man, ambitious, and intends to have the credit of everything he does. He knows perfectly well that the Government itself can offer the people no inducement to part with their cotton equal to the terms proposed by his agents. The people know that if they do not accept the propositions of the Governor they will be forced to accept those of the Government. The whole force of his plan is derived from the power invested in the cotton office by your order, an to my mind there is no plainer case of using Confederate authority to the detriment of the Government, for the exemption given for exportation of a like quantity is only valuable by the presence of our army on the Rio Grande.

Moreover, the course of his Excellency is illegal. There is no act of the Legislature which authorizes the Governor to buy cotton for the purpose of selling it. The act of December 10 authorizes the Governor to sell $2,000,000 of 6 per cent. bonds, the proceeds to be paid into the Treasury, these bonds to be paid primarily in cotton; the act of December 16, to purchase cotton for the payment of the above-mentioned bonds by the issue of 7 per cent. bonds, payable in money or redeemable in land. Thus the cotton bought by the State is not to be sold, but retained in kind to meet the first issue of bonds, and that issue is to be sold alone for money. Of course it would be quite competent for the Governor to sell his bonds for the specie proceeds of the cotton, but such a sale gives the State no interest in the cotton itself or protection to the planter in the interior of the State. But this mere illegality makes no difference to the people; they are sorely irritated by military impressments and profoundly disgusted with the former system of exporting cotton, and therefore accept with eagerness the plans of the State, which virtually offers to the citizen who ranges himself on the side of the governor support against confederate authorities, thus leading, in case of actual collision, to open resistance.

If the principles of the plans adopted by the State were sound, the manner in which they are carried out into effect ought to condemn them. Their execution will inaugurate s system of speculation, rascality, and swindling without any parallel in the history of this war. The Governor, at the date of his letter to you, is not prepared to give up his scheme, and Major Bryan failed to make any definite arrangement. I understand that Murrah has taken steps to secure the approval of President Davis, in which (if he is successful) it may be difficult to come to any satisfactory adjustment. He knows perfectly well our dependence upon cotton; understands thoroughly that the vitality of his own plans is derived from the existence of the cotton office. If he will make no arrangement that will give you the use of the cotton, and is sustained by the President and the laws, it seems to me no alternatives left you but to make a direct issue by impressing and appropriative is left you but to make a direct issue by impressing and appropriating the cotton of Texas or abandon the department with your troops and let their gubernatorial excellencies take care of their State.

In advance of any harsh measures, I beg to recommend a conciliatory policy, which is deemed of special importance on account of the peculiar temper of the people of Texas; but the cotton, if you acquire the means of defense and the supplies necessary to keep your troops together, must be appropriated to military purposes. The disease in our currency has run so long it can only be arrested by desperate remedies. The funding system is but a temporary expedient, and the Secretary of the Treasury clearly overestimates