City, and Laredo, thus putting our Government in position to let Maximilian very severely alone until I get my arrangements perfected. My purpose is to see, before the position of San Patricio is occupied, whether I can make accommodations with the rebels. If the intelligence at hand is true success in this part of the enterprise is quite promising. My propositions will be based on cotton, which, together with the fading prospects of the Confederacy, has brought the rebels to a low point of demoralization. The way to a private interview with Kirby Smith is clear, and I shall act as if already appointed to the command of the Department of Texas. Conditions will, of course, be subject to approval, and forwarded to you instantly. If accommodations are impossible, and if, in consequence, it becomes necessary to occupy San Patricion, then, behind that position, and under its cover, I shall initiate the organization of the Territory or new State of Rio Grande, without which it will be difficult to find plausible pretexts for the assemblage of men and materials essential to ulterior operations. Permit me to hope, however, that you will not delay creating the department and dispatching the troops. In selecting troops please send me Western men. You know how easily Southern people affiliate with them; and if the thing is at all possible it would give me additional confidence to have my old regiment, the Eleventh Indiana, and the Eighth Illinois Cavalry (Colonel Clendenin), ordered to report to me. I would also like the regiment of Texans now serving in the department. They know the region of Western Texas perfectly. While passing through Indianapolis I succeeded in getting 400 drilled conscripts for the Eleventh Indiana, so that it will now be respectably strong in numbers.

I have the honor to be, very respectfully, your obedient servant,

LEW. WALLACE,

Major-General, U. S. Volunteers.

HDQRS. MILITARY DIVISION OF WEST MISSISSIPPI,
New Orleans, La., February 22, 1865.

Rear-Admiral S. P. LEE,

Commanding Mississippi Squadron, Mound City, Ill.:

SIR: I have the honor to inclose for your information copy of a confidential circular to commanders of departments and districts within this division, and to request that you will be pleased to issue such orders to your divisional commanders as will secure increased vigilance on their part while we are operating east of the Mississippi and while the garrisons guarding the river are temporarily reduced. Our operations against Mobile will commence in the early part of next month, and co-operative cavalry movements will take place from Vicksburg, Memphis, Baton Rouge, and Pensacola. The navy in Mobile Bay is ready to do their part of the work. We are anxiously awaiting the arrival of the monitors and tin-clads, which you were kind enough to promise us.

Very respectfully, your obedient servant,

ED. R. S. CANBY,

Major-General, Commanding.

[Inclosure.]

CIRCULAR TO DEPARTMENT AND DISTRICT COMMANDERS.

CONFIDENTIAL.] HDQRS. MIL. DIV. OF WEST MISSISSIPPI,

New Orleans, La., February 22, 1865.

As the withdrawal of part of the troops in this command for operations east of the Mississippi may induce counter operations by the