HEADQUARTERS U. S. FORCES,
Fort Fisher, N. C., January 20, 1865.

GENERAL: I have the honor to report that on the morning of the 16th instant the enemy blew up Fort Caswell and Fort Campbell, and abandoned both them and their works on Smith's Island, at Smithville and on Reeves' Point. All these works were taken possession of by the navy. In them were found between 70 and 80 heavy guns, nearly all of which are serviceable, a great number of small-arms, and a large quantity of commissary and ordnance stores. Admiral Porter's vessels occupy the river as far up as Reeves' Point. I regret to report that shortly after sunrise on the 16th instant, the day following the assault, the magazine of reserve ammunition in the fort exploded, killing and wounding about 130 men. The cause of this explosion has not yet been ascertained. General Ames had caused guards to be placed over the magazines, and had taken precautions to prevent accidents. A board of officers has been appointed to investigate and report upon the matter. Our loss in the assault is less than I at first feared. It is 12 oficers and 107 enlisted men killed, and 45 officers and 495 enlisted men wounded. I shall forward the nominal list of casualties by the next steamer. The number of prisoners captured in the works is greater than I at first reported. We have 96 officers and 1,164 enlisted men unhurt, and 8 officers and 278 enlisted men wounded.

In obedience to verbal instructions from the Honorable Secretary of War, the captured officers have been and will be sent to Washington, D. C., the unwounded men to Point Lookout, Md., and the wounded men to Beaufort, N. C., Fort Monroe, and New York. Our own wounded will all be embarked to-day. The number of guns found in Fisher and the other works on Federal Point is 84. Day before yesterday (the 18th) a reconnaissance in force was made toward Wilmington for the purpose of discovering the enemy's position, and, if possible, his strength; but as it was not made with sufficient vigor to accomplish the object, it was renewed yesterday. The enemy's position was then fully ascertained, and 54-prisoners, including 2 officers, were captured. Our own loss was between 20 and 30. The position is from a mile and a half to two miles in front of our own defensive line toward Wilmington, and extends from Sugar Loaf Hill, on the Cape Fear Rive, in an easterly direction to a point a little west of Myrtle Sound. From that point it is refused,and stretches up nearly parallel to the sound toward Masonborough. How far their line extends toward Masonborough was not determined. It is a strong rifle-pit, at least partially covered by abatis, with some emplacements for guns.

The prisoners whom I have examined, some of whom speak with entire freedom (and, as I think, truthfully), tell me that Hoke's whole division and a brigade of North Carolina Senior Reserves are in our front. They also inform me that there is a line of works mounting heavy guns about three miles this side of Wilmington, and still another line around the city itself. On the right bank of their river, opposite the outer line, is Fort Anderson, mounting eleven guns. Admiral Porter is working up the river, dragging for and removing torpedoes. He will soon be in a position to attack Anderson, and then to give assistance to an attack upon this side of the river.

My force of infantry for duty is about 7,500 men, deducting garrisons for the works already taken. I could move against the enemy with about 6,000, a number which I think would be insufficient for the attack of successive lines of works such as I have reason to believe are in

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