The work on the defenses of this town is progressing very favorably, and before long I expect the town to be sufficiently fortified to be held by a small force.

The construction of the works for the defense of Washington is rapidly approaching completion.

The work on block-houses on the line of the Atlantic and North Carolina Railroad is going on with proper dispatch.

There are now three light batteries, of four guns each, organized and mounted, taken from the Third Regiment New York Volunteer Artillery. They are being drilled assiduously, and will soon reach that state of proficiency that will enable them to be most useful in attack or in defense.

There is from the same regiment another battery of six guns organized, which will be mounted from the horses arrived by the Cahawba (100 in number). I look forward to having a comparatively large and efficient corps of light artillery.

The health of the department, I am very happy to say, is improving, the new cases being mostly of milder form than before, but I have deemed best to establish a general hospital at Portsmouth, so as to remove as much as practicable the sick from the hospital in this town t the sea-breezes and purer air of Portsmouth. I have used the marine Hospital built by the United Stated Government for the purpose.

I have the report that, at the request of Major-General Burnside, nine Sisters of Mercy have arrived from New York, to take charge of the hospital at Beaufort, and under their kind and educated care I hope for a rapid improvement in the health of the patients. The Rev. Mr. Bruehl, their priest, accompanied them, and, in consideration of the worthiness of this gentlemen and of the large number of Catholics in the New York regiment attached to my command, I most earnestly recommend that he be appointed chaplain of the United States hospital at Beaufort, N. C.

Chaplain James Means has arrived at this place, and having presented his appointment as chaplain for the United States hospital at New Berne, has been assigned to duty accordingly.

I am, sir, with great respect, your obedient servant,

J. G. FOSTER,

Brigadier-General, U. S. Army, Commanding Department.

HEADQUARTERS DEPARTMENT OF NORTH CAROLINA,
New Berne, N. C., July 29, 1862.

Honorable E. M. STANTON,

Secretary of War, Washington, D. C.:

SIR: I have the honor to report that all is well in this department. The work on the fortifications at this point and at Washington is progressing well. At the latter place the fort is ready to receive its guns. This work, with the block-houses being erected and with the gunboat in the river, will make the place secure against any small force. The block-houses on the line of the Atlantic and North Carolina Railroad, between here and Beaufort, are going on well. The health of the troops continue about as last reported.

The condition of the hospital at Beaufort is improving, and the comforts of the men are being admirably looked after by the Sisters of Mercy, recently arrived from New York.