gun- boat Underwriter. She was surprised. Flusser, with the rest of the fleet, was going to the relief of New Berne, and was at the mouth of Neuse River last night.

B. F. BUTLER,

Major- General.

FORT MONROE, VA., February 4, 1864- 9. 30 p. m.

(Received 10. 45 p. m.)

Honorable GIDEON WELLES, Secretary of the Navy:

Last evening General Butler informed me that General Palmer reported that his outpost at New Berne had been driven in on the evening of the 1st instant, by a force estimated at 15,000 men. I immediately telegraphed Commander Dorning to send here with all possible dispatch the gun- boasts from the Sound, repairing at Baltimore. Commander Davenport, under date of the 2nd, in Pamlico Sound, received this evening, reports that he had just received a dispatch from General Palmer, saying that New Berne is now besieged by a very large force, and our communications by Neuse River are liable to be cut off by batteries erected on that river; that the gun- boat Underwriter was that day boarded, captured, and burned by the enemy. The Miami, Commander Flusser, and other gunboats have gone from Plymount to New Berne. Commander Davenport earnestly asks to be largely re- enforced. I wish to have four gun- boats, carrying heavy guns, draught not exceeding 8 1\2 feet, double- enders, capable of fighting, one (two would be better) heavy gun on end is preferred. Please let me know what can be done, and when. I am sending extra ammunition for the guns now there.

S. P. LEE,

Acting Rear- Admiral.

NORFOLK, VA., February 4, 1864- 3. 10 p. m.

(Received 4. 05 p. m.)

Honorable Senator WILSON, Washington:

New Berne was attacked by the enemy on the morning of the 1st instant. Heavy skirmishing and hard fighting was kept up during the day. At night five launches came down the Neuse River and attacked the gun- boat Underwriter; killed and captured all on board, except 5 men. Set the vessel on fire, and about 6 o'clock on morning of 2nd her magazine exploded opposite the city with terrible effect. Skirmishing and shelling from Fort Totten was continued through this day, and about 4 p. m. Newport Barracks was taken, and communication with Beaufort cut off. Every man at New Berne was in the field. The town was garrisoned by citizens and every negro capable of shouldering a musket was put under arms. Thus matters stood at 8 p. m. when we left.

GEO. B. SIMPSON,

Major and Paymaster, U. S. A.

HEADQUARTERS ARMY OF THE POTOMAC,

February 4, 1864. (Received War Department, 4 p. m.)

Major- General BUTLER, Commanding, Fort Monroe:

Your dispatch of last evening is received. The only troops sent from Lee's army on the Rapidan to orth Carolina are two brigades