the enemy landing below, and immediately ordered men to take possession of Colonel Belknap's house, for the purpose of holding them in check. When we reached the top of the hill near the house, the enemy poured into us a furious fire of musketry, at a short distance. I at once made a reconnaissance of their position in person, and ascertained that we were almost surrounded by a force of several hundred men. I informed Captain Fry of our situation, and was ordered by him to fall back to the battery, which I did with the few men who remained with me. When we reached the battery the enemy were on our front and right flank, and poured into us a galling cross-fire of musketry. Captain Fry gave the orders to retreat, and immediately the men scattered and ran the gauntlet of a heavy cross-fire for near half a mile, the officers bringing up the rear. I cannon make an accurate report of our loss, not knowing who have made their escape. It is, however, very slight. the enemy's loss must have been very heavy. They admit a loss of 140 killed, drowned, and scalded. All our stores and artillery fell into the hands of the enemy. I respectfully call your attention to the coolness and intrepid bearing exhibited by Captain Fry, our commander, who, from disease, could not make his escape, and was, I understand, severely wounded and taken prisoner. Captain Dunnington in this engagement has proved to the world that the Federal gunboats are no invulnerable. You are respectfully referred to his report for more minute information. I would also call your attention to the gallantry of a portion of my command, some 20 in number, whose names I cannot give, and particularly to the intrepid manner in which Privates [J. H.] Bruce and [G. W.] Everett, of Captain hearin's company, behaved themselves. I take great pleasure in acknowledging the services of Colonels Belknap and Finch and Messrs. Herman and Margins. The thanks of the country are due them for assistance rendered in encouraging and cheering the men, and bringing them up. I must, at the same time, bring to your notice the cowardly conduct of Lieutenant [R.] Bland and Sergeant Grey, who could not be kept at their places, and, as can be substantiated by witnesses, ran away several times. When orders had been given to retreat, a portion of the company, some 15 in number, behaved badly, and were perfectly uncontrollable, and seemed to have been scared out of their wits.

I am, very respectfully, your obedient servant,

A. M. WILLIAMS,

Captain of Engineers.

Colonel [R. C.] NEWTON,

Assistant Adjutant-General.

CORRESPONDENCE.

DEPARTMENT OF THE MISSOURI,

January 2, 1863.

General SCHOFIELD:

Your letter is received. I am glad to correct myself in regard to Colonel Daniels. It was during my first absence that his forces wee cut up in trying to get into Helena. It seems, too, he moved before, and not with, the troops I ordered. So you had, before I came here, arranged with General Steele his coming. I suppose it matter little who moved him; I only traversed the main point, as to his coming. General Washburn reported only 800 when he came to me, being parts of