I also inclose a separate communication from Major Fergusson in relation to some pieces of artillery bought by a private citizen of Chihuahua from the rebels as they retreated from New Mexico. It is submitted if it would not be well for the President to present these pieces to the Governor of Chihuahua, who now has them in his possession. It would cement the good feeling now growing up between us and the Mexican authorities along the line.

You will also find herewith inclosed a copy of a letter from myself to His Excellency the Governor of Chihuahua, which touches on points that should be known to the War Department.

I am, general, very respectfully, your obedient servant,

JAMES H. CARLETON,

Brigadier-General, Commanding.

[Inclosure No. 1.]

MESILLA, ARIZ., February 13, 1863.

BrigadierGeneral JOSEPH R. WEST,

Commanding District of Arizona, Present:

GENERAL: I have the honor to report that, in accordance with your verbal instructions previous to my leaving for Chihuahua to make if possible arrangements to obtain intelligence of military movements of Texas toward New Mexico and Arizona, I endeavored to carry out your orders in the following manner:

Feeling my way cautiously, I commenced at El Paso to make inquiries regarding the status and political sentiments of Americans residing in Chihuahua. Mr. Reuben W. Creel, a native of Kentucky, a merchant in Chihuahua, was highly spoken of in El Paso by gentlemen entitled to confidence as a true loyal American; also Charles Moye, esq., a native of Hamburg and a naturalized American, and Mr. Henry Muller, but the latter gentleman was not in the country. Dr. Davis R. Diffendorfer, of El Paso, gave me a letter of introduction to Mr. Moye, which insured me a princely reception from this most hospitable gentleman and worthy American.

On my arrival Mr. Creel called upon me, and I was soon convinced he is a sound, enthusiastic, loyal citizen, unwavering in his devotion to the Union. He was the only native American resident who called during my stay in the city; a fair index of the political sentiments of the few others residing there.

Mr. Creel assured me that it was impracticable to obtain intelligence, political or military, from Texas through the medium of correspondence between merchants and business men residing in Texas and Chihuahua. The system of repression and espionage being so complete in Texas, no one dares allude in letters to the forbidden topics. All letters going through the mails are opened, and death is the penalty of alluding to the condition of public affairs.

I soon found no one would risk the lives of their correspondents living in Texas by writing on these subjects of intense to all. I therefore wrote a note (copy herewith) to each of the American consuls at Monterey and Matamoras, having been satisfied of their loyalty, asking them to assist in obtaining and forwarding the desired information.

I appointed Mr. Creel confidential agent of the military authorities of the Department of New Mexico. He undertook very readily and cheerfully to make every effort to gain intelligence by correspondence with the consuls named above, and with merchants and others in whom he has confidence at Monterey, Matamoras, &c. Mr. Creel addressed a