Jim,
Thanks for posting. I wish my eyes were better or that a transcript were available.
I think the letter is dated May 1, 1863 from New Bern, NC. If this is correct then
the flag in question still survives in the collections of the NY State Museum as #306
identified as "7th NC Cavalry". It more acurately can be id'd as that of the 2nd
Georgia Partisan Rangers, aka 7th Confederate Cavalry.
Its a third bunting anv type.

Ken Legendre