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proceedings the clearance and departure of the hostile vessels which are being built, equipped, and manned in the ports of Great Britain. You will therefore sanction and authorize such prosecutions whenever, upon legal advice, it shall seem expedient.

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This government has heard with surprise and regret that a loan has been made in London to the insurgents, with conditions of security and payment openly hostile to the United States, and it has good reason for assuming that most or all of the moneys thus loaned are paid to British subjects residing in Great Britain for advances in money, labor, arms, military stores and supplies used in the fitting out of those hostile expeditions, in violation of the Queen's proclamation and of the enlistment acts of Great Britain, as well as of treaties and the law of nations.

April 13, 1863. - You will find the newspaper reports from the west quite confused. The War Department has regular advices, and is confident of ultimate and not long delayed success at Vicksburg.

The late reconnoissance at Charleston is regarded by the navy as establishing the invulnerability of the monitors, and, of course, their ability to reduce the land fortifications at that place. The only obstacle now remaining to be overcome is the obstructions in the channel. The attention of the fleet is now engaged upon this point. With reference to his (Earl Russell's) inquiries when the new Congress will come in, and when the present executive administration will go out, it may be proper for you, without directly recurring to them, to let him understand that no Congress and no administration are likely to come into this capital which shall be less strenuous than the present authorities in favor of the American Union, or less opposed to admitting foreign intervention in the affairs of the American people. It is true that this people, like every other, are moved by debates concerning the measures and policy of those who are conducting their affairs. But when any party betrays a want of devotion to the integrity or to the independence of the country, it loses the public confidence at once. Had this truth been understood in Europe at the first, much and deplorable suffering in both countries would have been averted.

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May 19, 1863. In reviewing the late movement of General Hooker across the Rappahannock, all critics approve of the plan, and admit that it was reasonably expected to be successful. Thus far

there is no intelligent agreement upon the cause of the failure. Certainly it was not for the want of men, material, or courage on the part of the army. The War Department will not fail of its duty in reorganizing and renewing this important portion of the campaign. Meantime it is consolatory to know that the losses and damages of the national army, especially when the relative conditions of the two parties are considered, are not disastrous, and that the result seems to have neither demoralized the troops nor discouraged the country. The intelligence from the valley of the Mississippi continues to be favorable thus far. Large portions of Louisiana and Mississippi have been reclaimed. The recent effective movements of our cavalry arm are giving us a surprise as pleasing and as full of promise as the naval successes with which the campaign of last year was opened.

You will not fail to notice the growing confidence of the public in the national finances. The sales of government stocks at par now reach the figure of ten millions weekly. In singular contrast with this improvement of the public credit, it is now discerned that the insurgents are actually driven to the importation of bread for their armies from Europe, through the hazards of the blockade. It is not easy to perceive how a purely agricultural country can long carry on a war when it has to import not only its material of war but its provisions, while it puts its governing population into the armies, and has continually to guard against the desertion or resistance of its laborers. It is obvious that this condition of things is becoming intolerable. The best negro laborers are now sold in Georgia at two thousand dollars each, insurrectionary currency-equal, it is supposed, to five hundred dollars national currency. Before the war their value was three times greater.

I can give you, of course, no special information concerning our internal affairs. We are in the midst of a great campaign. Important marches and protracted sieges engage the attention of the gov ernment and of the country. News of the results, sped by the telegraph, would outstrip anticipations travelling by slower processes. The country, although it exhibits the same mercurial temper which it has maintained throughout the whole war, is, nevertheless, sound in its resolution to suppress a needless and dangerous insurrection; and the government is performing its painful duty with no abatement of energy, and no diminution of confidence.

May 24, 1863.-The suspense in which we have been held

through a considerable period, filled with tantalizing delays and annoying though not disastrous disappointments, has been relieved at last by splendid successes obtained by General Banks, and still more brilliant victories won by General Grant, all of which seem to promise most important results.

I need not indicate the favorable influence which this change of our military situation will exercise in Europe to you, who know by experience even more trying than my own that the opinions and sympathies of states, not less than those of individuals, concerning any cause, are chiefly determined by the success obtained by those to whom the responsibilities of its defence are confided.

June 8, 1863. You will have already learned of the active operations which have been instituted by General Grant and General Banks upon the Mississippi. We are awaiting the results with much anxiety. The tone of the public mind is generally pure, and the confidence of the country in our financial system is perhaps the best possible evidence of the confidence of the people in the ultimate success of the government.

June 16, 1863. — The military situation in the southwest remains unchanged. The sieges of Vicksburg and Port Hudson are continued.

There has been a change on the line in Virginia. Lee has moved westward from Fredericksburg, and General Hooker's army has, of course, changed position and attitude. But the object of Lee's strategy is not yet developed.

June 22, 1863. -- Reports from Vicksburg and Port Hudson state that the sieges of those places still continue. We learn to-day, through the insurgent press, that the Fingal, which, during her long imprisonment at Savannah, had been converted into an iron-clad ship-of-war, was last week captured by two of our iron-clad ships, on her attempting to leave the port and enter upon her work of piracy. I informed you by the last mail that Lee's insurgent army had been put in motion, and that General Hooker had consequently taken a new position with the army of the Potomac. These changes have been attended by much activity of the cavalry of both armies, thus far unfruitful of important results. While due efforts have been made to prepare against surprise upon our part, the enemy's plan of attack has not yet been satisfactorily ascertained.

June 29, 1863. You may not be able to discover the true condi

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tion of military affairs through the confusion produced by the crosslights of the press. Our official information represents the sieges of Port Hudson and Vicksburg as going on successfully. Two of the three corps of the insurgent army, lately encamped on the Rappahannock, have forded the upper Potomac, and are in Maryland and Pennsylvania. The position of the third corps is not certainly known. General Hooker has, at his own request, been relieved, and is replaced by General Meade, an officer who enjoys the confidence of the army and of the War Department. He is moving vigorously, and, judging from present appearances, a meeting of the two armies is likely to occur in Pennsylvania, or on the border of Maryland. You will have heard much of cavalry raids, and other subordinate movements of the two armies, but they have thus far been unfruitful of any important results.

July 6, 1863. The two opposing armies in Pennsylvania are understood to be about equal in numbers. Seven corps constitute the army of the Potomac, while the insurgent forces are divided in three corps. On Wednesday, the third instant, the two advanced United States corps unexpectedly encountered two of the insurgent corps northwest of Gettysburg, and a severe conflict ensued, which resulted in a withdrawal of our forces to a favorable position in rear of the town, where they threw up defences, and were joined by the other portions of the army during the night and morning. On Thursday, the whole insurgent army, being in line, offered battle, which was accepted. It continued throughout Thursday and Friday. It was unquestionably the most sanguinary conflict of the war, and resulted in the withdrawal of the insurgents from the field on the morning of Saturday, the 4th, and the retreat towards the Potomac began on that night, and was continued at the date of the last advices. Our cavalry is harassing the retiring enemy in the rear, while General Meade is operating, with the aid of reinforcements, upon the enemy's flank.

From Vicksburg we have encouraging despatches of the date of Monday, the 29th of June.

I cannot inform you of the movements of General Rosecrans in any other way so well as by giving you his last despatch, which is as follows:

"Our movement commenced on the twenty-fourth (24th) June. Have driven Bragg from his intrenched positions at Shelbyville and

Tullahoma. Either of them is stronger than Corinth. Have pressed him through the mountains. Incessant rains and the impassable state of the roads alone prevented us from forcing him to a general battle. Sheridan's division occupied Cowen yesterday at three (3) P. M. The enemy has retreated towards Bridgeport and Chattanooga. Every effort is being made to bring forward supplies and threaten the enemy sufficiently to hold him. As I have already advised you, Tullahoma was evacuated Tuesday night. Our troops pursued him and overtook his train at Elk River. He burned the bridge. In that operation our loss in killed and wounded will not exceed five hundred. The loss of the enemy may be safely put at one thousand killed and wounded, one thousand prisoners, seven pieces of artillery, and five or six hundred tents. The country is filled with deserters from the Tennessee troops, and it is generally thought a very large portion of these troops will never leave their native state. Nothing but most stringent coercion can detain them. It is impossible to convey to you an idea of the continuous rains we have had since the commencement of these operations, or the state of the roads."

July 9, 1863.-The steamers of the 4th and 8th have carried to Europe intelligence of the defeat of General Lee in three pitched battles, equalling in the magnitude of forces, and surpassing in severity, the conflicts of Waterloo and Solferino. The defeated army, however, was not destroyed nor captured. A decisive battle is now gathering at Antietam, and information of its result will probably go out with this despatch.

The fall of Vicksburg1on the 4th of July, undoubtedly to be followed soon by the fall of Port Hudson, must completely revolutionize the contest on the Mississippi. Our land and naval forces, relieved from the labor of protracted sieges, become a movable power, adequate to the practical restoration of commerce, or, in other words, the Union, through the centre of our territory, from our northern boundary to the Gulf of Mexico.

Indications already appear, that the work of internal dissolution is begun in the insurgent confederacy. Practically, it has lost all the states west of the Mississippi, and is confined to the Atlantic states, south of Cape Henry, and the Gulf states. Its capacity to raise new levies and new armies, if not exhausted, is greatly diminished.

1 See speech on fall of Vicksburg, page 485.

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