crew of the steam Pet had landed, along the beach to Fort Caswell. They took the opportunity to desert. No doubt on their information, and perhaps also a knowledge of localities formed by men formerly on the coast survey, the attempt was made. It was certainly very daring,and the actors deserve great credit.

You are aware of the impossibility of discovering small boats from the shore at night in a wide entrance. To avoid a repetition of any such attempt, I now respectfully call your attention to the suggestion that, if you have the means at command,guard vessels or boats be established by the Navy at such points as may be regarded most suitable. I will be able to supply a number of boats for the use of the Navy, though I hope you will be able to station armed vessels as a relief or reserve for outpost guard-boats. These boats should be required to bring to all boats or vessels moving in their vicinity at night, and thoroughly ascertain their character, and to that end, should this or any similar suggestion be adopted, instructions will be given to the military authorities, that no difficulty may occur in complete co-operation.

This matter is now presented for your consideration, and I shall be glad to hear from you on the subject.

Very respectfully,

W. H. C. WHITING,

Major-General, Commanding.

[Inclosure Numbers 7.]

HEADQUARTERS NAVAL DEFENSES, Wilmington, N. C., March 2, 1864.

Major General W. H. C. WHITING,
C. S. Army, Commanding Department of the Cape Fear:

GENERAL: I have the honor to acknowledge the receipt of your communication of this date, and am disposed to do all in my power to prevent a recurrence of the transaction to which you allude. Unfortunately, the men under my command consist mostly of conscripts, whose loyalty is not unquestionable, and if sent in boats they might, as twice elsewhere and once here (in the case of the Tenth North Carolina Battalion), desert to the enemy.

The North Carolina is having a new smoke-stack and some repairs to her battery, preparatory to taking a position lower down,and the other iron-clad is being pushed forward toward completion with all expedition. The small new steamer Yadkin and the tug Equatorm are fitting for the same locality, and their cruising about occasionally will be far more effective than rowing guard with boats manned with unreliable crews. With those vessels and a cordon of sentinels the enemy cannot land, or landing cannot escape.

Very respectfully, your obedient servant,

W. F. LYNCH,

Flat Officer.

[Inclosure Numbers 8.]

HEADQUARTERS DEPARTMENT OF THE CAPE FEAR, Wilmington, N. C., March 8, 1864.

General COOPER,

Adjutant and Inspector General, Richmond, Va.:

To-day, without any communication, Captain Lynch, of the Navy, took possession of and placed a guard of marines upon the Hansa, a