NEW ORLEANS, May 30, 1865.

(Received 7 p. m.)

Lieutenant-General GRANT:

Your telegram of yesterday [28th] has just been received. All capture cotton and all questions of trade east of the Mississippi have already been turned over to the treasury Department. I have telegraphed orders to commanders in the interior to encourage the bringing in of cotton for sale, to make no search for Confederate cotton, and to offer all proper facilities for sending all cotton forward, and a considerable part of the country west of the Mississippi will be occupied by our troops in the course of this week, and this trade will be open and encouraged as far as it can be without the action of the President.

E. R. S. CANBY,

Major-General.

MOUTH OF RED RIVER, May 30, 1865-8. 25 p. m.

Major General E. R. S. CANBY,

Commanding Department of West Mississippi:

GENERAL: I have detailed and have in readiness here four gun-boats and two iron-clads.

W. E. FITZHUGH,

Lieutenant Commander, U. S. Navy, Commanding Third Div., Miss. Squadron.

HDQRS. MILITARY DIVISION OF WEST MISSISSIPPI,
OFFICE CHIEF SIGNAL OFFICER,

New Orleans, La., May 30, 1865.

Lieutenant Colonel C. T. CHRISTENSEN,

Asst. Adjt. General, Military Division of West Mississippi:

COLONEL: I have the honor to submit to your consideration the following report of information received at this office this 30th day of May, 1865: Mr. B. W. Musgrove, a citizen of Wood County, Northern Texas, reports as follows: Left his home in Wood County three weeks since en route for New Orleans; arrived at Shreveport, and was unable to proceed farther, being detained by General Buckner. During the time he Remained at Shreveport (two weeks) he discovered that large amounts of Confederate Government cotton and sugar were being moved into the interior and secreted for the purpose of defrauding the United States government. He furthermore reports that General Buckner and brother controlled all cotton transactions in the trans-Mississippi Department, and that they were actively engaged in transferring the cotton, sugar, and Government property generally into the hands of private individuals, and placing it where the Federal Government could not find it. He asserts it as his belief that General Buckner and other Confederate officers have joined hands for the purpose of defrauding kinds of Confederate Government property, including large amounts of specie which was reported to have been brought from France for the purpose of being distribute among the troops in the Trans-Mississippi Department. All the property thus transferred to merchants and citizens has of cotton, sugar, and Government property generally is being move into Mexico, where it will be claimed by private parties. Large

43 R R VOL XLVIII, PT II