Juarez writes from Saltillo, under date of January 16, to Governor Ruiz that an engagement had taken place near San Augustin, between the Liberal forces under General Negretta [Negrete] and the rebel Mexicans under General Mechie [Mejia], in which the latter were worsted and General Mechie [Mejia] badly wounded. Cortina is still acting governor of Tamaulipas, Ruiz being on this side, a refugee. The former is on very friendly terms with us. After affairs were quieted, Mr. Pierce moved back to Matamoras, and all goes on well with him, he being treated, however, with more marked consideration by everybody than ever before. All reports from the interior agree that the Liberal army is badly fed and paid, and terribly managed. Great dissatisfaction exists among the troops, and many are leaving entirely discouraged. It is still the impression at Monterey that Juarez will soon be at Matamoras.

I have the honor to be, with great respect, your obedient servant,

F. J. HERRON,

Major-General, Commanding.

[Inclosure Numbers 4.]

HEADQUARTERS U. S. FORCES ON THE RIO GRANDE,
Brownsville, Tex., January 26, 1864.

Brigadier General CHARLES P. STONE,

Chief of Staff:

GENERAL: I received several days ago, by express from Monterey, the inclosed letter from Brigadier General J. R. West, commanding at El Paso, to Major-General Banks, and supposing it might be necessary to take action upon the matters contained therein before it could be transmitted to New Orleans and back, I opened the same. From it tI see there is but little hope of help from General Carleton at present. Matters in Texas are not much changed since my last report. The rebels still hold Eagle Pass, and considerable trade is going on there. Since Vidauri's seizure of the cotton, the manner of conducting trade has changed. Goods are now carried by the merchants to Piedras Negras and sold across the river for cotton, the latter being delivered to them in Texas. Some cotton is also being crossed at Rio Grande City. I think it would be well to send Colonel Davis with his regiment to Rio Grande City and station them there. This would stop all crossing between here and there, and would alarm them in the Eagle Pass route. There is no doubt of his ability to hold that point, and I am satisfied he could fill up his regiment in half the time it would require here.

Inclosed please find copies of letters from Mr. Marsh, U. S. consul at Altona to Secretary Seward, and letter from Seward to Mr. Pierce relating to the movements of a Mr. Adams. The letters will explain themselves. Mr. Adams has just arrived at Matamoras, and has the brig. Herbert lying outside. He has proposed to sell the cargo to us and the brig is ordered around to Brazos. I will seize her upon arriving there and send forward full statement of the case. Mr. Adams expects another vessel in a few days, and I would suggest that the naval officer commanding Gulf Squadron be notified of it. I would also suggest that a gun-boat be ordered to this point, as she would be useful in cases like the present. Nothing new from the interior of Texas.

With great respect, your obedient servant,

F. J. HERRON,

Major-General, Commanding.