SPECIAL ORDERS,
HDQRS. OF ARMY, ADJT. General 'S OFFICE,

Numbers 537.
Washington, December 3, 1863.

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X. The Secretary of War directs that Major General J. J. Reynolds repair, without the least possible delay, to New Orleans, and assume command of the troops at that place and in the vicinity, reporting to Major-General Banks. Brigadier General C. P. Stone will be relieved from all command at New Orleans, and directed to report in person to General Banks.

By command of Major-General Halleck:

E. D. TOWNSEND,

Assistant Adjutant-General.

HEADQUARTERS DEPARTMENT OF THE GULF,
New Orleans, December 4, 1863.

THE PRESIDENT OF THE UNITED STATES:

SIR: Your letter, bearing date-, was presented to me by General Hamilton the 13th October. It gave me pleasure to assume him of my desire to comply with your instructions, and to assist him in the performance of his official duties in the State of Texas. We were then upon the eve of our departure for Texas, delayed for some days by a violent storm beyond the day appointed. I gave him an outline of my purposes, with which he expressed himself entirely satisfied, but advised him to remain in New Orleans until the practicability of re-establishing the flag of the Union in Texas could be determined. He adopted this course.

Advised of our success by the officer charged with the execution of my orders at New Orleans, he immediately left New Orleans, and met me at Aransas Pass, on the central coast of Texas, on the 25th November. Our positions on the coast, constantly changing by our advances, and being inclement and uncomfortable, in consequence of the sterility of the soil and the violence of the northers, I advised him to make his headquarters at Brownsville, where our position would be permanent, and his official communication with the interior of the State uninterrupted and easy. He adopted this course, and sailed for Brownsville on the 26th of November in the steamer Alabama. He had the pleasure of receiving at Aransas an official letter from the rebel officers, granting permission to this family to remove to Brownsville and thence to New Orleans. This was dated October 26, the day of the departure of my force from New Orleans, and he hoped to meet his family upon his arrival.

General Hamilton expressed unqualified satisfaction with the success which had been attained, and said that the occupation of Matagorda Bay placed in the control of the Government the entire State of Texas.

We have received news to-day of the capture of the fortifications at Pass Cavallo, which gives us the entire control of Matagorda Bay and every important position on the coast, except Galveston and the Sabine, which will follow Galveston.

I have the honor to be, with high respect, your obedient servant,

N. P. BANKS,

Major-General, Commanding.