necessary that they should have cotton to send to Europe immediately, that the would borrow one fifth of all that was in the vicinity of the crossing. The Texas merchants have submitted, and I believe that some of the foreigners have also.

To carry this cotton to Europe, the British steamers Sea Queen and Sir William Peel and the sailing ship Gladiator (also British) have been engaged, and are now loading.

All of these vessels were consigned to rebel agents in this city, and the larger part of their cargoes have been sent forward for rebel consumption. A great many army blankets, which were brought here in these steamers, are also stored here to be sent forward in the fall.

I am, sir, very respectfully, your most obedient servant,

L. PIERCE, JR.,

U. S. Consul.

WAR DEPARTMENT,

Washington City, September 7, 1863.

Honorable WM. H. SEWARD,

Secretary of State:

SIR: I have the honor to acknowledge the receipt of your note of the 5th instant, inclosing a copy of a dispatch, dated 21st of July last, from the United States consul at Matamoras, respecting arrangements made by the rebel General Bee for obtaining cotton to be sent to Europe in English vessels from that port, and to advise you that the same has been referred to the General-in-Chief.

I have the honor to be, sir, your obedient servant,

[EDWIN M. STANTON,]

Secretary of War.

WASHINGTON, D. C.,

September 8, 1863.

Major-General BANKS,

New Orleans:

GENERAL: Your letter of August 28, respecting your application for additional cavalry force, is just received. I have already informed you that General Grant would give you all the cavalry he could possibly spare, and that 8,000 horse equipments had been ordered to you and to him to mount infantry. It was also suggested to the Quartermaster's Department to send you as many horses as possible down the Mississippi River. General Meigs has gone west, and will give the matter his personal attention.

I have already stated to you that it would be impossible to send you any cavalry very soon from the north. The great losses in that arm in recent battles, and by the discharge of two years' and nine-months' men, and the great difficulty in procuring cavalry recruits, places this matter beyond question or discussion. Requisitions are received almost simultaneously with your from nearly every other department for additional cavalry, some 20,000 or 30,000 being urgently asked for, it being alleged in many cases that operations cannot be continued without them. Instead of 30,000, I have not a single man to supply these demands. You do not seem fully to appreciate the fact, general, that the loss in your army by expiration of terms of service has not been as great in proportion to numbers as in some others. As volunteering had virtually ceased, the only mode of supplying this loss was by the draft, which, as yet, has