(Report of Acting Rear Admiral Lee, U.S. Navy.)

"U.S. Flagship 'Minnesota,'
"Off Newport News, Va.,
"November 12, 1863.

"Sir: In addition to the captures of the Margaret and Jessie and the Cornubia, or Lady Davis, detailed in my Nos. 948 and 949 of this date, I have the gratification of presenting to the department the details of the capture of the rebel blockade runner Ella and Annie, off Wilmington.

"At 5.30 o'clock on the morning of the 9th instant, the Niphon, returning from an unsuccessful chase and steaming along the beach to the northward of New Inlet, made another steamer near Masonboro Inlet coming down along the shore. The stranger finding himself intercepted, put his helm up and endeavored to run down the Niphon. This attempt was partly avoided, though the Niphon was struck about the fore rigging, and her bowsprit, stem and starboard boats carried away. At the moment of collision Acting Master Breck reports he opened upon the enemy with shell and canister and carried the prize by boarding. A keg of powder and slow match were found ready to blow her up.

"The Ella and Annie is represented to be a vessel of 905 tons burden, in good order, with the exception of some small damages from shell and grape.

"Her cargo is chiefly composed of 480 sacks of salt, 500 sacks of saltpeter, 281 cases of Austrian rifles, 500 barrels of beef, 42 cases of paper, etc.

"In the collision three men on board the Niphon and four on board the Ella and Annie were slightly injured.

"Inclosed is a list of passengers from this prize, brought up by the New Berne (thirty-eight in number) and sent to New York in her.

"The capture seems to have been well and gallantly made by Acting Master Breck. Captain Ridgely, senior officer, commends his spirit and promptness. I hope that the department, in view of this especial and other good service on the part of Acting Master Breck, will favorably consider my application for his promotion.