The General Assembly which met in September, 1780, acting upon Governor Nash's advice, created a Board of War to assist him in conducting the military affairs of the State. This board now proceeded to put General Smallwood, of Maryland, in command of all the forces in the State, giving him authority over all the officers in the Southern army, the honor being conferred upon him on account of his gallant conduct at Camden. General Gregory was consequently ordered to hold himself in readiness to obey General Smallwood's orders, with the other officers in North Carolina.
The Board of War then proceeded to raise money, arms and men for the army that would soon be called upon to drive Cornwallis from the State. Gregory's brigade received $25,000 of the funds raised, and 150 flints and 15 guns were distributed among his soldiers.
The British now confidently expected that Cornwallis would quickly subdue North Carolina, then sweep over the State into Virginia. In order to prevent the Americans from hurrying into that State to join forces against Cornwallis, General Leslie was ordered from New York to the Chesapeake, and in October his army was stationed near South Quays in Virginia, not far from Norfolk.
The presence of Leslie's army so close to the Carolina border caused much alarm for the safety of the Albemarle section, which for the second time was in danger of invasion. General Gregory, who after the battle of Camden had joined Exum and Jarvis in front of Cornwallis, had recently returned to Albemarle. He was now ordered to take the field against Leslie, and to prevent him from entering the State. From his camp at Great Swamp, near North River, he wrote to Governor Nash in November, 1780, reporting the repulse of the enemy. He also warned the Governor that the British were planning to attack Edenton; and he set forth in his letter the blow that the capture of this town would be to the commerce of the State.
General Gregory's post at Great Swamp was no sinecure. He had only about 100 men to withstand Leslie, whose forces at Portsmouth amounted to nearly 1,000 men. His troops were poorly equipped, half naked, and ill-fed; and his situation seemed almost desperate. To add to his troubles, an attempt was made at this time by Colonel Blount, of the Edenton District, to deprive him of his command. But a Council of State, held at Camp Norfleet Mills to inquire into the matter, declared that as Colonel Blount had resigned of his own free will and accord--in favor of Gregory--he should not now take the command from him.