word, the work and its steam-tugs and officers and all its other means are now monopolized by the orders of Government. This company fitted out all the gun-boats now employed in the defense of the Albemarle and Pamlico Sounds, and their enterprise is most worthy of Government care and patronage. They ought certainly to be saved from sacrifice and enabled to serve Government more usefully on any reasonable terms.

With the highest respect,

HENRY A. WISE,

Brigadier-General.

[Indorsement.]

Quartermaster-General for estimate of what would be a fair compensation to be allowed by War Department for use of the canal for its own purposes. Plainly, the Navy Department will use the work much more than the War Department.

J. P. B.

[Inclosure Numbers 1.]

OFFICE OF THE ALBEMARLE AND CHESAPEAKE CANAL CO.,

Norfolk, Va., January 1, 1862.

Brigadier General Henry A. WISE:

SIR: Having learned you have been assigned to the command of the military district embracing the waters of Albemarle and Currituck Sounds, in North Carolina, I take the liberty of calling your attention to the Albemarle and Chesapeake Canal, through which you will obtain your supplies and military stores. L This canal and navigation, as you are aware, connects the waters of Virginia with those of North Carolina, and is sixty miles in length, and navigable for side-wheel steamers, propellers, and gun boats. Since the commencement of the war all the heavy ordnance and other military stores designed for the defenses of North Carolina have passed through this route, and since August 29 over 200 army transports and steam gun-boats, varying in size from 50 to 300 tons each, have traversed this navigation. The large fleet of gun-boats now constructing at the various ship-yards will require this navigation to reach the Gosport dock-yards for their outfits and equipments. So long, therefore, as it is desirable to keep up this communication for military purposes it is of vast importance to the Confederate States that this canal and navigation should be kept in the best condition to meet the requirements of the service. It is proper to inform, you though the canal was opened for navigation more than twelve months ago, it is yet unfinished. Our first contract was for a six-foot navigation, since which we have made a further contract for eight feet, and were applying our revenue befor ethe war (which exceeded $6,000 per month) to its completion to that depth. The war has caused nearly an entire cesstion of our trade, and the company having exhausted all its means wee compelled to discharge its mechnics and laborers on the 31st ultimo. From its incomplete condition a rapid deterioration of the work may be expected. Shoals will form in the rivers and landslides in the canal. The vessels used by the Government, being generally larger than those used for commercial purposes, have already in their hasty passage through the canal done much injury to its banks, and unless means are provided to keep it in constnat repair it will soon become useless for military purposes. No sufficient water communication will then exist between the waters of Virginia and North Carolina. Up to this time the canal company have received no compensation from the Confederate Government for the use of its canal. I have no doubt the Government will be equally willing to compensate this company as the various railroad companies engaged in its service. It is