scatter your forces too much. Columbus, Memphis, Grand Junction, and Corinth are the most important points to hold until Vicksburg is taken. If Bragg has been defeated he may fall back upon your line.

H. W. HALLECK,

General-in-Chief.

HOLLY SPRINGS, MISS., January 4, 1863-1 p.m.

Dispatches from Sherman and naval commander were received at Helena on 31st. Gunboats were engaging the enemy's batteries. Sherman was inland 3 miles from Vicksburg hotly engaged. From rebel sources I learn that Grenada Appeal of 31st says the Yankees have got possession of Vicksburg. If this statement is confirmed I will fall back to line of Memphis and Corinth. Since the late raids this department, except troops on the river, have subsisted off the country. There will be but little in North Mississippi to support guerrillas in a few weeks more.

U. S. GRANT,

Major-General, Commanding.

Major General H. W. HALLECK, General-in-Chief.

HOLLY SPRINGS, MISS., January 5, 1863-4 p.m.

Dispatch just received from Vicksburg to 29th. Sherman has had a terrific fight; loss probably 3,000 killed and wounded. Sherman captured a fort and nine guns at the point of the bayonet; also enemy's rifle-pits and main fort, but was obliged to fall back, owing to failure of troops to come to his support. Fleet was seen coming up the river when the boat left Vicksburg; no doubt it was General Banks. This is from General Gorman, who did not hear from Sherman direct. I am firm in the belief that news from the south that Vicksburg has fallen is correct.

U. S. GRANT.

Major-General, Commanding.

Major General H. W. HALLECK, General-in-Chief.

WAR DEPARTMENT,

Washington, January 6, 1863.

Major-General GRANT, Holly Springs, Miss.:

I suggest the propriety of immediately concentrating your forces, as proposed in a former telegram so as to be able to re-enforce Sherman should it be necessary or, if not, to co-operate with Rosecrans against Bragg's arm. In connection with this, should not all artillery be removed from points on the east side of the river, between Memphis and Columbus, so as to prevent its falling into the hands of the enemy? New Madrid and Helena must be held on the west side. Without heavy artillery the enemy can make no lodgments on the river from which they cannot be driven by the gunboats. Cannot Corinth now be supplied from Memphis, or during the winter from Pittsburg, more securely than from Columbus, and thus avoid the necessity of guarding the Mobile and Ohio Railroad?

H. W. HALLECK,

General-in-Chief.