my Bureau, and what impediments exist and what is necessary for success. "

Under the orders of the War Department I have been charged with the purchase, repairing, compressing, and shipment of cotton for the Government, the proceeds of said shipment passing into the Treasury and subject to requisitions of the several bureaus and departments of the Government; with the purchase and receipt of foreign supplies, to be paid for in cotton; and, incidentally with most of the foreign correspondence of the War Department. The cotton on hand, and that which may be purchased with $15,000,000 estimated and asked for through the Secretary of war, together with the usual transfers from the Treasury Department, and, if required, that to be procured by requisition through the several bureaus of the War Department, will be sufficient to make all purchase of supplies for the War Department and shipments for the Treasury Department through blockaded ports.

The fall of Fort Fisher and the loss of Wilmington as a port will diminish the receipt of supplies and shipment of cotton through the blockaded ports. The quantity of these supplies and shipments cannot be approximated, because it will depend upon the number of ports held by us and the effectiveness of the blockade. The Secretary of War has, upon my application, directed the removal of the Engineer Bureau to Georgetown, S. C., to see if it can be so protected with guns and works as to secure the safety of vessels entering and departing. The Secretary of the Navy has directed his officers to render aid in protecting vessels coming into Saint Marks's, Fla. The matter is of such importance now, I think, as to justify the Department in assigning a good engineer officer to the special duty of examining what other ports or inlets may be made available, with power immediately to provide whatever is necessary for the protection of vessels entering them.

The introduction of supplies and providing vessels wih ports and inlets remote from railroads will require the hearty co-operation of the Quartermaster's Department in furnishing transportation. With protection to the vessels, and transportation to provide cotton and remove supplies, these ports and inlets will be availed of to the utmost extent, and will, I trust, insure considerable success.

Within the last few months the question has been much discussed whether cotton should be used across the enemy's lines to procure through those lines coin for the Treasury and supplies for the Army. The question being settled affirmatively, John S. Wallis, esq., was placed on the general duty within the department of Lieutenant-General Taylor, purchasing all necessary supplies, to be paid for in cotton, and delivering the same to the officers of the various bureaus for distribution. Intimations have been recently given of the early delivery of large supplies of meat, shoes, blankets, &c., along the Atlantic coast and in Alabama from Pensacola. I think the trade should be limited to supplies indispensable to the Army. In close connection with the sale of cotton for supplies the Honorable Secretary of the Treasury is selling for coin, and there is entire accord and co-operation between the War and Treasury Departments in these transactions. The cotton required for purchase of supplies can be provided from the sources already named.

In conclusion I beg leave to say that unless the trade across the enemy's lines is prohibited I think all general supplies, such as meat,