To-day the rumor in Matamoras is that all foreigners are to be immediately prohibited from trading or doing business there. I have not been able to give any satisfactory explanation to the numerous applications for information on the subject, nor can I offer you any other solution than the one which will present itself to you own mind. The rebels are reported to be fortifying at Saint Fernando Creek.

Colonel Davis left here this morning with 100 mounted, men, two howitzers, 100 infantry in wagons, and 150 [cavalry] and one howitzer, on the Mustang. I instructed him to use his discretion in proceeding as far as Rio Grande City. He expects to move 30 miles a day. His condition, I regret to say, is just now discovered to be more deplorable than ever. After repeated orders to hurry up his carbine ammunition down Colonel Sergeant's stage by express for some yesterday, when I discovered that there is not a carbine cartridge in Texas; they were all sent back on the Peabody; she had of that description 180,000 rounds.

My last dispatch reported 114 bales of cotton since your departure. Since then, that is, during two days, I have secured 268 bales more, and I have the prospect of more work in that line than I can well attend to. We have here and at Point Isabel no more than 500 bales. Some horses begin to come in, and it is necessary Colonel Holabird should without delay furnish more of both sorts of funds to Major Carpenter, who is now here. To those who live over in Mexico, we can only pay gold. I have paid none out yet, and we have enough now only for daily wants-none for outstanding departments.

I have the honor to remain, with much respect, your obedient servant.

N. J. T. DANA,

Major-General.

Major General N. P. BANKS,

Commanding Department of the Gulf.

HEADQUARTER,

Brownsville, November 27, 1863-7 a.m.

GENERAL: Herewith I inclose dispatches from the United States consul at Monterey, of the respective dates 19th, and 22nd instant.* None of the refugees have as yet made their appearance. When they arrive, I will issue rations to them until Mr. Branbach shall arrive and organize them into a company, unless they are willing before his arrival to attach themselves to Colonel Davis' command.

I am at a loss about supplying funds for the unusual expenses incurred by the consul and Mr. Braubach in raising, assisting, and forwarding these men, and for other expenses which he states in his dispatches he has incurred.

I have not the control of any funds which are applicable to such objects, not the authority to turn over funds to the consul, and therefore I hasten to address you this dispatch, and inclose copies of those of the consul, in order that you may give me such orders and authority as you think necessary, and order such funds sent here as are applicable to the objects. I fear the consul will be embarrassed by advancing funds himself.

I find that Colonel Holabird has left no special instructions with Major Carpenter, nor supplied him with any contingent or secret fund

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*Not found.

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