There are extensive powder-mills at Arkadelphia, Ark. Niter beds and iron mines are to be extensively worked in Texas. Niter is scarce, but no complaints about sulphur. Iron for railroads and machinery scarce. All iron and iron mines and works to be hired, purchased, or impressed for the Government. Arms scarce in Arkansas.

It is said that the fall of Vicksburg and Port Hudson has been favorable to the rebel cause by the reaction of public feeling and a determination to avenge the loss. The rebel ranks are filling up much more rapidly than before.

The foregoing memoranda are taken from intercepted official rebel dispatches, dated from August 1 to 18, 1863.

Very respectfully, your obedient servant,

H. W. HALLECK,

Major-General, Commanding.

WAR DEPARTMENT,

Washington, September 29, 1863-4 p.m.

General ROBERT ALLEN,

Saint Louis, Mo.:

Six hundred wagons will be immediately sent to General Banks from Philadelphia. Send him all the animals you can spare after supplying General Rosecrans. Cannot General Grant spare some from his command till you can give him more?

H. W. HALLECK,

General-in-Chief.

HEADQUARTERS DEPARTMENT OF THE MISSOURI,
Saint Louis, September 29, 1863.

Major General FRED. STEELE,

Commanding Arkansas Expedition, Little Rock, Ark.:

GENERAL: I inclose you an abstract from a letter just received from General Halleck,* in reply to the one of which I wrote you yesterday.

I am not sufficiently informed of Price's movements, since he was driven from Little Rock, to say what your course should now be. If, however, he has not retreated beyond Red River, it is my opinion he should be forced beyond it, if you are strong enough for the purpose.

If the Arkansas River is to be your line of defense, the points named by General Halleck, and, I think, some point about midway between Little Rock and Fort Smith, should be occupied. Devall's Bluff will, I presume, be the point on White River. A regimental of cavalry at Jacksonport would also be of great benefit to that portion of Arkansas, and also to Missouri, by breaking up the guerrillas. A large cavalry force should also be thrown as an advance post toward Arkadelphia.

I give these views merely as suggestions. Please give me your views on this subject, and as to the number of troops that will be required at the various points to be occupied.

If any considerable number of troops can be raised about Little Rock, it will probably be well for you to assign a competent officer to the duty of superintending their organization. A volunteer officer may be selected as mustering officer, if you have no regular officer available, and his name forwarded for the approval of the appointment.

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*Not found.

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