the notice which declared them exchanged (October, 1863), I suppose the Federal authorities who contested the exchange put these parties in confinement to prevent their joining our armies. These facts make it somewhat doubtful whether inquiry should be made of the Federal authorities, as that inquiry will be apt to make them hold on more closely to those prisoners.

I shall be happy, however, to carry out any directions which the Honorable Secretary may give in the premises.

[RO. OULD.]

NAVY DEPARTMENT, September 9, 1864.

Lieutenant General U. S. GRANT, &c., City Point, Va.:

SIR: Inclosed herewith is an official communication, which the Department desires may be forwarded through the lines as early as practicable, addressed to the Honorable S. R. Mallory, Richmond, Va.

Very respectfully, &c.,

GIDEON WELLES,

Secretary of the Navy.

[Inclosure.]

NAVY DEPARTMENT, Washington, D. C., September 9, 1864.

Honorable S. R. MALLORY, Richmond, Va.:

SIR: Your letter dated Richmond, August 20, 1864, is received.

You state that "Mr. Ould informs me that some six weeks ato he made a verbal proposition to Major Mulford, an agent for the exchange of prisoners, being precluded from communicating in writing with General Bulter, to exchange mutually all naval officers and men, and to give an equivalent to whichever side might hold an excess. No notice whatever has been taken of this proposition. "

The Department has never received any information from any source touching the practicability of exchange of naval prisoners, notwithstanding the letters of the officers imprisoned at Fort Warren have bee forwarded through the lines at various times, asking that an exchange might be effected.

Regarding the proposition of Mr. Ould as your own, I have to inform you that it is accepted, and the supply steamer Circassian, daily excepted at Boston, will carry to Port Royal, S. C., all the naval prisoners, "including marines," that are now held in the North.

Rear-Admiral Farragut had already been directed to offer in exchange all those officers and men of the navy captured at Mobile for equivalents of our own hold in Texas and at other extreme southern points, or, if an exchange, could not be effected, to send them North.

It would prevent much delay if you should get together, as near Port Royal as convenient, all the officers and men belonging to the U. S. naval service, including the marines, as directions will be given by this Department agreeably to the tenor of Mr. Ould's verbal proposition, herein quoted. If those held in Texas cannot be sent to Port Royal, it will be necessary to make especial arrangements in the event of Rear-Admiral Farragut failing to effect an exchange.

Very respectfully, &c.,

GIDEON WELLES,

Secretary of the Navy.