The Southern loyalists are willing, as I understand, to furnish their share of the tax for the support of the war, but they should also furnish their quota of men, which they have not thus far done. An opportunity now offers of supplying the deficiency, and it is not safe to neglect opportunities in war. I think that with the proper facilities I could raise the three regiments proposed in a short time. Without holding out any inducements or offering any reward I have now upward of 300 Africans organized into five companies, who are well willing and ready to show their devotion to our cause in any way that it may be put to the test. They are willing to submit to anything rather than to slavery.

Society in the South seems to be on the point of dissolution, and the best way of preventing the African from becoming instrumental in a general state of anarchy is to enlist him in the cause of the Republic. If we reject his services any petty military chieftain by offering him freedom can have them for the purpose of robbery and plunder. It is for the interests of the South as well as for the North that the African should be permitted to offer his block for the Temple of Freedom. Sentiments unworthy of the man the present day, worthy only of another Cain, could prevent such an offer from being accepted.

I would recommend that the Cadet graduates of the present year should be sent to South Carolina and this point to organize and discipline our African levies, and that the more promising non-commissioned officers and privates of the Army be appointed as company officers to command them. Prompt and energetic efforts in this direction would probably accomplish more toward a speedy termination of the war and an early restoration of peace and amity than any other course which could be adopted.

I have the honor to remain, sir, very respectfully, your obedient servant,

J. W. PHELPS,

Brigadier-General.

[Inclosure No. 2.]

CAMP PARAPET, LA., July 31, 1862.

Captain R. S. DAVIS, A. A. A. G., New Orleans, La.:

SIR: The communication from your office of this date, signed "By order of Major-General Butler," directing me to employ the contrabands in and about my camp in cutting down all the trees between my lines and the lake, &c., has just been received.

In reply I must state that while I am willing to prepare African regiments for the defense of the Government against its assailants I am not willing to become the mere slaye-driver which you propose, having no qualifications in that way. I am therefore under the necessity of tendering the resignation of my commission as an officer of the Army of the United States, and respectfully request a leave of absence until it is accepted, in accordance with paragraph 29, page 12, of the General Regulations. While I am writing, at 8.30 o'clock p.m., a colored man is brought in by one of the pickets, who has just been wounded in the side by a charge of shot, which he says was fired at him by one of a party of three slave-hunters or guerrillas a mile or more from our line of sentinels. As it is some distance from camp to the lake, the party of wood-choppers which you have directed will probably need a considerable force to guard them against similar attacks.

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

J. W. PHELPS,

Brigadier-General.