[Inclosure.]

EXTRACT.

Colonel S. S. ANDERSON, Shreveport, la.:

COLONEL: In obedience to the requirements of a communication, Numbers 779 [September 121, 1863], addressed by you to the senior officer of the commission appointed by the lieutenant-general commanding to investigate the papers and reports of officers who have been engaged in the managements, purchase, or transportation of Government cotton under the authority of the War department, we have to report as follows:

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Major-General Magruger, having been directed by Lieutenant-General Holmes to give such orders as would enable the Government to obtain supplies from the exportation of cotton through our lines on the Rio Grande, published on the 22nd of February, A. D. 1863, his General Orders, Numbers 28.*

It will be seen by reference to that order that while all persons were allowed to export cotton across the Rio Grande, none could be exported except by those who had imported goods and supplies, and they were permitted to export only to the extent of the custom-house value of the original invoices at the port of entry, with 100 per cent. added. Had this order prohibited the use of conscript teamsters by any one except by the officer charged with the duty of supplying the army, it is believed that the most favorable results would have followed. But the powers of the major-general, though exercised to accomplish this end, were inadequate to the task. Contracts made with the sanction and under the direction of superior authority were then in existence, which he had no power to cancel.

In General Orders, Numbers 65, General Magruger required all conscript teamsters then being employed to be turned over to Major Hart, except where they were being used under authority emanating from the War Office of the commanding officer of the department. This order appears to have failed in the accomplishment of its object, and the evils resulting from individual cupidity remained unabated. Had Orders, Numbers 28, continued in force, though Major Hart might have failed, the army would have been supplied through other channels. But unfortunately for the Trans-Mississippi Department the necessities which embarrassed it and the mysteries of its cotton interest were not and could not be understood beyond its borders, and Orders, Numbers 28, and every other order having for its object the procurement of supplies by imposing restrictions on the exportation of cotton, was annulled in obedience to the requirements of a letter addressed by the honorable Secretary of War to the commandant of the department.

The letter of the Secretary of War in effect declared that the military authorities should do no act to prevent the unrestricted exportation of cotton to Mexico through its coterminous boundary. This clearly announced the law, but could that able functionary have witnessed the spectacle of capital in that hands of speculators, aliens, and traitors seeking investments abroad through the medium of cotton, thus draining the country of its resources without any benefit to the army or people, he would have recognized the existence

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* See Vol. XV, P. 986.

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