During the night, Brigadier-General Taliaferro, commanding at Morris Island, sent out a party of 150 men, under Major [J. H.] Rion, of the Seventh South Carolina Battalion, who drove the enemy's pickets from his rifle-pits across the island, some three-quarters of a mile from Battery Wagner.

On the 15th, the enemy on Morris Island appeared to be largely re-enforced, and during the night of the 14th frigate Ironsides recrossed the bar. The enemy was busy on his works; our men employed in repairing damages in Battery Wagner and answering the fire of the monitors and gunboats.

The following instructions were given to the engineer department: To have Shell Point Battery constructed for three instead of two guns; the mortar batteries at Fort Johnson to be converted into gun batteries for one heavy rifled gun or 10-inch columbiad each; to strengthened the gorge wall of Fort Sumter by means of wet cotton bales, filled in between with sand, and kept moist by means of tubes or hose from upper terre-plein. General Ripley was also instructed to reduce the forces on Morris Island to a command simply competent to hold the works against a coup de main; also to furnish the troops on that island with several hundred rice casks for the constructions of "rat holes" in the sand-hills in rear of Battery Wagner.

Instructions were given to the chief of subsistence to keep rations on Morris Island for 5,000 men for thirty days, and on James Island rations for 5,000 men for fifteen days, with a reserve supply in the city. On the same day the enemy's pickets along the Stono on John's Island were observed to be increased by the addition of negro troops. Brigadier-General Hagood made a reconnaissance of the enemy in his front on James Island.

At daybreak on the morning of July 16, Brigadier-General Hagood, in accordance with instructions, attacked the enemy on James Island, driving them to the shelter of their gunboats and to Battery Island. The loss was small on both sides - 3 men killed, 12 wounded, and 3 missing on our side. The enemy lost 40 negroes killed and 14 prisoners left in our hands.

This retreat of the enemy was followed by the advance of our troops, who have occupied the ground ever since. In the engagement, the gunboat Pawnee was forced to retire down the Stono River under fore from our light artillery. During the day, the monitors, gunboats, and mortar vessels shelled Battery Wagner. The enemy worked diligently on their batteries. In the evening, large bodies of infantry were landed on the south end of Morris Island. Colonel [D. B.] Harris, chief engineer, was directed to increase the batteries on James Island bearing on Morris Island by at least twenty guns on siege carriages, so as envelop the enemy with a circular fire whenever he might gain possession of the northeast end of Morris Island, all works to be pushed on any and night.

On the morning of the 17th, the enemy's fleet left the Stono River, after embarking his forces at Battery Island, and appeared to concentrate them on Little Folly and Morris Islands. Both the fleet and land batteries of the enemy shelled Wagner throughout the day, answered vigorously by our guns. The construction of batteries on Morris Island by the enemy proceeded rapidly.

In a telegraphic dispatch forwarded on this date, I pointed out that the contest had lapsed into one of engineering skill, where, with sufficient, owing to the plan of defense adopted; otherwise it was