"The government further agrees to deliver the cotton called for in this certificate at any time during the pending war, at any port within its possession, (if practicable to transport the cotton to the port selected,) upon the payment by the holder of the cost of transportation."

4. In case, by accident or otherwise, the holder should omit to make his demand within this period, the certificate is not forfeited, but the government has the option to deliver the cotton or return the amount paid, say one thousand dollars, with interest at six per cent. from the issue of the certificate.

5. An additional formality is added in requiring your indorsement. This addition has been made to guard against capture or loss of the certificates on their way to Europe, and also to give an official supervision there.

I now send, by Mr. G. N. Sanders, one thousand certificates for the Gulf ports and five hundred for the Atlantic. In order to have the payments put in proper form, you had better deposit the certificates with our depositaries, Messrs. Fraser, Trenholm & Co., at Liverpool, directing them to receive the money and deposit the same to the credit of the treasurer of the Confederate States. This will place matters in a business form, and relieve you of the necessity of keeping accounts.

In order that you may act understandingly, permit' me to apprise you of such financial arrangements as have already been made.

At your suggestion, I have appointed Mr. James Spence, of Liverpool, financial agent, and have requested him to negotiate for the sale of five millions of dollars of our eight per cent. bonds, if he can realize fifty per cent. on them. I have already sent over two millions of the bonds, and will send another million in a week or ten days Mr. Spence is directed to confer with Messrs. Fraser, Trenholm & Co., who had previously been made our depositaries at Liverpool. Had I known with certainty where you were I would also have referred him to you, and I would thank you now to place yourself in correspondence with him. I have also directed Mr. Spence to endeavor to negotiate for the application of two and a half millions of coin (which I have here) for the purchase of supplies and munitions for our I hope that this coin will be accepted by British houses in payment at the rate of sterling in England, less freight and insurance. It seems to me that, upon its transfer to British owners, they could obtain transportation for it on their vessels-of-war from any confederate port, inasmuch as it would be bona fide British property, and in any event the holder of the transfer would have a certain security.

army.

A difference has been made by our congress in some of its appropriations for the navy. Those for building vessels are payable in bonds. It follows, therefore, that a discrimination must be made in the application of funds from the different sources of revenue, of which you will take notice.

Under the act of congress authorizing me to accept produce in exchange for bonds, (of which I enclose a copy,) I have procured a considerable amount, which is stored on plantations or in warehouses. I send you a copy of one of the certificates taken for the cotton. These certificates it is proposed to offer for sale in Europe. They would give to the purchaser an absolute right to the particular lot of cotton, with the privilege of shipping the same, and may be preferred by some purchasers.

In conclusion, allow me to request your co-operation in these various plans, and any suggestions which your experience and observation may deem proper.

Respectfully, your obedient servant,

Hon. J. M. MASON,

Commissioner Confederate States, London.

C. G. MEMMINGER,

Secretary of the Treasury.

AN ACT to authorize the exchange of bonds for articles in kind, and the shipment, sale, or hypothecation of such articles.

SEC. 1. The Congress of the Confederate States of America do enact, That the secretary of the treasury be, and he is hereby, authorized to exchange the bonds or stocks of the Confederate States for any articles in kind which may be required for the use of the government, the said articles to be valued according to such regulations as the said secretary shall make.

SEO. 2. It shall be the duty of the commissary and quartermaster generals to direct their various officers to receive, at the place of purchase, all such articles purchased as are applicable to their several departments, and to apply the same in the same manner as if purchased directly by themselves; and the officer to whom each article is delivered shall be charged with the value as declared by the purchase, and shall be bound to account for the

same.

SEC. 3. The said secretary is also authorized to accept, for the use of the government, in exchange for the said bonds or stock, cotton, tobacco, and other agricultural products in kind, which have been subscribed to the produce loan, or which may be subscribed in kind, at such rates as may be adjusted between the parties and the agents of the government: Provided, That in no event shall he receive of cotton or tobacco a greater value than thirtyfive millions of dollars; and the said secretary is further authorized to deposit the same at such places as he shall deem proper, and to procure advances thereon by hypothecation, or to ship the same abroad or to sell the same at home or abroad, as he may deem best; and to assist these operations the said secretary may issue produce certificates, which shall entitle the party to whom issued, or his indorsee, to receive the produce therein set forth, and to ship the same to any neutral port in conformity with the laws of the Confederate States. SEC. 4. The secretary of the treasury may, from time to time, appoint and dismiss such agents as he may deem requisite to carry into effect the provisions of this act. Their compensation shall be a brokerage upon the business completed by them at such rates as the secretary of the treasury shall adjust by general regulation.

SEC. 5. The secretary of the treasury may, from time to time, issue regulations for carrying out all the details involved in the provisions of this act, which shall be obligatory upon all parties concerned therein.

Approved, April 21, 1862.

Confederate States of America.

$1,000 BOND.

Cotton certificate.

No.

This is to certify that - of- is the proprietor of twenty bales of cotton of 10,000 pounds weight, rating New Orleans middling at five pence sterling, which shall be delivered by the government of the Confederate States of America to

or order, at the port of Charleston or Savannah, subject only to charges for compressing, putting on board ship, and existing government dues, the latter not exceeding one-eighth of one cent per pound.

The cotton will be delivered as soon as demanded by the holder of this certificate, upon the government receiving thirty days' notice of such demand. The demand must be made within the six months after the declaration of peace between the present belligerents in America; in default of a demand within that period, this certificate may be discharged by payment of one thousand dollars, with interest, at the rate of six per cent. per annum, from the date of issue indorsed hereon.

This certificate will confer no right until verified and indorsed by the commissioner of the Confederate States in Great Britain.

In testimony whereof, the register of the treasury hath hereunto affixed his name and the seal of the treasury department, at Richmond, this first day of November, 1862. Register of Treasury.

Copy of "produce certificate."

[Here enter the weight of the bales only, and their marks]

42 bales good ordinary cotton, marked C. S. A., and 15 bales middling cotton, of same
mark.

County of Madison.

[Town, or post office, Canton.]

The undersigned having sold to the Con-
federate States of America, and received the
value of same in bonds, the receipt whereof is
hereby acknowledged, 57 bales of cotton,
marked, numbered, and classed as in the
margin, which are now deposited at his plan-
tation in said county, hereby agrees to take
due care of said cotton while on his planta-
tion, and to deliver the same, at his own ex-
pense, at Canton, on the N. O., I. & G. N.
railroad, in the State of Mississippi, to the
order of the secretary of the treasury, or his
agents, or their assigns.

THOS. G. SMITH.

CANTON, August 6, 1862.

The undersigned, as agent of the government, certifies that the within cotton has been
examined by him, and that its character will rank according to the commercial scale as
middling and good ordinary, and also that the weights and marks are as described-the
cotton being in good merchantable order and safely stored in a covered building.
The undersigned certifies that the price agreed upon is a fair market price at the present
time.

This is to certify that the within and above described cotton has been sold to
and delivery is hereby ordered to be made to him or his order, with license to export the
same from the Confederate States to any neutral port, on complying with the requisitions
of the law.

Given under my hand and the seal of the treasury department on the year and day above
mentioned.

Secretary of the Treasury.

Mr. Memminger to Mr. Mason.

[Triplicate.]

TREASURY DEPARTMENT. C. S. A.,
Richmond, October 25, 1862.

DEAR SIR: Your letter of 1st August, enclosing triplicate of yours of the 22d April last, is just received. That of 22d April is now for the first time received, and this fact will excuse the seeming neglect to Mr. James Smith, of Glasgow, in returning him a bond for his investment of £100. The sterling is now worth 150 per cent. premium, which makes the bill for £100 worth in dollars $1,100; for which sum a certificate of government stock has been issued in favor of Mr James Smith, and will be retained in this department, subject to his order, and a bill drawn for the £100.

Your letter of the 1st August also advises of the desire of Mr. James Brown, of Edinburgh, to contribute twenty-five pounds sterling. I have made the same arrangement for this amount, and have directed a certificate of stock to be issued in his name for $250, as we cannot issue for fractions of less than fifty dollars. This certificate will be retained, subject to his order, and a bill drawn for the £25.

SIR: Your letter of the 18th ultimo reached me a few days ago. Without your advice and effectual assistance the enterprise for which Lieutenant Sinclair has been selected must have been indefinitely deferred, and you have my cordial thanks for your action therein. Your stipulations in behalf of this department are fully indorsed, and will be promptly fulfilled.

The treasury has under consideration your suggestions as to cotton bonds, and Mr. Benjamin will advise you of the modifications of the form transmitted by you which Mr. Memminger deems necessary.

The speedy completion and departure of Mr. Sinclair's work I regard of so much importance that I must invoke your further aid, should he require it, to enable him to raise funds for the purpose of which I have advised him, and the repetition of which here I deem inexpedient.

The courier who brought your despatches found a means of communication whose safety justifies their further use, and Mr. Benjamin will probably advise you thereof. The completion of the contract of this gentleman will place a peculiar class of ships, never before constructed, upon the sea in our service; and I shall regret if the treasury department shall fail to make such arrangement as will enable him to accomplish this important enterprise.

I have the honor to be, very respectfully, your obedient servant, S. R. MALLORY, Secretary of the Navy. Hon. JAMES M. MASON,

Commissioner, &c., No. 54 Devonshire street, Portland Place, London.

It seems that previous to the departure of Mr. George N. Sanders for Europe certain legislation of the confederate congress, which had been proposed in the matter of contracting for the construction of iron-clad ships in Europe, encountered the opposition of that gentleman. The following memorandum from him on this subect is found among the intercepted papers. Addressed to "Reid Sanders," it was probably placed by the atter in the hands of Mr. Memminger or Mr. Mallory, respectively the secretaries of the confederate treasury and navy:

RICHMOND, August 5, 1862.

Any legislation in regard to the construction of iron-clad steamers until time is given me to get mine under way will be very unjust. My detention here was necessary to the perfection of the contracts, which took much time and reflection. The final instructions of the navy department have been issued but a few days. Bunglers entering the European market might endanger the entire scheme. Great skill and diplomacy must be exercised to avoid the interference of European governments.

No one is entitled to my suggestions until full time is given me to carry them out. GEORGE N. SANDERS.

REID SANDERS.

To this is added by Sanders the following list of names, consisting of persons connected with the confederate administration and congress. Several of the names, it will be seen, have a cross prefixed to them, intimating probably that they already favored his views, or needed to be still further approached on the subject. This supposition is, however, purely conjectural. The list is as follows, in G. N. Sanders's handwriting:

The following unsigned letter is also found among the captured papers:

SIR: As I contemplate leaving here without loss of time for Europe, for the purpose of rendering important and valuable service to the confederacy, I deem it proper to recommend to you the necessity of my having the co-operation of Commodore Forrest in the plans which have been suggested to you. He is an officer of experience, and well qualified to lend important assistance which may result in the complete realization of my hopes and expectations; indeed, if Commander Sinclair could also accompany me, or be sent out to give his attention to matters connected with the plans I have in contemplation, I am satisfied that with the professional knowledge of these gentlemen we cannot fail to subserve our interests and render high and important service to our cause, both in superintending and constructing the vessels built to cut up the enemy's commerce.

I have the honor.

Hon. S. R. MALLORY,
Secretary of the Navy.

The following memorandum appears to be in the same handwriting with the above letter, though much disguised or very carelessly written:

Gabreath & Co., of Scotland, and W. S. Lindsay & Co., of London, are the houses with whom I had the negotiation about the steamers. I request Captain Sinclair, of the confederate navy, to make all preliminary arrangement for the contract by my return. (See him first;) he will meet you in London.

George Thompson & Co., Glasgow, will make proposals for the construction of at least one steamer. They have the drawing and estimates complete. Lindsay & Co. will negotiate the naval store bonds.

B. Rice & Co. may undertake enough to load one vessel (Nova Scotia) with shoes and clothing under the North Carolina contract. Turpentine 100 should bring per gallon $2 ; rosin should bring $5 $4 bring $8.

C. S. NAVY DEPARTMENT,
Richmond, October 27, 1862.

SIR: I have the honor to call your attention to the copy of the secret joint resolution of congress, which was sent you on Saturday, and to so much of my recommendation to con