Third; Commercial property is that which has been or may be sold and purchased under the license of the President, through permits granted by the officers of the Treasury Department.

Fourth; Confiscable property is that which belongs to certain classes of persons, as recited in the Confiscation Act of July 17, 1862, and is liable to seizure and condemnation by judicial proceedings in the manner prescribed by that act.

Great care must be exercised in properly classifying all property, that the provisions of the law applicable to each class may be com plied with; and it must be remembered that with the property included in the fourth class, unless found deserted and abandoned, the Agents of the Treasury Department have no authority to interfere. The execution of the Confiscation Act is confided, by its express terms, to the President, by whom the Attorney General has been charged with the direction of all seizures and proceedings under it.

It must be remembered, also, that all property coming from insurrectionary districts into loyal States, or in reversed direction, or being transported within or to insurrectionary districts, in contravention of law or Departmental Regulations, is forfeited or forfeitable; and that it is the duty of the Agents of the Department, as well as of other proper officers, to enforce the forfeitures thus incurred; but property thus forfeited or forfeitable must not be confounded with confiscated or confiscable property, which is to be proceeded against and disposed of under the Act of July 17, 1862, or with prize property captured by the navy, and subject to disposition under the direction of Prize Commissioners and Courts.

In respect to property embraced in the first class, namely, abandoned property, it is to be observed that no Agent is authorized to make any other assurances than that property voluntarily abandoned shall be faithfully disposed of under the law, so as to secure, as far as practicable in the existing condition of the country, the rights of owners. No authority is given, or intended to be given, to agents to make any promises of special immunities or advantages not specified in the law.

In respect to both descriptions of abandoned property, whether found deserted or voluntarily abandoned, the law authorizes the pay. ment of such expenses as must necessarily be incurred in its collection, or receipt and disposition.

You will, therefore, pay all such expenses, including fees, taxes, freights, storage, charges, labor, and other necessary expenses, out of the general fund arising therefrom; being careful to avoid all useless or indiscreet expenditures, and to charge each particular lot or parcel with the specific or proportionate amount of expense pertaining to it, and, unless unavoidably prevented, to take vouchers therefor, to be filed with the account of sales in this Department.

Where property is liable to be lost or destroyed, in consequence of its location being unknown to the Special Agents, or from other causes, and parties propose for compensation to collect and deliver it into the hands of the Agents of this Department, at points to be designated by them, you may contract for the collection and delivery

thereof, on the best possible terms, not exceeding twenty-five per cent. of the proceeds of the property; which percentage must be full compensation for all expenses of whatever character incurred in collecting, preparing, and delivering such property at the points indicated. Prior to any contract being entered into, each party proposing must submit, in writing, a statement, as near as may be, giv. ing the kind and amount of property proposed to be collected; the location whence to be obtained; and all the facts and circumstances connected with it, particularly as to its ownership; and any contract made in pursuance of this authority will be restricted, either to the collection and delivery of particular lots at named localities, which is preferred, or, when circumstances clearly justify, to the general collection and delivery of all abandoned property in limited districts, not greater in any case than one parish or county, and not more than one district to be assigned to one contractor.

Before payment to any contractor for services in fulfilment of any contracts made in pursuance of this authority, a bond equal to the amount stipulated to be paid must be given by him, indemnifying the United States against all claims to the property delivered on account of damages by trespass or otherwise, occasioned by the act or connivance of the contractor, and against all claims that may arise on account of expenses incurred in the collection, preparation, and transportation of said property to the points designated in such

contract.

Should cases arise justifying, in your opinion, the allowance of a larger percentage than that herein authorized, you will refer such cases to this Department, accompanied by a statement of the facts. and circumstances connected therewith, together with such views and opinions of your own as you may think proper to submit for my consideration.

If property of a perishable nature is found abandoned, and its immediate sale is required by the interests of all concerned, it may be disposed of as provided for by regulations. You will aim to mitigate, as far as possible, and will in no case do anything avoidable to augment the calamities of war.

In relation to captured property you will observe the same directions, as far as they may be applicable, as to its receipt and subsequent disposition, as are prescribed in relation to abandoned property.

In relation both to captured and abandoned property, you will remember that no release must be granted to persons claiming ownership of property which has come to the possession of the Agents of the Department as abandoned, captured, or forfeited; nor must any permits be granted to individuals to remove such property; nor must personal favors, in any case, be extended to one individual or party rather than to another; nor must any liabilities be assumed or contracts made on the part of the United States not clearly warranted by law and the Departmental Regulations made in pursuance of law. In case furniture, or other movable property of like character, is abandoned or captured, you will cause it to be retained and left on the premises where found whenever it can be done with safety; other

wise, if practicable, and not attended with too great cost, you will have it safely stored and properly marked and numbered, and will report the facts to this Department and await further directions.

Your principal embarrassments will doubtless arise from questions relating to property of the third class, or commercial property.

The general purposes which, under the acts charging me with the regulation of the restricted commercial intercourse permitted by the President, I have kept steadily in view, have already been sufficiently explained in general regulations and in letters.

They may be briefly stated thus: (1) To allow within districts in insurrectionary States when the authority of the government is so completely re-established, in your judgment, sanctioned by that of the commanding General, as to warrant it, and between such districts and loyal States the freest commercial intercourse compatible with prevention of supplies to persons within rebel lines. (2d) To allow beyond such districts, but within the lines of our military occupation, such intercourse, sanctioned by the commanding General, as may be required to supply the inhabitants with necessaries, but to allow no other until the complete re-establishment of the national authority shall warrant it; and (3) To allow no intercourse at all beyond the national and within the rebel lines of military occupation; across these lines there can be no intercourse except that of a character exclusively military.

The limits of the districts within which the most general trade may be allowed must necessarily be prescribed by you, after full confer ence with the commanding Generals of Departments, whenever such conference is practicable, and these should be so clearly and distinctly marked by known geographical boundaries, or by the enumeration of counties, as to leave no uncertainty as to their course or compre. hension. The limits of the regions within which necessaries may be supplied cannot be so clearly defined, but must be ascertained as well as possible from the commanding Generals, and the power to permit any supplies within them must be exercised with great caution.

There does not seem to me to be so much danger in intercourse which does not involve the furnishing of supplies. If, for example, any person desires to bring cotton, tobacco, sugar, turpentine, or other property, already purchased, or to be purchased for money only, from any place within the lines of our military occupation, I can see no objection to his being permitted to do so, subject to the fees and obligations specified in the general Regulations, on his giving a bond in a sufficient sum, and with sufficient sureties, conditioned that no military, naval, or civil officers or persons, prohibited by law, or by orders of the President, or of the Secretaries of War or Navy, or of military or naval commanders having proper authority, from being interested in such property, whether purchased or to be purchased, shall be so interested therein. Intercourse such as this might, it seems to me, be safely permitted, almost, if not quite, coextensively with our lines of military occupation.

Should this view meet the approval of the Generals commanding Departments within your Agency, the question of intercourse within

the doubtful region between what may be called the commercial and the military line would be reduced to a question of the quantity of supplies allowed to be furnished for money.

It is impossible at once to arrive at the best possible ways of accomplishing the great objects which Congress had in view in the several acts relating to commercial intercourse; but if these objects themselves be kept steadily in view, namely, (1st,) non-intercourse between loyal States or districts, and States or districts controlled by insurgents; and (2d,) modified intercourse between loyal States or districts, and States or districts partially regained to the Union, the best modes of accomplishing them will gradually disclose themselves. You will diligently observe the course of events, and hear attentively all suggestions made by respectable and loyal citizens, and report to me whatever may seem to you proper for consideration in establishing or modifying the Regulations of the Department.

Nothing occurs to me as needing to be now added, except that hereafter the Supervising Special Agents may establish, in conjunction with, or obedience to, the Generals commanding Departments, lines within which trade, more or less limited, may be carried on without awaiting my sanction, taking care, however, to give as general notice as practicable, through the press and otherwise, of the establishment or modification of such lines. All action under this authority must be immediately and specifically reported to the Department.

With great respect,

WM. P. MELLEN, Esq.,
Supervising Special Agent, &c.

S. P. CHASE, Secretary of the Treasury.