CHARLESTON, September 24, 1864.

(Received 25th.)

General S. COOPER,

Adjutant and Inspector General:

A returned prisoner reports that the enemy have read all our signals. This was learned from a Yankee operator in Florida by an intelligent sergeant, who is now a prisoner.

SAM. JONES,

Major-General.

[First indorsement.]

Respectfully referred to chief of signal corps.

JOHN W. RIELY,

Assistant Adjutant-General.

[Second indorsement.]

SIGNAL BUREAU,

September 27, 1864.

Respectfully returned to Adjutant and Inspector General's Office.

The within statement had been anticipated by Major Milligan and myself. The officers of the corps are instructed to change daily the "key letter" in signaling important messages. The inclosed letter will show how, for strategic purposes, we sometimes allow the enemy to read our dispatches while we read his.

WM. N. BARKER,

Captain and Chief of Signal Bureau.

[Inclosure.]

CONFIDENTIAL.] SIGNAL OFFICE,

Petersburg, Va., August 27, 1864.

Captain WILLIAM N. BARKER, Chief of Signals, C. S. Army:

CAPTAIN: For strategic purposes we permit the enemy to read our signals by order of General Beauregard. We read their with ease and facility, having discovered their system of contracting, which is the omission of vowels in short words--for example, crs for cars, ws for was, and the first and last letters of short words, thus--tn for train, me for message, the context always developing the word.

I have been working on an alphabet, and can safely say I have at last succeeded in making up one which will defy their most rigid scrutiny. When the proper time comes I will introduce it. On the James River all important messages are sent by key, letter changed daily. Come over, you can spare the time, and under present circumstances I cannot, or I would come to you. Signals for strategy work to perfection, thanks to the mighty brain of the matchless Beauregard.

Yours, respectfully,

JAS. F. MILLIGAN,

Major and Signal Officer.

HDQRS. DEPT. OF S. CAROLINA, GEORGIA, AND FLORIDA,
Charleston, S. C., September 24, 1864.

General S. COOPER,

Adjutant and Inspector General, Richmond, Va.:

GENERAL: A very intelligent private of our service, an exchanged prisoner, who arrived here yesterday from Hilton Head, informs me