428 bales of cotton to New Orleans, and what has not been sold and is now left in General Herrons' hands amounts to about 109 bales and 25 sacks at this place, and about 63 bales which I obtained beyond King's Ranch and ordered in, and which reached Brownsville yesterday or the day before.

I have supplied Major Carpenter at different times, from sales of cotton, with about $40,000 in coil and $1,000 Treasury notes; Captain Emerson, chief commissary, $2,000 coin; Captain Routt, assistant quartermaster to General Herron, $9,000 coin and $2,000 Treasury notes. No attempt has been made for a settlement of whatever understanding there may be regarding the Mustang, Hale, and Matamoras. If a claim is allowed to be made I have no doubt it will be exorbitant. I recommend that the boats be immediately appraised by competent steam-boat men and officers at their value when handed over, and that that amount, together with whatever reasonable outlay the owners have since made, be paid, with interest at 6 percent since we received them.

Serna has abdicated and Ruiz is Governor at Matamoras, Cortina having agreed to march against the French at Tampico; the latter, however, has, as usual violated his agreement and stopped with his force in some large building on the edge of town, and is now keeping the place in a ferment by a threatening attitude. It is not without hesitation that I thus fully advance my views above, but I do it merely from my stand-point and in frankness, expecting that they will received only such attention as the major-general commanding may deem them worth. I have received no dispatches for nearly three weeks, no mail having come to me by the Saint Mary's I hope to hear from at you Esperanza.

I have the honor to remain, with high respect,

N. J. T. DANA,

Major-General.

HEADQUARTERS U. S. FORCES ON THE RIO GRANDE,
Brownsville, Tex., January 7, 1864.

Brigadier General CHARLES P. STONE,

Chief of Staff:

GENERAL: I have just time by this steamer to make a hurried statements in regard to supplies. We are shot of everything, but particularly of commissary and forage, and orders should be issued at New Orleans to send forward such amounts as requisitions have been made, or it may leave us in trouble. General Dana purchased some forage from a brig lying outside, but she cannot get into the harbor owing to the constant norther,s and we have no boat that can go out. I find that it will be absolutely necessary to have the steamboat Matamoras,now at Pass Cavallo, sent back here. She is the only boat that can run from Brazos Santiago to the mount of the river. General Dana is satisfied of this from his experience, and I certainly am. I would therefore ask that an order be issued to the quartermaster at Pass Cavallo to sent the matamoras to this point. I will write more fully in regard to these matters by next steamer.

Nothing new from above.

Very respectfully, your obedient servant,

F. J. HERRON,

Major-General.