Mr. Seward to Lord Lyons,.

My Lord: Referring to your communication of the 30th ultimo, in regard to large purchases of cotton said to have been made under Treasury regulations by the Messrs. McDonald Brothers & Co., of Montreal, so far as it relates to the effect of the recent act of Congress upon such purchases, I have the honor to enclose, [Page 682] in reply, a copy of a letter from George Harrington, esq., the Acting Secretary of the Treasury, and four printed copies of the rules and regulations to which it refers.

I have the honor to be, with high consideration, my lord, your obedient servant,

WILLIAM H. SEWARD.

Right Hon. Lord Lyons, &c., &c., &c.

Mr. Harrington to Mr. Seward.

Sir: I have the honor to acknowledge the receipt of your letter of the 6th instant, transmitting copy of a communication from Lord Lyons, and enclosure, relative to certain cotton alleged to have been purchased by Messrs. McDonald Brothers & Co., of Montreal, under treasury permits.

The regulations of this department of the 29th July concerning commercial intercourse (copies of which are enclosed herewith) provide for the transportation to the market of products purchased in good faith under proper authorities, and paid for prior to the date thereof, in the same manner and subject to the same conditions as products raised by the labor of freedmen, (see pages 30, and 24-5.)

No information is furnished in regard to the location of the cotton in question; but if it is within the lines of military occupation by the national forces, it is believed the provisions above cited will remove all ground of complaint so far as this department is concerned.

The order of General Washburn referred to, and the action in regard to it, desired by Messrs. McDonald Brothers & Co., are matters exclusively within the jurisdiction of the War Department.

With great respect,

GEO. HARRINGTON. Acting Secretary of the Treasury.

Hon. William H. Seward, Secretary of State.