while the men engaged in it must be traitors to our side, and probably to both, as all have to take the oath of allegiance to the Yankees before obtaining their clearances. Should it be deemed advisable to allow this trade to continue-and the inhabitants are certainly in a deplorably destitute condition-it would probably be as well t give notice to the enemy that we will permit the export of certain harmless articles, very much in demand by the citizens of New Orleans, in return for provisions, and grant regular licenses for the trade.

The third class requiring notice is the shipment of cotton, under permits from the Secretary of War, for army supplies promised to be brought back.

On the 3rd instant, the schooner Lucy left the Chefunctee River with 57 bales of cotton, under orders from Colonel Logan, commanding brigade of cavalry, based upon a permit from the Secretary of War, dated December 19, 1862. Copies of order and permit are inclosed herewith, marked A and B. I have fund the permit so contrary to my instructions of a more recent date, that I have ventured to give positive orders prohibiting the further shipment of cotton until department headquarters could be communicated with, and I wait further orders on this point, as well as more definite instructions in regard to the trade in general.

Captain Greenlee has a small company of sharpshooters (formerly Mullen's) stationed near Convington. His men were too much scattered on picket duty to admit of a regular inspection, but a return of his command is inclosed, marked C.* They are pretty well armed with mississippi rifles, and the captain informs me he has orders to press horses to mount his men, which will make them more efficient.

Many complaints are made of the illegal manner in which impressments of cattle, corn, &c., have been made, and I am inclined to believe that there are instances in which it has been done by unauthorized parties.

I have written to Major [W. H.] Dameron, chief of subsistence for Mississippi and Eastern Louisiana, calling his attention to the matter, and have directed such officers as are stationed in this section to examine the papers of impressment agents, and, if fraudulent, or they appear to be acting on private account, to forward them to these headquarters for trial.

Throughout the whole country bordering on Mississippi Sound and Lake Pontchartrain the difficulty of sustaining troops is very great. The country contains no resources within itself, and the distances over which corn must be hauled are so great that it is almost consumed before it reaches the shore.

The brigades and ferries are many of them destroyed, and with the first rain of winter the streams will become unfordable. With the absolute command of the water held by the enemy, any small force on the immediate shore is liable to be cut off by superior numbers, or driven back by the gunboats that are continually passing.

I have to note a better feeling among the inhabitants and fewer deserters than at the date of my last report, although the latter are still too numerous.

I think that, with some little encouragement, local companies of exempts could be raised at several points, and that they would probably do more toward returning the deserters to their commands than the occasional visits of squads of cavalry unacquainted with the localities, as

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*Not found.

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27 R R-VOL XXVI, PT II