Morale check after step losses from assualt

[Hugmenot]

Suppose an American stack of an assault contains the following and suffers a "2" result in assault combat. Let us further assume that side has 7/6 morale. All of the units are full (not reduced).

1 x disrupted Captain (9-0-1)
1 x good order Sergeant (8-0-0)
1 x good order INF unit
1 x disrupted ENG unit
1 x demoralized HMG unit

The first step loss must come from the good order INF unit because it has the best morale status (7.63).  The second step loss can be taken from the now reduced good order INF unit, the disrupted ENG, or the demoralized HMG.

I will assume the second step loss was applied to the disrupted ENG unit.

All units and leaders must take a "M2" morale check.

The disrupted Captain goes first (14.12) and the player rolls a "8". Adding "2" gives "10" so it's a failure. The Captain is now demoralized and thus cannot apply his morale modifier to the other morale checks. 

The Sergeant is next and the player rolls a "6". Adding "2" is "8" so he passes and remains in good order.

The units can be checked in any order. The player rolls a "7" for the now reduced INF. Adding "2" gives "9", three greater than its current morale of "6" and it is thus demoralized. Note that it would have failed its morale check by "2" and only be disrupted if the Captain had passed its own morale check (and applied its "1" morale modifier). The player rolls a "5" for the now reduced disrupted ENG unit. Adding "2" gives "7", which is greater than its current morale of "6". A failure and the reduced ENG is now demoralized. The player rolls a "11" for the demoralized HMG. Adding "2" is "13" which is seven more than its current morale of "6". ("7" - "1" for being demoralized). It too must take a step loss.

As the units took step losses, the American player must check for leader casualties (6.7)  and subtract "3" from the die roll (note that step losses caused by compound morale failure count towards the total). The player rolls a "7" for the demoralized Captain. Subtracting "3" gives "4" so the Captain is alive. The player rolls a "4" for the Sergeant. Subtracting "3" gives "1" and thus he's dead.

All that remains in the stack is:

1 x demoralized Captain (9-0-1)

1 x reduced demoralized INF unit
1 x reduced demoralized ENG unit
1 x reduced demoralized HMG unit

Not a happy stack.

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Which unit to choose for the second step loss can be a difficult choice. In most cases, I will choose to apply the second step loss to demoralized unit (reduced demoralized unit if there is one present) but it's not always for case. If the demoralized unit is a ENG or HMG and there is plenty of time left in the scenario, I may choose something else if I believe I will need the HMG high firepower or the ENG town assault bonus to win. The side's morale is also a consideration, as well as the leaders present and if I can reinforce the assault this turn.