ing. I have exhausted all the power I possess to bring both forward, and can do no more. The department is slowly improving. Reports come forward more promptly, and we are beginning to approximate to the true state of things. You can see this in the reports forwarded to your office. I have received and disposed of a vast amount of freight in the last month. I do not believe that the Government ever dealt with such a huge pike at so little cost, both in transportation and demurrage; and, moreover, I have not lost a pound by sudden rising of the river. The other day it came up 20 feet, but, fearing it, I worked several thousand men all night, and saved everything. Last year they lost 1,000 tons by just such a rise. I am still in want of workmen. I pay $ 40 a month to laborers, and cannot get enough at that. The want of labor is my great trouble. I have now three railroads out of Nashville, and require an officer for each road, and a disbursing officer for all. The railroads will be an enormous item in our expenses, as rolling-stock, motive power, and materials increase, and employes will be a small army of themselves. I want a first-rate officer to disburse for all of them.

I have Captain Crane in charge of the Nashville and Chattanooga Road, under Colonel McCallum; Captain Ruger in charge of the Northwestern, and think of placing Captain Brown, now at Clarksville, in charge of the Decatur road - Tennessee and Alabama Road. I have instructed Captain Ruger to put up store-houses and prepare a levee at Reynoldsburg, the terminus of the Northwestern Railroad, and shall send a couple of saw-mills there, and the requisite materials. I find I must act in the matter, as the road will be soon completed to the Tennessee River.

Very truly, yours,

J. L. DONALDSON.

CULPEPER, March 26, 1864 - 10 p. m.

Major General W. T. SHERMAN, and

COMMANDING OFFICER AT MEMPHIS:

Forrest should not be allowed to get out of the trap he has placed himself in at Paducah. Send Grierson with all your cavalry with orders to find and destroy him wherever found. If General Sherman has sent instructions they will govern.

U. S. GRANT,

Lieutenant-General.

NASHVILLE, March 26, 1864.

Major-General SCHOFIELD,

Knoxville:

Your dispatch to General Sherman was received and forwarded to him at Athens.

He has directed me by telegraph to say to you that he is on his way to see you. In the mean time he desires you to feel the enemy to make him develop his plans. He does not believe the enemy intends to make an invasion of Kentucky, but all of Longstreet's army will re-enforce Lee in Virginia.

Respectfully,

R. M. SAWYER,

Assistant Adjutant-General.