SELECTED LETTERS OF SALMON P. CHASE

NEW ORLEANS, August 12th, 1863.

DEAR SIR: I returned two days ago from Memphis. My journey was partially unsuccessful, because Mr. Mellen was absent, but I had interviews with Gen. Grant, and other Generals commanding Posts, and acquired considerable information from Mr. Yeatman.
The people all along the River, and throughout Western Mississippi, are abjectly submissive. I never supposed a people who had boasted so much, could be so thoroughly subjugated. The organization of negro troops is progressing tolerably well both here and in Gen. Grant's Department, but in Grant's army I perceive a prejudice against negro troops which does not exist here. I don't mean to say that it is general, but it is noticeable, although every one spoke highly of the fighting qualities of the negro troops as displayed at Milliken's Bend and other places. The great trouble in organizing negro troops anywhere along or near the River, is that the "prime hands" have all been removed to Texas, or Eastwardly into Alabama. We shall get at them before long however.
Mr. Plumly has gone to Natchez and will return in two or three days. I think I told you that one of his sons is colonel in a negro regiment here. His other son commanded a battery in Ellett's Marine Brigade, but Mr. Plumly has caused him to be transferred to this Department, and he is now raising a colored battery. Both these young men are fine officers.
A great expedition against Mobile is in preparation. I do not know how many men will be used, nor in what manner nor at what time the attack will be made, but a portion at least of Grant's Army will go, and I think the expedition will start very soon - say in three or four weeks. After the capture of Mobile, I understand the long-deferred Texas expedition will start, and will advance from here probably by way of Red River.
Mr. Plumly has had a full conversation with Gen. Banks concerning political matters. I have seen him but once since the conversation and then for a few minutes only and therefore I cannot now give you a full report of the conversation. I only can say that Gen. Banks states positively that he has no alliance with Mr. Seward and never has had any. That he was approached with a proposition to make such an alliance, which he did not accept. That Seward's friends, for their own purposes, have frequently created the impression that such an alliance existed, when it never has existed - and that he is under no obligations to them. That he regards you as the power at present in the Government, and would be willing to come to an understanding with you.
I believe what Gen. Banks says, and think I have correctly reported the substance of his statements. Mr. Plumly will return in three or four days, when I write you fully concerning this matter. He left two days before my return from Memphis, and probably expected to meet me somewhere in the river.
I now know that the letter I wrote you from Memphis was unnecessary. The Collector at St. Louis, advertised the collection of 5 per cent. on shipments to New Orleans, as I told you, but reed. proper instructions from you before the tax was exacted. Shipments of the Produce and live stock are coming here from St. Louis, and have already much diminished the cost of living here.
I am satisfied I did right in recommending the appointment of Mr. Hutchins in my place, as Collector of Internal Revenue. I have more than I can do, although I leave the business of the Internal Revenue almost entirely to Mr. Whitaker, the Deputy.
A great pressure is brought to bear on Mr. Flanders and myself by holders of cotton and speculators, who are urgent to bring their crops to the City by the River. Gen. Banks agreed to furnish Mr. F. with a plan whereby all interests would be protected. He submitted to Mr. F. to-day, a general order on the subject, of which I quote two sections, which are the main features of the order.
"The owners of cotton and other staple products of the country are hereby authorized to transport the same to the Mississippi River at New Orleans, Donaldsonville, Plaquemine, Port Hudson, or other points occupied by troops 'of the United States, and deliver the same to the authorized agents of the Treasury Department to be disposed of for the benefit of the Gov't. according to law. Such owners or their Agents shall be entitled to receive upon such delivery, in the Treasury notes of the United States, at the rate of cents par pound for cotton, and a proportionate sum for other staple products."
"Loyal persons will be permitted, in addition to this payment, to present claims to the Government for such additional payment hereafter as may be deemed equitable and just. But no person shall be held or considered to have an absolute claim against the Gov't. except for the sum specified which is to be paid upon delivery of the property."
I do not approve, and shall advise Mr. Flanders, not to accept the foregoing, for various reasons - viz. - because I suppose the Gov't. does not wish to speculate in cotton - because I. do not think it will bring in large amounts - because I have understood that the Gov't. had once considered the purchase of southern products by itself, and decided not to do it-because the labor will be immense much dissatisfaction will necessarily be created, and because the whole thing being managed by Treasury officers, the responsibility, blame if there be any, will fall upon the Treasury Department. I should not want to consent to such a new and decided project, without your previous sanction.
I should rather Gen. Banks would increase the tax to $50 per bale, or say, ten cents per pound, which should be the aggregate of all taxes imposed, and then permits would be issued to purchase anywhere on the Mississippi. In this case the Gov't. would be saved great labor and would receive large returns - and would not act as speculator. Besides I think this would bring forward much more cotton, after it was generally known. Gen. Banks and Mr. F. will, I suppose, settle on some plan in three or four days.
The city is very healthy and there are no signs of yellow fever. There are a few cases at Quarantine, as there always are, but probably we shall have none in the city this season.
I failed to mentioned, that Gen. Banks does not define our military lines within which trade can be permitted and probably cannot, as they frequently change. The Lafourche is the only section strictly and wholly within our lines, but that is not a cotton country.

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