"Hampton Roads, Va., November 1, 1864.

"The most audacious, brilliant and successful affair of the war, occurred in the waters of North Carolina last week, in which, after the briefest contest, but one as it will prove of the best results, the rebel iron-clad ram Albemarle was effectually destroyed and sent to the bottom by a torpedo discharged by Lieutenant William B. Cushing, of the Navy. The great mailed monster that has so long excited the apprehensions of the Navy Department, and held in the Sound a force greatly in excess of that which was usually stationed there, now lies quietly at the bottom of the Roanoke river, a subject of curious contemplation and dread to the fish that frequent these waters. In the squadron every one feels a sense of relief in realizing the fact that the Albemarle is no longer afloat, or capable of doing further damage; for it is no secret that she was one of the toughest customers for wooden vessels to confront that has yet floated. Her raid on the flotilla, on the 5th of last May, proved that fact beyond a shadow of a doubt. She then encountered and fought to great advantage three heavily armed double-enders—the Sassacus, Mattabessett and Wyalusing—and retired, after a long contest, but slightly damaged. While she floated, no post held by us and accessible to her was safe. She could go her way as she chose, in spite of the efforts of our wooden vessels, unless some accident occurred to her which should prevent her steaming. None of the light-draft monitors were ready to confront her, and she threatened to clear our forces out of the State of North Carolina.

"Such was the state of affairs subsequent to the 5th of May. Our squadron in Albemarle Sound had been largely increased by the addition of several light draught, heavily-armed vessels; but, even with these, it was somewhat doubtful whether the possession of the Sound was insured us; so it was determined to get rid of the monster in some more expeditious and certain way.

"Lieutenant William B. Cushing, a young officer of great bravery, coolness and resource, submitted a project to Admiral Lee, in June last, by which he hoped, if successfully carried out, to rid the Sound of the Albemarle, and insure us its possession. Admiral Lee entered warmly into the scheme, as did the Navy Department, which immediately detached Lieutenant Cushing from the Monticello, and placed him on special duty, at the same time giving him every facility to carry out the object in view.

"Lieutenant Cushing at once proceeded to New York, and in conjunction with Admiral Gregory, Captain Boggs, and Chief Engineer Wm. W. W. Wood, fitted one of the new steam picket boats, which is about the size of a frigate launch, with a torpedo arrangement, and then took her down into the Sound for duty. Having made several reconnoissances up the Roanoke river, which gave him some valuable information, and having perfected his arrangements, on the night of the 27th ultimo he got under way from the squadron off the mouth of the river, and steamed boldly up stream. In the steam launch were Lieutenant Cushing, Paymaster T. H. Swann, a volunteer from the Otsego, Master's Mate W. L. Howorth, of the gunboat Monticello, and Third Assistant Engineer Stolsbury, in charge of the engine, with a crew of ten men, nearly all of whom volunteered for the service. An armed cutter of the Shamrock, with an officer and ten men, was towed along for the purpose of attending to some of the minor details of the work. It was known that the enemy had pickets along the river banks, and on the wreck of the gunboat Southfield sunk by the Albemarle last spring, and which lay about a mile below the town of Plymouth. The pickets, who were in the habit of stationing themselves on the hurricane deck of the Southfield—the only portion of the wreck above water—were to be turned over to the care of the Shamrock's cutter when the proper time came, whilst those along the river were to be passed in silence, and without giving alarm, if possible.

"At about midnight the little picket-boat entered the narrow river, and steamed silently and cautiously up without giving the least alarm. The Southfield and three schooners alongside of her, engaged in raising her up, were passed at a short distance—almost within biscuit-toss—without challenge or hail. It was not till Lieutenant Cushing reached within pistol-shot of the Albemarle, which lay alongside of the dock at Plymouth, that he was hailed, and then in an uncertain sort of way, as though the lookouts doubted the accuracy of their vision. He made no reply, but continued to press towards the rebel monster, and was for the second time hailed. He paid no attention to the challenge, but kept straight on his way, first detaching the Shamrock's cutter, to go below and secure the rebel pickets on the Southfield.

"In another instant, as he closed in on the ram Albemarle, the rebel Captain Walley, in a very dignified, pompous, studied manner, shouted, 'What boat is that?' The reply was an invitation for him to go to ——! Thereupon arose a terrible clamor. The rattle was vigorously sprung, the bells on the ship were sharply rung, and hands were called to quarters, evidently in great consternation and some confusion. A musketry fire was immediately opened on the torpedo-boat, and a charge of canister was fired, injuring some of the crew. Along the dock to which the Albemarle was tied, were a large number of soldiers, evidently stationed there to guard against a landing of our force after a surprise; and in front of their lines blazed cheerily up a number of their camp fires, which threw a strong light on the rebel vessel and the bosom of the river. By the aid of this glare Lieutenant Cushing discovered the raft of floating timbers which surrounded the ram on the accessible sides, to guard against the approach of rams and torpedoes; and by the aid of the same light he plainly saw the large body of soldiers thronging to the wharf and blazing away at his boat. To quiet these fellows, he brought the bow of his boat around a little, and discharged a heavy stand of canister into them from his twelve-pounder howitzer mounted at the bow, and sent them flying. Making a complete circle under a scorching musketry fire, at less than thirty yards, he came around, bow on, at full steam, and struck the floating guard of timbers, pressing them towards the hull of the ram. His boat soon lost headway, and came to a standstill, refusing to back off or move ahead. The moment for decisive action had now arrived. The enemy fired muskets and pistols almost in his face, from the ports of the ram, and from the hundred small arms on shore. Several of his men were injured, and Paymaster Swann had fallen severely wounded. The officers and crew of the Albemarle cried out: 'Now we've got him! Surrender! surrender! or we will blow you to pieces!' The case looked desperate, indeed; but Lieutenant Cushing was as cool and determined at that moment as one could be under the most agreeable circumstances. He knew that the decisive moment had come, and he did not allow it to glide from his hands. He seized the lanyard to the torpedo and the line of the spar, and crowding the spar until he brought the torpedo under the over-hang of the Albemarle, he detached it by one effort, and the next second he pulled the lanyard of the torpedo, and exploded it under the vessel on her port side, just below the port-hole of the two-hundred-pounder Brooke's rifle, which at that moment was discharged at the boat. An immense volume of water was thrown out by the explosion of the torpedo, almost drowning all in the steam-launch; and to add to the peril of the moment, the heavy shell from the enemy's gun had gone through the bottom of the boat, knocking the splinters about in a terrible style. She at once began to sink in the most rapid manner, and Lieutenant Cushing ordered all hands to save themselves as best they might. He divested himself of his coat and shoes, and plunged into the river, followed by those of his men who were able to do so. All struck for the middle of the river under a hot fire of musketry, the balls perforating their clothing and striking all about them, and in two or three instances, it is feared, so badly wounding the swimmers that they sunk before boats from shore could reach them. Lieutenant Cushing heard the rebels take to boats and push after the survivors, demanding their surrender. Many gave up, but two of his seamen were drowned near by him—whether from wounds received or exhaustion, he could not state. Paymaster Swann was wounded and is a prisoner; but how many others fell into the rebel hands has not as yet been ascertained. Lieutenant Cushing swam down the river half a mile, until, exhausted and chilled by the cold water, he was compelled to struggle to the shore, which he reached about daybreak. After lying in the weeds along the river bank for some time, he recovered his strength sufficiently to crawl into the swamp further, till daylight found him lying in the swamp grass, between two paths, and in speaking distance of the enemy's fort. While lying there but partially screened by the low sedge, he saw rebel officers and men walk by, and heard their conversation, which was entirely devoted to the affair of the morning. From their remarks he learned that the torpedo had done its work effectively and thoroughly, and that his great object was accomplished. He did not learn any of the details of the sinking, but heard it stated that the ram had gone down by her dock, and was a complete loss. He also learned of the capture of the paymaster and some others of his crew from the same source.

"Finding that there was great danger of his detection if he remained in his exposed position all day, lying within a few yards of two frequented paths, and so near the river, he began to move slowly away towards the swamp. He was obliged to move cautiously, so he lay on his back, and by pushing his heels into the ground, he slowly pushed himself along, and after a long and exhausting effort, passed over the sixty yards of ground that lay between him and better cover. Once concealed, he laid up for the day and rested himself. He was fortunate enough before midnight to get hold of a negro, whom he sent into town to learn the extent of his success. The negro obeyed his instructions, and reported that the Albemarle was out of sight—'clar gone sunk.'

"At night, Lieutenant Cushing struck through the swamp, and after the greatest and most exhausting toil and pain—as he was in his stocking-feet, and continually plunging over roots, briers, logs, oyster-shells, and lacerating his flesh severely—he reached a point four miles below the town, where he discovered a skiff used by a picket. Watching his chance, he seized this, and, with a single paddle, paddled off to the squadron, four miles distant, which he reached in safety. Only one besides himself—William Holton, a sailor on the Chicopee, who had volunteered on the occasion—returned to the squadron. He was picked up by the Valley City, the following day, nearly exhausted.

"Lieutenant Cushing immediately came here on the special despatch-boat Valley City, and reported to Admiral D. D. Porter. To-night he will go to Washington and report to the Department. He is worn out and in need of rest, which we hope he will be permitted to enjoy.