OR, Series 4, Vol. 2, Page 1012

Confederate States of America, War Department
Richmond, November 26, 1863
 
His Excellency Jefferson Davis
President Confederate States of America
 
Sir,
   I have the honor to submit the following report:
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   The administration of the Department in all its extensive operations has been greatly impeded by the deficiency of transportation, especially on railroads. Shut off from the sea, and with command of very few of its rivers, the Confederacy is dependent almost wholly on the railroads for communication and transportation. The roads were not constructed with reference to such extensive needs, and even in time of peace, with all facilities of supplies and repairs, would have been inadequate to such duties. How much less in time of war, with every drawback of deficient labor, insufficient stock, defective machinery, and scant supplies, and with exposure often to seizures or spoliations by the enemy, could they be expected to meet such unexpected requirements. It must be matter of surprise and gratification that they have sustained themselves so well and have afforded to the Government and the people the measure of accommodation they have. It is but a just tribute to them to say that in the main they have been managed in a patriotic spirit, and have rarely failed to meet the requirements of the Government with alacrity and zeal. It has not been necessary during the year to exercise the large discretionary powers of control vested by Congress in the Executive over the railroads, for if repugnancy existed to the just demands of the Government the known possession of such powers has sufficed to exact compliance. But while the dispositions of the railroad companies have been good, their means have gradually been becoming less. The Government has already given to many some aid, but will have hereafter to render fuller and more constant assistance. Some of the minor roads will have to be sacrificed to keep up the tracks of the leading lines. Iron will have to be provided and rolled for machinery and the construction and repair of locomotives and rolling-stock. Skilled mechanics, to some extent, will have to be furnished from the Army, and for some of the more delicate machinery needed by them importations from abroad may have to be attempted. With these aids it is hoped they may not only be maintained, but improved in their means of transportation. The lowest point of depression has probably passed. For the first year or more, under the delusive expectation of the early termination of the war, the companies relied almost wholly on their existing stock, and made few efforts at supply or reparation. They scarcely husbanded their resources, which, under the exhausting demands made on them, became greatly diminished. Of late, with more experience, a wiser prescience guides their management, and besides practicing economy of means they are sedulously engaged in endeavoring to increase their stock, and to provide for the contingencies of future service or loss. In their best estate they will not be able to furnish adequate facilities of transportation for both the Government and the people. From considerations of public utility and supreme duty, as well as from their dependence on the aid of the Government, they should be required by law, as nearly all have engaged by contract to give preference in all cases to Government freight, so as to command all their means of transport when necessary. Beyond that it is the fixed rule of the Department to make no exaction on them, and to attempt no regulation of their surplus means of transportation, or to award no special privileges to any in their use, but leave such free to the discretion and management of their officers. On this subject misconception has often prevailed, and the charge of favoritism has been alleged against the Department, but on no point has inflexibility been more steadfastly maintained and all special privileges denied.
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   The Department was aided in effecting this arrangement {regarding blockade running}, not only by the patriotic feelings of the private owners, but also by the facilities it was enabled to afford them in commanding cargoes of cotton without unnecessary delays through the preference in transportation given by the railroads to cotton ordered by the Government. Hence, in view of the importance of continuing these arrangements with private merchants, it has become more than ever essential that the priority of transportation on the railroads should be maintained to the Government, for under present laws by that preference alone can these arrangements for the exportation of cotton be continued.
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Respectfully submitted,
James A. Seddon
Secretary of War

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