HEADQUARTERS OF THE ARMY,
Washington, July 3, 1864.

Lieutenant General U. S. GRANT,

City Point, Va.:

GENERAL: Your note of the 1st instant in relation to General Butler is just received. I will, as you propose, await further advices from you before I submit the matter officially to the Secretary of War and the President. It was foreseen from the first that you would eventually find it necessary to relieve General B. on account of his total unfitness to command in the field, and his generally quarrelsome character. What shall be done with him has, therefore, already been, as I am informed, a matter of consultation. To send him to Kentucky would probably cause an insurrection in that State and an immediate call for large re-enforcements. Moreover, he would probably greatly embarrass Sherman, if he did not attempt to supersede him, by using against him all his talent at political intrigue and his facilities for newspaper abuse. If you send him to Missouri nearly the same think will occur there. Although it might not be objectionable to have a fire fight between him and Rosecrans the Government would be seriously embarrassed by the local difficulties, and calls for re-enforcements likely to follow. Inveterate as is Rosecrans' habit of continually calling for more troops, Butler differs only in demanding instead of calling. As things now stand in the West I think we can keep the peace, but if Butler be thrown in as a disturbing element I anticipate very serious results. Why not leave General Butler in the local command of his department, including North Carolina, Norfolk, Fort Monroe, Yorktown, &c., and make a new army corps of the part of the Eighteenth under Smith? This would leave B. under your immediate control, and at the same time would relieve you of his presence in the field. Moreover, it would save the necessity of organizing a new department. If he must be relieved entirely I think it would be best to make a new department for him in New England. I make these remarks merely as suggestions. Whatever you may finally determine on I will try to have done. As General B. claims to rank me I shall give him no orders wherever he may go without the special direction of yourself or the Secretary of War.

Yours, truly,

H. W. HALLECK,

Major-General.

HEADQUARTERS ARMY OF THE POTOMAC,
July 3, 1864-10 a.m.

Lieutenant-General GRANT,

City Point:

I have nothing particular to report from the lines of this army during the past twenty-four hours. Major-General Burnside has made progress in the construction of his siege batteries, one of which will be completed by to-night. He has met with difficulty in his mining operations owing to the presence of water and quicksands. He expresses himself confident of being able to overcome all these obstacles and shortly finish the mine. Major-General Warren continues to strengthen his front, and is about placing in position a battery of heavy guns. There has been no change in the lines of Generals Hancock and Wright. The cavalry ordered to Prince George Court-House finding that posi-