Mr. Pike to Mr. Seward.
Sir: I have had the honor to receive your despatch of July 24, (No. 111.) Two weeks’ digestion of the news from America results in no revival of hopes on this side for the rebellion. The partisans of the south seem discouraged and disheartened. The only pretence they raise, to mitigate the extremity of the situation, is the allegation that their case has seemed equally desperate before. The argument does not arrest the fall of their sinking fortunes on the exchange. Their favorite cotton loan, so lately above par, is down to 10. The complete break down of the financial system of the insurgents, demonstrated by the fall of their paper currency to 10 cents on the dollar, has, perhaps, more weight attached to it here than in the United States. It is regarded as indicating a near relapse. Dispassionate observers fail to see how the resources of the rebel government are to be replenished, or their finances even nominally administered. The melting away of its armies, from internal weakness, alone seems thus inevitable.
But beyond this, the clearing out of the Mississippi river, if its approaches be properly guarded against any sudden descent of armed iron-clads from Europe, is viewed as a fatal grip at the throat of the rebellion. The events occurring in Mexico make New Orleans looked upon more than ever as the key of our empire. Its original capture was considered in Europe a deadly [Page 901] blow to the insurrection. The conviction was and is that it should be made impregnable to attack by sea, which seems easy enough; the hostile action of no power in the Gulf need be feared. But should this safeguard be neglected, we might find our dear-bought triumphs suddenly brought to a disastrous termination. Our enemies try to find consolation in the hope that we shall be less prudent to secure than we have been energetic to conquer.
That we must look to ultimate collision in that quarter with foreign powers, the action of France in Mexico does not seem to allow us to doubt.
As I took occasion to observe some months ago (I believe you thought prematurely) the cotton question is ended in Europe. We have entirely gone by that danger. Cotton is abundant. The only disturbing fact that remains is that the price is so high that manufacturers decline to spin and weave on the old scale. Distress is again setting into the manufacturing districts, but the disorder and suffering is, to a great extent, compensated by the excellent harvest which almost everywhere prevails.
Now, therefore, as heretofore, I believe we are to be unmolested from abroad. If we can furnish the troops necessary to follow up our recent great successes triumphantly, we shall have a glorious issue from our trials. Viewed at this distance, the prospects of the country have never seemed so encouraging.
I have the honor to be, with great respect, your most obedient servant,
Hon. William H. Seward, Secretary of State, &c.