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At six in the morning of the 27th of September, the enemy made two attacks on the position of our whole army, the one on the right, the other on the left, of the highest point of the Sierra de Busaco. They were re pulsed in both quarters. The loss of the allies in killed, wounded, and missing, was above 1200. The loss of the enemy in killed, wounded, and prisoners, was com puted in our reports at 10,000. The French gave it out at 11,000 ; and by our own account, the prisoners whom we took did not exceed 386. The French also tell us that their whole army was not engaged, but only two brigades of it; and that, in fact, they amused Lord Wellington with this portion of their army, while they came round with their main force to get between his rear and Lisbon. The immediate consequences of this victory at Busaco, which was announced by the firing of the Park and Tower guns, by no means confuted this last assertion of the enemy.

Massena did not renew his attack on the 28th, except by " the fire of his light troops ;" hut he moved a large body in such a direction, as induced his lordship to withdraw from the mountains of Busaco, and to take his army in a southern direction, that is to say, nearer to Lisbon, to his strong holds, his shipping, and his rein forcements. His lordship adds in the same dispatch, that the enemy's communication with Almeida was cut off, and that Massena possessed only the ground on which he stood. The Spaniards, too, according to Lord Wellington's dispatches, dated Coimbra, 30th of September, were collecting an army of 20,000 men in the north ; and the armed peasantry, with the Portu guese regulars, under Colonels Millar and Trant, were operating on Alassena's communication, whose men were deserting by hundreds, and dying of hunger. These were cheering statements. Nevertheless it appeared, by his lordship's dispatches, dated the 6th of October, that our army had retired gradually, first to Pombal, next to Leyria, and next to Alcobaca, having skirmished daily with the French, during this retreat of 70 miles, in the space of six days. The retreat of the combined army drew after it the whole of the enemy's disposable force, except such as were left to guard the sick and wounded at Coimbra. Colonel Trant finding his com munication with the combined army cut off, retired in the direction of Mialhada, where he expected to have been joined by the corps of militia and ordenensa, under General Millar and Col. Wilson; but fii.ding that these corps were delayed in the vicinity of Busaco for want of supplies, he formed the resolution of advancing alone, iu order to dislodge the French who remained at Coim bra. Reaching that place with a slight resistance from straggling parties of the enemy, he made prisoners to the number of 5000, principally sick and wounded, and captured between three and four thousand muskets.

Lord Wellington took up his first line of defence, after his long retreat from Busaco, in a strong position be tween Alhandra and Torres Vedras. From this posi tion he afterwards retired, throwing back his left flank by Mafra, and occupying a range of mountains which extend from Alhandra to the coast near Mafra. lu this position the passes of Bucellas, Cabccha de Ma ritachique, and Mafra, are the principal features of the country ; and through each of these points a road leads from Torres Vedras to Lisbon. These passes are ex tremely strong by nature, and were further strength ened by redoubts and batteries. The right of his po sition was covered by the Tagus, and a number of gun-boats were stationed on that river, for the purpose of annoying the enemy if he should make an assault in that direction. The enemy remained inactive in front of this position for the space of a month, his right being on Sobral, and his left flank at. Villa Franca. Abrantes and Peniche, in his rear, were garrisoned chiefly by the Portuguese militia, which, on several occasions, intercepted his foraging parties, and took some prison ers. Lord Wellington was joined, a short time after he had taken up his line of defence, by a Spanish corps of about 9500 men under the Marquis de Romano. In this state the contending armies continued until the 14th of November, when Marshal Massena retired from his right, by the road of Alemquer towards Alcocntre, and from his left by Villa Nova, continuing his retreat to Santarem, where he halted and took post. The al lied army broke up from its position on the morning of the 15th, following the march of the enemy as far as Cartaxo, where Lord Wellington established his head quarters. In these movements about 400 prisoners were taken from the enemy. General Hill's corps, at the same time, passed in boats across the Tagus at Voiotia. By this retreat, Massena secured the passage of the Zezcre the power of withdrawing into Spain by the line of Castel lo Branco; a junction with his expected reinforcements ; and a country not yet exhausted, which afforded sup port to his army. The allies bad clearly retained, at the end of the campaign, a position which the French could not force, at least in the present circumstances, when the winter rains had set in, to which the French, if they had not retreated, would have been exposed without shelter, in a country which afforded no supplies, while the allies were securely hutted, and obtained supplies of provisions by sea. A desultory resistance to the French was kept up in several parts of Spain, throughout the provinces of Arragon, Catalonia, Va lencia, and Murcia ; but the enemy crossed the Sierra Morena once more without opposition, and pushed on their conquests to the isle of Leon.

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