War of the Rebellion: Serial 009 Page 0408 OPERATIONS IN NORTH CAROLINA. Chapter XX.

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troops he could spare. I sent it off immediately, with a letter from myself, describing to General Burnside the position of General McClellan's army. The steamer having gone, I cannot send your dispatch to Colonel Hawking until morning. I will do so them, if you desire it.

JOHN A. DIX,

Major-General.

HEADQUARTERS DEPARTMENT OF NORTH CAROLINA,

New Berne, July 5, 1862.

Honorable E. M. STANTON,

Secretary of War, Washington:

SIR: I have the honor to report that the dispatch boat which I sent through the canal to Norfolk for information and instructions has not yet returned. In the mean time we hear most startling rumors of disasters to General McClellan's army, which are in sad contrast too the dispatch from Colonel Hawkins, on Roanoke Island, on the night of the 2nd instant. We have Richmond papers giving information, or rather their version of the events, up to 10 o'clock of the night of the 1st. After making due allowance for the exaggerations, we are led to hope that General McClellan has made a successful retreat to some point on the James River nearly opposite City Point, thereby securing a new and better base of operations; in which case he can, I imagine, after resting his army and receiving proper re-enforcements, work his way up the James River to Richmond. In view of the great uncertainty of the actual state of affairs in the Army of the Potomac, I beg to make the following statement:

First. We can move with 7,000 infantry (which were started the other day for the James River) at once, at the same time holding with tolerable security all the points now in our possession, together with the railroads from this place ot Beaufort.

Second. Or we can send 8,000 infantry and hold all these points, but cannot protect either the railroad or Beaufort. The latter, however, can be protected by the Navy, while we hold Fort Macon. This movement will require two days' notice.

Third. Or we can move from here with from three to five days' notice with the entire command, except the garrison for Hatteras Inlet, Fort Macon, and Roanoke Island, placing our sick at the latter place, leaving this place to be protected by the Navy, as Elizabeth City and other places on the Albemarle Sound are held. This will involve the dismantling of the two very strong forts on the outskirts of the city, which have been erected with great care and labor with a view to holding the place as a base of operations. This movement can be made without exciting the suspicions of the enemy in this neighborhood, and we can thus add to the Army of the Potomac a force of 11,500 infantry, one regiment of cavalry, twenty pieces of light artillery, and, if necessary, 100 wagons and a supply of ambulances; all in good condition.

All these propositions presuppose that the rebel army are still occupied in Richmond by the Establishment of the Army of the Potomac at some point on James River near City Point.

If such is the case, General McClellan would, I imagine, cut off tier communication with North Carolina by taking Petersburg, thus rendering it unnecessary for the present to cut the two lines in the interior of this State.

If, as the rebel papers assert, the Army of the Potomac is demoralized and broken to pieces, which we do not credit, the rebel army in front of