Admiral Arbuthnot had in fact overtaken Destouches on the 16th of March, off the capes of Virginia. Their forces were nearly equal; eight ships-of-the-line, and four frigates on each side, the French having more men, the English more guns. An engagement took place which lasted about an hour. The British van at first took the brunt of the action, and was severely handled; the centre came up to its relief. The French line was broken and gave way, but rallied, and formed again at some distance. The crippled state of some of his ships prevented the British admiral from bringing on a second encounter; nor did the French seek one, but shaped their course the next day back to Newport. Both sides claimed a victory. The British certainly effected the main objects they had in view; the French were cut off from the Chesapeake; the combined enterprise against Portsmouth was disconcerted, and Arnold was saved.

A detachment [of two thousand troops] from New York, under General Phillips, arrived at Portsmouth on the 26th of March. That officer immediately took command, greatly to the satisfaction of the British officers, who had been acting under Arnold. The force now collected there amounted to three thousand five hundred men. The disparity in force was now so great, that the Baron Steuben had to withdraw his troops, and remove the military stores into the interior. Many of the militia, too, their term of three months being expired, stacked their arms, and set off for their homes, and most of the residue had to be discharged.

General Phillips had hitherto remained quiet in Portsmouth, completing the fortifications, but evidently making preparations for an expedition. On the 16th of April he left one thousand men in garrison, and embarking the rest in small vessels of light draught, proceeded up James River, destroying armed vessels, public magazines, and a ship-yard belonging to the State. Landing at City Point, he advanced against Petersburg, a place of deposit of military stores and tobacco. He was met about a mile below the town by about one thousand militia, under General Muhlenburg, who, after disputing the ground inch by inch for nearly two hours, with considerable loss on both sides, retreated across the Appomattox, breaking down the bridge behind them.

Phillips entered the town, set fire to the tobacco warehouses, and destroyed all the vessels lying in the river. Repairing and crossing the bridge over the Appomattox, he proceeded to Chesterfield Court-house, where he destroyed barracks and public stores; while Arnold, with a detachment, laid waste the magazines of tobacco in the direction of Warwick. A fire was opened by the latter from a few field-pieces on the river bank, upon a squadron of small, armed vessels, which had been intended to co-operate with the French fleet against Portsmouth. The crews scuttled or set fire to them, and escaped to the north side of the river.

This destructive course was pursued until they arrived at Manchester, a small place opposite Richmond, where the tobacco warehouses were immediately in a blaze. Richmond was a leading object of this desolating enterprise, for there a great part of the military stores of the State had been collected. Fortunately, Lafayette, with his detachment of two thousand men, had arrived there, by forced marches, the evening before, and being joined by about two thousand militia and sixty dragoons (the latter, principally young Virginians of family), had posted himself strongly on the high banks on the north side of the river. There being no bridge across the river at that time, General Phillips did not think it prudent to attempt a passage in face of such a force so posted. Returning down the south bank of the river, to the place where his vessels awaited him, he re-embarked on the 2d of May, and dropped slowly down the river below the confluence of the Chickahomony. He was followed cautiously, and his movements watched by Lafayette, who posted himself behind the last-named river.

Despatches from Cornwallis now informed Phillips that his lordship was advancing with all speed from the South to effect a junction with him. The general immediately made a rapid move to regain possession of Petersburg, where the junction was to take place. Lafayette attempted by forced marches to get there before him, but was too late. Falling back, therefore, he recrossed James River and stationed himself some miles below Richmond, to be at hand for the protection of the public stores collected there.

During this main expedition of Phillips, some of his smaller vessels had carried on the plan of plunder and devastation in other of the rivers emptying into the Chesapeake Bay; setting fire to the houses where they met with resistance.

In the meantime the desolating career of General Phillips was brought to a close. He had been ill for some days previous to his arrival at Petersburg, and by the time he reached there, was no longer capable of giving orders. He died four days afterwards; honored and deeply regretted by his brothers in arms, as a meritorious and well-tried soldier.

Lord Cornwallis arrived at Petersburg on the 20th of May, after nearly a month's weary marching from Wilmington. His lordship, on taking command, found his force augmented by a considerable detachment of royal artillery, two battalions of light infantry, the 76th and 80th British regiments, a Hessian regiment, Lieutenant-colonel Simcoe's corps of Queen's rangers, cavalry and infantry, one hundred yagers, Arnold's legion of royalists, and the garrison of Portsmouth. His mind, we are told, was now set at ease with regard to Southern affairs; his spirits, so long jaded by his harassing tramps about the Carolinas, were again lifted up by his augmented strength.

While affairs were approaching a crisis in Virginia, troubles were threatening from the North. There were rumors of invasion from Canada; of war councils and leagues among the savage tribes; of a revival of the territorial feuds between New York and Vermont. Such, however, was the deplorable inefficiency of the military system, that though, according to the resolves of Congress, there were to have been thirty-seven thousand men under arms at the beginning of the year, Washington's whole force on the Hudson in the month of May did not amount to seven thousand men, of whom little more than four thousand were effective.