WAR DEPARTMENT,

July 8, 1863.

General G. W. C. LEE:

By the direction of the Secretary of War, I inclose you a copy of a dispatch sent to General Buckner, with the reply of that officer, in cipher, which you will perceive the general states you can read.

Very respectfully, your obedient servant,

V. E. SHEPHERD.

[Inclosure.]

RICHMOND, July 6, 1863.

General S. B. BUCKNER, Knoxville, Tenn.:

Do the affairs of your department allow you to move or send any, and what, force into Kentucky? In your opinion, would such movement in any operate to frustrate Rosecran's designs, or to compel him to fall back? Wound it lay East Tennessee or the Salt-Works open to raids, or would is disperse of frustrate the cavalry of the enemy, manacling such? Are you likely to need aid soon in your department from General Jones, or may he be withdrawn without reference to your department with a considerable portion of his forces? Answer at once by telegraph.

J. A. SEDDON,

Secretary of war.

KNOXVILLE, July 7, 1863.

Honorable JAMES A. SEDDON:

Your dispatch of yesterday just received. General Bragg has not relieved andy of my guards at and south of London. I have just returned with most of my troops from Tullahoma. I took about 4,000 re-enforcements to General Bragg. The last of them will return tomorrow. Before leaving Chattanooga, I had begun arrangements for a forward movements. The most pressing want is corn for the animals. If you will order railroad transportation thought, this can be supplied very soon. In ten days' or two weeks' time I can advance into Kentucky with 5,000 infantry and 3,000 cavalry, including part of Preston's force, and still leave sufficient guard for brigades and Cumberland Gap against raids. It that case, General Jones should still guard the Salt-Works. Such a movements would prove a powerful diversion. If General Bragg could me two or three veteran brigades in addition, I can move to Lexington, or Louisville, or else compel the enemy to throw 20,000 or 30,000 into Kentucky to occupy the State. I have no information of the enemy since my return. The present position of General Bragg enables us to co-operate for metal support. General Jones' troops, with the expedition of the guard at the Salt-Works, will not probably be needed here soon, owing to the proximity of General Bragg. My suggestions may be modified by future development.

S. B. BUCKNER,

Major-General, Commanding.

DUBLIN, July 8, 1863.

Brigadier-General WILLIAMS,

Commanding Saltville:

Colonel Giltner, commanding at Abingdon, informs me that Colonel Caudillo, with 100 of his men, was surprised and captured at Gladesville