Lord Lyons to Mr. Seward.

Sir: I have the honor to acknowledge the receipt of your note of the 20th ultimo on the subject of the compensation to be made in the case of the Magicienne.

In a note which I had the honor to address to you on the 22d of April last, respecting the capture of this vessel, I applied to the government of the United States for full compensation to the parties interested.

In answer to this application you were so good as to convey to me, in a note dated the 6th of June, a proposal that the same course should be pursued in this case as that proposed to be pursued in the case of the Mont Blanc.

I replied to that proposal by a note dated the 20th of June, from which the following is an extract:

“The course proposed to be taken in the case of the Mont Blanc is described in the note which you did me the honor to address to me on the 7th of last month, in the following terms:

“‘I have submitted this claim to the President, and am authorized to say that he admits that, in view of all the circumstances of the case, such compensation ought to be made. The Secretary of the Navy will, therefore, designate some person at or near Key West to confer with such person as her Majesty’s authorities may appoint, to ascertain and agree upon the damages to be thus paid; and the President, upon their report, will ask an appropriation of Congress, for the discharge of the claim, at their next session.’ ”

My note went on to say that I purposed to inform her Majesty’s government that the government of the United States proposed to settle the case of the Magicienne on the terms specified in the foregoing extract; but that I would, before doing so, await a further communication from you, in order that I might be quite sure of representing the intentions of the United States government with perfect correctness.

In a note dated 22d June you did me the honor to state to me, in reply, that such was the true interpretation of your offer.

By your note of the 20th ultimo, to which I am now replying, I understand you to propose that the referees, whose appointment is contemplated in the preceding communications, shall meet at New York instead of at Key West.

Having consulted Mr. Edwin Gerard, who is, as you are aware, empowered to represent some of the principal parties interested, that is to say, the owners of the vessel and some of the shippers of the cargo, I have no difficulty in agreeing to this proposal. I accordingly name Mr. Edward Mortimer Archibald, her [Page CXXX] Majesty’s consul for the State of New York, as referee, and I shall be ready, on receiving your answer to this note, to instruct him to confer in the city of New York with the referee named by you, Mr. William M. Evarts, with a view to bringing the case of the Magicienne to a settlement on the terms specified in the notes of the 22d April and of the 6th, 20th, and 22d June, to which I have referred above.

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

LYONS.