My chief of ordnance has rented, with the right of purchase within two years by the Government, a tract of land in the suburbs of the town as the site for an arsenal. Machinery has been erected, a foundry established, which will be in operation in a few days, and the necessary steps taken for establishing an arsenal of construction, which can be extended to meet the general wants. Its vicinity to the iron mines, the facilities for transportation, and the inland position of Shreveport make it the most desirable selection within the department for such an establishment.

The chief of the clothing bureau reports that before next spring he will be prepared to supply, permanently, the troops of the department. He has made arrangements for the erection of mills where cloth, hats, & c., can be manufactured.

The crops are unusually abundant, and the chief commissary of the department reports that under the provisions of the tax bill almost a sufficient supply will be obtained for the troops within the department. His report will be forwarded, showing the steps taken for the future supply of the command, as well as for the troops east of the Mississippi. The immediate appointment of assessors by the Treasury Department is a necessity. The assessment by those officers must be made and reported to the quartermaster before the tax can be secured. The machinery for the enforcement of the tax should be put to work without delay. The wheat crop has already been gathered, and delay only adds to the difficulty of its enforcement. I have repeatedly adverted to the vast extent of the department, and the inadequate force for its defense. The fighting population is with the armies east of the Mississippi. The male population remaining are old men, or have furnished substitutes, are lukewarm, or are wrapped up in speculations and money-making. It will be difficult to develop any force from such material. The conscript bureau is defective; has been under no general supervision. I have taken it in hand; have appointed General Greer commandant for the department, and trust that, when systematized, abuses will be corrected and a force brought into the field.

My duties now and for some time must be principally of an administrative character. It is in that field that my usefulness, if I have any, will be felt. The department has to be made self-sustaining, and its resources developed to that end. The force is not sufficient, threatened as the department is at different points, nor are troops prepared in arms and equipments for advance on Missouri. Success in the valley of Mississippi, and a relief from the pressure in Louisiana, may accomplish this desired end, which, both politically and in a military point of view, will be productive of great results. The district commanders are officers of merit and ability, and while they have my confidence I shall not take the field in person within their district commands, unless a large concentration of troops becomes necessary, when I shall certainly place myself where both inclination and duty call me. General Taylor is commanding the troops within his own district, and is in person with the force operating for the relief of Port Hudson. General Walker was left in command of the force in Northern Louisiana, and operating opposite Vicksburg. They both have instructions to spare no efforts in throwing supplies into those places.

All the disposable force of the department has been thrown to the relief of Port Hudson and Vicksburg, and is operating on the Mississippi to that end. General Tappan's brigade, of General Price's division, is with General Walker. In addition, two brigades of General Holmes' command, one of infantry and one of cavalry, have been ordered to the