Lord Lyons to Mr. Seward.

Sir: I have the honor to acknowledge the receipt of the note dated the day before yesterday, in which, in answer to my inquiries respecting the British steamship Granite City, you have done me the honor to inform me that that ship has [Page 579] been transferred to the United States navy, pursuant to an offer of the head of the Navy Department to receive her at a valuation of fifty-five thousand dollars.

With regard to the general principles involved in this transaction, I will at this moment content myself with referring you to the note which I had the honor to address you on the 31st December last, and, waiving for the present any further discussion of those principles, will now merely ask you for some additional information respecting the proceedings in the case of the Granite City.

It would seem from the papers before me, that the ship was transferred to the Navy Department by the court, as a matter of course, on the motion of the United States district attorney. It does not appear whether the representatives of the owners were heard, either on the question of making the transfer, or on that of fixing the value of the vessel; nor, indeed, whether in any stage of the proceedings, an opportunity was offered for defending the interests of the owners. I shall, therefore, be very much obliged if you will do me the honor to furnish me with information on these points.

I desire, as I have already intimated, to avoid entering in the present note upon a discussion of general principles; but my earnest desire to guard beforehand against everything likely to lead to difficulty, or irritating questions, induces me to take this opportunity of begging you to consider the unfavorable impression which must, especially in important cases, be produced, if captured vessels, not condemned by any prize court, be appropriated by the Navy Department, without regard to the interests of the owners, and solely on the ground that they are suited to the naval service of the United States.

I have the honor to be, with the highest consideration, sir, you most obedient, humble servant,

LYONS.

Hon. William H. Seward, Secretary of State, &c., &c., &c.