HEADQUARTERS DEPARTMENT OF THE SOUTH,
Hilton Head, S. C., December 30, 1864.

Major General H. W. HALLECK, U. S. ARMY,

Chief of Staff, Armies of the United States, Washington, D. C.:

GENERAL; Availing myself of the opportunity afforded by the sailing of the steamer, I have the honor to inform you that everything in this department is progressing favorably. I have just returned from Savannah, where I left General Sherman with his whole army. Preparations are rapidly being made for offensive operations, and the different corps are being reviewed by General Sherman in person. Supplies are being landed at the city, and although General Easton has not been able to effect his arrangements, yet, by rapid transfer by lighters from the vessels having them on board to the wharves of Savannah, it is expected that this will soon by facilitated so as to meet all demands. The admiral having relinquished his efforts to remove the obstructions in the north channel at the upper end of Elba Island, so as to allow the vessels of sixteen feet draught to go to the city wharves, I have undertaken to do it, and expect to accomplish the work in about three weeks. At present the lighters have to carry the supplies three miles by way of the south channel, which has only five feet of water at low tide. I intend to-morrow to go through Wilmington River, via Thunderbolt and Saint Augustine Creeks, and expect to be able to find a passage that way for vessels drawing ten feet of water, certainly as far as Thunderbolt, and probably up to the wharves of the city. The supply of forage thus far received here is very inadequate to the wants of General Sherman's army. The commissary supplies have been thus far sufficient. Five or six steamers sent by General Meigs have just arrived and have made the water transportation ample. I have no news of importance to communicate from either of the districts of the department.

Very respectfully, your obedient servant,

J. G. FOSTER,

Major-General, Commanding.

HDQRS. NORTHERN DISTRICT, DEPT. OF THE SOUTH,
Morris Island, S. C., December 30, 1864.

Captain W. L. M. BURGER,

Assistant Adjutant-General, Department of the South:

CAPTAIN: I have the honor to inform you that nothing of special interest has occurred in my command since my last report. The inclosed copy of an intercepted dispatch gives the news they had in Charleston this morning with regard to our forces at Wilmington. My outposts report that night before last (the 28th to the 29th) the cars were running frequently on the Charleston and Savannah Railroad to the city. Last night (the 29th-30th) trains seemed to be running to and from the city as often as about once in every forty-five minutes. At about 1 a. m. a band was heard playing on James Island, and also considerable cheering. These indications, of course, lead me to suppose that troops are arriving on or returning to my front. At the request of Admiral Dahlgren, I have given instructions for Fort Strong and Battery Chatfield to throw rifle and mortar shells at intervals during the night to those points in the harbor where the enemy might be supposed to be placing new obstructions. The naval battery will also