"3.30 a.m., steering N.E. by N., Beaufort 45 miles distant, made a steamer bearing N.E. by E., 4 miles distant, running slow and heading E.N.E.; she, being to the eastward, did not immediately discover this vessel. Hauled up E.N.E., when, gaining on her within 2-1/2 miles, she made all speed, steering E. Opened fire and stood E by N. The second shot carried away the forward davit of her quarter boat. She immediately changed her course, steered N., and struck the beach 9 miles west of Beaufort at 8.05 a.m. Her crew took to the boats at once, this vessel at the time being 1-1/2 miles distant. Ran into 3-1/2 fathoms, and when within 100 yards of the strand she blew up. "Sent in three boats, boarded her, and found her engines and boilers completely blown out. Plugged up the pipes; anchored in 3 fathoms, and made arrangements to pull her off; 9 a.m., tug _Violet_ came down from Beaufort and anchored on the quarter; 9.30 a.m., Commander B.M. Dove arrived in the _Cherokee_, came on board and said he would take charge of the wreck, and the _New Berne_ would proceed to Beaufort, it being then high water, to save the tide in. Recalled boats and arrived at Beaufort at 11 a.m., anchoring outside too late for the tide. "One prisoner was found on board the vessel, unharmed from the explosion, who proved himself to be an escaped prisoner from Johnson's Island, of Morgan's guerillas. One body was found upon the beach, and thirty-five prisoners were captured on shore by the cavalry, three of whom are supposed to be Confederate officers, one of them adjutant general to Magruder. She was loaded on Confederate account, cargo consisting of arms, blankets, shoes, cloth, clothing, lead, bacon, and numerous packages marked to individuals. She had been chased on the 7th instant by the _Quaker City_, and had thrown overboard, by log book, 30 tons lead and 20 tons bacon; was 543 tons, of English register; no manifest of cargo found. Gunner S.D. Hines has discovered seven Whitworth tompions tied together, bright, and in good condition, which suggests the possibility of that number of guns being under the musket boxes. "The prisoners captured ashore were held in Fort Macon, and the one secured on board was transferred there by order of Commander Dove. I understood that after the army authorities had satisfied themselves with regard to the identity of the prisoners they were to be transferred to this [place] per _Keystone State_. "I have learned since leaving Beaufort that the reputed mate is the real captain; that he is a Captain Long, the outdoor agent of Major Walker (the Confederate agent at Bermuda), a citizen of New York, and having formerly commanded a ship from there. The reputed captain (an Englishman) was merely the paper or clearing captain. Of these facts I have informed Captain Gansevoort. "It will not now be possible to get the vessel off, but a large amount of the cargo can be saved, if properly guarded.