HEADQUARTERS EIGHTEENTH ARMY CORPS, New Berne, N. C., August 20, 1863.

Major General J. G. FOSTER,
Commanding Dept. of Virginia and North Carolina:

GENERAL: Your private communication touching the flag of truce and the attack upon the Gaston House, has just reached me. These affairs occurred prior to my arrival, and I presumed that General Palmer had brought them to the notice of the naval authorities. Admiral Lee is here, but has not called upon me, as his duty, which probably results from a short but plain correspondence I had with him while at Suffolk, upon official matters. Your letter will be presented to him at once, as it embodies all that is necessary, and in better language, &c., than I could present the subject for his consideration. General Palmer will be called upon for a report, with the correspondence, &c.

No mail matter has been received since I left Old Point. If the quartermaster would sent to the Norfolk and Old Point postmasters for mail, when about to send a boat to New Berne, many would be obliged.

I am, very respectfully, your obedient servant,

JOHN J. PECK,

Major-General.

HEADQUARTERS EIGHTEENTH ARMY CORPS, New Berne, N. C., August 20, 1863.

Major General J. G. FOSTER,
Commanding Dept. of Virginia and North Carolina:

GENERAL: Agreeable to your instructions of the 12th instant, I assumed command on the 14th instant of the Eighteenth Army Corps, serving in North Carolina. On the 15th instant, in company with General Palmer, I commenced an inspection of this important command, more especially with respect to the general system of defenses.

Pamlico District. - At Washington I examined the old and new lines, both of which are well arranged. The second or interior line had many advantages over the exterior, especially in its command and the requiring of a lesser force for its defense. Some guns should be added, and some slashing done for the better protection of the artillerists against riflemen.

In this connection I will observe, that on the 14th the cavalry outpost, 1 corporal and 4 men, were surprised. The corporal, 2 men, 4 horses, and the equipments were captured.

The cavalry company at Washington is small and inefficient. It seems proper to make a change. Really, another company ought to be sent there; a good field officer to take charge of both.

General Palmer, General Heckman, and others urge Colonel Amory, or some new commander, for that place. But in view of your observations on this point, I shall defer any change until I see you. Colonel Amory has been relieved by General Heckman.

Albermarle District. - The line of works at Plymouth is what is demanded for that place. The area of open land is so small that the health and comfort of the troops will be much promoted by a general feeling of timber in front of the intrenchments.

6 R R-VOL XXIX, PT II