HEADQUARTERS DEPARTMENT OF THE GULF, New Orleans, September 10, 1862.

Dr. W. N. MERCER,
President Bank of Louisiana:

SIR: I have carefully examined the memoranda of resolutions passed by your board of directors and submitted to me on the subject of drawing against the specie of your bank now not in its vanits.

The proposed arrangements, if carried out in good faith, would reassure the standing of the bank, save its stockholders from loss, and benefit the currency of New Orleans.

With these views I consent to it on behalf of the United States Government.

I have the honor to be, your obedient servant,

BENJ. F. BUTLER,

Major-General, Commanding.

HEADQUARTERS DEPARTMENT OF THE GULF, New Orleans, September 10, 1862.

General RICHARD TAYLOR, Commanding, &c.:

GENERAL: I received your letter by the Hon. R. C. Wickliffe, in whom I once recognized a gentleman of the highest respectability, but I take leave to suggest that a flag of truce leaving communications from one military officer to another is usually in charge of an officer of the command of the party sending it. I am pleased to be informed as to the command of the Confederate forces on the western side of the Mississippi.

No information has reached these headquarters save by your note of the occurrences of which you write.

The troops at the Bayou de Allemands were an advance post, guarding a railroad bridge, and not an expedition at all, nor were they allowed to go on any expedition up the coast or elsewhere, so that upon this topic I am constrained to believe you were misinformed.

I need not say that acts such as you describe are neither ordered nor tolerated by the Government or by myself.

I inclose a copy of my general order and also the order of the War Department upon this subject.

That unlicensed acts are committed by troops on marching service is the well-known fact of all civilized warfare.

If any deeds such as you describe have been committed, and you will send me the written evidence which you have, together with the parties, my acts heretofore should convince you that they will be properly punished. Therefore if you have the guilty parties you will do well to allow them to be exchanged, as it will be impossible for me to ascertain their guilt if you retain them. I could have wished that this answer to your communication could have ended here and that you could have contended yourself not to threaten.

It is true you have 136 men duty enlisted in the Eighth Vermont Regiment, including their officers, but how captured? A part by ambush of a supply train. This savors rather of Indian than of civilized warfare. "But the worst remains behind." I am informed that the guerrilla force which made the capture of the post at Bayou de Allemands raised a flag of truce; that it was answered by another flag from my men, the bearers of which was seized and detained; that a second flag was sent