General Canby the control of matters on the great river. I have sent by telegraph to General Washburn a copy of your dispatch, with an order to be governed by it, but it will need some further orders to make things straight. I will see General Howard to-day, and we will submit some proposition that will give General Canby all the troops of the Department of the Tennessee resting on the Mississippi, but for the sake of accountability we should have sent to this army certain detachments that resulted from the General Banks expedition. You will remember that I made up my Meridian force out of the SIXTEENTH and Seventeenth Corps, and when General Banks asked for 10,000 men for one month on Red River we made up the force by using troops, non-veterans, and availed ourselves of the lull to furlough the veterans. In this operation some considerable confusion was made in old DIVISIONS, brigades, and even regiments, so that still fractions of these are here and the other fractions down the Mississippi, making it very difficulty to preserve the standard organizations. My orders to General Washburn were to let General A. J. Smith sweep across North MISSISSIPPI and reach either Eastport or Decatur, whence I would draw these fragments and the DIVISION of General A. J. Smith, which was designed to form a part of General McPherson's column, and send the balance, including the cavalry, back. I only gave this order after I knew that Stephen D. Lee had joined General Johnston at Atlanta with a large part of the MISSISSIPPI army. I think it would be well, if possible still, to send here by river and rail, if necessary, the fragments to which I refer, which cannot amount to more than 2,000 or 3,000 men, and leave General Canby the balance.

Our casualties here from death, wounds, and sickness have been and must continue large, but we lose more by the expiration of service of regiments and individuals. I think more than half this army is entitled to discharge between this and October, so that if Hood can simply hold on here he will be enabled to defeat us by the superior method they have of recruitment. In the South all men are soldiers, and they are not held for limited terms, but for life if the war lasts that long. In the end we must adopt the same plan, but in the mean time may lose the result of all former labors and have to commence de novo.

If General Canby can hold the river and prevent Kirby Smith passing over (which he cannot, for the men pass by individuals and meet at some rendezvous in Mississippi, whence they come in organized masses to Hood), he will accomplish the same result as here. Also the operations up the Alabama are of equal assistance to me. I would not take Mobile city, for that would simply tie up a garrison, whereas now Gury holds it with a Confederate garrison which is lost to our opponents. A single gun-boat can watch Fort Morgan, and if I am not in error, General Gordon Granger's troops could go up the old Spanish channel by Blakely and reach Selma, and it may be Montgomery, which would compel Hood to detach as against him, for a large portion of the Confederate supplies come through the reach of the Alabama River between Selma and Montgomery.

I beg you will submit these views to the lieutenant-general commanding, and I will be perfectly satisfied if the troops hitherto subject to my orders can be directed to the accomplishment of these ends.

I am, with great respect, your obedient servant,

W. T. SHERMAN,

Major-General, Commanding.