Lord Lyons to Mr. Seward.

Sir: I have the honor to submit to you a copy of a letter which has been addressed to me by Messrs. McDonald Brothers and Company, who state that. they are British subjects, of the city of Montreal, in Canada, and represent that they have made large purchases of cotton under the treasury regulations, and that they apprehend that they shall be great losers if the recent act of Congress be so construed as to operate as a repeal of the permits granted to them. They pray that the government of the United States will issue to them such documents as will enable them to bring their purchases to market.

I beg you to recommend the case to the favorable consideration of the proper authority, and to inform me of the view taken of it by the government of the United States.

Messrs. McDonald Brothers also represent that their business will render it important for them to visit Memphis, in Tennessee, from time to time, and that they fear that the recent order issued by the military authority at Memphis will interfere with their doing so. I should be very glad to be enabled by you to assure them that there are no grounds for this fear.

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

LYONS.

Hon. William H. Seward, &c., &c., &c.

[Page 665]

McDonald Brothers to Lord Lyons.

May it please your Lordship: We, the undersigned, of the city of Montreal, Canada, British subjects, take the liberty of drawing your lordship’s attention to the enclosed General Order, No. 18, issued by Major General C. C. Washburn, for the district of West Tennessee.

In March last, and subsequently, we obtained from the United States customhouse, under the Treasury regulations respecting trade with the insurrectionary parts of the country, permits to buy there and ship from those parts some 4,000 bales of cotton, and in pursuance of said authority sold somewhat over two hundred and twenty thousand dollars ($220,000) gold, and invested the proceeds, some three hundred and forty-five thousand dollars ($345,000) United States currency, in part payment of said cotton, and are liable for further large sums to be paid. These purchases were made in the neighborhood of the Mississippi river, but owing to the obstacles thrown in the way of the navigation of that river by the forces of the insurgents we were afraid to attempt the removal of the cotton. While waiting for this temporary difficulty to pass away, we have learned that a new law has been enacted by Congress that does away with all previous legislation on this point. This repeal of our permits for the payment of the excise under which we have given to the United States Treasury bonds and sureties for the sum of $120,000, and having invested so much money as hereinbefore mentioned upon the faith of these permits, places us in a very embarrassing position. Besides, in regard to this matter, we had considered as certain and reliable the open declaration of his excellency the honorable William H. Seward, that the Mississippi river from its source to the tide-waters of the Atlantic was open to the commerce of the world, of course under Treasury regulations. This declaration was made after the fall of Vicksburg.

It is very unpleasant to have to ask your lordship to trouble the United States authorities upon a private matter of this kind; but we are in a serious dilemma. The amount is considerable, and further large obligations have been incurred that have to be met, and yet we are now debarred from the privileges of getting our cotton to market under previous permits.

We cannot think that the United States authorities contemplated an abrogation of rights under documents they had already granted, and trust that upon the representation of your lordship they will issue to us such documents as will permit these purchases to be brought to market.

A number of persons, citizens of the United States, and otherwise as the case may be, will become entirely bankrupt by this cancellation of permits, because the United States Treasury Department being expected under the new law to become the only dealer in cotton upon the Mississippi river, the insurgents have, as we learn by recent intelligence, recommenced their system of burning cotton to prevent the United States Treasury agents from obtaining it by purchase from the owners. This practice has not as yet been recommenced in the neighborhood of where ours is situated, but it is difficult to say at what moment the torch may be applied to it.

In view of this danger, and the fact that after the swamps fill with water in the autumn transportation will be impracticable, we ask your lordship to use your influence for us at the earliest moment.

With reference to the order of General Washburn, not being residents of Memphis, it might not seem to touch our case; but we fear that no one, foreigner or otherwise, will now be permitted to go into the city or depart from it without mustering into service.

The frequent necessity for travelling upon the river, in connexion with the above business, will combel us often to visit Memphis.

[Page 666]

If the Secretary of War should instruct General Washburn that that order should at most only apply to such foreigners as are permanent residents of Memphis it would meet our case.

We have, &c., &c.,

McDONALD BROTHERS &CO.

Lord Lyons, &c., &c., &c.