the President at such time as you deem fit. I am anxious to serve the Government to the best of my ability in whatever position it deems best to place me, and feel assured that I am acting to the best of my ability in the present instance, and ask the above solely from a sense of duty.
I omitted to remark above that in the shoe factory I employ only 1 man as superintendent, 1 as clerk, and I as inspector, in addition to the mechanics.
Respectfully, your obedient servant,
Quarter ending De- Quarter ending March
cember 31, 1862. 31, 1863.
----------Articles.----------- Quantity. Average cost.Quantity. Average cost.
Jackets number. 37,150 $8 63 .... ....
Pants .pairs 13,430 8 61 33,960 $7 83
Cotton drawers ..do.. 13,700 76 34,992 1 31
Cotton shirts number 10,475 1 15 89,245 1 83
Flannel shirts ..do.. 1,500 6 75 1,160 5 08
Total 76,255 .... 159,357 ....
Manufactured at quartermaster's depot at Atlanta, Ga., by Maj. G. W. Cunningham, quartermaster, during month of March 1863, 3,285 pairs of shoes; actual cost each pair, $4.23.
Secretary of War, Richmond, Va.:
SIR: The Hon. James E. Ward reached Paris on the 2lst of March, and delivered me your letter of 6th of January. After negotiating with him and those he represented for five weeks the negotiations terminated on the 26th of April in the inclosed proposition from Mr. E. P. Stringer, managing director of the Mercantile Trading Company (alias C. H. Reid & Co.), with whom the Ordnance Bureau has a large, partnership contract.(*) This proposition I of course declined. I have since made arrangements with Messrs. Fraser, Trenholm & Co. to furnish the Government with eight first-class steamers, to be purchased by or built under the directions of Captain Bulloch. Two of these steamers, the Bat and the Owl, have already been purchased, and will leave for Bermuda on the 1st of August. The six others are contracted for, to be ready for sea as follows--say two in November, two in December, and two in April, 1865.
I have also made an arrangement with the highly respectable firm of J. K. Gilliat & Co. to advance £150,000 for the purpose of purchasing or building other steamers to run on Government account, produce to be consigned to them. For this advance I pay 5 per cent. commission and 7 per cent. interest, and the usual mercantile commission of 2½ per cent. for selling the produce, I lodging with them bonds of the £3,000,000 cotton loan, at the market value, to net the £150,000, with a margin of 25 per cent. As Messrs. Gilliat & Co. have the money ready, this entire line might be started at once, if the proper steamers could be found, but the difficulty is in getting steamers ready built that are suited to the trade. Captain Bulloch, with whom I am directed by the Secretary of the Treasury to consult as to the character and fitness of the steamers, is now negotiating for two on the Clyde, which will be ready for sea during the month of August. Thus we expect to get off four first-class paddle-wheel steamers during the month of August. On their first outward trips they all will be sent to Bermuda, where I understand there is a large accumulation of Government freight; thence they will be consigned to Lieutenant-Colonel Bayne. The other steamers to be supplied under the Gilliat contract will be built as speedily as possible. The plans and specifications are ready, and negotiations are going on <ar129_526> with the builders. The whole will be ready for sea during the month of December. Thus you will see that I have made provision for fourteen steamers, four of which will leave here during the month of August, eight in December, and two (the last of the Fraser, Trenholm & Co. Line)in April, 1865. The two bought by Messrs. F., T. & Co.--the Bat and the Owl--and the two we expect to purchase on the Clyde are the four best steamers now being built in the kingdom, and are greatly superior to most of the steamers heretofore engaged in the blockade business. They are built of steel, and will carry 1,000 bales of cotton each on a draft of seven feet water and with an average speed of thirteen knots per hour. Those to be built will be superior to these, and will, I think, have such sea-going qualities, combined with speed, as will greatly reduce the danger of running the blockade. A certain part of the proceeds of the produce brought out by these steamers will be set aside to keep up the lines, and by the end of the year the Government will have the means in its own hands to obtain all the supplies required abroad without incurring any further foreign debt.
That there may be no want of supplies for the Army until we begin to reap the result of these enterprises, I have made a contract with Alex. Collie & Co. for £150,000 clothing and quartermaster's supplies to be purchased by Maj. J. B. Ferguson, and for £50,000 ordnance and medical supplies to be purchased by Maj. C. Huse. A copy of the contract you will find inclosed. Already one of Mr. Collie's steamers, the Falcon, to be employed in carrying out this contract, has sailed for Bermuda, and the second steamer, the Flamingo, which takes this, will sail to-morrow. Major Huse has purchased about £30,000 on his credit under this contract, a part of which (medical stores) went on the Falcon, and he hopes to get off some other light goods by the Flamingo. Major Ferguson has placed orders for the whole amount of his credit, and the entire contract will go forward to the islands within five months.
As above stated, two of the steamers of the line to be employed in this business may be said already to have commenced work. The other two will sail, one in the middle of July, the other the 1st of August, and the goods will be speedily arriving at Wilmington. Therefore, no time should be lost by the Quartermaster's Department and Ordnance Bureau in getting cotton ready at the ports, to be exchanged for the goods on delivery as per the contract. May I respectfully ask that you will give instructions to this effect?
In a letter to the Quartermaster-General of 7th of May I advised him that I should make a contract with Mr. Collie for his department for carrying out that made with Mr. Tait, at Richmond, and sent to me for confirmation. Mr. Tait has arranged with Mr. Collie and Major Ferguson to furnish £50,000 of ready-made clothing at prices somewhat lower than those named in the contract drawn up at Richmond, and he waives the 5 per cent., as Mr. Collie pays him cash for the goods on delivery. He also pays cash for the purchases of Majors Huse and Ferguson, for which, you will perceive by reference to the contract, he is allowed 2½ per cent. The balance (£100,000) will be invested in such general quartermaster's supplies as Major Ferguson has the most pressing orders for.
The first trips of these steamers in may not take goods enough to pay for full outward cargoes, as per contract, but very soon they will take in more in value than they can bring out. I therefore request that you will direct Colonel Bayne to give the steamers of this line <ar129_527> full outward cargoes of cotton. It is understood with Mr. Collie that if any of the inward cargoes are lost or captured, and he should have received cotton in excess of goods delivered, that he will pay for such excess at the rate of 8d. per pound in sterling, or he will duplicate the goods, at the option of the Government. In addition to this contract I have opened a credit with Messrs. J. K. Gilliat & Co. for the Ordnance Bureau, which has enabled Major Huse to complete the contracts for all the machinery required for the works of Colonel Rains, Major Mallet, and Superintendent Burton, and the machinery is now in process of construction. To obtain this credit I deposited with Messrs. Gilliat & Co. $1,000,000 8 per cent. Confederate bonds belonging to the Ordnance Bureau, and pay them 2½ per cent. commission for the credit and 7 per cent. interest. The credit extends over a period of twelve months, though Major Huse expects to get all the machinery off much sooner. I have also authorized Major Huse to purchase, at six months' credit, rifles, carbines, pistols, cavalry equipments, leather, harness, &c., to the extent of £40,000. Under this credit he informs me that he can purchase from certain parties almost as cheap as he could for cash, interest off. Major Ferguson also informs me that he can purchase from the Lancastershire and Yorkshire manufacturers, at four and six months, on the credit of the Government, but I have not thought it advisable to go beyond the £40,000 at six months, as I do not wish to create any debts that I cannot see the way clear, to pay. Our credit begins to grow stronger, and by proper management will soon be available for all our wants.
The legislation of the last Congress, with the regulations since adopted in reference to the foreign commerce of the country, has greatly strengthened it, and I hope the Government will not allow the outside pressure to cause any future modification of these regulations, and, above all, that for a momentary necessity you will not allow the agents at the islands to make contracts with steamers granting privileges not in accordance with these regulations.
Since I wrote you last (19th February, No. 6A) I have paid W. G. Crenshaw £40,000 and Major Ferguson £35,000, Maj. R. P. Waller's drafts (£20,000), and an additional draft of Major Waller in favor of Thomas Sharp, for £3,000 to purchase machinery for a shoe manufactory. To make these payments I had to sell the stock of the loan--some as low as 42. I hope, however, that matters are now in such a train as will prevent any such sacrifices in future. The £40,000 paid W. G. Crenshaw has enabled him to re-establish his line of steamers. He has three now running, and has made arrangements with Messrs. Gilliat & Co. to furnish him with the means to purchase two more. You are aware that he has dissolved his connection with Mr. Collie. He informs me that at present he has no contract with you, but that his operations are three-fourths for the Government and one-fourth for himself. Having myself made pretty ample provision for quartermaster's, ordnance, and medical supplies, I have advised him to confine his operations to getting in commissary supplies, and I believe he is energetically working at it. Would it not be well to have a new contract made, defining accurately the interest of the Government in his operations? The Collie & Crenshaw contract was by no means favorable to the Government, and from a general statement presented me by Mr. Crenshaw when I paid him the £40,000 it appears that the Government had not received from it the money invested. You are aware from my previous letters that I do not favor any partnership connections between the Government and individuals. If there be <ar129_528> profits the individuals will get them; if losses, they will fall on the Government. Besides, there will always be difficulty in getting settlements. The contract with C. H. Reid & Co. illustrates this. More than a month ago, after receiving a letter from Colonel Bayne authorizing me to do so, I called in person on them and asked for a statement of their accounts with the Government, which they promised to furnish. After waiting three weeks without hearing from them, ten days ago I made the request in writing, and as yet have only received a note saying that they were getting the accounts ready. I have, however, learned from Major Huse that he has received from the company £35,000 on account of the Government interest in the adventure. As the arrangements made with Fraser, Trenholm & Co. and J. K. Gilliat & Co. will furnish the Government with the means of obtaining ample supplies, I respectfully suggest that these partnership contracts be annulled; or, rather, that the Government buy out the interest of the other parties in the steamers and run them on its own account.
But little progress has been made in the settlement of the accounts of Messrs. S. Isaac, Campbell & Co. since the letter of Mr. Bloodgood and myself of the 17th March. All your conjectures in reference to this firm have proven but too true. The investigation of their accounts shows that they have in many instances made charges that can be characterized by no other term than that of fraudulent. In that portion of their accounts which they originally professed to have furnished on commission, we find that they have in many instances charged, in addition to the commission, from 5 to 20 per cent. more than they paid. They now seek to turn this commission account into a purchasing account, and claim that under the circumstances (i.e., the precarious credit of the Government) the profit they have charged is not unreasonable or excessive. Not being able to come to a settlement in any other way on the proposition of Messrs. S. I., C. & Co., we have agreed to leave the matter to arbitration, provided there should be but one arbitrator, and he a barrister or attorney of eminence. The papers are now in the hands of our solicitors, Messrs. Thomas & Hollams, who, with the solicitor of Messrs. S. I., C. & Co., are to select the barrister.
I have received, under cover of a letter from Lieutenant-Colonel Bayne, of 21st of April, copy of the regulations established by the Secretary of the Treasury, yourself, and the Secretary of the Navy on the 14th of April, and approved by the President on the 18th, for the purchase and transportation abroad of tobacco, cotton, and naval stores. The arrangement I have made for steamers seems to have anticipated your action, and will supply the means of rendering it immediately efficacious. The distribution of the work among the various departments appears to me the simplest and most effective mode of carrying out the objects in view. The only thing necessary, in my opinion, to give the public service the full benefit of these regulations is, that all persons abroad acting under them should be formally instructed of the nature and limits of their respective duties. On a former occasion, i.e., the agreement of the 15th of September and your letter of the 26th idem, the failure to do this defeated the principal objects you had in view, namely, to give me control in cases of emergency of the funds of your Department in the hands of Messrs. Fraser, Trenholm & Co., since that firm declined to transfer funds in their hands from one bureau of your Department to another, as advised in my letter to you of the 18th of December, No. 4A, to which I hoped <ar129_529> ere this to have received a reply, inclosing such directions to Messrs. Fraser, Trenholm & Co. as would enable me to carry out the views expressed in your letter of September 26. I still think it desirable that all the funds of your Department abroad should be under my direction. As I am now issuing large credits to the purchasing officers and paying any drafts that may be drawn on me from the islands, I may make sacrifices to meet these engagements which might not be necessary if I were fully advised of the exact state of the finances of your Department.
With much respect, your obedient servant,
1. Alexander Collie agrees to provide four large and powerful new steamers to carry out the following arrangement with the least possible delay:
2. Alexander Collie will at once cause to be purchased, under Colin J. McRae's direction, quartermaster's stores to the value of 150,000 pounds sterling, and ordnance or medical stores to the value of 50,000 pounds sterling--the one subject to the inspection of Maj. J. B. Ferguson, the other to that of Maj. C. Huse.
3. The delivery of such purchases to extend over a period of about six months, in proportionate quantities, and shipment to be made to the Confederate States with as little delay thereafter as practicable.
4. Inland carriage and packing expense to be charged in the invoice, and 2½ per cent. commission to be charged also.
5. Colin J. McRae, on behalf of his Government, agrees that on arrival in the Confederacy of any goods purchased and shipped by Alexander Collie under this agreement, such goods will be immediately claimed and taken over by the Government. Fifty per cent. advance will be added to the English invoice, and Alexander Collie, through his agent, will immediately receive in exchange cotton at the rate of 6 pence sterling per pound.
6. Such cotton to class middling and to be delivered alongside the steamers as required, compressed, packed, and in good merchantable condition.
7. Full cargoes of cotton received in exchange for goods delivered under this agreement may be shipped by Alexander Collie, through his agent, free from any other charge or restriction whatsoever beyond the now existing tare of one-eighth of a cent per pound.
8. No steamers to have priority in any way over those employed by Alexander Collie in this service, and more than the four above mentioned may be used if Alexander Collie can arrange to put them on.
9. Colin J. McRae further agrees that to cover the expense of Alexander Collie's agencies abroad, he, Alexander Collie, is to have the privilege of providing and bringing out other cotton than that received under this agreement to the extent of one-tenth part of the cargo space of the respective steamers, and such cotton (or tobacco) may be shipped on same terms as indicated per Government cotton, viz, free from all other charges or restrictions whatsoever excepting the before-named export duty now existing.
10. This agreement is to be construed by both parties in a spirit of confidence and liberality. The one will purchase and send forward the supplies indicated with the least possible delay; the other will deliver cotton as required in the same way, and neither party will withhold necessary supplies on account of any temporary shortcoming on the part of the other.
11. Alexander Collie's agents, with the necessary staff for attending to this business, are to be allowed the privilege of residing in the Confederacy free from liability to conscription, and every reasonable facility is to be allowed them for effectually carrying out the terms of this agreement.
ALEX. COLLIE.