At dawn on New Year's Day, Confederate Major General Thomas J. Jackson, already known as "Stonewall," marched a large force north from Winchester, Virginia with the aim to cut the Baltimore and Ohio Railroad and clear the Union forces from the area.  Three days later, he occupied Bath in Morgan County (now part of West Virginia) and the federal forces withdrew across the Potomac into Washington County, Maryland. Jackson's artillery shelled Hancock, Maryland across the river the next day but did not follow.  (By John Osborne) 

The Confederate steamer Ella Warley had slipped out of Nassau in the Bahamas and reached the entrance to Charleston Harbour at around six in the morning in heavy fog.  Despite the efforts of the U.S.S. Mohican, which gave chase and fired at her, the blockade runner made it into the port without damage.  This was a significant embarrassment for which Gideon Welles, the Navy Secretary, demanded an explanation.  (By John Osborne)