of the evil would be prevented. I was called to the Rio Grande frontier by the alarming state of our relations with the Mexican authorities and people after the seizure of Colonel [Edmund J.] Davis, of the Federal army, and [William W.] Montgomery, on the Mexican soil, and the hanging of the latter, and also to place our commercial affairs, if possible, on a surer footing. Major Hart proceeded to Brownsville at the same time. I found an unfortunate difficulty had arisen between an influential foreign house and Major Hart as to the proper construction of a contract between them, and the same being referred to me, I decided, though reluctantly, in favor of Major Hart.

In the course of this transaction, I discovered that it would not be prudent to depend on any foreign house for our supplies, if we could procure them with equal economy and certainty from a house having the same credit and means, whose property was in our country, and, therefore, in our power, and King, Kennedy & Stillman, a house in Brownsville, having agreed to furnish supplies at lower rates than any house in Matamoras, I advised Major Hart to enter into a contract with them, which was done through Major [Charles] Russell, quartermaster, C. S. Army.

These gentlemen have advanced very liberally, and if Major Hart can fulfill his obligations to deliver 500 bales a month, all will go well. For this purpose, I have placed steamboats at his disposal and service in matagorda Bay, having run the blockade with them, and a large number of conscripts and their teams were also placed at this disposal, but he does not seem to have any cotton. These steamers have been ready for two months, and he has been notified long since of it. Believing that this work does not progress as rapidly s it ought, I have authorized the chief disbursing agents of this district to make contracts, in addition to Major Harat's, for army supplies, so as to embrace all the chances of getting them. I would respectfully suggest that these chief disbursing staff officers be also authorized to export cotton with which to purchase supplies, that power being confined at present to Major Hart. My orders were to afford Major Hart every facility to enable him to carry out the orders of the Government. He has stated that I have done so, and so states now.

I have even lost some influence by the determined course I have pursued in his support, for he is extremely unpopular. I believe him, however, to be honest, and though too slow for transactions of this magnitude, I think he will be able to re-establish his credit after some months. At all events, he must have money in large quantities, or he can do nothing. I will in the meantime do all I can to support him, but again recommend that the staff officers be empowered also to buy with cotton, as one man cannot do so large a business, unless the Government bought all the cotton in Texas on its own account, which was the course I recommended to the Department as I was abut the leave Richmond. It might, perhaps, be done hereafter, if our currency should grow better.

I am happy to say that I was enabled to place our relations with the Mexicans and their authorities on the best footing whilst on the Rio Grande and have every reason to believe that they will remain so for some time to come.

There being apprehensions of yellow fever at Brownsville, and Banks' invasion of Louisiana taking place whilst I was at Brownsville, I ordered, privately, all the troops excepting one regiment and a battery to march in this direction; since then, Banks has crossed the Mississippi, and a report has gained credence with Brigadier-General Bee that an expedition of 20,000 men is fitting out in New York for the Rio Grande.