DEMOPOLIS, May 6, 1864.

Colonel C. G. ARMISTEAD,

Demopolis, Ala.:

COLONEL: Knowing that you feel a very deep interest for the welfare of the whole country, but more particularly that portion embracing your old home, and the section of country including your farm on the Tallahatchie River, and thinking you can bring to the attention of General Polk the fact that a large and constant trade is going on in the way of sending cotton from Grenada to Memphis and from Tuscahoma, Choechuma, and the Tallahatchie River to Friar's Point, on the MISSISSIPPI River, I am induced to address and present you the following facts:

For several months past a large trade has existed between Friar's Point and the planters on the Tallahatchie River, and more recently has extended up as high as Tuscahoma and Choechuma; whole families and neighborhoods now visit the MISSISSIPPI with large amounts of cotton, exchanging it for goods and greenbacks and [so] large and lucrative has this trade become that planters have become commission merchants and take forward cotton, make sales, and return either goods or money, and so tempting is the opportunity for robbing and jayhawking that large numbers of soldiers have deserted and now occupy the swamp and carry on a general of robbery. From Grenada to Memphis it is still worse; cotton is now and has been for some time past loaded on the cars of the MISSISSIPPI and Tennessee Railroad, taken up to the terminus of the road, and then hauled to Memphis. The negroes are now engaged in the trade and taking up cotton and purchasing goods. Agents are employed to purchase cotton, I am informed, for parties in Memphis, not yet to be moved. For some time part there has [been] no difficulty to procure passes to go or return from Memphis. The Federals offer no opposition to persons who go in with cotton and pass them out again without restraint. Will you not bring this matter to the attention of the commanding general, that orders may be given to commandants of posts and pr-marshals to remedy the evil.

I am further informed that several parties represent that they have orders from General Polk authorizing the trade and permits to take up cotton and purchase goods. The trade has so depreciated Confederate money, you can make no purchases only for cotton or greenbacks; and the demoralization is so great among the people that the country mentioned will be ruined unless the intercourse is broken up.

I am, colonel, very respectfully, yours,

LEVIN LAKE.

[First indorsement.]

DEMOPOLIS, ALA., May 7, 1864.

Respectfully referred to Major Douglas West, assistant adjutant- general, with the statement that I know the writer to be one of the most reliable citizens of Grenada, Miss. ; that I have seen letters corroborating his statements, and fully indorse him for integrity and reliability. He is in the service of the army and for prudential reasons does not desire his name connected with an investigation of the matter unless absolutely necessary.

C. G. ARMISTEAD,

Colonel, Commanding Post.