CONFIDENTIAL.] NAVY DEPARTMENT,

January 2, 1864.

Honorable E. M. STANTON,

Secretary of War:

SIR: The admiral in command of the North Atlantic Blockading Squadron is confident that he can land a military force on the open beach to the westward of Fort Caswell, whence the reduction of that important work is easily accomplished by the engineers. The result of such operation is to enable the naval vessels to lie inside, as is the case at Charleston, thus closing the port effectually. As this is the only port by which any supplies whatever reach the rebels, and as the armies are mostly going into winter quarters, it seems a fit opportunity to undertake such an operation.

Very respectfully, your obedient servant,

GIDEON WELLES,

Secretary of the Navy.

HEADQUARTERS ARMY OF THE POTOMAC,
January 2, 1864.

ADJUTANT-GENERAL OF THE ARMY:

I have the honor to request that I may be informed whether it is expected that Wheaton's brigade, Sixth Corps, recently detached from this army for service in the Shenandoah Valley, will remain absent for some weeks. The brigade numbers about 2,000 men, and its absence will to that extent diminish the number of furloughs that can now be given in this army to soldiers re-enlisting as veteran volunteers. There is a general disposition on the part of those eligible to re-enlist, provided they can at once be granted the furlough of thirty days. The unexpected reduction by 2,000 of the number of furloughs I had calculated upon granting at the present time will, I fear, have an unfavorable effect upon re-enlistments.

Very respectfully, &c.,

GEO. G. MEADE,

Major-General, Commanding.

PONY MOUNTAIN, January 2, 1864 - 5 p. m.

Captain NORTON:

The smoke reported this p. m. is still visible, but much reduced. Nothing new over the river. A heavy white smoke at signal station on Clark's Mountain about 3 p. m. has disappeared. It seemed like brush burning.

PAINE.

HEADQUARTERS ARMY OF THE POTOMAC,
January 2, 1864.

Major-General PLEASONTON,

Commanding Cavalry Corps:

The major-general commanding directs that not less than 100 cavalry be stationed as guards to the signal office on Cedar Mountain in addition to the 100 infantry ordered from the First Corps. They should be concealed as far as practicable from the view of the enemy.