Mr. Seward to Mr. Sullivan.

No. 38.]

Sir: I have to acknowledge the receipt of your dispatch of January 20, 1868, No. 49, inclosing copies of your correspondence with the government of the United States of Colombia on the subject of the Panama commercial war tax.

The instructions of this department, under date of June 13, 1867, were made necessary mainly by the doubt which then existed whether the threatened resistance by the State of Panama to troops acting under the orders of General Mosquera was to be regarded as rebellion against the legitimate government of the United States of Colombia. The progress of events having resolved that doubt in favor of the State of Panama, the further discussion of the general question of the liabilty of our citizens to extraordinary taxes may be postponed to some future occasion.

I am, sir, your obedient servant.

WILLIAM H. SEWARD.

Peter J. Sullivan, Esq., &c., &c., &c.