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But some of the gunboats advanced to the entrance of Croatan Sound, and reconnoitred. The rebel fleet was discovered, drawn up in line of battle on the west side of the island, awaiting the conflict. A fog coming on, active operations against the enemy were postponed, and the gunboats, withdrawing also, came to anchor for the night.

On the bark of a tree was found the word "Croatan," legibly inscribed, and White hoped, from the absence of the cross, which he himself had suggested as a sign of distress, that the settlers were still in being; but as they proceeded to Croatan a furious storm arose and drove them from the coast, and their dismayed spirits could find no relief except in a return to England.

Mace spent a month lounging about the Hatorask coast and trading with the natives, but did not land on Croatan, or at any place where the lost colony might be expected to be found; but having taken on board some sassafras, which at that time brought a good price in England, and some other barks which were supposed to be valuable, he basely shirked the errand on which he was hired to go, and took himself and his spicy woods home.

John White, who was appointed Governor of the colony, with twelve assistants as a Council, who were incorporated under the name of "The Governor and Assistants of the City of Ralegh in Virginia," with instructions to change their settlement to Chesapeake Bay. Captain Stafford, with twenty men, went to Croatan to seek the lost colonists.

Picket-boats were out in advance all night, at the entrance to Croatan Sound, in the darkness and fog, keeping watch for the enemy. No enemy appeared. Towards morning, however, the fog lifting, two rebel steamers were seen hastily taking to their heels, having come down in the obscurity to see what they could see. It was Friday, the 7th of February.