Up to January, 1865, the enemy occupied Fort Fisher, at the mouth of Cape Fear River and below the City of Wilmington. This port was of immense importance to the Confederates, because it formed their principal inlet for blockade runners by means of which they brought in from abroad such supplies and munitions of war as they could not produce at home. It was equally important to us to get possession of it, not only because it was desirable to cut off their supplies so as to insure a speedy termination of the war, but also because foreign governments, particularly the British Government, were constantly threatening that unless ours could maintain the blockade of that coast they should cease to recognize any blockade. For these reasons I determined, with the concurrence of the Navy Department, in December, to send an expedition against Fort Fisher for the purpose of capturing it.

To show the difficulty experienced in maintaining the blockade, I will mention a circumstance that took place at Fort Fisher after its fall. Two English blockade runners came in at night. Their commanders, not supposing the fort had fallen, worked their way through all our fleet and got into the river unobserved. They then signalled the fort, announcing their arrival. There was a colored man in the fort who had been there before and who understood these signals. He informed General Terry what reply he should make to have them come in, and Terry did as he advised. The vessels came in, their officers entirely unconscious that they were falling into the hands of the Union forces. Even after they were brought in to the fort they were entertained in conversation for some little time before suspecting that the Union troops were occupying the fort. They were finally informed that their vessels and cargoes were prizes.

I selected General Weitzel, of the Army of the James, to go with the expedition, but gave instructions through General Butler. He commanded the department within whose geographical limits Fort Fisher was situated, as well as Beaufort and other points on that coast held by our troops; he was, therefore, entitled to the right of fitting out the expedition against Fort Fisher.

General Butler conceived the idea that if a steamer loaded heavily with powder could be run up to near the shore under the fort and exploded, it would create great havoc and make the capture an easy matter. Admiral Porter, who was to command the naval squadron, seemed to fall in with the idea, and it was not disapproved of in Washington; the navy was therefore given the task of preparing the steamer for this purpose. I had no confidence in the success of the scheme, and so expressed myself; but as no serious harm could come of the experiment, and the authorities at Washington seemed desirous to have it tried, I permitted it. The steamer was sent to Beaufort, North Carolina, and was there loaded with powder and prepared for the part she was to play in the reduction of Fort Fisher.

General Butler chose to go in command of the expedition himself, and was all ready to sail by the 9th of December (1864). Very heavy storms prevailed, however, at that time along that part of the sea-coast, and prevented him from getting off until the 13th or 14th. His advance arrived off Fort Fisher on the 15th. The naval force had been already assembled, or was assembling, but they were obliged to run into Beaufort for munitions, coal, etc.; then, too, the powder-boat was not yet fully prepared. The fleet was ready to proceed on the 18th; but Butler, who had remained outside from the 15th up to that time, now found himself out of coal, fresh water, etc., and had to put into Beaufort to replenish. Another storm overtook him, and several days more were lost before the army and navy were both ready at the same time to co-operate.

On the night of the 23d the powder-boat was towed in by a gunboat as near to the fort as it was safe to run. She was then propelled by her own machinery to within about five hundred yards of the shore. There the clockwork, which was to explode her within a certain length of time, was set and she was abandoned. Everybody left, and even the vessels put out to sea to prevent the effect of the explosion upon them. At two o'clock in the morning the explosion took place--and produced no more effect on the fort, or anything else on land, than the bursting of a boiler anywhere on the Atlantic Ocean would have done. Indeed when the troops in Fort Fisher heard the explosion they supposed it was the bursting of a boiler in one of the Yankee gunboats.

Fort Fisher was situated upon a low, flat peninsula north of Cape Fear River. The soil is sandy. Back a little the peninsula is very heavily wooded, and covered with fresh-water swamps. The fort ran across this peninsula, about five hundred yards in width, and extended along the sea coast about thirteen hundred yards. The fort had an armament of 21 guns and 3 mortars on the land side, and 24 guns on the sea front. At that time it was only garrisoned by four companies of infantry, one light battery and the gunners at the heavy guns less than seven hundred men with a reserve of less than a thousand men five miles up the peninsula. General Whiting of the Confederate army was in command, and General Bragg was in command of the force at Wilmington. Both commenced calling for reinforcements the moment they saw our troops landing. The Governor of North Carolina called for everybody who could stand behind a parapet and shoot a gun, to join them. In this way they got two or three hundred additional men into Fort Fisher; and Hoke's division, five or six thousand strong, was sent down from Richmond. A few of these troops arrived the very day that Butler was ready to advance.

On the 24th the fleet formed for an attack in arcs of concentric circles, their heavy iron-clads going in very close range, being nearest the shore, and leaving intervals or spaces so that the outer vessels could fire between them. Porter was thus enabled to throw one hundred and fifteen shells per minute. The damage done to the fort by these shells was very slight, only two or three cannon being disabled in the fort. But the firing silenced all the guns by making it too hot for the men to maintain their positions about them and compelling them to seek shelter in the bomb-proofs.

On the next day part of Butler's troops under General Adelbert Ames effected a landing out of range of the fort without difficulty. This was accomplished under the protection of gunboats sent for the purpose, and under cover of a renewed attack upon the fort by the fleet. They formed a line across the peninsula and advanced, part going north and part toward the fort, covering themselves as they did so. Curtis pushed forward and came near to Fort Fisher, capturing the small garrison at what was called the Flag Pond Battery. Weitzel accompanied him to within a half a mile of the works. Here he saw that the fort had not been injured, and so reported to Butler, advising against an assault. Ames, who had gone north in his advance, captured 228 of the reserves. These prisoners reported to Butler that sixteen hundred of Hoke's division of six thousand from Richmond had already arrived and the rest would soon be in his rear.

Upon these reports Butler determined to withdraw his troops from the peninsula and return to the fleet. At that time there had not been a man on our side injured except by one of the shells from the fleet. Curtis had got within a few yards of the works. Some of his men had snatched a flag from the parapet of the fort, and others had taken a horse from the inside of the stockade. At night Butler informed Porter of his withdrawal, giving the reasons above stated, and announced his purpose as soon as his men could embark to start for Hampton Roads. Porter represented to him that he had sent to Beaufort for more ammunition. He could fire much faster than he had been doing, and would keep the enemy from showing himself until our men were within twenty yards of the fort, and he begged that Butler would leave some brave fellows like those who had snatched the flag from the parapet and taken the horse from the fort.

Butler was unchangeable. He got all his troops aboard, except Curtis's brigade, and started back. In doing this, Butler made a fearful mistake. My instructions to him, or to the officer who went in command of the expedition, were explicit in the statement that to effect a landing would be of itself a great victory, and if one should be effected, the foothold must not be relinquished; on the contrary, a regular siege of the fort must be commenced and, to guard against interference by reason of storms, supplies of provisions must be laid in as soon as they could be got on shore. But General Butler seems to have lost sight of this part of his instructions, and was back at Fort Monroe on the 28th.

I telegraphed to the President as follows:

CITY POINT, VA., Dec. 28, 1864.--8.30 P.M.

The Wilmington expedition has proven a gross and culpable failure. Many of the troops are back here. Delays and free talk of the object of the expedition enabled the enemy to move troops to Wilmington to defeat it. After the expedition sailed from Fort Monroe, three days of fine weather were squandered, during which the enemy was without a force to protect himself. Who is to blame will, I hope, be known.

U. S. GRANT, Lieutenant-General.

Porter sent dispatches to the Navy Department in which he complained bitterly of having been abandoned by the army just when the fort was nearly in our possession, and begged that our troops might be sent back again to cooperate, but with a different commander. As soon as I heard this I sent a messenger to Porter with a letter asking him to hold on. I assured him that I fully sympathized with him in his disappointment, and that I would send the same troops back with a different commander, with some reinforcements to offset those which the enemy had received. I told him it would take some little time to get transportation for the additional troops; but as soon as it could be had the men should be on their way to him, and there would be no delay on my part. I selected A. H. Terry to command.

It was the 6th of January before the transports could be got ready and the troops aboard. They sailed from Fortress Monroe on that day. The object and destination of the second expedition were at the time kept a secret to all except a few in the Navy Department and in the army to whom it was necessary to impart the information. General Terry had not the slightest idea of where he was going or what he was to do. He simply knew that he was going to sea and that he had his orders with him, which were to be opened when out at sea.

He was instructed to communicate freely with Porter and have entire harmony between army and navy, because the work before them would require the best efforts of both arms of service. They arrived off Beaufort on the 8th. A heavy storm, however, prevented a landing at Forth Fisher until the 13th. The navy prepared itself for attack about as before, and the same time assisted the army in landing, this time five miles away. Only iron-clads fired at first; the object being to draw the fire of the enemy's guns so as to ascertain their positions. This object being accomplished, they then let in their shots thick and fast. Very soon the guns were all silenced, and the fort showed evident signs of being much injured.

Terry deployed his men across the peninsula as had been done before, and at two o'clock on the following morning was up within two miles of the fort with a respectable abatis in front of his line. His artillery was all landed on that day, the 14th. Again Curtis's brigade of Ame's division had the lead. By noon they had carried an unfinished work less than a half mile from the fort, and turned it so as to face the other way.

Terry now saw Porter and arranged for an assault on the following day. The two commanders arranged their signals so that they could communicate with each other from time to time as they might have occasion. At day light the fleet commenced its firing. The time agreed upon for the assault was the middle of the afternoon, and Ames who commanded the assaulting column moved at 3.30. Porter landed a force of sailors and marines to move against the sea-front in co-operation with Ames's assault. They were under Commander Breese of the navy. These sailors and marines had worked their way up to within a couple of hundred yards of the fort before the assault. The signal was given and the assault was made; but the poor sailors and marines were repulsed and very badly handled by the enemy, losing 280 killed and wounded out of their number.

Curtis's brigade charged successfully though met by a heavy fire, some of the men having to wade through the swamp up to their waists to reach the fort. Many were wounded, of course, and some killed; but they soon reached the palisades. These they cut away, and pushed on through. The other troops then came up, Pennypacker's following Curtis, and Bell, who commanded the 3d brigade of Ames's division, following Pennypacker. But the fort was not yet captured though the parapet was gained.

The works were very extensive. The large parapet around the work would have been but very little protection to those inside except when they were close up under it. Traverses had, therefore, been run until really the work was a succession of small forts enclosed by a large one. The rebels made a desperate effort to hold the fort, and had to be driven from these traverses one by one. The fight continued till long after night. Our troops gained first one traverse and then another, and by 10 o'clock at night the place was carried. During this engagement the sailors, who had been repulsed in their assault on the bastion, rendered the best service they could by reinforcing Terry's northern line--thus enabling him to send a detachment to the assistance of Ames. The fleet kept up a continuous fire upon that part of the fort which was still occupied by the enemy. By means of signals they could be informed where to direct their shots.

During the succeeding nights the enemy blew up Fort Caswell on the opposite side of Cape Fear River, and abandoned two extensive works on Smith's Island in the river.

Our captures in all amounted to 169 guns, besides small-arms, with full supplies of ammunition, and 2,083 prisoners. In addition to these, there were about 700 dead and wounded left there. We had lost 110 killed and 536 wounded.

In this assault on Fort Fisher, Bell, one of the brigade commanders, was killed, and two, Curtis and Pennypacker, were badly wounded.

Secretary Stanton, who was on his way back from Savannah, arrived off Fort Fisher soon after it fell. When he heard the good news he promoted all the officers of any considerable rank for their conspicuous gallantry. Terry had been nominated for major-general, but had not been confirmed. This confirmed him; and soon after I recommended him for a brigadier-generalcy in the regular army, and it was given to him for this victory.