during his recent advance, and recommends that all persons within his lines be permitted to bring their products to New Orleans for sale, paying to the Government 50 per cent of the proceeds

There are four classes of property in the insurrectionary districts-confiscated, abandoned, captured, and purchased property. Confiscated property is that which belongs to certain classes of persons and is liable to seizure and condemnation by judicial proceedings. Abandoned property is that which has been deserted by its owners and is voluntarily abandoned by them to the civil or military officers of the Federal Government. Captured property is understood to be that which is seized or taken from hostile possession by the military or naval forces of the United States. Under the head of purchased property may be included that which is the subject of sale and purchase under the license of the President, through permits granted by officers of the Treasury Department.

The first of these classes of property includes much that may be also regarded, until confiscation is enforced through judicial proceedings, as belonging to one or more of the other classes.

The property seized by General Banks belongs to the second class, and its disposition is already determined by law and the orders of the War Department. So far as the property is useful to the army, it is to be turned over to the quartermasters or commissaries; so far as it is not so required, it is to be turned over to the agents of the Treasury Department.

The State of Louisiana having been declared, by proclamation of the President in a state of insurrection, and the port of New Orleans being excepted from the effects of that proclamation, all trade between that place and other portions of the State of Louisiana, except in accordance with the regulations and orders referred to is illegal. But, with a view to the same end as that contemplated by Major-General Banks, the Honorable B. F. Flanders, has been appointed supervising special agent for the States included in the Department of the Gulf, to take charge and dispose of all captured or abandoned property, and also to supervise all permitted trade. The collector of the port of New Orleans has been authorized, under the directions of the of the supervising special agent, to grant permits, on certain terms, for the purchase of cotton and other staples within the lines occupied by the army. This will enable parties whose property may not be considered fit subject for capture and who may desire to sell, it to dispose of it to the best advantage, subject to a proper contribution to the Government and will enable them also to obtain such supplies as may be permitted without too much risk of their being carried to the rebels. Mr. Flanders has been instructed to confer fully with Major-General Banks and to act in concert with him.

The communication of Major-General Banks is herewith returned.

Yours, very respectfully,

S. P. CHASE,

Secretary of the Treasury.

[Indorsement.]

MAY 29, 1863.

Referred to the General-in-Chief for answer to the communication of General Banks of the 4th of May. The Department does not deem it necessary to give any other or further instructions except a reference to the act of Congress and trade regulations of the Treasury Department, which are doubtless well known to Major- General