The honorable Secretary of the Navy says:

That there is distress in Norfolk and the whole insurrectionary region I doubt not. The object of the blockade is to destroy their traffic while in rebellion. The relief is in the hands of the people who have only to be loyal to be relieved. The case is not one of sympathy but of duty.

The honorable Secretary, under date of October 13, also says:

The rule which General Dix applies to Norfolk, denying that it is a blockaded port, would exempt any port and the whole coast, with the exception of Wilmington and Charleston, from blockade, for all are held by military occupation.

I have the honor to be, general, very respectfully, yours,

S. P. LEE,

Actg. Rear-Admiral, Commanding N. Atlantic Blockading Squadron.

TREASURY DEPARTMENT,

October 16, 1862.

The Honorable SECRETARY OF WAR:

SIR: I have the honor to transmit herewith, for your information and such action as you may think necessary, copy of a letter this day received from Major R. W. Shenk, of the One hundred and thirty-fifth Regiment Pennsylvania Volunteers, relative to abuses of flag of truce boats on the James River.

With great respect,

S. P. CHASE,

Secretary of the Treasury.

[Inclosure.]

ON BOARD STEAMER KENNEBEC,

Annapolis Bay, October 15, 1862.

Honorable SALMON P. CHASE,

Secretary of the Treasury:

DEAR SIR: I respectfully call your attention to certain facts which have come to my notice, and which as an officer of the United States Government I feel my duty to make known to you. Flags-of-truce boats are now and have been to a great extent used, in addition to their lawful mission, to pass contraband goods and other articles through the lines at Aiken's Landing on James River. I predicate my belief upon this: First, a trunk was placed on board of the John A. Warner, purporting to pass upon the permission of a lady going South and placed by accident on board of said boat, then under my command. Upon examination I found no single article of woman's apparel, but cloths, quinine, mathematical instruments, a large quantity of silk, thread, needles, & c. I retained and will turn it over to the proper authorities at Washington on my return. Second: I was approached at the landing by a certain Colonel Blanton Duncan, of Kentucky, now engraver of the notes of the Confederate Treasury, who desired me to enter into arrangements to pass goods suitable to his business and other avocations from the boat through the lines, and mentioned in connection the assistance of a prominent officer of the rebel Government. Duncan assured me that he had such arrangements with officers con