the guilty parties (if discovered) will be satisfactory to the authorities of Mexico. I append General Bee's communication to me, and his reply to Governor Lopez's demand, marked A and B.

Immediately upon the reception of the above-mentioned dispatch, I called on General Vidaurri, and informed him of the occurrence at the mouth of the river. He told me he was not surprised to hear of it; he expected it as a natural consequence of the favors shown by the Mexican authorities to the United States consul at Matamoras, and the vagabonds he has recruited to join the United States Army. He believes this affair to be a good offset to the Zapata raid on Texas. He says that some of the authorities in Tamaulipas are, like those at the capital of Mexico, controlled by an unprovoked hostility to the Confederacy, thinking themselves capable not only to cope with France but with the Southern States. He laughs at their conceit and ignorance.

I learn by private letters from Brownsville that the city of matamoras was, on the night of the 15th instant, in a blaze, on account of the violation of the neutrality of Mexico; that bands of music paraded the streets with vivas to Lincoln and death to the Confederates. Governor Lopez was hissed at the theater because he feared the Confederates. It was understood that the trade with Texas would be stopped. I, however, am inclined to believe that matters are greatly exaggerated. I have decided not to act upon them until I receive direct official information from the Mexican authorities.

The news has caused no excitement here. I am to send a correct version of the affair to the City of Mexico, San Luis, and other places.

Should it be necessary for me to visit matamoras again in order to have a peaceful settlement of our difficulties, I will immediately do so.

I have ere this informed the Department about Colonel E. J. Davis. he was formerly judge of the district court one the Lower Rio Grande. Soon after the secession of Texas, he left the State, and, in company of John L. Haynes, endeavored to array the Mexicans on the frontier against us. He afterward repaired to New Orleans, where he organized one of the Union regiments, composed of Texas renegades, which, under Generals Banks and Hamilton,were to invade Texas. The capture of Galveston by the Confederates disconcerted their plans. Colonel Davis at the time of his arrest was at the mouth of the Rio Grande, with his family, and several deserters from our army, whom he was to take on board of a Federal vessels to new Orleans to join his regiment. During his stay in matamoras he was lionized. The neutrality of the city was violated, it becoming a recruiting office for our enemies, and the men were not only enlisted, but drilled in open day and marched to the coast as soldiers. Colonel Davis was a bitter enemy of our cause. Owing to his former position, and many acquaintances among the Mexicans on the frontier, he was calculated to do great harm to Texas. One Mr. Montgomery, aide-de-camp to General Hamilton, was captured with him. I have reasons to believe that they will not commit treason again in this world. They are permanently located in the soil of the country. Deserving as their fate has been, the occurrence at the mouth of the river is deeply to be regretted, as it may lead to new complications.

Many of the merchants here complain that their cotton has been detained at Eagle Pass by order of General Magruder, on the ground that the permits for their exportation are not based upon contracts. These merchants, however, have taken many supplies to the interior of Texas, and have permits from General Bee showing the quantity of cotton they are entitled to. I am at a loss to know how said permits are now disregarded.