in the Rio Grande continues to be a serious embarrassment to all our operations.

Very respectfully, sir, your obedient servant,

ED. R. S. CANBY,

Colonel Nineteenth Infantry and Brigadier General Commanding Dept.

The ADJUTANT-GENERAL OF THE ARMY,

Washington, D. C.

JULY 4, 1862.-Attack on U. S. Vessels near Velasco, Tex.

Report of Colonel J. Bates, Thirteenth Texas Infantry.

HEADQUARTERS BATES' REGIMENT,
Velasco, Tex., July 5, 1862.

SIR: On the 3rd instant, at dusk, I received information form Captain William Saunders that there was a vessel outside, near San Luis. It was the impression of the pilots that she had some design upon a cotton schooner in the canal, intending to capture or burn her. At Captain Saunders' request I issued him an order to take 40 of his men, without delay, repair to the cotton schooner, and defend her.

On the morning of the 4th a schooner was reported near shore this side of San Louis, on the peninsula, and soon afterwards I saw a large steamer coming from the west. When near the schooner the steamer opened fire. I started immediately for the scene of action. The schooner was about 6 miles east of this place. When about half way to the schooner I met Captain Saunders and his command. I halted them, ascertained that the schooner had been beached, and was out of gun-shot of the shore. Our men had been driven off by a constant fire of the enemy of shot and shell. I felt that Captain Saunders and his men had performed all that was in their power and with much hazard to their lives. I perceived, also, that the cotton schooner was in line with the steamer and beached; schooner with her sails lowered. Captain Saunders informed me that he thought her crew had abandoned her. I at once ordered a forward movement of Captain Saunders' company as skirmishers, and sent an order back to Velasco to Lieutenant Moss to move forward, with Captain Clark's infantry company as a reserve, to defend the schooner in the canal, and have no doubt that the presence of Captain Saunders and his men saved the schooner from conflagration. Fire was now seen to be raging on the beached schooner and shells were thrown at all who attempted to approach her. Captain Saunders disposed of his men in detachments near the scene of action, and advanced with a few of his men under fire to the burning schooner. Soon afterwards the steamer got under way, apparently abandoning all design upon the schooner in the canal, and I ordered Captain Clark's company back to Velasco, and some of Captain Saunders' men also commenced to return, when, to my surprise, the steamer put back, came close in to shore near the cotton schooner, and landed three boats full of men under a brisk fire. Such of Captain Saunders' men who were within reach I ordered rapidly forward, with instructions to attack; others voluntarily returned, and shots were exchanged between the enemy and our force. The fire from the steamer upon our men became very galling, they firing round shot and shell at the rate of six per minute, and scattering our men whenever

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