The order concerning horses was issued for the reason that there are hundreds upon hundreds of horses kept by citizens, traders, soldiers, &c., all of which are fed by the Government. No forage is brought here except such as is brought by the Government, and of course the quartermaster's department must feed all these animals. I wish to find out who are the owners, or pretended owners, of the animals, and where they get their forage.

A flag of truce came in yesterday, down the river, in charge of Major Whitford. The steamer Southfield received it, and, much to my surprise, permitted the officers with it to come to me. I sent them immediately back to the Southfield, and as soon as I could, I sent a steamer alongside of her to receive the officers and men who came with Whitford, and to return with them up the river this morning.

The dispatch brought was from General Martin, and unimportant, as it was only concerning some of Whitford's men, who are prisoners here, and who General Martin says were reported to be in irons.

Some women and children came in, too, to remain here, and one to go North. I never knew of their being here until they made their appearance before me. I should have felt obliged to refuse two of them admittance. One of them is a Northern woman from Massachusetts.

The canal I presume is fairly opened. About 200 men are stationed at Currituck Bridge. A small field-work is in process of construction, laid out by Lieutenant King, and there are two guns, for the work, one a field piece and one a carronade. We are much in need of a boat to run through the canal. I hear that you have some suitable for that purpose at Norfolk or Fort Monroe. I go to-day to Hatteras to see how matters are there, and to regulate some difficulties that have arisen between the commanding officer, the quartermaster, and the surgeon of the post. Admiral Lee has been here, but he is now inspecting his force in the sounds. He will return in a few days. I shall send with this a supply of the latest Richmond papers.

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

I. N. PALMER,

Brigadier-General, Commanding.

NORFOLK,

August 12, 1863.

General FOSTER,

The Governor [Peirpoint] called upon me last night, and after a big effort to blind me, was taken up in handsome style. Admitted that the council were interfering with the military, and had failed at Washington, and concluded with me that he merely wished to suggest a certain policy which I will not order, namely, to at once confiscate all property unless the owners will take the oath of allegiance to the United States and to the State of Virginia. I have to-day issued the following order, which is as far as I will go. The Governor is too rabid.

NAGLEE.