[Indorsement.]

JANUARY 21, 1865.

Assistant Secretary, for consideration.

Do you advise any order on this subject, or would it be well to submit a project of a bill for the action of Congress?

J. A. S.

[Inclosure.]

SUBSISTENCE DEPARTMENT,

Pitch Landing, Hertford County, N. C., December 23, 1864.

Major W. W. MORRISON,

Chief Commissary of Subsistence, Dist. Numbers 1, North Carolina.

MAJOR: You have done me the honor to ask my opinion of the cotton trade carried on principally in my district, its effects, abuses, and their remedy. To be brief, the statement of Mr. Wilson is his letter to the Secretary of War, and the concurrent of Mr. Smith, are mainly correct. The demoralization, however, is more the fault of the people than the necessary result of the traffic. They argue that if the Government has a right to trade a contraband article across the lines for indispensable supplies, individuals should not be debarred the privilege of trading on speculation. Hence, in defiance of law and orders, many private speculators are extensively and constantly engaged in running cotton through the lines. The extent of the evil is now daily increasing to an alarming extent, owing mostly, I think, to the numerous agencies recently issued by the State, and the loose manner in which business is carried on by some of the men. Some buy their own cotton in sections unwatched by the military, transport it by obscure roads, and select unpicketed crossings on the river for their operation. By this plan they are responsible to no one for the amount of cotton carried over. It is the misconduct of these, and some individual agents, and detailed men in Confederate employ, that gives a show of foundation to the broad charge made by Mr. Wilson that "all hands, agents and all," are speculating. Another chief ground for the charge is, that many speculators, strangers and citizens, represent themselves as acting for the Government, when they really have no connection with it, and persons who do not take time to inquire the precise standing of these men, charge the Government with the illegality of their transactions. I have been watchful, and only two cases of clear misconduct have been found among Confederate agents or detailed men. These cases came before you, and it is unnecessary for me to say they met with immediate punishment.

The practical working of the trade is precisely what Mr. Smith represents it to be, viz: "The giving a permit to pass cotton over the river and thence to the enemy as a premium, in addition to the price paid for subsistence stores," and most of these stores are procured in counties of North Carolina east of the Chowan. Confederate credit, however, would not have brought out the supplies, as he thinks. To remedy the abuse of the trade is a most desirable consummation. There are about seventy miles of river shore from Murfreesborough to the sound, and now only about fifty badly disciplined cavalrymen to represent a military force. It would seem out of the question to procure a sufficient force to watch, night and day, the scores of landings on this extent of river shore. The represent plan of keeping a record of permits given and making a report of them is practically of no value toward stopping