Gloria, I'll be watching to see the answer as well, since I too am working on the rectangular base for a felted bag and knit the first couple of rows in garter without doing a slipstitch edge as I usually do.
What I meant to do, and what will make things easier for you in the future as well, is to knit the garter rectangle with a slipstitch edge. I do it with a single manuever at the beginning of every row. With the yarn in front, slip the first stitch as if to purl. Put the yarn back and do the rest of the row in knit as usual. You'll have a nice garter rectangle with what looks like a single stockinette stitch on the edge. It's much easier to do your picking up that way.
There are other ways to do the slipped stitch edge besides this one, but I prefer this method because you only have to do something at the beginning of each row, and other methods usually have you do something at each end. Just a little easier to remember for me!
OTN: French Market Bag, Knitty
Craftster Circular Shrug
Saturday Market Bags (2 at once!), Magknits