A severe snowstorm. Did not venture abroad. Had a call from Dahlgren, who is very grateful that he is named for admiral. Told him to thank the President, who had made it a specialty; that I did not advise it. He called with reference to a written promise the President had given one Dillon for $150,000 provided a newly invented gunpowder should prove effective. I warned Dahlgren that these irregular proceedings would involve himself and others in difficulty; that the President had no authority for it; that there was no appropriation in our Department from which this sum could be paid; that he ought certainly to know, and the President should understand, that we could not divert funds from their legitimate appropriation. I cautioned him, as I have had occasion to do repeatedly, against encouraging the President in these well-intentioned but irregular proceedings. He assures me he does restrain the President as far as respect will permit, but his “restraints” are impotent, valueless. He is no check on the President, who has a propensity to engage in matters of this kind, and is liable to be constantly imposed upon by sharpers and adventurers. Finding the heads of Departments opposed to these schemes, the President goes often behind them, as in this instance; and subordinates, flattered by his notice, encourage him. In this instance, Dahlgren says it is the President's act, that he is responsible, that there is his written promise, that it is not my act nor his (D.'s).
Something was said to me some days since in regard to the great secret of this man Dillon, but I gave it no attention, did not like the manner, etc. So it was, I apprehend, with the War Department; and then Dillon went to the President with his secret, which I apprehend is no secret.
SOURCE: Gideon Welles, Diary of Gideon Welles, Secretary of the Navy Under Lincoln and Johnson, Vol. 1: 1861 – March 30, 1864, p. 239-40