3. That in six weeks' time the boat may have been put in good order, if there was any disposition so to day by the quartermaster.

4. That the probable or possible movements of the enemy cannot be taken into consideration when a work of importance is to be carried out, until the movement actually takes place.

I therefore respectfully suggest that the dredge-boat be appraised in its present condition, and then after its completion, and the difference to be put to Government credit, to be deducted from its services. Ten thousand dollars will put the boat in good order.

V. SULAKOWSKI,

Chief Engineer.

[OCTOBER 11, 1863.]

Lieutenant General E. KIRBY SMITH,

Commanding Trans-Mississippi Department:

GENERAL: I have discovered a well-laid and I fear widespread conspiracy, with an understanding with the Federal army, through the Federal prisoners at Hempstead, by which our cause is greatly endangered on the side the Mississippi River. A Mr. Baldwin and a Dr. Peeples, the former of this place and the latter living near Hempstead, are ringleaders.

I have arrested both, and have Baldwin's papers, implicating many. A German printer, named Zinke, is also one of them. Baldwin and Zinke are now on their way to El Paso, via San Antonio, and Dr. Peeples is here in jail, and will be sent forward to avoid the writ of habeas corpus until I can hear from you. There are grave objections to these men going out of the country. They are intelligent and daring, and know everything. They ought not to be allowed to go. On the other hand, if they stay, there will be a great public discussion by men of talent and boldness which will prove eminently dangerous.

I have taken the course of sending these men toward San Antonio, not to send them out of the country, which would be the most unwise plan of any for this class of men, but only to gain time until I can hear from you. I urgently request that I may be allowed to declare martial law, and to suspend the writ of habeas corpus. In this manner alone can the public interest be preserved. I have a considerable number of names implicated, but for the present small make no further arrests.

Boldness and promptness are absolutely necessary. As you are really the Government on this side of the river, cut off as we are from the President, I think you would be perfectly right to exercise the power conferred upon him by Congress. I agree with you that we should be more particular, in our isolation, in exercising any authority not possessed by us, unless absolutely necessary; but I think the President would fully justify it if the public safety were clearly in jeopardy by a combination of traitors. Please answer as soon as you receive this.

Our difficulties increase on all sides; arms arrived at the mouth of the Rio Grande the other day; 4,000 were landed and 6,000 captured by the French. I have 7,000 men without any arms, and one half of the rest very badly armed. I understand from Major Snead that General Price's army is now well armed, and so is General Taylor's. I hope I may be allowed to retain these, 4,000 for my unarmed and badly armed troops.

I am, general, very respectfully, your obedient servant,

J. BANKHEAD MAGRUDER,

Major-General, Commanding.