which could have accomplished but little at best, and which might prove hazardous. I therefore withdrew to the east of La Fayette, and halted on the Resaca road, until we could learn something more definite as to the situation. During the afternoon Colonel Watkins determined to move on the following morning back to Gordon's Mills for ammunition and supplies, and requested that I should cover his rear as far as Rock Spring Church, which I promised to do. Just as he moved out of the town, however, he received your dispatch, notifying him that the THIRD Kentucky had been ordered there. He determined to remain. The THIRD arrived before noon, and that evening we moved through Ship's Gap. Colonel Watkins and his command deserve great credit for the gallantry of their defense against such overwhelming numbers, and in the face of such a compete surprise. As far as I was able to learn, all the outposts were captured or driven off by the enemy getting between them and the town, and the first notice the command had was the presence of the enemy in the streets. * On the 25th I moved, via Villanow and Snake Creek Gap, to Sugar Valley, in order to get near enough the railroad to obtain supplies. On the 26th we returned to Villanow and scoured the valley during that day and the succeeding, but found nothing save a few scouting squads which we chased to the hills. On the 27th we again returned to Sugar Valley for supplies, where I now await your order. I find no influential rebels in the country. They have left. I have found, on the contrary, a number of very reliable loyal men who can be trusted to give us information of matters in that quarter. To- day I have sent a company toward Subligna and another toward Floyd's Spring. My scout from the latter place yesterday reports a small force of rebels this side. Your dispatch of the 28th seemed based upon the understanding that I was at La Fayette, and had some command I addition to my own regiment. I think, likely, some order sent me has not been received. I expected something the night of the 27th, at Villanow, but nothing came. Newtown (which in the original dispatch was Estontown) is east of Resaca; and one regiment in my opinion, is not sufficient to guard the line from there to the head of McLemore's Cove. The Fifth Kentucky Cavalry is at Resaca. Capron's brigade left for front. The THIRD Kentucky is, I presume, still at La Fayette, with Colonel Watkins.

I remain, captain, very respectfully, your obedient servant,

JOHN T. CROXTON,

Colonel Fourth Kentucky Veteran Infantry, Mounted.

WAR DEPARTMENT,

July 1, 1864- 3. 30 p. m.

Major- General SHERMAN,

Headquarters, via Chattanooga:

Your letter of the 21st of June has just reached me and meets my approval. I shall strive to have the measures you recommend enforced. Nothing new from General Grant. Chase has resigned and Fessenden is appointed Secretary of the Treasury.

EDWIN M. STANTON,

Secretary of War.

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*See also Vol. XXXVIII, Part II, p. 777.

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