Since their removal the unusual mortality has been entirely checked. The land belongs to the United States Government, being on the light-house reservation. It is covered along the shore with great quantities of driftwood, furnishing abundance for buildings shelters and for fire-wood. Excelelnt water abounds everywere within three feet of the surface. I have authroized the purahcse of another boat, which is obviously necessary to be kept on the other side of the bay for the use of the guard. It is supposed the cost will be about $60. This expnse will be very soon more than balanced by the saving of rations, the issue of which to the Indians will now be comparatively small. Thosuands of Indians could be kept on the new site in perfect security and content. The peninsula is so narrow that one company would suffice to guard them, whatever might be their number. I respectfully request to be instructed to what extent it is my duty to execute any direction or suggestions coming from Mr. Hanson, the superintendent of Indian affairs, who is pexted here daily, especially as to whether I am to send away the Indian prisoners to such place as he may direct without waiting for instructions from the department commander. The present number of Indians confined here is 412. The number at Fort Baker is 157. Total, 569. I have just dispatched Lieutenant Ustick, Third Infantry California Volunteers, to take the detachment of his company (Captain Ketchma's), now at Cooper's Mills, to Fort Baker, in order to bring down the Indians at that post. I herewith inclose the plan of the new guard-house, inadvertently omitted, to be inclosed with my dispatch of the 2nd instant.

I have the honor to be, very respectfully, your obedient servant,

F. J. LIPPITT,

Colonel Second Infty, California Vols., Commanding Humboldt Mil. Dist.

HEADQUARTERS,
Fort Steilacoom, Wash., Ter., August 4, 1862.

Major R. C. DRUM,

Asst. Adjt. General, Dept. of the Pacific, San Francisco, Cal.:

MAJOR: Herewith I inclose a letter received by me last evening from the Governor of Washington Territory, together with a coipy of my reply thereto. From information received Saturday evening, I should judge that the excitement at Port Townsend, growing out of the affair of the alleged removal of the papers, books, &c., of the U. S. custom-house at that place to the revenue cutter Shubrick, and the threatening attitude assumed by the commander of that craft toward the citizens of the Port, is intense. I am told that the cutter Joe Lane, of which Lieutenant Merryman (hitehrto the acting custom-house officer at Port Townsend) is an officer, is daily expected back to Port Townsend, from which port she was temporarily absent on the arrival of the Shubrick, having on board Victor Smith, the collector, returning from Washington, and a collision is apprheended by many between the two cutters, asthe officers of the Joe Lane, as well as the citizens of Port Townsend, are siad to be much opposed to Mr. Smith oin account of sundry misdemeanors alleged against him. The citizens uphold Lieutenant Merryman in the curse which he took in refusing to deliver up the papers of the custom-house until Mr. Smith should show him his authority as the regular appointed collector, which, it is stated, Mr. Smith refused to do, and caused an armed guard from the cutter to take forcible possession of them, the town at the same time being threatened by the guns of the cutter. The Governor of the Territory has been appealed to, and I expect him at