New Orleans, July 31, 1862.

"General:—The general commanding wishes you to employ the contrabands in and about your camp in cutting down all the trees, &c., between your lines and the lake, and in forming abatis, according to the plan agreed upon between you and Lieutenant Weitzel when he visited you some time since. What wood is not needed by you is much needed in this city. For this purpose I have ordered the quartermaster to furnish you with axes, and tents for the contrabands to be quartered in.

"I am, sir, very respectfully, your obedient servant,

"By order of Major-General Butler.

"R. S. Davis, Capt. and A. A. A. G.

"To Brigadier-General J. W. Phelps, Camp Parapet."

General Butler's effort to turn the attention of Gen. Phelps to the law of Congress recently passed was of no avail, that officer was determined in his policy of warring on the enemy; but finding General Butler as firm in his policy of leniency, and knowing of his strong pro-slavery sentiments prior to the war,—notwithstanding his "contraband" order at Fortress Monroe,—General Phelps felt as though he would be humiliated if he departed from his own policy and became what he regarded as a slave-driver, therefore he determined to resign. He replied to General Butler as follows:

"Camp Parapet, La., July 31, 1862.

"Captain R. S. Davis, A. A. A. General, New Orleans, La.:

"Sir:—The communication from your office of this date, signed, 'By order of Major-General Butler,' directing me to employ the 'contrabands' in and about my camp in cutting down all the trees between my lines and the lake, etc., has just been received.