By the summer of 1781, the 76th was on service in America, part of the army under General Cornwallis operating in Virginia along the banks of the James River. On 6 July they began the complex operation of moving the army across the river. Wallace was part of a detachment of about 20 men from the 76th and 80th Regiments posted in the rear of the army, charged with protecting the army during the delicate river crossing.
In the afternoon the picket was attacked by a substantial force from an American army commanded by the Marquis de Lafayette. The British hoped to convince the Americans that most of Cornwallis's army had already crossed the river and that the rear guard was vulnerable. This meant that the little piquet guard of Scottish soldiers was not reinforced. They fought desperately for about two hours, expending 50 rounds. The subaltern officer commanding the detachment was wounded; an officer who replaced him was wounded, and then a third. When they finally withdrew, John Wallace was one of only a few who escaped unscathed. The engagement escalated into the battle of Green Spring; the Americans were driven from the field, and Cornwallis's army moved on to establish a fateful encampment at Yorktown.
Soon after the army arrived at Yorktown in August 1781, violent thunderstorms roiled through the area. A few soldiers were killed. James Wallace, after surviving the gallant stand at Green Spring, was wounded by nature's wrath. A lightning strike caused him to lose an eye. So it was that he returned from America as a wounded soldier, albeit not wounded in battle.
When he arrived at this home in the Highlands of Sutherland, he learned that friends had, in his absence, "disposed of his little property, a house & garden." He went to a town to work at his trade as a baker, but his other eye soon began to dim, perhaps from the strain caused by the loss of the first. Unable to see well enough to earn a living at the age of only 33, he turned to the government for relief. He applied for an out pension, and was able to support his case with an affidavit signed by a general officer who was familiar with his brave service at Green Spring. His application was granted, providing this young old soldier a modest income for the rest of his life.