Cline can give you information in reference to these routes. Order a board of survey to assess the damages by troops at the house adjoining headquarters and owned by Mr. Carnall.

Your obedient servant,

WM. STEELE,

Brigadier-General.

WAR DEPARTMENT, C. S. A., Richmond, Va., August 3, 1863.

General E. KIRBY SMITH,

Commanding, &c.:

GENERAL: I wrote you, unofficially, immediately after the fall of Vicksburg, expressing fully my convictions of the necessities and responsibilities cast upon you by our late reverses in the Mississippi Department. Since, I have had no opportunity of writing, but hope now to enjoy the privilege,as an officer proposes to endeavor to pass the river to your headquarters.

The great duty of defending the Trans-Mississippi States and of holding them firm to the Confederacy must now devolve mainly upon you,and full confidence is felt that the charge could not be more worthily bestowed.

It is impossible to give you from here special instructions as to the measures to be adopted. They must be left, in large measure, to your superior knowledge of the circumstances of your command and to a wise discretion. It is suggested that you should put yourself in communication with the Governors of the Trans-Mississippi States, and maintain,if possible, with them a cordial understanding and secure their efficient co-operation to your plans. It will likewise be well for you to confer with and invite the counsel and influence of leading citizens throughout your department. One great difficulty, I fear you will have to encounter, will be the want of funds, which it will be difficult regularly to supply from here. I had hoped the Secretary of the Treasury would have arranged to have an office of issue for the Trans-Mississippi Department; but he represents that he finds it impracticable to send over the requisite machinery and the proper corps of officers. He will in time endeavor to send funds via Havana and Matamoras. As escort, of course, will have to be provided, and General Magruder should be instructed to give the requisite instructions to the officer commanding on the Rio Grande. In addition, I shall lose no opportunity that may offer to transmit funds to the quartermaster in your department.

Since the fall of Vicksburg the enemy have commenced using the river for trade,and do this with the greatest possible ostentation, to produce effect both abroad and with their own people. It becomes of great importance that the river should be effectually closed,at least for trade, and surely this can be done by the use of field artillery along the banks, which must be accessible for hundreds of miles. You could not direct your efforts to a more important service, and I urge earnestly that adequate corps be organized and means and resources,as far as practicable,be prepared for the prevention of all trade on the river.

It is likewise very desirable the enemy should not be able to appropriate or raise cotton on the districts overrun by them. The cotton already raised, whenever it cannot be moved back to districts of safety (which should be urged and encouraged by the Government), should be unhesitatingly destroyed, rather than be allowed into the hands of the enemy. It will not do to rely for this on the voluntary action of