125, surprised and captured about 40 men of the Sixth Indiana Cavalry, stationed at Big Springs, on the Morristown road, 5 1/2 miles from this place, under command of Captain Stepp. It was a complete surprise. This officer escaped, and has been placed in arrest and required to give an explanation, which will be forwarded to you for information as soon as received. As soon as this was reported, a detachment of cavalry under Lieutenant-Colonel Matson, Sixth Indiana Cavalry, was sent in pursuit. Colonel Matson went as far as Evans' Ford, on the Clinch River, and sent a scout across. They found no enemy, and returned. The enemy went out in the direction of Morristown, crossing Clinch River at Evans' Ford. I sent a scout yesterday which went in the neighborhood of Mulberry Gap, and returned this evening. They report no enemy in that locality except small scouting parties depredating upon the citizens. Colonel Love, commanding Third Brigade, First Division, Cavalry Corps, is encamped near Ball's Bridge, on the Virginia road, 14 miles from Cumberland Gap. His scouts have been several miles beyond that point, and report information received from citizens that the enemy is in position near Jonesville, 1,700 strong. If this is so, and I have no reason to doubt it, I have not mounted force sufficient to dislodge them.

I am, general, your obedient servant,

C. D. PENNEBAKER,

Colonel, Commanding District.

Brigadier General E. E. POTTER,

Chief of Staff.

Numbers 2. Report of Captain Jackson Stepp, Sixth Indiana Cavalry.

CAMP SIXTH CAV., (SEVENTY-FIRST) INDIANA VOLS.,

January 20, 1864.

COLONEL: In compliance with your order directing me to send to you a statement in explanation of my conduct on the morning of the 19th instant, at Big Springs, I hereby send you the facts as they occurred. In order to present the facts clearly it will be necessary to state what occurred the day previous.

On the morning of the 18th I had for duty 3 lieutenants and 127 men. On that day I was ordered by Colonel Matson to have 1 lieutenant and 30 men to report to the commandant of the post at Tazewell, which left me with 97 men and 2 lieutenants. Out of 97 men left me I had 40 on picket duty and 7 on camp duty. My pickets were posted as followed: On the Mulberry Gap road were posted 6 men and 2 non-commissioned officers; on the Evans' Ford road were posted 6 men and 2 non-commissioned officers; on the Walker's Ferry road were posted 8 men and 1 non-commissioned officer. These pickets were all posted from three-fourths of a mile to 1 mile from my headquarters in camp. The pickets on Walker's Ferry road and on Shelton's Ferry road were under the command of Lieutenant James, of Company G, while the others I commanded my-