some port of Canada or in Welland Canal for the purpose of attacking the guard at Johnson's Island and releasing the prisoners, to capture if possible the U. S. steamer "Michigan," and levy contributions on the lake cities or destroy them. I immediately sent special detectives over to Windsor, Canada, who associated with the rebels and disaffected persons there, and in the course of a few days I became satisfied that there was an organization which would make us trouble unless precautions were taken.

I consulted with acting assistant provost-marshal-general, Colonel B. H. Hill, and other influential persons of this State, and put them in possession of all the facts. I also notified General Cox, commanding at Cincinnati, and Lieutenant-Colonel Pierson, commanding the guard at Johnson's Island. General Cox informed me that he had ordered detachments of artillery and infantry to Sandusky.

Within the last four or five days the large number of rebels had disappeared from Windsor, and my detectives informed me that they had gone to take possession of their vessels, the precise locality of which I could not ascertain. But I sent detectives two days since to accompany some of the men, and I am now waiting and expecting their return, when I shall know all the facts. I also, after consultation with the acting assistant provost- marshal-general, General Robertson, Senator Chandler, and others, sent yesterday a steamer - the Forest Queen - to look around the lake for a day or two to ascertain the truth of the rumors which had reached us that one or two hostile vessels were already in Lake Erie.

It was deemed advisable by all with whom I consulted that a small armament should be placed on board the steamer under charge of Colonel Loomis, of Michigan artillery, who chanced to be in the city at the time. This community was in a state of wild excitement at all the rumors, and it was believed that the measure of sending a steamer with a few arms on board to make a reconnaissance would have the effect to allay the excitement, which has been happily effected.

In all these measures I have consulted freely with the authorities of the Federal and State governments, and have only acted on their entirely coinciding with me in opinion.

As soon as the steamer returns, probably this evening or to- morrow, I will be able to make a more complete report.

Very respectfully, I am, sir, your obedient servant,

J. R. SMITH,

Lieutenant-Colonel, U. S. Army, Military Commander.

WAR DEPARTMENT,

Washington City, November 13, 1863.

Major-General SCHOFIELD,

Saint Louis:

The modifications proposed by you in your two telegrams of the 12th, of which one was received last night and the other this morning, are approved. You are authorized to recruit colored troops in accordance with them, as if embraced in the original regulations. I am obliged to you for the attention you are giving to this important subject.

EDWIN M. STANTON,

Secretary of War.