I beg leave to inform you that on the 8th inst cruizing off Cape Anne in his Majesty's Sloop under my Command I discovered two Schooners under Sail standing in for the Shore. I made Sail after them and very soon came up with the Sternmost and detained her; the other got into Cape Anne Harbour whither I followed. On my anchoring the same day I sent Lieutt Thornborough with the Pinnace Long boat and Jolly Boat manned and armed in order to bring the Schooner out; the Master coming in from Sea at the same time in a small Tender, I directed him to go and assist the Lieutt When the Boats had passed the Point of Rocks that was between the Ship and Schooner; they received a very heavy fire from the Rebels who were hidden behind Rocks and Houses and behind Schooners aground at Wharfs, but notwithstanding the Heavy fire from the Rebels, Lieutt Thornborough boarded the Schooner and was himself and three men wounded from the Shore. On the Rebels firing on the Boats I fired from the Ship into the Town to draw the Rebels from the Boats. I very soon observed the Rebels paid very little Attention to the firing from the Ship, and seeing their Fire continued very heavy in the Schooner, the Lieutt had boarded, I made an Attempt to set fire to the Town of Cape Anne and had I succeeded I flatter myself would have given the Lieutt an Opportunity of bringing the Schooner off, or have left her by the Boats, as the Rebels Attention must have been to the fire. But an American, part of my Complement, who had always been very active in our cause, set fire to the Powder before it was properly placed; Our attempt to fire the Town therefore not only failed but one of the men was blown up, and the American deserted. A second Attempt was made to set fire to the Town, but did not succeed. The Rebels coming to the Fort obliged the four men to leave it. I then began a second time to fire on the Town but the Houses being built of Wood could do no great Damage. About four o'Clock in the Afternoon the Lieutt was brought on board under Cover of the Masters fire from the Schooner who could not leave her. All the Boats are much damaged by Shot; and lay on the side of the Schooner next the Rebels. On my being made acquainted with the Situation of the Master I sent the Prize Schooner to anchor ahead of the Schooner the Master was in, and veer along side to take him and people away, who were much exposed to the Rebels fire; but for want of an Officer to send in her it was not performed, the Vessel not anchored properly; And as, I apprehend, the Master could not see any Prospect of being assisted, and a heavy fire from the Rebels, and numbers coming to their Assistance, delivered himself up about 7 in the Evening with the Gunner, fifteen Seamen, seven Marines, one Boy and ten prest Americans. The Schooner I sent in to assist the Master on his going ashore, ran in and was retaken by the Rebels. I am inclined to think the Company of the Schooner had been hid and took that opportunity of retaking the Vessel that was sent to assist the Master. After the Master was landed I found I could not do him any good, or distress the Rebels by firing. I therefore left off. On this Occasion the Rebels took the Pinnace Jolly Boat three Swivels some small Arms and two small Anchors with one hawser that was to warp the Schooner out by. I remained at Anchor till the following Morning and then warped out in order to proceed to this place.
I am &c