The foregoing is a correct statement of our losses as far as heard from.

They have taken off a number of horses, and the ground over which they collected and the route along which they went out are strewn with horses killed by them.

I learn, through an expressman from Major John R. Diamond and Captain J. J. Diamond on last evening and this morning, that they were in pursuit of the Indians, and that they were about eight hours behind them; consequently, I judge they will not be able to overtake them. The Indians having fresh horses each day, they say, as they advance the trail becomes less, and that parties are breaking off, and that they, are satisfied that there are Indians still in the country as those breaking off appear to be falling back; consequently we expect but small parties to commit raids upon us.

I am, your obedient servant,

JAS. BOURLAND,

Colonel, Commanding on Frontier.

CAMP WHARTON,

December 25, 1863

Brigadier General W. R. BOGGS,

Chief of Staff:

The accumulation of the enemy's transports, steamers, and sailing vessels on this coast, a large number of which are loaded with valuable stores greatly needed in the army, has induced the reflection that the Mexican Gulf affords a field of adventure and usefulness for one or more of our armed steamers such as is to be found nowhere else on the seas. Few of the enemy's war vessels on the coast are able to cope with them in action, nearly all being merchant steamers fitted up for blockading purposes. The vessels with which they have inflicted most damage are light-draught river steamers, which would fall an easy prey to our powerful and well-armed cruisers.

Our posts of Galveston, Velasco, and Sabine furnish safe harbors for the admission of prizes, the disposition of which, with their cargoes, would be profitable to the captors, and would result in great benefit to the army. The captured vessels can be rapidly loaded with cotton, and engaged in the importation of arms and stores, of which a large quantity have already accumulated for sale to our trade at the West Indies and Mexican ports.

These suggestions are made for the consideration of the lieutenant-general commanding, believing that, if the matter were brought to the attention of the President, he would send this powerful auxiliary to the aid of our armies in the Trans-Mississippi Department.

The most brilliant achievement of our naval cruisers was in the waters of the Mexican Gulf, when the Alabama destroyed the Hatteras, off Galveston. The opportunities for the repetition of that success have been numerous ever since.

We have also, by captures and the energy of the marine officers engaged in the defense of the Texas coast, accumulated, a respectable number of gunboats, which will, if aided by the presence of our cruisers off the coast, co-operate with the army in the effort to recapture such of our ports as are now held by the enemy.

J. BANKHEAD MAGRUDER,

Major-General, Commanding.