Previous to my assuming command of this department, very little had been done to complete or strength the national defenses since the evacuation of New Orleans by the Confederate army. Much labor and money were expended upon other public works, but the fortifications were, as a general thing, neglected. The small work at Donaldsonville is, perhaps, the only exception, which was just commenced, and has been completed under my authority. During my administration, all the public works have been greatly strengthened, and many have been added. The recent invasion of the enemy has renewed our attention to this subject, and some elaborate and extensive works have been projected, the outline of which is presented in the report of the commissioners.

The completion of this work requires much labor, and some provision must be made for defraying the expenses incident thereto. Hitherto the work has been done by hired men, working at the rate of $1.25 a day - men who were formerly paid $1.50. We have been obliged to employ this labor to a considerable extent upon the works commenced since the investment of Port Hudson, the negro troops being employed in the siege of that place. My belief is that negro troops can be usefully employed to a considerable extent in this kind of work, but that they ought not to be withdrawn altogether from the field. The regiments that have been organized will constitute a considerable part of our force, and I should reluctantly see them all drawn to any other duty. If we avail ourselves of their labor, it will be at considerable expense, and I hope that our requisitions upon the engineering fund may be honored, or that we may be permitted to apply property within the control of the Government here to works of that kind. Great dissatisfaction is occasioned by the employment of men without prompt payment.

Major-General Ord, of General Grant's command, reported here on the 10th instant. His corps, which consists of about 11,000 effective men, will be placed on the north side of Lake Pontchartrain. It will probably be increased by the return of absentees during the present month 2,000 or 3,000 men making possibly 13,000 or 14,000 men.

The location is healthy, and the spirit and strength of his command will by much improved by the rest they may obtain in the position assigned to them.

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

N. P. BANKS,

Major-General, Commanding.

[Inclosure.]

Proceedings of a board convened to take into consideration the best mode of defense for the city of New Orleans, by virtue of the following Special Orders, viz:

SPECIAL ORDERS,
HDQRS, DEPT. OF THE GULF, 19TH A. C., Numbers 183.
New Orleans, July 27, 1863.

I. A board, to consist of Major General W. B. Franklin, U. S. Volunteers, Brigadier General C. P. Stone, U. S. Volunteers, Brigadier General W. H. Emory, U. S. Volunteers, Brigadier General G. Weitzel, U. S. Volunteers, and Major D. C. Houston, chief engineer, will assemble in this city to-day at 10 a. m., to take into consideration the best mode of defense for the city of New Orleans, the defensive works proper to construct on the Mississippi and Red Rivers, within the limits of this department, with reference to the present war, and to report fully its opinions on these subjects, as well as upon the proper positions for depots of ammunition and other material,