Mr. Adams to Mr. Seward.

No. 400.]

Sir: In obedience to so much of the instructions contained in your despatch No. 545, of the 10th of April, as relates to the loan made here in behalf of the rebels, I have addressed a note to Lord Russell on that subject, a copy of which is herewith transmitted.

I have the honor to be, sir, your obedient servant,

CHARLES FRANCIS ADAMS.

Hon. William H. Seward, Secretary of State.

Mr. Adams to Lord Russell.

My Lord: I am instructed to inform your lordship that the government of the United States has heard with surprise and regret of the negotiation of a loan in this city, with conditions of security and payment openly hostile to the United States, and under the strongest presumption that the funds thus supplied are to be used in fitting out expeditions, in violation of her Majesty’s proclamation and of the law of the land, as well as of treaties and the law of nations. The President does not for a moment believe that her Majesty’s government have lent or will lend any sanction or approval to these proceedings. The painful fact, nevertheless, is forced upon his attention that this loan contains a direct engagement with the armed insurgents, who have assumed to control, supply, and deliver cotton for the reimbursement of the money advanced, with interest. Hence it becomes an imperative duty to apprise her Majesty’s government that this transaction must bring an end to all concessions, of whatever form, that may have been heretofore made for mitigating or alleviating the rigors of the blockade in regard to the shipment of cotton. Neither can any title of any person, whether citizen of the United States or subject of a foreign power, to any cotton or other merchandise, which title is derived from or through any pretended insurgent authority, or other agency hostile to the United States, be respected.

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It has always been, and it still continues to be, the desire of my government to do everything in its power to lighten the difficulties which inevitably follow a state of war to all friendly nations. I am sure that it is with the greatest reluctance it finds itself compelled by the offensive acts of apparently irresponsible parties, bent upon carrying on hostilities under the shelter of neutrality, to restrict rather than to expand the avenues of legitimate trade. The responsibility for this must rest mainly upon those who, for motives best known to themselves, have labored and continue to labor so strenuously and effectually to furnish the means for the protraction of the struggle.

Renewing, &c.,

CHARLES FRANCIS ADAMS.

Right Hon. Earl Russell, &c., &c.