CAIRO.

The most important strategic point in the West at this time was the city of Cairo, situated at the extreme southern point of the State of Illinois, at the junction of the Ohio and Mississippi rivers, where the latter river separates it from Missouri, and the former from Kentucky. It completely commands both streams, and in a military point of view may be properly considered as the key to what is usually denominated “the Great North-west.”

The Illinois Central railroad connects it with Chicago, the greatest grain city of the world—with Lake Michigan, and the chain of lakes, and with the vast net work of railroads that branch from thence eastward. On the Missouri bank of the Mississippi river, two miles distant, is Ohio city, the initial point of the Cairo and Fulton railroad, designed to be extended to the Red river, in Arkansas, and thence to Galveston, in Texas. Twenty miles below, on the Kentucky side of the same giant river, is Columbus, which was soon after occupied and fortified by the rebel troops.

As soon as General Lyon was vested with supreme command in Missouri, one of his first steps was to order a body of Federal troops to take possession of Cairo, under General Prentiss, who immediately proceeded thither, with 6,000 men, and commenced fortifying the place.

On the 28th of May, Bird’s Point, on the Missouri side of the river, a commanding position, was also occupied, by direction of General Lyon, by the Fourth Missouri Volunteers, under the command of Colonel Schuttner.

On the 11th of June, Governor Jackson, at his own instance, accompanied by General Price, had an interview with General Lyon and Colonel Blair at St. Louis, when he requested that the United States troops should be withdrawn from the soil of Missouri. General Lyon, as well as Colonel Blair, were equally blind to the advantages of this movement, and could not be made to see how the Government or the State of Missouri could be benefitted by a surrender of the field to the secessionists. Jackson and Price, finding their negotiations altogether vain, and under a previous arrangement that they were not to be arrested or interfered with before the 12th, returned to Jefferson City on the same night, and prepared for an immediate hostile demonstration. General Lyon, convinced that the only effective treatment demanded by the occasion consisted in an instant arrest of the conspirators, if possible, started up the river, and occupied Jefferson City on the 15th, the place having been abandoned by the rebels. On the 16th, he started in pursuit of Price and Jackson, and on the 17th landed about four miles below Booneville, where their forces were collected, and had resolved to make a stand.