draught high-pressure steamer, for making reconnaissances. She went over to Biloxi the other day, and from all I can learn I should judge that a great deal of property lies exposed to us on the northern shore of the sound. If so, the condition of affairs presents the curious spectacle of a rebel army lying in wait to seize upon Washington, staking everything upon the hazard of seizing upon our capital and its capital influences with the unrelenting determination of accomplishing our ruin, while at the same time they leave their rear comparatively unprocted. and their property exposed in a way that appeals rather to mercy and pity than to the ordinary visitations of war. I may possibly be mistaken in this view of thing. The waters of the opposite coast are very shallow, and may be regarded as unnavigable for all our vessels except the Lewis, which for various reasons has not been in condition for reconnoitering till within the last week or fortnight. I shall endeavor to extend our knowledge of this region of country by all the means in my power, which however, are exceedingly limited. It might become desirable to transfer our camp to the northern shore, and especially if the rebellion should continue through the summer. The glare and heat of the sand of which the island is composed would probably be intolerable during that season. The depot, however, must be here, whatever direction the forces may take.

So convenient thus far have we found the harbor, admitting easily of large vessels of war, that, taken together with the modern tendency of building large vessels, I think that it must become of more importance than New Orleans. By means of railroads terminating on the other shore, and large vessels, like the Constitution, I think that it would be cheaper to dispatch a cargo of rice or cotton from this point than it would be from the month of the Mississippi. The question is whether we ought not to adopt a plan from very beginning with regard to this point and begin its execution at once; for under any circumstances, holding in view even a temporary independence of the South, the possession of the island would be valuable to us. The opposite shore is comparatively healthy, and by means of long wharves and light-draught steamers vessels could be expeditiously laden at this point in almost any weather that we have had since being here. It would be economy in the long run to follow. The plan should be well matured, covering at least a period of thirty years, and be left with the head of the Engineer Corps for preservation and execution.

JANUARY 8, 1862.

I am informed that the mail will leave to-day for the North.

It may be well to state that the Schenkl shot that have been supplied to the battery appear to be too large in their paper envelopes, these envelops or cylinders fitting too close for a foul piece. The only means that I have of reducing them is to them through a hot ring.

Just previous to my leaving Newport New I applied for two officers viz, Lieutenant Tyler, of the Second Vermont, and Lieutenant Holbrook, of the Fourth Vermont, as staff officers. I have heard nothing from them since, but I trust that the application has been favorably entertained and the officers authorized to report to me for duty. Without either a staff or the usual blank forms to do business by, my duties are rendered more difficult than they need be.

I am, sir, very respectfully, your obedient servant,

J. W. PHELPS,

Brigadier-General, Commanding.