Mr. Thompson to Mr. Gresham.

[Telegram.]

Mr. Thompson reports that Capt. Picking has refused protection to American vessels which have been allowed by the proper authorities to land their cargoes at the docks and in the neighborhood, basing his action on the ground that the line of fire of the insurgents would be interfered with and neutrality consequently violated. He explains that inasmuch as the said line of fire is not confined to any particular place in the bay, besides being desultory, the commerce of the United States will suffer serious impediments in consequence. He reports that in compliance with an order issued some days ago by the Government merchant vessels have left their berths near the islands of Enchados, Cobras, and Santa Barbara.