8 o'clock on the morning of the 3d, as preconcerted. First Lieutenant Hempfield was stationed with a party at the river, Sergeant Hurst commanded the guard a Corporal Underwood the lower side of the river opposite the ranch. I proceeded with the howitzer to the mill opposite the ranch, from which place a good range with shell can be had. We were all at our posts when the Indians discovered us. Some endeavored to escape, but were stopped; others proposed to fight, and were about to commence when I ordered the howitzer forward to load with shell. The Indians, seeing the helplessness of fighting, gave themselves up; but one escaped, and he was badly wounded and left his gun behind. We captured 41 fighting bucks and 74 squaws and children, 9 guns all loaded, and 30 quivers of bows and arrows. The prisoners were immediately removed to the fort and just under range of the howitzer. They were then put to work removing their ranches to a site neir the fort. They are now gathering food for the winter and constructing a fish dam. They are apparently perfectly contended, and so far have not cost the Government a single extra dollar. I feel confident that all the Indians in this valley can be managed here without extra cost, and kept from participating with or holding correspondence with the hostile Indians if properly controlled. I am satisfied that this has been the leading place for all the attacks made on trains and travelers. The outside Indians, now hostile, are comparatively insignificant, and can be easily cleared out this winter if the war is prosecuted with energy and with vigor. The men at this post are ready and willing to finish this long continued war this season. I would respectfully call the attention of the department to the importance of this post. It is so situated, commanding as it does such a large body of Indians, by far the most warlike and intelligent of this whole district. It command a large extend of country connecting with trails and ridges throughout the whole Indian country. We have had lately as much as 100 miles between portions of Company B, Mountaineers. We have scouted from New River, Trinity, and South Fork n the coast, and all this from this post. When we made the attack on the ranch September 3 we were obliged to take the sick out of the hospital, the hospital stewards, cooks, &c., to garrison the post. We could only muster, including mechanics and such sick as were able to walk, fifty-six men. I would most respectfully recommend the discontinuance of the Weaverville mail to this place. Its route is through a dangerous country. To make it safe now would require twenty mounted men and stations and ferries at the South Fork and main Trinity during the winter months. The same service can be obtained by the regular mail route to Fort Jones, Scott Valley, via Etna Mills, Sawyer's Bar, Orleans Bar, Hoopa, Fort Gaston. Letters from San Francisco would probably be one day later by the proposed route, but would be perfectly safe at all seasons, not requiring any escort. I would also most earnestly and respectfully urge the necessity of the inclosed requisitions being forwarded immediately, as the trails soon close and be impassable for trains until about may, unless at very high rates. It is expected that two or more companies will be stationed at this post.

I have the honor, sir, to remain, very respectfully, your obedient servant,

WM. S. R. TAYLOR,

Majr. 1st Batt. Mountaineers, California Vols., Commanding Fort Gaston.

Colonel R. C. DRUM,

Assistant Adjutant-General, San Francisco, Cal.