ANDERSON, October 1, 1864.

Brigadier General J. E. SLAUGHTER, Brownsville, Tex.:

I am led to believe, from unofficial information, that the principal element in the injurious trade that has sprung up with Mexico is cotton illegally exported. I need not impress upon you how necessary it is that this trade, which is having so disastrous an effect upon the value of our currency, should be confined to as narrow limits as possible. I regret exceedingly that I cannot give your orders to break it up entirely, so well satisfied am I that this is the only remedy for the present frightful depreciation of Confederate notes. By means of this trade [we get] specie in quantities insufficient to supply the demands of trade for a circulating medium, but, unfortunately, quite enough to bring specie in competition with Confederate money, and to sink the latter to a point where it no longer has any "purchase" in it. All that the military authorities of this district can properly do in the matter will be to prevent the extension of this trade upon the basis of illegally exported cotton. You will, therefore, give instructions to seize all cotton being exported to Mexico without the proper permits from the Cotton Bureau, and turn it over on duplicate receipts to the cotton agent at San Antonio, sending one of the receipts to Lieutenant-Colonel Hutchins, at Houston. The wagons and teams will also be seized and used to transport the cotton to San Antonio, where they can be released or impressed for the use of the Government. My attention has been called to the fact that the cotton agent at San Antonio, to save trouble, or for some less venal reason, has been in the habit of giving printed passes with his name also printed. Cotton going out under such permits will be seized, as above directed, but if, upon close investigation, it should appear to be an honest transaction, you can use your discretion as to whether it shall be released and restored to the owner.

I desire also to call your attention to the complicated state of affairs upon the lower Rio Grande. I have just been informed by Brigadier-General Drayton of the unprovoked attack made by Cortina and his forces upon Colonel Ford's command at Brownsville. If Cortina could be considered as representing the Juarez or any other government in Mexico, it would be a just measure of retaliation to cross the Rio Grande and for our own security to take military possession of Matamoras. But as his acts are those of a successful robber, who finds himself accidently in possession of a city, and as this state of affairs is likely in a very few days to be put a stop to by the French or Maximilian forces, to avoid any hurtful complication it will be advisable to pursue a defensive policy-that is, to confine the operation of our troops to our own side of the river. Should Cortina fall into your hands he is not to be treated as a prisoner of war, but as a robber and murderer, and executed immediately. My own impression is that the occupation of Matamoras by the troops supporting the cause of the Imperial Government will very soon relieve you from the embarrassments growing out of the present condition of affairs in that vicinity. It will be the interest of both parties to cultivate the most cordial relations with the adherents of the Maximilian Government and the French Army, and I feel sure you will do everything to promote and foster any latent good feeling they may entertain for our cause and people. It is to be hoped that the imprudence of the Federal commander at Brazos in giving protection and encouragement to Cortina and his band of outlaws will give you material assistance in the accomplishment of this desirable purpose. After the arrival of the French forces at Matamoras, and the consequent establishment of order on the west banks of the Rio