NEW ORLEANS, May 2, 1864.

Lieutenant-General GRANT, Commanding U. S. Army:

GENERAL: You told me to write you fully with regard to affairs in this department. I may write too freely, but where great and vital interests are at stake you must excuse me if I am very free. Knowing that your time is very precious, I shall briefly state the conclusion to which I have arrived:

First. The Department of the Gulf is one great mass of corruption. Cotton and politics, instead of the war, appear to have engrossed the army. The vital interests of the contest are laid aside, and we are amused with sham State governments, which are a complete laughing-stock to the people, and the lives of our men are sacrificed in the interests of cotton speculators.

Second. The vicious trade regulations, or the vicious administration of them, have filled the enemy's country with all kinds of goods except military supplies, and these they have been smart enough to capture. If this course is continued we cannot look for a speedy termination of the war.

Third. The best interests of the service require that General McPherson, or some other competent commander, should be sent immediately here. Port Hudson and Natchez are both threatened, and unless prompt action is immediately taken we shall lose the navigation of the Mississippi. General Banks has treated me with great politeness and kindness, and I regret greatly to say anything prejudicial to him as a soldier or a gentleman, but a strong sense of an important duty compels me to speak. The most intelligent of the officers of the army and navy will, I think, fully concur in all I have said. General Banks has not certainly the confidence of his army.

I have the honor to be, very respectfully, your most obedient,

D. HUNTER,

Major-General.

HEADQUARTERS DEPARTMENT OF THE GULF,
Alexandria, May 2, 1864.

Colonel CHANDLER, Chief Quartermaster:

COLONEL: By direction of the major-general commanding, you will furnish Lieutenant-Colonel Bailey, acting military engineer, with 20 mule teams complete and 100 oxen, to assist in the building of the dam now in course of construction across the Red River. You will also furnish Captain Stein with 1 horse and equipments complete, for temporary use while engaged on the dam.

I am, very respectfully, your obedient servant,

O. MATTHEWS,

Assistant Adjutant-General.

HEADQUARTERS DEPARTMENT OF THE GULF,
Alexandria, May 2, 1864.

Lieutenant-Colonel CHANDLER, Chief Quartermaster:

COLONEL: The major-general commanding directs that you have 100 wagons ready to leave here by 9 a.m. to-morrow, for the purpose of procuring forage. The rebels will be driven from the point where the former you spoke of is stored.

GEO. B. DRAKE,

Assistant Adjutant-General.