portation when necessary. I have limited that power however to transportation in Texas; that coming into Texas owned by Mexicans and foreigners bringing in supplies must not only be exempted from impressment, but must be protected. As the enemy is expected daily on the Rio Grande I have directed that the cotton now on its way to Brownsville should be diverted to Ringgold Barracks on the landing of his troops. I presume the lieutenant-general commanding is informed that the Lower Rio Grande, from Ringgold Barracks to the mouth, has been virtually given up, being occupied by only a few hundred cavalry, and that the guns have been stored at San Antonio. This I found on my arrival; also that almost the whole of the coast is in possession of the enemy. Arms are our principal need. I brought only 1,000 small-arms with me, and know not when I shall get any more from the other side of the Mississippi. If Lieutenant-General Holmes can send arms to Texas I beg that he will do so without delay, and if he receives any from the Government I request that a portion of them be ordered here. There are none to be had in Mexico, nor do I see the least prospect of getting them from abroad for a long time to come, if ever. Being contraband of war, merchants (foreign) will not run the risk of the blockade. As Major Hart has great experience as a merchant, has the confidence of the President and War Department, and is more likely than any one I know to bring order out of the chaos I find the cotton trade in here, I respectfully recommend to the lieutenant-general commanding the department the publication of an order directing all agents for the purchase of cotton to report to him, and that he be invested with authority from the headquarters of the Trans-Mississippi Department to superintend all the cotton arrangements of this district, carrying out contracts already made by agents properly authorized. I have heard of many agents here for the purchase of cotton, and am already satisfied that they are acting without proper authority and that their course has almost deprived the Government of the means of transporting cotton. I heard of one, a heavy operator, acting under authority from General Lovell, given before the fall of New Orleans. There is very conceivable scheme presented to evate the last orders of General Holmes on this subject, patriotism being generally the basis upon which rascality raises its structure.

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

J. BANKHEAD MAGRUDER,

Major-General, Commanding.

PORT HUDSON, December 17, 1862.

Lieutenant-General PEMBERTON:

Fourteen gunboats and sloops are at Baton Rouge this morning. The Essex has started up.

WM. N. R. BEALL,

Brigadier-General, Commanding.

PORT HUDSON, December 17, 1862.

General PEMBERTON:

Report is that between 6,000 and 7,000 of the enemy at Baton Rouge.

WM. N. R. BEALL.