[First indorsement.]

ADJUTANT AND INSPECTOR GENERAL'S OFFICE,

December 16, 1864.

Respectfully submitted to the Secretary of War.

H. L. CLAY,

Assistant Adjutant-General.

[Second indorsement.]

DECEMBER 18, 1964.

ASSISTANT SECRETARY:

What would you advise in this matter? Can you explain the impression entertained that a quartermaster had been commissioned to make purchases, and the statement that General Taylor had received instructions excluding any control or action by him? I am not aware of any instructions which would warrant such statements.

J. A. S.,

Secretary.

[Third indorsement.]

Honorable SECRETARY OF WAR:

In March last a letter was addressed to each of the department commanders on the subject of the act concerning trade. A limited and special control was given to the department commanded to allow contracts to be made, under the supervision of trustworthy officers, and requiring the permission to be countersigned by the commander himself. Permissions were granted by General Polk to a liberal extent and by subordinate officers in his command, leading to abuse and augmenting a mischievous traffic. This was made known to the Department through inspection reports. A letter was addressed to General Taylor, 27th of September last, communicating the fact of these abuses, referring him to the act and orders, and informing him that Mr. Clapp had been appointed by the Treasury, and referring him to Mr. C. For information of the cases in which such trade could be licensed. He was also informed that but few contracts had been made; that those had not been productive, and had expired by limitation. General Taylor's circular is prior in date to this letter, and therefore his action was not affected by it. Three letters have since been addressed to general Taylor by you, in which a concurrence in his circular is expressed and his supervision of the trade recognized to be legitimate. I know of no communication from this Department to any quartermaster that would justify the making of contracts for supplies through the use of cotton.

J. A. CAMPBELL,

Assistant Adjutant-General.

[Fourth indorsement.]

FEBRUARY 4, 1865.

ADJUTANT-GENERAL:

The whole matter has been now arranged by the appointment (in concert with the honorable Secretary of the Treasury) of an officer or agent to make and superintend the execution of all contracts for supplies in the Mississippi Department.

J. A. S.,

Secretary.