NEW ORLEANS, LA., October 15, 1864.-2 p. m.

Major General H. W. HALLECK,

Chief of Staff:

The rebel leaders in the Trans-Mississippi Department expect Price to be soon driven out of Missouri, and that he will strike at Devall's Bluff on his return. Magruder is expected to attack Steele's line to favor Price's movement or to cover his retreat. With the exception of Taylor's old division (about 6,000 men), all the infantry that could be spared has been sent to Magruder. With the exception of about 3,000 men I have sent all the disposable force at Morganza into Arkansas, and have instructed General Dana to send 2,000 or as more as can be spared from Vicksburg. General Reynolds will command the troops sent from this department and from Vicksburg and will report to General Steele. I have advised Rosecrans of these movements, and have directed him when Price's forces are driven out of Missouri to pursue him as far as his troops can follows. General Steele has a sufficient force not only to hold his line but to cut off Price's retreat if he should attempt to return by the same route. With the knowledge of the movements in his rear I think he will endeavor to return through Southwestern Missouri and the Indian country. Taylor's old division is still under orders to cross the river, but as we have captured a letter indicating the points of crossing, and the means by which it is to be done, I think we will not have much difficulty in preventing it. In furtherance of these movements a demonstration is to be made against Brashear City Harrisons' command, 1,200 strong, and against the Atchafalaya District at Morgan's or Logan's Ferry by Terrell's command, which is from 1,200 to 1,500 strong. Taylor is also expected to favor the crossing by a demonstration on the east bank of the river. With the exception of 300 or 400 head of beef-cattle, no supplies for these troops have yet crossed the river, and those I think have been or will be captured by a force sent for that purpose three days ago.

The yellow fever thus far is confined to the navy, and it is not apprehended that it will become epidemic.

E. R. S. CANBY,

Major-General, Commanding.

(Copy to Major-General Reynolds.)

NEW ORLEANS, LA., October 15, 1864.

Major General H. W. HALLECK,

Chief of Staff:

I go up the river by the first boat. Please send your orders to the care of the naval commander at the mouth of White River, and, if important, duplicates to this city. Your communication of the 26th ultimo, in relation to affairs in Arkansas, has been received. Some of the subject have already been investigated and the investigation of others was ordered before the receipt of your communication. General Reynolds and General Dana will make the best department commanders; the former will be in position to relieve General Steele if it should be considered advisable; the latter is greatly needed at Vicksburg and there is no one to replace him. I will report fully upon your letter in a few days.

E. R. S. CANBY,

Major-General, Commanding.