Morgan then raced up Sault au Matelot to the next barricade. Finding the gate open and unguarded, he surveyed the work and returned. However, his officers refused to push on until the main body came up, fearing that their growing haul of prisoners (three times their own number) would overpower any guards. It was another 30 minutes before the main body caught up and the delay would prove fatal. Still further back, Dearborn's company, delayed by a high tide, was only just entering St Roche.
Meanwhile, Caldwell, with a detachment of British Militia, was investigating the activity at Cape Diamond. Spotting Brown's action as a feint, he was returning to report to Carleton when he learned of Arnold's attack on Sault au Matelot. Picking up 30 Royal Highland Emigrants under Captain John Nairne of MacLean's regiment and 50 sailors led by a former naval officer named Anderson, he headed for the second barricade. There he found 200 French Militia under Voyer and Captain Alexandre Dumas, and a company of the 7th Foot, all in a state of confusion not knowing how to defend the barricade. Dispersing the militia and Emigrants into the surrounding houses, he formed the Regulars in a double line behind the 12ft (3.6m) high barricade, with cannon mounted on a platform immediately behind them pointing down the Sault au Matelot.
Reinforced by the Pennsylvanian riflemen, and Greene's and Meigs' detachments, Morgan led his men toward the second barricade. Some sailors, led by Anderson, sallied through the gate and blocked his path. Anderson called on Morgan to surrender, at which Morgan shot him dead and the sailors retreated through the gate. Shouting "Quebec is ours!" Morgan's men surged forward, but were caught in a hail of musketry from the upper windows of the houses. With men falling on every side, the Americans placed their ladders against the barricade but were beaten back. Some riflemen tried to outflank the barricade through a house, but were cleared out at bayonet point by Nairne. At this point the Americans could still have escaped, but as Steele, Topham, Hendrick, and Lamb all fell wounded, Morgan ordered his men into the houses. Once inside, they refused to venture out into the hail of lead.
Informed of events in Sault au Matelot, Carleton ordered Captain George Laws to retake the first barricade with 500 Emigrants and sailors. Laws emerged from the Porte Palais only to encounter Dearborn still blundering around St Roche. With their powder damp, Dearborn's men could not fight back and his entire group was captured and taken into the Upper Town. Laws then continued toward the first barricade, but found himself entirely alone amongst Morgan's men. He tried to bluff them into surrendering but was taken prisoner. However, once his men re-occupied the barricade the Americans' fate was sealed. After holding out until 10.00am, one group after another gave up as they ran out of ammunition. Finally, only Morgan was left. Refusing to surrender to a British officer, he handed his sword to a priest.
Carleton ordered a small force to deal with Wool's battery in St Roche. Wool was reinforced by men of the 3rd New York and Livingston's Canadians, but the British managed to capture the guns and withdraw successfully. Beyond that, however, Carleton would not risk his men outside the city walls - a decision that was not unanimously supported. Caldwell, in particular, suggested that more aggression would have finished the Americans off. Nonetheless, the moment of crisis had passed.
