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NEW ORLEANS, Sept. 12, 1863.

DEAR SIR: I have the honor, to acknowledge the receipt of your letter (unofficial) of 26th, August.
Of late my letters have been, necessarily, hastily written and imperfect. I supposed, however, you were kept fully informed by Mr. Hutchins, and more lately by Mr. Plumly, in person
The new regulations of which you speak have not yet reached me, but are expected by the next steamer. So far as I have observed, most of the complaints concerning the restrictions and taxes imposed come from people who are anxious to make large gains by trading with the enemy. I understand that a petition has been forwarded to you from here, asking for the removal of the five per cent. tax; but I do not think this would ever have been done, had it not been for the active exertions of Mr. Sargeant, Custom House Appraiser.
Five per cent. tax is collected on all shipments of supplies from this port to any point outside the city, whether for trade or family supplies. This is done by order of Mr. Flanders, with whom at first I did not agree as to the propriety of the order, but I now think it just and expedient. The poorer class generally buy their supplies from traders who have paid their five per cent. The planters and wealthier people generally send orders to their commission merchants in the city, who make the shipments. I do not see any impropriety in regarding these transactions as trade. If, in this community, only what was for trade should be taxed, I think government would receive but little, for many people would not hesitate to ship, as for plantation use, what they really intended for sale, and, owing to the size of plantations, in most cases without detection.
The military authorities have interfered much with trade. Provost Marshal General Bowen allows nothing to go out of the city without the permit has his endorsement. He allows no one to use permit to trade, except the permit be first endorsed by the Pro. Marshal of the place where the goods are to be sold, and afterward endorsed in his office. On all permits to Baton Rouge two per cent. is collected by the Pro. Marshal. All cotton arriving here is taxed five dollars per bale for hospital fund. I think these unnecessary military restrictions are more vexatious to the public than all those imposed by the regulations of the Treasury Department, and I have endeavored to have them removed, and, at last, with promise of success. Gen. Bowen to-day informs me will cease to interfere, but the promise is not yet fulfilled.
I have issued several permits to purchase cotton at points within our lines and below the mouth of the Red river. Considerable cotton has already arrived here and more will arrive. The guerillas in Mississippi are burning a good deal, and have captured two or three cotton traders in the vicinity of Baton Rouge, and, it is said have hanged one or two of them.
It is important that the extent of Mr. Flanders' jurisdiction be defined. You intimate that his authority will have the same geographical boundaries as that of the Commanding General of this Department. General Banks informs me that his command terminates, and Gen. Grant's commences, at or near the mouth of Red river. Now the whole country up to points above Vicksburg has always drawn supplies from, and sent their produce to, this port. Any attempt to force trade out of its fixed and natural channels by turning the produce up the river, would be attended with difficulty, expense and inconvenience; though the inconvenience would not be so much felt in the country between Vicksburg and Memphis. Of the truth of these statements I am reminded every day, by persons applying for supplies for Natchez and points above which have always been supplied from here, and from which the cotton has always come hither. You are aware that the factor generally makes advances on crops, and that the planter generally spends the proceeds of his crop before it goes to market. Most of these factors lived in this city, and, claims being still unsettled, they come to me for permits to bring down their cotton. I suggested to you that Mr. Flanders' district should include all south of the Northern boundary (on west side of the river) of Louisiana, said line being extended right across the State of Mississippi. At any rate, it should go as high as Vicksburg or Natchez, at least, - on both sides of the river. You can tell better than myself whether this is objectionable because Mr. Fs'. district would then extend into two military departments; but I should think this no objection.
Under instructions from the Treasury Department, spirituous liquors have been regarded as contraband of war, and have not been allowed to be brought to this port. On the first of September, the steamer Julia arrived here from Saint Louis, having on board more than one hundred bbls. whiskey, which was cleared (somewhat irregularly) from the Custom House at St. Louis. I detained it in Government Warehouse, not permitting it to go into consumption until receipt of instructions from you, when it will be delivered to claimants, or turned over to the District Attorney, as you may direct. Kennedy and Co., of this city, agents of the owners, have addressed a letter to you on the subject. Thirty barrels more arrived to-day, which was seized by Mr. Bullitt. If you have authorized the officers of Customs at Saint Louis to clear whiskey for this Department, I should like to be informed of it.
What you say of the "True Delta" is quite correct, but I am sure you overestimate the influence of that paper. It makes a business of assailing all persons in office without regard to merit or demerit, and with an apparent disregard of truth. When the character of the paper is well understood, as it is here, its influence is small. I have reason, however, for stating that no more articles will be written in the same strain; and for the reasons above mentioned, I do not think any printed explanation is necessary.
In my former letter, I quoted two clauses of a proposed order of Gen. Banks, for the purchase of cotton on behalf of government; said cotton to be paid for at such a price as might be deemed sufficient. In your letter of the 25th. you say "that these two sections correspond exactly with my own views; and I endeavored, at the last session of Congress, to obtain authority to receive property, and pay for it in the mode, and with the further provision for contingent additional payment, which he suggests. Congress, however, refused to confer this authority, and, of course, I do not feel at liberty to exercise it."
I wish t6 be distinctly informed if you are in favor of this project being carried into execution by military order, myself or other officers of the Treasury Department attending to the execution thereof. The quotation above made merely expresses your preference for this mode, to be executed in a certain manner, and I cannot conclude therefrom that you would desire its execution in the manner proposed by Gen. Banks. It is not too late to adopt Gen. Banks's plan here. Texas will soon be occupied, and then no obstacle will be in the way of the execution of the plan. Please inform me if you would approve doing this thing in the manner proposed (military order), the agents of the Treasury Department executing such orders. I deem this matter of importance.
There are three distinct ways of managing the cotton trade, each having its merits and objections. First; that the military authorities should seize all produce and turn it over to the Treasury Department. Second; that they should seize nothing, but that permits should be issued to traders to purchase it. Third; that the Government should purchase at a fair price according to Gen. Banks's proposed order. These distinct plans, or a combination of two or three of them, are, I think the only methods whereby cotton may be brought out. This is not a subject that can be neglected and allowed to take care of itself, because heavy pecuniary interests are involved.
I have conversed with Gen. Banks upon this subject. If you approve of the adoption of his order, in the manner indicated, please inform me unofficially, And I can have it carried into effect. I have no doubt, without responsibility on your part.
I enclose, for your information, a copy of letter relating to salaries this day transmitted to Commissioner of Internal Revenue.


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Annual Report of the American Historical Association; Volume II; Washington, Government Printing Office; 1903

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