The extent and richness of the gold region have not been exaggerated; and the exorbitant prices paid for labor, rent, and subsistence, have hardly been fully set forth. But all the estimates of the amount actually produced are but mere suppositions, which may surpass or may fall short of the truth.

I have already directed that the men to whom their commanding officers may give short leaves of absence may be employed by the quartermasters at the usual rates here. This will be an encouragement to the men and an advantage to the public service, as labor is hard to get. But I doubt the propriety of yielding to the current of gold-seeking, and allowing large bodies of the men to go to the mines. It may be permitted to reward good conduct, as any other indulgence is; but to make it general, would be either to acknowledge the right of the men to modify their obligations as they please, or to confess our inability to enforce their fulfilment. For the sake of principle and preciseness, it would be better to adhere to what is right now, though the effect here in this particular instance would be the desertion of the men.

I am, with respect, your obedient servant,

PERSIFOR F. SMITH,
Brevet Major-General, commanding 3d Division.

Brigadier-General R. Jones,
Adjutant-General.

Appendix F.

The following despatch contains instructions to General Kearny concerning the conquest of California, contained in a despatch from the Secretary of War, marked confidential. But a portion of these instructions were carried out, in consequence of the anticipation of the conquest by Commodore Stockton and Colonel Fremont.

[Confidential.]

War Department,