of being cut off entirely, that he correspond with the Secretary of the Treasury, through the Secretary of War, and obtain his consent to the reissue of the funded notes, and the payment, by depositaries, of his drafts; that I would continue to hold these notes uncanceled until Mr. Memminger could be heard from, adding that in the meantime, should the emergency require it, I would pay out funds upon his request, if accompanied with letters stating (for my justification) the emergency. To this letter I was not honored with a reply. Some months afterward General Smith drew an order on me for &150,000, signed by a member of his staff. I indorsed it, "Respectfully returned for the sign-manual of Lieutenant General E. Kirby Smith," and returned it; it did not come back. On the same day I received another order, signed by the same officer of the staff, directing me to sort the notes in my hands, stamp those fit for use with the place whence and the date when reissued, and hold them subject to the order of Lieutenant-General Smith, he assuming the responsibility. I replied that as an officer of the Treasury Department I could receive orders only from the Secretary of the Treasury, and begged to be informed if his authority had been received. The answer was; "That the Secretary of War had instructed General Smith that it would be his duty to assume the control of the civil as well as the military government of his department." The assistant adjutant-general who wrote this stated that General Smith was absent in Arkansas, which accounted for the otherwise remarkable statement of the remarkable powers with which the Secretary of War sought to clothe General Smith. Knowing that the powers of the various heads of Departments were clearly defined, I knew that the Secretary of War had no control of funds in the Treasury, and consequently had no such authority to delegate, and inferred that the assistant adjutant-general had simply made a mistake. I renewed my offer to pay out funds in the manner indicated in my letter of April 26, preferring to trust to the approval of the Secretary of the Treasury rather than rest the responsibility on General Smith. I declined the stamping on the notes of the date of reissue on the following grounds:

The various acts of Congress on the subject of funding limited the funding in 8 per cents. to April 22, 1863, and in 7 per cents. to August 1, 1863, after which the notes dates prior to December 2, 1862, were no longer fundable, and those subsequent only in 4 per cents. The issues subsequent to April 3, 1863, were required to be stamped with the month and year of issue, fundable within twelve months in 6 per cents., after in 4 per cents; this issue was restricted to &50,000,000 per month. I held that stamping the place and date of reissue on the old notes (no longer fundable) would place them on a footing with the last issue authorized, and that the holder might lawfully demand to fund them anew in 6 per cents., a condition to which I, as a subordinate, had no right to pledge the Government.

In anticipating the approval of Mr. Memminger of the responsibility taken by me in advancing funds to meet military emergencies, I was correct; for I have reported each case to him in full, and, so far as I have heard from him, he has approved. I am not so sure that he would have approved my paying peremptory orders of an officer of another department. On the 19th ultimo, I received instructions from the Secretary of the Treasury to pay the drafts of Lieutenant-General Smith, which relieves me of taking further responsibility.

The amount of funds now in the department, together with that on the way (stated at &26,000,000), will, in my opinion, amply suffice for the wants of the public service. Many millions might have been saved