On the 9th of November, New Mexico was constituted a military department, and Colonel E. R. S. Canby, of the United States army, was appointed to the command. Colonel Canby immediately entered upon his duties, and pushed his work with so much energy, that by the end of December he had retaken Forts Craig and Stanton. Federal forces also held Fort Massachusetts to the north, and Fort Union, on the south-east of Santa Fé, the capital of the Territory. On the 2d of December, the Legislature assembled, and the Governor recommended the adoption of measures to secure the loyal adhesion of such of the Indian tribes as had not been betrayed into the hands of the Confederate agents. While loyal to the Government in their sentiments, they found themselves apparently cut off from its protection and support, under the circumstances in which they were placed; and pressed on all sides, they were somewhat divided. While some remained loyal, and were willing to enlist in the Federal service, others joined the Confederates; but the great body desired to pursue a course which would be entirely neutral. On the 30th of December, General Sibley, the rebel commander, issued a proclamation from his headquarters, notifying the people that he took possession of New Mexico in behalf of, and for the benefit of the Confederate States. He declared, that “by geographical position, by similarity of institutions, by commercial interests, and by future destinies, New Mexico pertains to the Confederacy.” General Sibley also declared the United States tax laws abolished. BATTLE OF VALVENDE. FEBRUARY 21, 1862.