night, taking an obscure road across the mountain toward Old Town, abandoning in his march his dead, 8 in number; his wounded, some 30-odd; 2 caissons, several carriages, and a large quantity of ammunition. About 5 a. m. August 2 he attacked Colonel Stough near Old Town, Md., who with his regiment defended the crossing until the enemy succeeded in flanking him, when he recrossed the river. By the time he had reached the Virginia side, his men had become so demoralized that all but five officers and seventy-seven enlisted men took the care which had carried them down and moved out of reach of the enemy. Colonel Stough, with the small command now left him, assisted by the iron- clad cars, commanded by Captain Petrie, Second Regiment Potomac Home Brigade, Maryland Volunteer Infantry, continued to defend the crossing until the enemy succeeded in disabling the iron-clads, by a shot through the boilers of the engine, when Captain Petrie's command was compelled to take shelter in the woods, leaving Colonel Stough in the blockhouse, where he remained until the enemy's guns were brought to bear upon it, when the following demand for his surrender was received:

AUGUST 2, 1864.

COMMANDER OF THE FORCES IN THE BLOCK-HOUSE:

You will surrender the block-house and your force at once. If you do not you will not receive any terms.

BRADLEY T. JOHNSON,

Brigadier-General, Confederate Forces.

Colonel Stough returned the following answer as the terms upon which he would surrender his command, deeming it useless to longer attempt a defense: First, that his men should be immediately paroled; second, that private property should be respected; third, that the men should retain canteens, haversacks, blankets, and rations; fourth, that he should have a hand-car with which to transport his wounded men to Cumberland. The propositions made by Colonel Stough were accepted and his command at once paroled.

The enemy lost from 20 to 25 killed in the engagement and from 40 to 50 wounded; our loss, 2 killed and 3 wounded.

After destroying the block-house and iron-clad cars, the enemy moved south toward Romney.

On the 3rd instant a detachment of the enemy, McNeill's guerrillas, crossed the Potomac at Brady's Mills, six miles west of Cumberland, and destroyed several culverts, &c., indicating clearly that the enemy meditated an attack on New Creek and to prevent the sending of re-enforcements to that place. In anticipation of their probable movements I at once, on the night of the 3rd, had the road repaired and put in running order. On the same day a scout discovered a camp of the enemy at or near the Wire Brigade in Hampshire County. *

Very respectfully, your obedient servant,

B. F. KELLEY,

Brevet Major-General.

Captain P. G. BIER,

Assistant Adjutant-General.

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*For continuation of report, see Vol. XLIII, Part I.

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