he will rather be deterred than encouraged by the result of his late expedition, especially when he considers the probability of re-enforcements being sent to North Carolina. It is as natural that he should be preparing for defense as offense. It is proper, however, that we should be prepared, and we ought to concentrate there as large a force as possible, and to be successful in our operations, our officers must be bold and energetic. Information should be obtained by our own scouts- men accustomed to see thinks as they are and not liable to excitement or exaggeration.

After receiving your dispatch of the 2nd instant I put General Ransom's division in march for Richmond on the morning of the 3rd. He has orders to report to General Smith. I hope it may not be necessary to advance him beyond Drewry's Bluff. I think it very hazardous to divide this army. Much labor has been expended in its organization. It is now in excellent condition, physically and morally, and I wish to maintain it so if possible. If I get further intelligence to-day rendering it advisable I will place another division near Hanover Junction, but until I can learn something definite of General Burnside's intentions I do not think it advisable to send it farther. I think it very certain that General Burnside's whole army is between this place and the Potomac and that as yet he has made no movement to put it into winter quarters or to transfer it elsewhere. The glorious victory obtained by General Bragg, will I think produce a pause in the military operations of the Federal Army everywhere. New organizations and new combinations will have to be made before much of importance can be attempted. In the mean time we should prosecute our preparations with the greatest energy and vigor.

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

R. E. LEE,

General.

HEADQUARTERS,
Wilmington, N. C., January 5, 1863.

Flag-Officer LYNCH,

Commanding C. S. Navy:

COMMODORE: I have received your note of yesterday, placing the naval forces under your command at my disposal for the defense of this place and requesting information as to their disposition. I am much obliged. Regarding the security of the gunboats as of the first importance, and indeed, in case of disaster here the most efficient, if not the only, means of reprisal upon the enemy to regain the place, I do not think their safety should be risked. In the event of a formidable attack they should be carried out of the way up the Cape Fear River. For further security I have caused batteries at three points on the river to be located, and the guns and crew of the Arctic should be disposed to occupy and hold these batteries against any attempt by the enemy's boats to ascent the river. This is obvious to me as the proper arrangement under the circumstances, and indeed those guns are nearly all that I have to depend upon for this important service. I will in addition if possible assign a small Whitworth gun to your command.

Very respectfully,

W. H. C. WHITING,

Brigadier-General, Commanding.