NEW ORLEANS, LA., July 10, 1865.

(Received 9 a. m. 12th.)

Lieutenant General U. S. GRANT,

Commanding Armies of the United States:

GENERAL: General Steele sends the following information: The French Mexicans on the Rio Grande appear to be anxious to bring on difficulties with the United States and are very bitter. Cortina holds all the roads around Matamoras. Says he could take the place if he had ammunition. He has captured considerable of rebel cotton and broken up the thieving parties engaged in this on the upper Rio Grande. He says he will also break up the parties engaged in running over stock. He visited General Steele at Brownsville. Has, as Governor of Tamaulipas under the Liberal Government, given permission for our forces to enter Mexico. Governor Murrah, of Texas, and the ex-Governor, and Walker, Shelby, and others are at Monterey and in considerable numbers. Shelby took over an organized force. Nothing is yet known of their intentions. They are with the Imperialists without doubt, and are represented by a Matamoras paper as 10,000 strong. This is exaggeration. General Merritt is on his way to San Antonio.

P. H. SHERIDAN,

Major-General.

HDQRS. MILITARY DIVISION OF THE SOUTHWEST,
New Orleans, La., July 10, 1865.

Major General GORDON GRANGER,

Commanding District of Texas:

GENERAL: Your communication of the 7th instant is received. A portion of General Merritt's column of cavalry has started, and according to the latest news from his he was to have started to-day. General Custer is not yet ready. Many of the men he received were dismounted, and delays occurred in getting horses, nails, shoes, &c. In fact, there was nothing in the depot here. It has not been commensurate with the wants of so important a place. I do not want either Custer's or Meritt's commands distributed. If they cannot be kept together they are of no value and the discipline is lost. I am, in addition, not in favor of distributing troops and having and eternity of small places, each commanded by some petty officer who will on more airs than a major-general; will have his aides, provost-marshal, &c., and who, instead of being a benefit, is an injury and source of constant irritation. I want Custer to come to Houston, and then it can be determined where he shall go afterward. If a sufficient depot can be collected at San Antonio I propose to unite the two columns into one large division. I am glad You have taken up the important matter of the Victoria Railroad. Push it along. About 5,000 men of over of the Fourth Corps have left here under General Wood for Indianola. They will push on the Victoria road to good grounds and encamp. As soon as General Stanley goes over he will report to You. I have not heard from General Steele since the arrival of the Mejia correspondence.

I am, general, very respectfully, Your obedient servant,

P. H. SHERIDAN,

Major-General, Commanding.