Finally, on August 8, Congress directed the committee for procuring medicines "to supply the director general of the Hospital with such medicines as he may want."[58] By this time, such a resolution was hardly much consolation to Morgan. Evidence of the status of the supplies in the general hospital at New York can be gleaned from an advertisement in the New-York Gazette of July 29 signed by Thomas Carnes, "Steward and Quarter-Master to the General Hospital":

WANTED immediately ... a large quantity of dry herbs, for baths, fomentations, &c. &c. particularly baum hysop, wormwood and mallows, for which a good price will be given. The good people of the neighboring towns, and even those who live more remote from this city, by carefully collecting and curing quantities of useful herbs will greatly promote the good of the Army, and considerably benefit themselves.

The retreat from Long Island on August 27 and the subsequent loss of New York City to the British certainly did not help the medical supply problem. Despite the fact that part of the medical stores were shipped to Stamford, Connecticut, and another stock of supplies removed to Newark, Morgan admits that "the most valuable part was still left in New-York when the enemy had effected a landing, drawn a line across the island, and were entering New-York."[59] General Knox later told how "late in the day of the 15th of September, 1776, after the enemy had beat back part of the American troops," Morgan "came over from Powles Hook in a pettiauger, and had her loaded with Hospital stores."[60] Washington personally reported on September 16 that "the retreat was effected with but little loss of Men, tho' a considerable part of our Baggage ... part of our Stores and Provisions, which we were removing, was unavoidably left in the City...."[61]

One small bundle of private drug supplies saved from the British is reported[62] by "Doct. Prime, A Refuge from Long Island," who announced the opening of a shop in Wethersfield. The newspaper advertisement reported that Prime

... has saved from the enemy a parcel of medicines, part of which he would barter for such articles as he wants, especially shop utensils of which he had unfortunately lost the most of his own....

The medical supply problem went from bad to worse as Washington's army retreated from Harlem Heights to White Plains and then finally into New Jersey. Morgan again turned to Philadelphia for drugs, but obtained "none or next to none." Instead of ten pounds of tartar emetic which Morgan requested from Philadelphia druggist Robert Bass and the newly appointed Continental Druggist, William Smith, four ounces was all that he received, but with "a proper apology."[63]

On September 21, the supply of bark was completely exhausted, and Washington was furious. On September 24 in a letter to the President of the Congress, Washington charged that the regimental surgeons were aiming "to break up the Genl. Hospital" and that they had "in numberless Instances drawn for Medicines, Stores, &c. in the most profuse and extravagent manner for private purposes."[64]

To make matters worse, new troops continued to arrive without medical supplies. For example, those from Maryland arrived at White Plains with their regimental surgeons fully expecting Morgan to supply them with medicines, even though the Maryland Convention on October 4 had ordered that these troops be supplied with medicines by the Maryland Council of Safety before their departure.[65]

Morgan thought he had at least one small but safe stock of drugs. Barnabas Binney, who was sent to Philadelphia in July for medical supplies, was successful in obtaining "a reasonable good order" about the middle of August, including "30 lb. Camphor; 10 lb. Ipecac; 7 lb. Opium; 50 lb. Quicksilver; 40 lb. Jalap; 68 lb. Manna; 186 lb. Nitre; 200 lb. Cream of Tartar; 269 lb. Bark; and other important articles."[66] However, since these supplies arrived at Newark just as Washington was beginning to pull out of Long Island, they were deposited at a newly established hospital under Cutting, the assistant apothecary.[67]

When Morgan finally began drawing on these supplies, Dr. William Shippen had been placed in charge of the hospitals in New Jersey and the medicines had been turned over to him by a vote of Congress.[68] Finally, on January 9, 1777, Congress dismissed Morgan as director general without giving any reasons except to indicate indirectly that it was due to his inability to provide adequate medical supplies.[69] To add insult to injury, on February 5 Congress asked "what is become of the medicines which Dr. Morgan took from Boston ..." and resolved to "take measures to have them secured, and applied to the use of the army."[70]