NEW ORLEANS, December 15, 1865.

(Received 12 p. m.)

Lieutenant-General GRANT:

Brigadier General W. T. Clark, accompanied by Colonel Mejia, of the Liberal Army, has just arrived from the Rio Grande. They report as follows: General Mejia made a proposition to General Weitzel to turn over Matamoras for the sum of $200,000, and a guarantee of protection to the city when occupied by the Liberal forces. This money was about to be raised and the city turned over to Colonel Mejia, of the Liberal Army, but it appears that General H. Clay Crawford arrived, and, learning the condition of things, offered General Mejia a greater sum and broke off the whole affair, and has put things in a regular mess. He then started for General Escobedo's camp, but couriers from General Mejia at Brownsville preceded him to warn General Escobedo to have nothing to do with him. I think that General Mejia will give up Matamoras if the thing is well managed, and General Clark and Colonel Mejia say that General Mejia is only awaiting their return fro New Orleans. The presence of Crawford and his assertions that he is acting under the authority of the President embarrasses me much. Can You give me any instructions? I think it best to make a short trip over to the Rio Grande, if You do not object. Two hundred and eighty Austrians have arrived at Rio Grande, that is all. Answer quick, please.

P. H. SHERIDAN,

Major-General.

WASHINGTON, December 16, 1865.

Major-General SHERIDAN,

New Orleans, La.:

I will see the President and give You a full answer to Your dispatch relating to affairs on the Rio Grande as soon as I can.

U. S. GRANT,

Lieutenant-General.

NEW ORLEANS, December 16, 1865-12 p. m.

(Received 8 p. m.)

Lieutenant-General GRANT,

Commanding Armies of the United States:

Subsequent information form the Rio Grande brought by Major Parsons, my inspector, makes me believe that the report given me by General Clark and sent to You yesterday may be a little colored and excited. I have again notified General Weitzel to preserve strict neutrality, and have nothing to do with the transactions spoken of in my telegram yesterday.

P. H. SHERIDAN,

Major-General.

WASHINGTON, December 19, 1865.

Major-General SHERIDAN,

New Orleans:

Instruct the commander on the Rio Grande that he can make no agreement with Imperial or Liberal commanders. If either belligerent lay down their arms and cross over to the United States they will not be given up to their enemies, but will be protected from them.

U. S. GRANT,

Lieutenant-General.