Mr. Pike to Mr. Seward.

No. 75.]

Sir: I have the honor to acknowledge the receipt of your circular No. 30, dated the 24th of December last, in respect to the means adopted by the several nations of Europe for the protection of their respective revenues and the collection of duties in the passage of goods across the national frontiers and in the transhipment in their ports for export to a foreign land.

I have taken measures to obtain from the finance department the necessary information on this subject, so far as the question relates to this kingdom.

I am also in receipt of your despatches, Nos. 85 and 86, under date of January 14.

I have applied for the recognition of Mr. Morse, in his consular capacity at the island of Curaçoa, which, when received, I shall forward to him according to your instructions.

The interest and solicitude in regard to our war is now turned almost exclusively upon its financial aspects. The opinion has become very general—almost universal—that it must soon terminate unless it is brought within more manageable compass and placed on a broader basis of taxation.

It is vaunted in all hostile circles that if the confederates are able to hold [Page 885] out only a short time longer—of which their success thus far gives strong assurance—the efforts to subdue them must be suspended in consequence of the exhaustion of the resources relied on by the government.

It is not doubted, however, as I had the honor to observe last week, that if the country chooses to incur additional taxation, and to reduce its armies to more moderate dimensions, that it possesses the ability to protract the war indefinitely, and until it shall effect its objects in the final reduction of the rebels.

But so long as they and everybody else sees that the lapse of time will rapidly exhaust the means provided by recent legislation for prolonging the contest, it tends to excite the hopes of enemies and the fears of friends in Europe, among whom we number many noble men, equally anxious with ourselves that the nation shall not waste or misapply its strength.

The experience of Europe, from which the laws of finance have been mainly deduced, forbids confidence in paper money issues where they are not held in check by redemption in coin, and the news of the new issues ordered by Congress has resulted in a further depreciation of American securities and fresh apprehensions of coming financial and political disasters.

I have the honor to be, with great respect, your most obedient servant,


Hon. William H. Seward, Secretary of State, Washington.