Our loss is limited to the two gunboats, the officers and crew, and about 90 men, who were on board the boats as sharpshooters; these were captured. The killed and wounded, it is believed, will not exceed 30. The troops and remaining gunboats returned to Berwick Back and New Orleans on the 11th instant.

In all respects the co-operation of the naval authorities has been hearty and efficient. Fully comphending the purposes of the Government, they entered upon the expedition with great spirit. Commodore Bell gave all the assistance in his power, and Captain Crocker, of the Clifton, now a prisoner, deserves especial mention for his conspicuous gallantry.

Were it not for the very serious and lamentable deficiency of light-draught boats in this department, to which I have so often called the attention of the Government, I should consider the loss of the two boats as unimportant, except as to their armament. That of the Clifton was important.

The boat were unreliable for any service, on account of their decay and weakness both of hull and machinery.

It gives me great pleasure to say that both in the preparation and conduct of the expedition, General Franklin, his officers, and men exhibited the best spirit, and satisfied every expectation that could reasonably have been required of them. The failure is to be attributed solely to the misfortune attending the gunboats, and the impossibility of managing them in the shoal waters of the Sabine. Had it not been for this incurable unfitness for the work in hand, the gallant spirit exhibited by both navy and army would have insured the entire success of the enterprise. It would have placed our army between Taylor, Magruder, and Kirby Smith, and given us with certainty the immediate control of Texas.

I have the honor to inclose full reports by Generals Franklin and Weitzel, which will give in detail the operations of the army and navy, and embrace some precedent neglect on the part of the advance naval boats to which I have not adverted. The only incident of serious moment, tending to disclose to the enemy our plans, that occurred, was the desertion of an engineer while the gunboats were at Berwick Bay. This is believed to have been the only advance information they obtained.

Immediately upon the receipt of information of the failure at Sabine, and before the return of the troops, I commenced preparations for an overland movement from Brashear City via Vermillionville and Niblett's Bluff.

Had we the requisite naval force or transportation, I would renew the attempt on the Sabine, or strike at the Rio Grande. But we have neither.

It is impossible to move up the Red River at this season, except by most tedious marches, on account of the low stage of water. The entrance to the Atchafalaya is now covered by a dry sand-bar, which extends entirely across the bed of the river.

I have constantly borne in mind your suggestion as to a movement from Alexandria or Shreveport, but the low stage of the water makes it impracticable at this season.

The march to the Sabine will be difficult, but the men are full of energy and can accomplish it. It will enable us to disperse or destroy the enemy, leaving nothing in our rear but guerrillas to harass or threaten our position on the river.

If successful, we shall establish communication with the coast at Calcasieu, the Sabine, and Galveston, dispersing or destroying as we move,

19 R R-VOL XXVI, PT I