Fort Gaines surrendered. Lieutenant-Colonel Williams, Twenty-first Alabama Infantry, late commander at Fort Powell, is under arrest for evacuating the fort.

Very respectfully, major, your obedient servant,

ASBOTH,

Brigadier-General.

CITY POINT, August 21, 1864-5 p. m.

SECRETARY OF WAR,

Washington:

Please inform Major General J. G. Foster that in no circumstances will he be authorized to make exchange of prisoners of war. Exchanges simply re-enforce the enemy at once, whilst we do not get the benefit of those received for two or three months, and lose the majority entirely. I telegraph this from just hearing that some 500 or 600 more prisoners had been sent to Major-General Foster.

U. S. GRANT,

Lieutenant-General.

WASHINGTON, August 22, 1864.

Major General J. G. FOSTER,

Department of the South:

GENERAL: The Secretary of War approves of your course in permitting aliens, who are bona fide leaving the rebel States to avoid conscription, to pass through your lines.

Very respectfully, your obedient servant,

H. W. HALLECK,

Major-General and Chief of Staff.

HDQRS. DISTRICT OF FLORIDA, DEPT. OF THE SOUTH,
Jacksonville, August 22, 1864.

Major General J. G. FOSTER,

Commanding Department of the South:

GENERAL: I have the honor to acknowledge the receipt of your letter of August 11, 1864. The One hundred and fourth [Pennsylvania] Regiment is sent with the steamer that takes this. The One hundred and second [colored] will be sent by first opportunity. The recent capture of our cavalry will render it necessary that more be furnished me from without the district until I can raise a Florida regiment. You direct that I shall establish no new post. I am now building a post at Magnolia, a small but strong fort. It was my intention to put Colonel Montgomery's regiment there and have him bushwhack. He understands the business, and assisted by a company of Floridians, would do more to keep the enemy from taking the offensive than any other course I can suggest. If, however, you think it best, I will destroy the work and abandon the place. It is completely under the fire of the gun-boats, an done is kept there by the commander of the squadron.

Picolata I intend the strengthen materially, and your instructions not to place large amounts of stores at either place will be complied with. It is my intention to strengthen the works at this place ma-