ORN, Series 2, Vol. 2, Page 241

Confederate States
Navy Department, Richmond, August 16, 1862
 
The President
  
Sir,
   I have the honor to report to you the operations of this department since the 27th of February last, the date of my last report.
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   The want of expert workmen is felt in every workshop, public and private, some of which have had to discontinue operations, while others are employing only a third or a half their productive capacity.
   The want of expert mechanics and of iron and the absence of tools and workshops for such work as heavy ironclad ships require, greatly curtail the ability of the Confederacy in the construction of this class of vessels.
   From the want of mechanics, contractors with this department for steam machinery, ordnance, and ordnance stores, and the hulls of vessels and for lumber and iron, fail to fulfill their engagements.
   The scarcity of mechanics is attributable to the fact that a large portion of those employed in the Confederacy were Northern men or foreigners, who have, in consequence of the war, left the country, while our own mechanics are generally in the Army.
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   Certain patriotic citizens of Georgia having constructed a floating battery sheathed with railroad iron for service in the Savannah River, and tendered her to this Government, she has been received, armed, manned, and equipped by this department.

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Iron and Coal

   The appended report {not posted}, marked "G," of the officer in charge of ordnance will exhibit the contracts and advances made by this department for iron and coal. Favorable representations having been made of iron and coal deposits in Cass and Harrison Counties, Texas, an agent has been dispatched there empowered to make such contracts as will encourage their development, and the manufacture of iron plates and ordnance.
   In addition to these contracts, in conjunction with the War Department, the following have been made:
   F. B. Deane, jr., & Son, of Lynchburg, Va., for 4,000 tons of shot and shell, to be delivered within two years.
   J. R. Anderson & Co., of Richmond, Va., for cannon, shot, shell, bolt, bar, rod, plate, and boiler iron, to the amount of $2,000,000 annually, for two years.
   Messrs. Quinby and Robinson, Etowah Works, Georgia, for cannon, shot, shell, bolt, bar, rod, plate, boiler, and railroad iron and car springs to the amount of $1,500,000 annually for two years.
   The report of the officer in charge of ordnance, showing the progress and condition of the ordnance work shops at Richmond, [Va.], Charlotte, N. C., and Atlanta, Ga., and the powder mill at Columbia, S. C., is also appended {not posted}, marked "H."
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Production of Iron

   The want of iron is severely felt throughout the Confederacy, and the means of increasing its production demand, in my judgment, the prompt consideration of Congress.
   The Government has outstanding contracts amounting to millions of dollars, but the iron is not forthcoming to meet the increasing public wants.
   Scrap iron of all classes is being industriously collected by agents of the Government, and we are now rolling railroad iron into plates for covering ships, while the condition of the roads admonish us that they will soon require extensive supplies. The freight upon imported rails at this time, independent of all risks, exceeds three times its original cost.
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I have the honor to be, very respectfully, your obedient servant,
S. R. Mallory
Secretary of the Navy

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