in such an emergency, were the most difficult of attainment. The blockade then and still existing all around the Southern States rendered the importation of these articles almost impossible. At the time of the organization of this board there was not a cap factory in the whole South, nor a powder mill in operation, nor a manufactory of small-arms to any extent, and but one cannon foundry. In this state of things there was no appeal except to our own resources. Under the auspices of Samuel D. Morgan, esq., a manufactory of caps was established in this city, which from small beginning has been made to produce within the last four months over 12,000,000 caps, and is now producing daily enough to sustain the waste of a great battle. Much credit is due Mr. Morgan for his aid in this and other matters connected with the public service. The capacity of this establishment is believed to be adequate to meet the demands of the whole Confederate States.

Cannon enough have been cast, both bronze and iron, to supply the whole Provisional Army of Tennessee for the present. This has been done principally in Nashville and Memphis, and to some extent in Chattanooga, and can now be carried on to any limit. The manufacture of small-arms, such as guns and sabers, has also been pressed with the utmost diligence. A large amount of capital and skill has been brought into requisition for this purpose in Nashville, Memphis, Knoxville, and other places, and while the production up to this time has not been great, the foundation has been laid by which, in a few months, there will have been more guns manufactured in the State than were to be found in the arsenal at the commencement of the present struggle. The skill employed in this important branch is rapidly improving, and the most confident hopes are indulged that the success will be complete. On the subject of powder, the undersigned have encountered the greatest difficulty. By timely action a large amount of sulphur was obtained by purchase at different points, but the supply of saltpeter was limited, and not to be had in the markets of the South. To supply this indispensable article, resort was had to the caves of Tennessee, Georgia, Alabama, and Arkansas, and, at considerable expense and delay, contracts were made in all these localities which, with varied success, promise in the aggregate to afford a sufficient amount for the current demand. In many instances liberal advances had to be made to induce the investment of capital and labor in that uncertain and precarious business, and it has been impossible to procure the manufacture of the article at all, except at high prices. The undersigned also, by advances, procured one powder mill that had been out of use for some time to be refitted with increased capacity, and it has been in operation for several weeks past. They procured also in like manner to be erected a new mill, which is now about completed, with large capacity. These two mills, if they meet with no accident, it is believed will be able to furnish powder enough to meet the current demands of the whole Government during the war. The expenses of all these operations have been considerable and greatly enhanced by the increase in the price of materials and in certain bnical labor. Arms of every description soon roose to enormous rates, but the undersigned, while seeking to practice economy as far as possible, did not hesitate to pay high prices where it was necessary to arm and sustain the soldier and prepare for the impending struggle. Much of the expense incurred resulted from the failure of Confederate authorities promptly to muster our troops and to prepare for their support. The consequence was that the State has been compelled, until a recent date, to pay, clothe, and sustain her army, notwithstanding it was virtually