The next major action for the 67^th was the Seven Days Battle, which concluded at Malvern Hill. Hodgson was awarded the brevet rank of captain for "gallant and meritorious services" in the Battle of Malvern Hill, where he was wounded.

After a stay in a Washington DC hospital, Lieutenant Hodgson was discharged from the service on August 2, 1862. Committed to the Union cause, he subsequently joined the Veteran Reserve Corps, becoming a first lieutenant of the 21^st Regiment, New York Veterans. The reserve corps was composed of men unfit for field service because of wounds or disease contracted in service; the corps performed light duties such as garrison duty.

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