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Knox's letter seems clear to me that he was complaining about theft by the bakers.

> and often times more, as they put as great a proportion of water as they please, there being no person whose duty it is to superintend them




The way I understood that passage, soldiers were expecting to lose around 30% of their flour in the deal, but some bakers figured out they could take a larger cut by adding more water. That doesn't necessarily mean the practice of taking a cut is forbidden, only that some bakers gave a worse deal than others.




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