Being in town toward morning I noticed a body of men rushing in confusion toward the bridge, and on inquiring of some of them what was the cause of their hurry, and where they were going, they replied the enemy was attacking our men on the hill in overwhelming force and all were retreating into Maryland. They said, in reply to my inquiry, that they were Maryland Home Guards and belonged to Maulsby's regiment.

To my remonstrance against their abandoning their posts without any visible enemy even threatening them they said they enlisted to defend Maryland, and that the troops enlisted for the war were all retreating to the Maryland side, with the intention of leaving them alone to fight in Virginia; a thing they would not do under the circumstances.

On going up the hill to discover, if possible, the cause of alarm, I found the troops changing position, General Slough posting his men on Harper's Ferry Heights, having withdrawn them from Bolivar Heights, while General Cooper's brigade was moving across the river to take position on Maryland Heights.

Finding that Maulsby's forces had been stampeded merely, and without any real cause, and that the confusion would be irremediable until daylight, and that no other harm than the demoralization of the troops would result from it, I retired to obtain an hour or two's rest, and on returning, about 6 o'clock, Colonel Miles, the chief of General Saxton's staff, told me that every sentinel of Maulsby's regiment had abandoned his post, leaving all the public stores and the river entirely unguarded, and that Colonel Maulsby had reported his inability to induce the men to return to their posts; on which report General Saxton, after a few remarks by no means complimentary, allowed the regiment to retire to Maryland, out of harm's way.

General Saxton informed me that he had never known troops to conduct themselves so disgracefully, and that he should feel it his duty to report them, that they might received the scorn and indignation their bad conduct merit.

I have the honor to be, very respectfully, your obedient servant,

P. H. WATSON,

Assistant Secretary of War.

HARPER'S FERRY, May 31, 1862.

(Received 1.10 p. m.)

Honorable E. M. STANTON, Secretary of War:

Just returned from personal reconnaissance as far as Halltown. The enemy has fled in front. The last company of rebel cavalry left Halltown about an hour since. General Saxton up at naval battery.

D. S. MILES,

Colonel Second Infantry, Chief of Staff.

(Telegraphed to Fremont 2 p. m. and to McDowell 3.15 p. m.)

WASHINGTON, May 31, 1862.

Major-General DIX,

Commanding Department of Maryland, Baltimore:

Cause all the ferry-boats from Point of Rocks to Edwards Ferry to