As the enemy is congregating at Ship Island, I shall organize the forces here as rapidly as possible. The governor, at my request, has ordered all the independent volunteer companies to form into regiments and elect their field officers, which will give about 6,000 pretty well armed men in the city subject to call. Do they their general officers when called into service? A militia law has also been draughted and presented, which I think will make about one-third of the militia available at short notice.

Respectfully, your obedient servant,

M. LOVELL,

Major-General, Commanding.

NEW ORLEANS, LA., December 27, 1861.

Honorable J. P. BENJAMIN,

Secretary of War:

I have made into good powder all the saltpeter sent. Can you spare any more?

M. LOVELL.

WAR DEPARTMENT, C. S. A., Richmond, December 27, 1861.

Major General BRAXTON BRAGG,

Pensacola:

MY DEAR SIR: When we sent General A. S. Johnston to take command of the Western Department it was believed that he would proceed at once to the west of the Mississippi and conduct the campaign in Arkansas and Missouri. The obtaining possession of the latter State is of such supreme importance, that I need not say to you a word on the subject. Before, however, General Johnston reached the Mississippi the threatened invasion of Tennessee and the advance of the Federal forces into Kentucky rendered it necessary to detain him in this latter State, equally important as Missouri to the Confederacy, and threatening more immediate danger, especially when considered in connection with the menaced attack on out lines of communication by railroad through East Tennessee. At that time, too, the Department of Missouri was committed by the enemy to Genera Fremont, whose incompetency, well known to us, was a guarantee against immediate peril. All this is now changed. Missouri is under command of an able and well-instructed military commander. Dissensions exist between General Price and General McCulloch which prevent their cordial co-operation. We are threatened with grievous disaster. McCulloch has put his army (of about 9,000 excellent troops) into winter quarters in Northwestern Arkansas. Price has advanced alone,a nd we fear with fatal rashness, into a district of country where he is likely to be surrounded and cut off by overwhelming forces,a nd the Army of Missouri is represented to be a mere gathering of brave but undisciplined partisan troops, coming and going at pleasure, and needing a master mind to control and reduce it into order and to convert it into a real army.

After long and anxious consultation with the President we can find no one but yourself on whom we feel we could rely with confidence as commander-in-chief of the Trans-Mississippi Department; yet we do not know how to fill your place at Pensacola. Missouri, however, must not be lost to us, even at some risk of misfortune at Pensacola.