LITTLE ROCK, August 20, 1864.

Colonel P. CLAYTON,

Commanding:

What has become of the Annie Jacobs? She was aground yesterday morning. It is reported by Mrs. Grace that the rebels are advancing on us in force from Texas and Louisiana, and Magruder in command at Camden. Price is assigned to the cavalry. I have ordered two regiments of infantry to be sent to you. The steamers are ready to take them. A cavalry force of rebels was at Benton day before yesterday. They retired on the approach of a force sent from here. Our troops still in pursuit and may go to Princeton. Canby has written me twice advising me to abandon Pine Bluff. I have objected. If you cannot hold the place I presume you can retire across the pontoon and come up on the other side of the river. Give me your ideas about the reported advance. They are making some sort of a movement in Arkansas from Louisiana. Canby has organized a force at Morganza to be moved in case of any emergency. Has appears to think the rebels will try to cross the Mississippi. The steamer Empress had sixty-three shots put through her at Gaines' Landing; was disabled and towed off by a gun-boat. About 200 were killed and wounded. The captain's head was taken off. General West has returned without catching Shelby. Is there a chance for a coup de main near you? Admiral Farragut has Mobile in a tight place. Forts Morgan and Gaines have surrendered, with all the troops, munitions, &c. General Stoneman has been captured with 500 men. The rest of the command except about 500 more are safe. Steamer arrived last night and brings a report that Sherman had taken Atlanta and 10,000 prisoners. I suppose you heard of the disaster to the negroes at Petersburg.

F. STEELE,

Major-General.

PINE BLUFF, ARK., August 20, 1864-2.50 p. m.

Major-General STEELE:

Cabell, with about 2,000 cavalry, is eighteen miles from here, on the road leading from Mount Elba to Pine Bluff. He has been there for several days. I cannot tell what his object is unless it is to cover movement of troops in this direction. A great many reports are rifle from secesh quarters of the advance of a large force against this place, &c. While I pay but little attention to these reports, I believe the garrison of this post is too small for security against a force that could be bright against it at almost any time. The term of service of the First Indiana Cavalry expired yesterday. I have relieved them from duty, and will send them to Little Rock to-morrow on the Annie Jacobs unless I receive other orders. To keep up my outposts I have been compelled to mount what is left of the Third Minnesota, say about 200 men. In case of an attack my present force is not sufficient to man my line of defenses. The capture and burning of the Miller was one of the most pusillanimous affairs upon the part of those on board that I have ever heard of. She was captured and destroyed by three men. There was a large mail on her for this post and some commissary stores, which were lost. I recommend that all official documents be duplicated. Lieutenant Grove made a very gallant dash day before yesterday. I sent him to reconnoiter Cabell's camp on the Mount Elba road. He