Evans' Mill was about to be attacked; and, if carried, the commands at the stations mentioned would have been jeopardized. The commands came safely. At midnight the rebel force, under the immediate command of General Pickett, commenced to retire toward Kinston. They had been immediately in front of Fort Totten, apparently making preparations for an attack during the day. I only directed firing upon them when they were in plain view. The firing was excellent, and whenever they appeared they were forced to retire immediately. On the south side of Trent River the same thing occurred. I had placed all the forces there under the command of Colonel Amory, of the Seventeenth Massachusetts Volunteers. I was not surprised when I discovered they had retired, although I certainly thought with their large force they would make a strong effort to capture this place. I have never had any fears as to my ability to hold the position, and in writing to you of affairs here, I have merely wished to keep the commanding general posted as to the actual condition of affairs; not to request re-enforcements, except so much as to re-establish our communication with Morehead City, and to keep the river clear in case the rebels commenced to erect batteries on its banks. To-morrow, I hope to open the communication with the coast. To-day I have followed up the retreating force with cavalry on the Neuse road toward Kinston, and on the other side of the Trent River toward Pollocksville. They appear to be making for Kinston, but I am still on the watch for them from a new quarter.

The force here is in good shape. I have armed a very respectable force of negroes, and we are in good situation to stand a siege. At the first attack on our force at the Neuse bridge we lost 1 officer killed and 3-wounded. A few non-commissioned officers and privates were also killed and wounded. At this point the rebels suffered considerably, and among the killed was Colonel Shaw, of the Eighth North Carolina Volunteers. I made every effort to relieve the section of artillery reported as lost in my communication of the 1st instant. This section, with two companies as support, was sent to the support of a company of North Carolina at Troops at Beech Grove, some 9 miles from here. The rebels came down the Neuse road so rapidly that they got in rear of the force at the Grove, and yesterday afternoon they sent two regiments and three pieces of artillery against them and captured them. The most of the North Carolina troops, I am happy to say, escaped.

Deserters have been coming in all day, mostly from North Carolina regiments, some few from Virginia and Georgia regiments. From them I got the following list of the forces brought against me, all under command of General George E. Picket: Pickett's division, consisting of the three brigades of Kemper, Corse, and Armistead's old brigade; the brigades of Clongman, Hoke, Ransom, and Barton; sixteen pieces of artillery, formerly under Major Dearing, but now under Major Read; two or three regiments of cavalry (one of them Baker's); in all, probably about 15,000.

I cannot at this time give any correct account of the losses in the Sub-district of Beaufort, but hope to communicate with Colonel Jourdan to-morrow, and to send complete reports to your office soon.

I am, sir, very respectfully, your obedient servant,

I. N. PALMER,

Brigadier-General.

Major R. S. DAVIS,

Assistant Adjutant-General.