John Francis, loaded with merchandise and articles for traffic. The John Francis was bound from Fort Monroe to Yorktown under a permit signed, by your command, by Captain Millward, of the army. Her manifest, written in a large folio book, consists of miscellaneous merchandise, owned by B. F. Voorhees (name not legibly written). This afternoon a certificate was brought to me signed, by your command, by Captain Millward, saying that this cargo of goods (not army supplies) is solely for the use of the Sixth [Fourth?] Army Corps, under the command of Major General E. D. Keyes, at Yorktown. The bearer of this certificate states that Mr. Voorhees, who swears in the manifest that he is the owner of the cargo, is not a subtler in the army but a general trader at Fort Monroe.

The certificate does not state, as is usual, that this vessel is in the employ of the army and has only supplies for the army on board. I am not informed that Mr. Voorhees has a permit to trade from either the Treasury, War, or Navy Departments. I decline under the circumstances to accept the certificate as sufficient to justify this vessel passing the blockade with her cargo of goods.

I have reported the facts to the Navy Department.

Very respectfully, yours,

S. P. LEE.

WASHINGTON, October 18, 1862 - 10.25 a. m.

Major-General DIX:

It was resolved in Cabinet yesterday that the Norfolk trade should be placed under your personal direction, in the manner proposed when you were here.

Clearances for which you ask admission into the port will be granted by the Treasury Department, and all exports permitted by you will be allowed by the Navy to pass. Your own attention personally is requested and your own signature to permits required.

EDWIN M. STANTON,

Secretary of War.

UNITED STATES FLAG-SHIP PHILADELPHIA,

Hampton Roads, Va., October 20,, 1862.

Major General JOHN A. DIX, U. S. A.,

Commanding Seventh Army Corps, Fort Monroe, Va.:

GENERAL: I have the honor to acknowledge the receipt of your communications of the 18th and 19th instant. In regard to permits for vessels with return cargoes from Norfolk you are aware that the decision of the Navy Department is adverse to your making any such clearance. I do not know of any conflicting decision of the Secretary of the Treasury. The North Atlantic blockade extends from the Piankatank River, on the western shore of Virginia, to the coast of South Carolina, excepting the harbor of Beaufort, the blockade of which has been raised by proclamation of the President. Within these limits I am required to maintain a strict blockade and to prevent all traffic, except under a permit from the Secretary of the Treasury, War, or Navy.

My instructions to the gunboat off Fort Monroe are only to carry out

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