FORT CRAIG, N. MEX., March 7, 1862.

COLONEL: As our communications via Santa Fe will probably be interrupted, I wish you to send me by reliable expressmen, and as frequently as possible, any information that you can gain with regard to the movements of troops coming into the Territory, and any other information that would be useful in our present position.

Our wounded are all doing well, and the men are in good spirits.

Very truly, your, &c.,

ED. R. S. CANBY.

Colonel G. R. PAUL.

DEPARTMENT OF STATE,

Washington, March 13, 1862.

Honorable E. M. STANTON, Secretary of War:

SIR: This Department has recently had correspondence with the Department of War upon the subject of the occupation of a part at least of the west bank of the Rio Grande, for the purpose of preventing trade between the adjacent region of Texas and the Mexican bank of the river, particularly Matamoros. Though fully appreciating the objections and difficulties suggested by the military authorities against that occupation at this juncture, I cannot forbear to mention a recent marked instance of its importance.

There has in all probability been an extensive importation of merchandise, especially contraband of war, into Matamoros, destined for the insurgent States, and an exportation of cotton from those States through the same channel. Our right to blockade the mouth of the Rio Grande for the purpose of preventing this commerce may be considered as at least questionable. A British steamer, with a cargo of cotton, has recently been captured near the mouth of that river, and has been sent to New York for adjudication. In all probability this Government will ultimately have to pay heavy damages for this capture. A military force, however competent to guard the roads leading toward Matamoros from Texas, might check the carriage of cotton to that port, and consequently the temptation to vessels to proceed thither and exchange it for contraband of war.

I have the honor to be, sir, your obedient servant,

WILLIAM H. SEWARD.

HEADQUARTERS EASTERN DISTRICT,
Fort Union, N. Mex., March 17, 1862.

The ADJUTANT-GENERAL U. S. ARMY,

Washington, D. C.:

GENERAL: I have the honor to state that on the 9th instant Colonel Canby was still at Fort Craig awaiting the arrival of re-enforcements. His note to Major Donaldson is herein inclosed.* The enemy has ascended the Rio Grande and taken possession of Albuquerque and Santa Fe. Their main body is at or near the former place, and their advance guard is at the latter. I expect an answer to-morrow from Colonel Canby to a dispatch I sent him proposing a plan for his relief. As soon as it reaches me I shall move forward. I have just written a communication to His Excellency Governor W. Gilpin, of Colorado Territory, urging him to send forward all the assistance he can to the re-

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*Not found herewith, but see inclosures to Paul's letter of March 11, p. 646.

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