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NEW ORLEANS, January 15th, 1863.

DEAR SIR: A fight is progressing on Bayou Teche. Gen. Weitzel commands. He crossed Berwick's Bay yesterday morning, and has advanced up the Teche as far as the enemy's fortifications. The enemy have 1,100 infantry and 1,000 cavalry. Weitzel will succeed without doubt, and advance to New Iberia, where fortifications will be erected by us. The rebel salt works near New Iberia, are yielding one million pounds per day. It is carried all over the Southern States. If this movement is successful, these works will be destroyed. The Teche country is full of sugar. This present movement is simply carrying out Gen. Butler's plan of operations. I urged it a week ago, but advised a flank movement. Gen. Banks has thought best to attack in front. I have traveled through that country several times, and know it well.
The U. S. armed Transport, "Hatteras", was sunk by the "Alabama" on Sunday the 11th inst. The fight lasted about 45 minutes, and occurred sixteen miles from Galveston. The Flag officer there sent the "Hatteras" out to overhaul a strange sail—which proved to be the "Alabama", and proved too powerful for her antagonist. Six men of the " I Hatteras" escaped in a boat the rest of the crew were killed or captured. The "Hatteras" carried ninety men. The "Brooklyn" and other vessels lying off Galveston, immediately started for the " Alabama ", but could find nothing of her. The rebels have not attempted to come out of Galveston Bay with the "Harriet Lane". She is still lying in the Harbor, and I do not know why our Gunboats do not go in and destroy her.
Major Gen. Augur has at last been sent to Baton Rouge to take command, and organize the force there. There begins to be exhibited in this department some little energy and activity. All that is now done, ought to have been done four weeks ago.
The business of "Special Agent" under regulations of August 28th, is not now interfered with by military authorities. In consequence of this non-interference I have organized it with great success. I am satisfied that nothing, or very little, reaches the enemy from this port - and the planters within our lines are supplying themselves rapidly with whatever they need for their own use. I supervise everything myself and have an immense amount of labor to perform. I hear that large amounts of merchandise and supplies reach the enemy from Memphis and vicinity. This can be avoided by honestly adopting the right plan. Trade must be centralized and none allowed except at one or few points. I prevent it as far as possible, outside of the city, and can therefore control it. This plan is well adapted to this country, because property real and personal, is in the hands of a few planters. It is easy (and has been customary heretofore) for each planter to come to the City - take the proper oaths and be made individually responsible for whatever he wishes to take out of the City. Every boat going up the river, carries an "Aid to the Revenue" who sees that the supplies are delivered only at the proper plantation. I have to employ many additional "aids", but make the system pay its own expenses. My personal supervision of all the details is an immense labor, but I know it will be well done if I attend to it myself -  otherwise not.
The planters within and without our lines have been afraid to bring their crops of sugar and cotton because it was seized and must pass through the hands of the military commission. Gen. Butler's military commission was a dishonest plundering concern. By the enclosed order of Gen. Banks, you will see that planters are invited to bring their crops to the City and promised protection. It will have a good and marked effect. This order will not interfere with my action as " Special Agent."
The system of furnishing supplies to planters - adopted by me, gives satisfaction to planters - but dissatisfaction to the great number of Jews, military speculators, and men from the North, who expect to swindle planters out of fortunes.
It is known here that the President has issued his proclamation, but its terms are not fully known. Gen. Banks told me this morning he is going to raise negro troops, but I fear, not in large numbers. I have information that the number of rebel troops in Texas is about 9,000 - of whom one-third are cavalry. They are provided with good arms brought through Mexico. About one-third of them are conscripts.
The number of troops in Louisiana, west of the Mississippi, is about 4,500 - nearly all of whom are in the Teche country.


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Annual Report of the American Historical Association; Volume II; Washington, Government Printing Office; 1903

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