On the evening of the 3rd, I became satisfied that Adams contemplated an attack on Natchez, with a force variously estimated at from 2,000 to 3,000 men and six pieces of artillery. I immediately ordered Gresham to embark on board of transports, with two regiments of infantry, two of cavalry, and a section of artillery, and proceed down the river to Natchez, take command of the U. S. forces, and disperse the enemy, if the place was threatened. If it was not threatened, he was to disembark at Rodney and move out through Fayette, coming in to the rear of Natchez, then re-embark, and come up to the vicinity of Water Proof, and disembark and clean out McNeill, or drive him across the Tensas.

He embarked his command on the afternoon and evening of the 4th, and started at daylight the next morning, in company with the [Mississippi] Marine Brigade, which arrived most opportunely and took on board a portion of his cavalry, and reached Natchez the same night about 10 o'clock, just in time to frustrate the plans of the enemy and prevent an attack on the place. During the night the enemy fell back, and were pursued the next day by General Gresham, but without getting into a fight, though some slight skirmishing ensued.

Gresham reports that Adams has from 2,500 to 4,000 men and ten pieces of artillery-two 10-pounder rifled, two 6-pounder rifled, and six 12-pounder howitzers.

Cosby's and Whitfield's brigades are still out here in our front, in the vicinity of Brownsville and Clinton, and Loring's division is at Canton, three brigades, and about 4,000 infantry at Brandon, Meridian, and Enterprise, which can be moved to Canton rapidly.

It is reported through a deserter, this evening, that Harrison's force has fallen back and gone to join Taylor. Rumors come up from below that the force which has been annoying steam-boats below the mouth of Red River is crossing Red River and coming north, but it needs confirmation.

I shall leave Gresham in command at Natchez, for a while, at least, as I consider him one of the best officers in my corps.

My kindest regards to all the staff.

Sincerely, your friend,

JAS. B. McPHERSON,

Major-General.

Major General U. S. GRANT.

HDQRS. 17TH ARMY CORPS, DEPT. OF THE TENNESSEE, Vicksburg, December 16, 1863.

GENERAL: I inclose herewith a report from Colonel Farrar, and also a report from Brigadier-General Ellet, showing the movements of the [Mississippi] Marine Brigade in connection with our forces under General Gresham:

Colonel Farrar has shown himself a bold, adventurous, and skillful partisan, and in his recent operations about Natchez has rendered most efficient service. His forte lies in commanding a small body of resolute, daring men.

From the best information I can obtain, Loring's division is still at Canton, Whitfield's and Cosby's brigades of cavalry from Brownsville, via Clinton, around to Raymond; Wirt Adams' (late Logan's) somewhere in rear of Natchez, and last week French's