The Situation.

September 30, 1862, The New York Herald

Gen. McClellan has advanced his headquarters three miles nearer to Harper’s Ferry, of which place we now hold undisputed possession. Some important move of our army is spoken of, but cannot be definitely referred t just now. The pickets of both armies occupy opposite sides of the Potomac, and are in constant sight of each other, near Shepherdstown, but by common consent they do not fire, as was formerly the uncivilized custom. Yesterday morning a large force of our cavalry crossed the river on a reconnoitering party, at Blackburn’s ford, and had not returned at latest accounts.

One of the most exciting and extraordinary events of the day is the unfortunate collision between Generals Nelson and J.C. Davis, at the Galt House, in Louisville, by which the former lost his life. We publish in another column all the details which have reached us concerning this unhappy and disgraceful affair. It would appear that a personal quarrel existed between Generals Nelson and Davis for some time past, and that on the occasion of the fatal rencontre in the hotel some harsh language was used by Nelson to Davis, and it is said that blows were administered by the former. General Davis borrowed a pistol from a friend, and following General Nelson up stairs, shot him through the heart. Such is the story as we learn it, and it is sad enough, for both were valuable officers, and had rendered good service in the Western campaign.

The particulars of the capture of Augusta, Ky., by the rebels, which we announced yesterday, have reached us from Cincinnati. It appears that the place was attacked by six hundred and forty mounted rebels, with two cannon, under the command of a brother of the guerilla chief John Morgan. The Union forces, under Colonel Bradford, numbering one hundred and twenty men, took refuge in houses and fired from windows, killing and wounding ninety of the rebels. Among the mortally wounded was Lieutenant Colonel Prentice, a son of George D. Prentice, of the Louisville Journal. The rebels set fire to the houses, and two squares of the town were burned. Our loss was nine killed and fifteen wounded. The balance of our forces were taken prisoners. Subsequently a Union force from Maysville intercepted and attacked the rebels, when they fled in a perfect panic. The result of the pursuit has not yet been learned up to latest accounts. Humphrey Marshall and Kirby Smith were reported to be at Cynthiana, marching towards Covington.

An official despatch to General Halleck from General Curtis, at St. Louis, under date of the 28th inst., reports that Colonel Guitar has captured Major Wells, Captains Emery and Robinson, and Lieutenant Morrison, with several privates, and important correspondence of the rebels, and that he routed a party of some fifty guerillas, taking five prisoners, with a quantity of arms and horses, on the 25th inst.

The Richmond Dispatch of the 27th inst. says the only way the present war can end is by the exhaustion of the North or the extermination of the South. The news of President Lincoln’s emancipation proclamation reached Richmond on the 26th inst., in a telegram from Petersburg. The rebel press are in the fog as to the movements of General Lee. It is said his men are improving in condition, and accumulating by daily accessions of stragglers and conscripts. The yellow fever is raging with unabating fury at Wilmington, N.C. Letters from the scourged city are many, calling for help from abroad. Its rapid spread and malignity arises from the utter ignorance of the physicians and others in their treatment of the disease. In official despatches to the rebel Adjutant General, relative to the capture of Munfordsville, Ky., General Jones says that 23,000 Kentuckians had joined Kirby Smith’s corps d since his advent in that State.

The Europa, off Cape Race, telegraphs news from Europe to the 21st September, two days later.

The London Times denounces the policy of the abolitionists of the United States in the most unqualified terms asserting that they are seeking to raise the negroes of the South against their masters. In the same article Mr. Lincoln’s emancipation proclamation is condemned beforehand, and such action of the President is characterized as crime and a blunder.

The New York correspondent of the London Times, indeed, assures the European Powers they need not fear that the North will unite to repel foreign interrent as courage is gone, and the game is lost,’for the are destroying the Union.’

The London News endeavors, but in a weakly manner, to counteract the impression produced by the articles of the Times by holding out the Exeter Hall bugbear of a renewed and extensive African slave trade by the rebels.

It was said that the Anglo-rebel steamer Alabama, otherwise ‘No. 290,’ had put back into Holyhead, England. The report was not credited, and the vessel just arrived was supposed to be an irregular Mediterranean trader.

Mr. Laing, who has been Secretary of Finance to the new imperial government of India, made a speech, either in Manchester or Liverpool, to the Chamber of Commerce on the subject of the cotton supply. He entertains little hope of full relief from India for some time to come, but prophesies that in a few months the war in America will be ended by the recognition of the South by the great Powers of Europe.

The cotton operatives of France were suffering unusual distress.

La France (new Paris journal) says that a majority of the Jaurez Cabinet have agreed to offer to surrender the cities of Mexico and Puebla to General Forey, of France, as the basis of a capitulation to Napoleon’s army.

Civil War

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