War of the Rebellion: Serial 026 Page 0421 Chapter XXX. CORRESPONDENCE, ETC. - UNION.

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Norfolk with a cargo, under a permit and under a rule prescribed by the Secretary of the Treasury."

I know not who gave such a permit. Neither it, nor a rule for it, can be found in the above-mentioned copy of Secretary Chase's letter to Mr. Cutting. The proceeding was a manifest violation of the blockade; it is my duty to state the facts to the Department.

I beg leave to suggest that the War or Treasury Department can best explain any part of the printed instructions not distinct to you. Perhaps embarrassment arises from considering that the port of Norfolk, the blockade of which has never been raised by proclamation of the President, is to be regarded as on the same footing as the ports of Beaufort and New Orleans.

I have the honor to be, general, very respectfully, yours,

S. P. LEE,

Actg. Rear-Admiral, Commanding N. Atlantic Blockading Squadron.

HDQRS. DEPT. OF VIRGINIA, SEVENTH ARMY CORPS,

Fort Monroe, Va., October 9, 1862.

Actg. Rear-Admiral S. P. LEE,

Commanding North Atlantic Blockading Squadron:

ADMIRAL: I have the honor to acknowledge the receipt of your communication of the 8th instant, in reply to mine of the 7th, and am happy to know that the instructions of the Secretary of the Navy, declaring that "no traffic" should be permitted with Norfolk, is not considered as interfering with traffic by permits given under the regulations concerning coastwise intercourse, & c.

In regard to the schooner Marblehead the permit to pass was given at Norfolk in the letter of the Secretary of the Treasury of the 27th of September, written in reply to one from Mr. Cutting asking a clearance for the vessel and a return cargo, as was stated by him, although the return cargo is not mentioned in the Secretary's answer. I have sent to Washington to ascertain whether it was mentioned in Mr. Cutting's letter which the Secretary acknowledges.

The Marblehead was cleared before any notice of the view taken by the Secretary of the Navy was received. Why she was reported to you as cleared in ballast I cannot imagine.

I have brought the whole subject of traffic with Norfolk before the Government and trust that it will be disposed of in some satisfactory mode. Among other questions I have specifically referred to is that of return cargoes. In the mean time I shall act in strict conformity to the regulations.

I have just learned that a permit was granted yesterday in my absence, at the request of General Viele, to a schooner laden with coal and lumber for Norfolk, and that the captain of the guard boat after allowing her to pass sent to Norfolk to recall her. I have directed that she be sent back as he requests. I have not seen her papers, but believe that the permit was improperly granted by Captain Millward. The schooner came here with a regular clearance for Norfolk, as I am informed, but the permit of the Secretary of the Treasury was wanting. I shall see that there is no recurrence of this irregularity.

I am, very respectfully, your obedient servant,

JOHN A. DIX,

Major-General.

P. S. - I have, on reflection, thought best to notice briefly the suggestion in your letter "that the War or Treasury Departments can best