James A. Seddon to C. J. McRae, January 6, 1864

Burlington Hotel, London, England:

Sir: Hon. J. E. Ward, of Georgia, has submitted to the Department plans suggested by certain capitalists in London, who are large holders of cotton bonds, to which he has sought my approval. The plan contemplates in substance that the bondholders subscribe 10 per cent. of the amount held by them, to be appropriated to the purchase or construction of steamers, which are to be turned over to the Confederate Government on condition that, being sailed at the expense of the Government, they shall be employed in transporting cotton to England, which shall there be sold and the proceeds applied, one-fourth to the payment of the cost of the steamers; one-fourth to be applied to keeping up the number of steamers, and the residue to the payment of the bonds held by the subscribers to the fund. The Government running the boats is to have the control and use of them for return cargoes. These are the leading features.

There are some stipulations of minor character to the approval of Messrs. De Vaux & Co., the parties selected as the consignees of the cotton and the agents of the subscribers, which would require modification, as the dignity of the Government would require such matters to be left to its own control and good faith. The general scheme, as you will perceive, is addressed rather to the discretion of the Secretary of the Treasury, who must determine the time and mode of discharging the cotton bonds, than to myself, from whom only an expression of opinion has been sought by Mr. Ward. I have no hesitation in saying that such a plan would be beneficial, in my judgment, and I deem it probable you have received, or will receive, from the Secretary of the Treasury some expression of like general approval. It would, of course, be even more acceptable if some portion of the proceeds of the cotton sent out in these vessels could be appropriated to the more immediate and pressing necessities of the Government; but as the vessels would be furnished without expense to us, and an adequate return for the charge of running them would be afforded by the return cargo, and as, moreover, the whole proceeds of the cotton would in one form or another inure to the benefit of the Government, it does not appear to me that the point could in equity be insisted on. You will, of course, endeavor to obtain it if practicable.

On another point, however, there should be a clear understanding, and that is, that while the Government will use all reasonable efforts to supply the cotton to these vessels promptly and regularly, if, through deficiency of transportation or otherwise it should be unable to provide at our ports the cotton which it has the means of sending out directly for its immediate necessities, and likewise the cotton required for these steamers, preference will be given to the export of the former. The reasonableness of this, it is expected, will be seen and acquiesced in. These are at best but opinions expressed in a matter not strictly subject to my direction, but only collaterally connected with the business which has been thrown on this Department. They will, of course, not be regarded by you as instructions. So far as I am concerned, the matter is cheerfully left to your discretion, acting under the more direct instructions, whatever they may be, which may be given by the Secretary of the Treasury.

Very respectfully, your obedient servant,