HDQRS. DEPT. OF VIRGINIA AND NORTH CAROLINA,
In the Field, Va., August 4, 1864.

Honorable ROBERT OULD,

Comr. for Exchange of Confed. Authorities, Richmond, Va.:

SIR: Very probably you have had your attention called to the particulars of the engagement between the U. S. steamer Kearsarge and the steamer Alabama, which claimed to sail under a flag and commission from your authorities.

It would seem from the reports*, copies of which I inclose, of R. Semmes, captain, and John A. Winslow, captain, in command of the two vessels, that the Alabama surrendered to the Kearsarge in a sinking condition; that her colors were colors were then hauled down and a boat dispatched to the Kearsarge to inform her of that condition; that the Kearsarge, although employed in picking up the drowning crew, was prevented from taking them all in actual custody by the sinking of the prize before she was actually boarded. Some of the Kearsarge's prisoners were picked up, at the request of Captain Winslow, by the British steamer yacht Greyhound [Deerhound.]

Under the precedent set by this Government in the case of the officers and crew of the U. S. steamer Mercedita, which surrendered to the ironclads which came out of Charleston in January, 1863, and although not taken possession of the by Confederate forces, who were driven off before they had opportunity so to do, her officers and crew were regarded by this Government as prisoners of war, and were duly exchanged, equivalents being forwarded for them.

I am instructed by the Government of the United States to bring this matter to your instructions and notify you that the officers and crew of the Alabama at the time of her surrender are regarded by this Government as prisoners of war, and that we shall expect, in each exchange for them, our officers and steam prisoners in the South or on parole.

I also take leave to forward for your consideration, as bearing upon the subject-matter of this note, the report of a board of naval officers to the Secretary of the Navy of the United States, convened by his order to examine and report upon the questions here involved*.

I take leave to ask that you will favor me with an early reply, stating whether you desire special exchanges for these prisoners, or whether you desire to let them stand as subject to the general cartel or other general negotiations as prisoners of war.

I have the honor to be, very respectfully, your obedient servant,

BENJ. F. BUTLER,

Major-General and Commissioner for Exchange.

HDQRS. MILITARY DIVISION OF WEST MISSISSIPPI,
New Orleans, La., August 4, 1864.

Major General E. A. HITCHCOCK, Commissioner for Exchange, &c.:

GENERAL; I have the honor to report that the proposed exchange of prisoners of war in this division and the Trans-Mississippi Department failed on the alleged ground of want of authority on the part of General Smith. A special exchange was subsequently proposed, to which I have agreed, as it will release a large number of our prisoners now confined in Texas, in exchange, in great part, for men that have been paroled

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* Not found as inclosures; but see Official Records of the Union and Confederate Navies, published by the Navy Department.

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