At these posts I will authorize the purchase of Southern products to all persons of the character above named.

The authority to trade at these posts, either in selling or buying, will be rigidly confined to persons of unquestioned loyalty and of good character as merchants, and all traders will be placed under heavy bonds. No sale will be permitted at these posts except under the permit of a local special agent, which permit should also, I think be countersigned by the local provost-marshal or such other military officer as shall be designated for that purpose by the local military commander. This will be a double check against abuse.

No person can buy or sell at these posts except under the authority or license required by the regulations of the Secretary of the Treasury, and these authorities will be subject to revocation at once upon any breach of the privilege granted.

I know that, notwithstanding every safeguard, abuses will occur; but if the military and civil authorities combine harmoniously for the execution of the regulations in conducting an honest trade by honest men, I shall hope that but little supplies will reach the enemy or little interference with military operations will occur in the carrying on of the trade so authorized.

I will feel very much obliged to you for such suggestions as may from time to time occur to you calculated to correct any abuses which may come to your knowledge either as to the general system adopted or as to any individuals, officers, or traders acting under it. If you will issue such a general order under which this system may be faithfully carried out throughout your department as you shall think sufficient for the purpose, I will be much obliged to you, and I feel certain that it will do very great good in producing harmony of action between the civil and military officers of the Government. (See order of War Department, page 52 of the pamphlet inclosed.)

I shall commence working under this system as soon as possible, unless I receive from you advice that I have misunderstood the meaning of your letter.

Will you acknowledge the receipt of this letter at your very earliest opportunity that I may know if it entirely accords with your views? And if any change in the system or any additional features in it seem proper to you, I will thank you to name them and I will promptly adopt them.

I am, very respectfully, your obedient servant,

WM. P. MELLEN,

Supervising Special Agent, Treasury Department.

P. S.-I inclose herewith a copy of the regulations of the Secretary of the Treasury of September 11, 1863. I have marked such sections as particularly relate to the trade, &c., in the districts named, viz, Sections, VII, IX, X, XI, XII, XIII, XIV, XV, XVI, XVII, XVIII, XIX, XX, XXI, XXIII, XXIV, and XXV.

PROVOST-MARSHAL-GENERAL'S OFFICE,

Washington, October 25, 1863.

General GRAY,

Adjutant-General of Missouri, Saint Louis, Mo.:

You can at once commence raising recruits for organizations whose terms expire in 1864 or 1865, and give each recruit so raised bounty,