Yesterday morning the enemy fell back to the intrenchments proper of the city of Atlanta, which are in a general circle, with a radius of one and a half miles, and we closed in. While we were forming our lines, and selecting positions for our batteries, the enemy appeared suddenly out of the dense woods in heavy masses on our extreme left, and struck the Seventeenth Corps (General Blair) in flank, and was forcing it back, when the Sixteenth Corps (General Dodge) came up and checked the movement, but the enemy's cavalry got well to our rear, and into Decatur, and for some hours our left flank was completely enveloped. The fight that resulted was continuous until night, with heavy loss on both sides. The enemy took one of our batteries (Murray's, of the Regular Army) that was marching in its place in column in the road, unconscious of danger. About p.m. the enemy sallied against the division of General Morgan L. Smith, of the Fifteenth Corps, which occupied an abandoned line of rifle-trench near the railroad east of the city, and forced it back some four hundred yards, leaving in his hands for the time two batteries, but the ground and batteries were immediately after recovered by the same troops reenforced. I cannot well approximate our loss, which fell heavily on the Fifteenth and Seventeenth Corps, but count it as three thousand; I know that, being on the defensive, we have inflicted equally heavy loss on the enemy.

General McPherson, when arranging his troops about 11.00 A.M., and passing from one column to another, incautiously rode upon an ambuscade without apprehension, at some distance ahead of his staff and orderlies, and was shot dead.

W. T. SHERMAN, Major-General commanding.

HEADQUARTERS MILITARY DIVISION OF THE MISSISSIPPI IN THE FIELD NEAR ATLANTA, July 26,1864.

Major-General HALLECK, Washington, D. C.

GENERAL: I find it difficult to make prompt report of results, coupled with some data or information, without occasionally making mistakes. McPherson's sudden death, and Logan succeeding to the command as it were in the midst of battle, made some confusion on our extreme left; but it soon recovered and made sad havoc with the enemy, who had practised one of his favorite games of attacking our left when in motion, and before it had time to cover its weak flank. After riding over the ground and hearing the varying statements of the actors, I directed General Logan to make an official report of the actual result, and I herewith inclose it.

Though the number of dead rebels seems excessive, I am disposed to give full credit to the report that our loss, though only thirty- five hundred and twenty-one killed, wounded, and missing, the enemy's dead alone on the field nearly equaled that number, viz., thirty-two hundred and twenty. Happening at that point of the line when a flag of truce was sent in to ask permission for each party to bury its dead, I gave General Logan authority to permit a temporary truce on that flank alone, while our labors and fighting proceeded at all others.

I also send you a copy of General Garrard's report of the breaking of the railroad toward Augusta. I am now grouping my command to attack the Macon road, and with that view will intrench a strong line of circumvallation with flanks, so as to have as large an infantry column as possible, with all the cavalry to swing round to the south and east, to strike that road at or below East Point.