In the meantime Captain Hudnall, hearing the firing of the enemy on Captain McNeely, immediately moved down a valley half a mile from the road he had left in the direction of the town. His approach was concealed from the enemy by the timber. As he emerged from this he saw in his front, not 200 yards distant, the rebel line of battle. Immediately dismounting and forming his men, he moved forward to the open ground and opened on the enemy. About the same time the two companies of the right (Captains Jacobs and Harrington) came up on Hudnall's left. The surprise was so complete and the firing so vigorous that the enemy immediately broke and fled in confusion beyond the town, leavin their dead and wounded. Fourteen prisoners were captured by Captain harrington, including the lieutenant-colonel and a captain of the Ninth Alabama. Captain Hudnall captured several prisoners, inlcuding the adjutant of the Twelfth Tennessee, also recaptured and ambulance belonging to Colonel Watkins' command, and the colors of his brigade, which the rebels had taken from his headquaters in the town. Just as I reached the Dug Gap road in sight of the town I received word from Colonel Kelly that our forces were in possession. I at once ordered the companies of Captains Jacobs and Harrington to remount and join me, intending to push on for the next road leading south. At the same time I threw a force out on the Blue Bird Gap road, who learned that about 200 of the enemy had passed there nearly two hours previous, having in charge about forty prisoners, whom I supposed were captured early that morning. Captain Jacobs' company, a platoon of Captain Long's, and a platoon of Lieutenant McDermott's company, dismounted and deployed, were moved forward toward the Summerville road, and about a mile south of the town joined the two companies which Colonel Kelly had sent directly through with a portion of the command of Colonel Watkins, which, as soon as relieved by us, had mounted and moved out in pursuit of the rebels. It was soon discovered that the enemy were in full retreat and out of our reach. Colonel Watkins lost, he informed me, so many horses killed and captured that half his command were dismounted, and that the whole was well-night out of ammunition. In view of these facts, and the uncertainty as to the nature of Pillow's mission, whether independent or the advance of a large force, together with the pressing necessity of having the railroad communication to the front opened and protected, which was my special mission, induced me to abandon a purusit which could have accomplished but little at best and which might prove hazardous. I therefore withdrew to the east of La Fayette and halted on the Resaca road until we could learn something more definite as to the situation.

During the afternoon Colonel Wartkins determined to ove on the following morning back to Gordon's Mills for ammunition and supplies, and requested that I should cover his rear as far as Rock Spring Church, which I promised to do. Just as he moved out of the town, however, he received your dispatch notifying him that the third Kentucky had been ordered there. He determined to remain. The Third arrived before noon, and that evening we moved through Ship's Gap. Colonel Watkins and his command deserve great credit for the gallantry of their defense against such overwhelming numbers and in the face of such a complete surprise. As far as I was able to learn, all the outposts were captured or driven off by the enemy getting between them and the town, and the first notice the command had was the presence of the enemy in the streets. On the 25th I moved via Villanow and Snake Creek Gap to Sugar Valley, in order to get near enough to the