No. 32. Report of Lieutenant Colonel Horace A. Manchester, First New York Marine Artillery, of naval operations of the Neuse River, December 12-15.

HEADQUARTERS MARINE ARTILLERY, New Berne, N. C., December 16, 18862.

SIR: In accordance with your instructions on the 12th instant, after waiting until 4 p.m. at Willis' Landing and learning that your boats could not reach me for want of water, I proceeded on board the steamer Allison, accompanied by the steamers Ocean Wave, Port Royal, Wilson, and North State, to ascend the Neuse River on a reconnaissance toward Kinston. At dusk I anchored in the neighborhood of Lee's Landing, about 20 miles from New Berne by the river, making all dispositions for defense in case of attack.

At daylight on the 13th got under way,and, with much difficulty and labor, worked our way up to within 2 miles of Kinston, meeting with bust slight opposition from the guerrillas on shore, by whose fire 1 man of the Allison crew was seriously wounded. About 2 miles from Kinston, upon a turn in the river, we suddenly found our boats in face of a 10-gun battery, and penned up within the banks of the river, about 100 feet wide. I immediately ordered the Port Royal, Ocean Wave, and Wilson to retire, the North State not having arrived, and interposed the Allison between the battery, which had opened fire, and the boats. The boats had to be backed down, as the river would not admit their turning, and it occupied twenty or thirty minutes. We replied to the enemy's fire with one Parrott gun, the first fire being within canister range. These shells were exploded within the batteries with apparent effect, as the enemy ceased their fire for some time after.

It was sunset when the firing commenced, and it became dark so soon that I was scarcely able to get the boats under the protection of the trees before we were left to grope in total darkness. The enemy's shell exploded over and around us with but little damage. The Allison received three shots, one taking off the tip of the pilot-house; the next passing through the roof and through the some-stack, and the third cutting away some fender and light work. Our boats were moved in double line, hay, beef, bread, &c., being packed along the sides. The guns were put into battery on the decks and bags of oats spread over the decks. In this position we awaited until morning in expectation of the enemy's appearance. Several attempts were made to reconnoiter our position in the early evening, which were promptly defeated by the sentinel's fire. A reconnaissance was made on theirs by Lieutenant Doane, but little information gained.

Soon after taking up our position for the night we heard heavy firing a few miles to the westward of us,which continued about an hour.

At daylight in the morning, upon examination, I found the largest boat on the bottom, and that the water had fallen during the night over 19 inches. I immediately ordered a lighter boat to hitch on to the Ocean Wave and drag here off and then drop down the river to deeper water. This was a slow operation, as we had to go stern foremost, and our boats often grounded. The forenoon was consumed in getting 5 miles. Here we found the North State, and learned that a force of the enemy was about 3 miles below to dispute our passage down. We winded all our boats but the Ocean Wave and dropped down 2 miles farther when we succeeded in turning her. The North States was sent forward to find the enemy's position, the others following to shell them out. About a