After the fleet got into the bay the Tennessee gallantly attacked it all and for more than an hour she withstood the combined pounding of 200 guns before surrendering. Fort Gaines is closely invested; our pickets are in half a mile of the glacis and the line of battle one mile. We are getting the 30-pounders into position slowly; the labor is severe owing to the deep sand and the great distance; everything has to be hauled and packed on the men's backs. All the landings on this island are difficult and uncertain owing to the wind and surf and shallow water, and nearly the whole of it is a quagmire of deep heavy sand hot enough during the day for roasting potatoes.

A deserter came in last night and states that there are about 1,000 men in Gaines and have two month's provisions.

I think it certain that the fort will hold out as long as possible. Last night they burnt all the outbuildings and cleared off everything obstructing their front. Last night we took possession of Little Dauphin and found some FIFTY splendid negroes who had been sent from Gaines the day before. One thing is certain that Farragut cannot get out of Mobile Bay except by running Morgan until that fort is reduced either by siege or starvation. I therefore deem it of vital importance that it should be invested as speedily as possible before supplies can be thrown into it from the land side.

The moment my guns are in position and I see what effect our fire will have upon the nerve and morale of the garrison of Gaines, I will come to New Orleans and talk the matter over with you and await your decision as to future operations. Captains McAlester and Palfrey coincide with me in opinion that it is neither practicable nor profitable to besiege Gaines, but that Morgan is the first objective point, and that its early investment is of vital importance to the fleet.

What news have you of the movements and designs of Kirby Smith and Forrest? For upon them will depend your ability to spare the necessary troops for operations in this quarter.

The rebel gun-boat Morgan passed outside last night and made her escape.

Yours, truly,

G. GRANGER,

COLUMBUS, OHIO, August 5, 1864.

Honorable E. M. STANTON,

Secretary of War:

Colonel Swords and Captain Brooks, of New Albany, met me at Cincinnati and acted very promptly. They undertook to prepare six boats inside of two weeks from last Friday and to provide the armament. I was to confer with you as to detailing the officers and men. I have not heard from them since; will ask their progress by telegraph this morning.

JNO BROUGH

COLUMBUS, August 5, 1864

Honorable E. M. STANTON,

Secretary of War:

Colonel Swords telegraphs that two boats are fitting up at Cincinnati; one more will arrive there to-day.

Captain Brooks is fitting up three at Pittsburg. All the boats will be ready next week; may be delayed a few days for guns and carriages.

J. BROUGH.