except by stealth-must have a most important bearing upon the war. One-half of the State of Mississippi falls at once into the hands of the Government. the beef-cattle from the west of the Mississippi can no longer reach the armies of the East, and arms and ammunition can no longer be sent from the Eastern arsenals to the troops west of the Mississippi.

The extent of the trade in such supplies is shown by the capture at Natchez by General Grant of 5,000 head of beef-cattle, which had there crossed the Mississippi on their way to the Eastern armies.

At Charleston a rigorous blockade has been maintained, and though fast steamers of light draft and painted gray succeed in slipping through the blockading squadron in the uncertain light of morning and evening, many were captured or destroyed in the attempt. An attack by the fleet upon the forts and batteries of Charleston Harbor failed because the obstructions of ropes placed in the channels fouled the propellers of the monitors. These vessels bore the fire of the forts while exploring the harbor, with some injury, it is true, which pointed out deficiencies to be supplied, but with a singular immunity to their crews. Only one man was killed on the fleet in a cannonade of almost unexampled severity.

The defects of the vessels have been repaired, and an attack is now in progress, with good prospect of ultimate success, having for its object the reduction of the forts.

At the mouth of the harbor, by a combined attack by sea and land, more than ne-half of Morris Island is now in possession of our land forces, which, aided by the fire of the batteries a float and ashore, are pushing siege-works up to Fort Wagner, a strong earth-work which has been twice gallantly assaulted without success. Its fall by gradual approaches is certain, if it is not carried by assault.

In North Carolina our lines have neither extended nor contracted. All attempts of the rebels to recapture their towns have been successfully repulsed. Much damage has been inflicted upon their communications, and many valuable military stores have been destroyed by expeditions organized for that purpose.

The situation on the York and James Rivers remains unchanged since the withdrawal of the army of General McClellan from the Peninsula a year ago. Attempts to retake Williamsburg and Suffolk have been repulsed, but lately, finding Suffolk a position of little value and requiring a considerable force for its defense, our troops have been withdrawn from that village for use elsewhere. It has not been occupied by the enemy, but it is now visited occasionally by scouting parties from both armies.

Returning to the army of the Potomac, which we left resting and refitting itself after putting an end to the first invasion of Maryland, we find that in November it had crossed the Potomac and, advancing into Virginia, had forced the rebel army under General Lee to fall back to Gordonsville, south of the Rappahannock. Our army under command of General Burnside, who in the middle of November took command, marched to Falmouth, hoping to cross the Rappahannock at Fredericksburg and move at once upon Richmond, thus compelling a battle in front of that city. Delays in the movement, however, allowed General Lee to occupy the heights of Fredericksburg, and when at length, in December, General Burnside crossed the Rappahannock, his assault upon this well-fortified position failed with heavy loss. He skillfully recrossed the river in the night without his movements being interfered with by the enemy.