promise me that, when a judgment on a question should be rendered, he would send me a copy of any written opinion that might then be pronounced. On the 28th of May, 1862, I communicated a copy of this letter of the district attorney to your lordship. Certainly I did not then doubt, nor do I now think I had any reason to doubt, that the owners and claimants of the Labuan and her cargo would, without any delay, lay their claims for damages and costs before the prize court, and ask its judgment for the same. Had they done so, the amount of the award could have been examined by the parties themselves, and by this government, and, with any change of the sum which should have been found necessary to perfect justice, it could and it would have been promptly submitted to Congress at the last session, with a proper request for the needful constitutional appropriation. Thus the case rested in the court. On the 12th of October, 1862, the Hon. Mr. Stuart, who, during your absence from Washington, was charged with the affairs of your legation, advised me by a note that he had informed the parties interested of the order of the court. He enclosed a copy of letters from Messrs. Bailey & Leetham, the owners, and Messrs. De Jersey & Co., the charterers of the Labuan, forwarding certified copies of affidavits and declarations, setting forth their respective claims in the case. Mr. Stuart informed me that he was instructed by her Majesty's government to say that a sentence merely restoring the vessel to its owners, without the costs of the litigation and the damages incident to detention, would fall very far short of justice, or, quoting my own language, that due reparation to which the sufferers by this wrongful and unjustifiable violence were entitled; and Mr. Stuart, under instructions, added that the claimants are entitled to whatever damages have been occasioned by the act of the wrong-doer, according to precedents in Great Britain and the United States; that her Majesty's government .can scarcely suppose the court will fail to apply this principle, and to condemn the captor in damages as well as costs. Mr. Stuart proceeded to say that the peculiar circumstances attending the case of the Labuan warrant her Majesty's government in appealing to the United States for immediate compensation, both of the charterers and owners, directly from the government. Mr. Stuart, after reciting the circumstances of the seizure, proceeded to say: "Lord Lyons appears, from one of his despatches to Earl Russell of the 15th of March last, to have pointed out emphatically and carefully to the Secretary of State that sending in for adjudication would largely increase the expenses already incurred, and add to hardships and inconvenience already suffered by this innocent ship; that it might be necessary that the claims should be submitted to persons professionally competent to decide upon them, but the damages ought to be assessed upon the principle that the seizure and the detention were, throughout, without a pretext of legal justification." On the 16th of October I transmitted a copy of Mr. Stuart's letter, with the enclosures, to the United States district attorney at New York, in accordance with a note which, on the 14th, I had had the honor to address to Mr. Stuart, in which I informed him that there was, in my judgment, no reason to doubt that the court would render justice to the claimants. I did not at that time doubt that the claimants had followed, or, at least, would follow, their claim before the court, which, as it seemed to me, had every facility and competency to award damages to the claimants; and, under a bel ef that when the claimants should have moved the court to a decree of damages, that decree would then be brought to the attention of this government by the claimants or by your lordship, the transaction passed out of my thoughts, and it was not recalled until on the 28th of March last, when I received a note concerning it from your lordship. I find in this note the remarks that the sending back this vessel (the Labuan) to the prize court for further adjudication, as to costs and damages, is, even if technically correct, a practical evasion of the plain duty cast upon the govern ment of the United States to make, without delay, all the reparation in its power for an act of hostility towards a neutral and friendly state, condemned alike by the government and the legal tribunals of the United States; that the delay which has been already occasioned, by the sending of the case back to the prize court, is, in the opinion of her Majesty's government, a serious addition to the injuries already sustained by the owners of the Labuan; and also that her Majesty's government feel bound to observe that it is no small aggravation of the injury to the owners, that, by reason of the delay occasioned by referring the case again to the prize court, the payment of the compensation to be awarded to them must, in all probability, be deferred until the reassembling of Congress. Such was the reply given by the British government on the 28th of March, 1863-twenty-four days after the adjournment of Congress-to the decision of this government, communicated to your lordship on the 14th of October, one and a half months before Congress assembled. I immediately applied to the United States district attorney at New York to know whether any decision had been made by the prize court in the case of the “Labuan," in regard to damages and costs. In reply I have received the decree of the court, made on the 21st day of May, 1862, a copy of which I subjoin. From this decree I learn that the cause was argued by counsel for the claimants, and that the court decided that the vessel was not a lawful prize; and it was decreed that the vessel and cargo be restored to the claimants without delay, and that the court reserved all questions of costs and damages for the future adjudication of the court; and that although this reservation was made, and although the district attorney had been in possession of all the papers touching the question which your lordship had put into my hands for the purpose of submitting them to the court, yet that the claimants had never in any way moved the court with any application for the award of damages. I think no one would have expected the court to proceed to the reserved question of damages without a motion thereto by the claimants or their counsel. And I think the President would have found it difficult to satisfy Congress concerning any award of damages that this department might have made, while the question of damages was judicially remaining before the prize court through the inactivity of the claimants. From the review of the correspondence which I have now given, it may be ascertained how far the action of this government is obnoxious to the reflections in which, under the direction of her Majesty's government, your lordship has indulged. I freely admit that I believe the claimants entitled to damages and costs. I am not prepared, upon the information I now have, to deny that the damages ought to be assessed upon the very principle for which you contend, namely, that the seizure and the detention were throughout without a pretext of legal justification. I am, at the same time, unprepared to admit that proposition in its full extent, without a review of the testimony which the court has among its records, for the purpose of adjudicating upon that very question. I now learn from the district attorney that the court delivered no written reasons for their decree of restitution, and that the alleged reasons for the decree which were furnished to me by that officer, and which, as hereinbefore set forth, although probably they are correctly stated, were taken by him from an unauthorized newspaper publication, and which I am therefore unable to accept definitively as authentic. I think it is perfectly regular and legal to wait for the court to decree the damages. I know no reason to doubt, and I do not doubt, that the court will decide the question with more exact justice than this department, or any other executive department, could perform that duty. I think also that it can decide upon the subject with at least as much of certainty of absolute justice as any commission of merchants could do, and can do so with more ease, because it can even command the testimony of such mercantile persons. I believe that if the owners of the "Labuan" had moved the court, as they had a right to do, they would have obtained a decree which could have been reviewed and made the basis of a recommendation for appropriation by Congress at its last session. I do not hold, and I have never held, that the decree which the court may make on the subject of damages will be absolutely conclusive against your government in regard to the amount. But I do think it would be not only proper, but eminently useful, to have the judgment of the court concerning the amount of damages, and the principles of the judgment, for examination, if it shall finally be found necessary for this department to ascertain and state the sum which shall be paid, and so actually to commit the nation for the amount that the Congress shall appropriate in satisfaction of the claim. In conclusion, I am authorized by the President to inform your lordship that the district attorney will be immediately instructed to give notice to the claimants or their counsel, as he may be able, of an early day when he will move the court to proceed to consider and determine what damages and what costs shall be awarded to the claimants of the ship "Labuan" and her cargo for her unlawful seizure, and to place before the court on that occasion all the proofs which have been furnished to this government by her Majesty's government; and in pursuance of such notice, the district attorney will be instructed to prosecute the question of damages and costs to a decision, whether the claimants appear or not. When that decision shall have been obtained, its effect will be immediately communicated to your lordship. If it shall be satisfactory, it will be recommended to Congress to make an appropriation for the payment of the sums awarded. If unsatisfactory, I shall then receive with entire pleasure any objec tions to it that may be made by or on behalf of the claimants, or on behalf of their government; and if I shall not be able to adjust the amount satisfactorily to both governments without a reference to impartial mercantile persons, I shall then be prepared to consider, with the most entire respect, the expediency of such a reference, with directions that the referees shall report so seasonably as to admit an application to Congress at the next session for its authority to pay the damages and costs which shall thus finally be ascertained. For your lordship's information I append the note touching the proceedings of the prize court, which I have received from the district attorney of the United States at New York. I have the honor to be, with high consideration, your lordship's obedient MY LORD: Adverting to your note of the 7th ultimo, relative to Acting Rear-Admiral Wilkes's alleged threat to capture a British mail packet bound for a British port, on the sole ground of her carrying to that port officers or other passengers belonging to the so-called Confederate States, and to my reply, I now have the honor to inform you that the report has been brought to bis notice, and that he authorizes the Secretary of the Navy to pronounce it entirely erroneous and without any foundation in fact. I have the honor to be, with high consideration, your lordship's obedient WILLIAM H. SEWARD. servant, Right Hon. LORD LYONS, &c., sx., &c. Mr. Seward to Lord Lyons. DEPARTMENT OF STATE, MY LORD: Referring to your communication of the 26th ultimo, in which complaint is made of the firing of a shot across the bows of her Majesty's ship Desperate by the United States steamer Memphis, on the 26th of February last, and to my reply, I now have the honor to enclose to you the copy of a letter of the 7th instant, from the Secretary of the Navy, on the subject, which it is hoped will be regarded as satisfactory. I avail myself of this opportunity to renew to your lordship the assurance of my high consideration. Right Hon. LORD LYONS. WILLIAM H. SEWARD. Mr. Welles to Mr. Seward. NAVY DEPARTMENT, April 7, 1863. SIR: I have the honor to acknowledge the receipt of your note of the 31st ultimo, covering the communication of Lord Lyons, and copies of the despatches of Commander Thrupp, of her Majesty's ship Desperate, and of Sir Alexander Milne, complaining that the United States steamer Memphis, on the 26th of February, fired a shot across the bows of that vessel. The rule in ordinary cases is, undoubtedly, as is stated by Admiral Milne, and the presumption is, that our ships-of-war, as a rule, conform to it; but there are circumstances attending a blockade rigidly enforced, like that maintained by our squadrons, which furnish extenuating circumstances that palliate, if they do not form an exception to justify, the seeming discourtesy. From the unceasing efforts made by reckless and unscrupulous parties to violate the blockade, the armed vessels are in the exercise of unremitting vigilance, and, that they may be always prepared, have all their guns shotted. The sudden appearance of a vessel "steaming along the land for Charleston," as was the case of the Desperate, as was reported by Commander Thrupp in his despatch, "the fog so thick that the blockading squadron could not be seen until within three or four miles," left no time for preparation. It must be borne in mind that blockade duty requires sleepless vigilance; and that of our officers is made more difficult from the courtesy extended to neutral relations of permitting their men-of-war to enter the blockaded ports. It is necessary that vessels approaching a blockading force should check their speed, and wait until the sentinel vessel is satisfied of their true character. Commander Thrupp, if aware of these facts, does not seem to have observed them; and, while he refused to receive a disavowal of insult which was tendered him before he anchored, states that he passed the Memphis, which hailed him, without stopping; that he was told that it was intended he should come no nearer until he was boarded; that though he had the appearance of a man-of-war, we had suffered from courtesy to apparent foreign men-of-war; that vessels had hoisted English colors and answered, when hailed, that they were English menof-war, and afterwards fired into and sunk our ships, as in the case of the Hatteras. These explanations and the distinct disavowal of insult were insufficient to satisfy Commander Thrupp, who denied that the cases were similar, seeing that it was daylight, and the two ships within a mile of each other; that the shot did not stop him; speaks of the "outward appearance of his ship," his "ensign and large pendant," &c. Admiral Milne also states, "they had their colors flying; they were steering for the ships of the blockading squadron, from which they were still at a considerable distance," &c. It is well known that the English-built steamer Oreto, now called the Florida, in the month of September last approached the blockading force off the harbor of Mobile, under precisely the circumstances stated by Admiral Milne. It was in open daylight; she had the English flag and pendant; she steered directly for the blockading squadron, and the senior officer, in his desire to be courteous to an English man-of-war, failed to do his duty-permitted the vessel to approach him-and the consequence was, she passed him and entered the harbor of Mobile. The officer guilty of this neglect strove to vindicate himself on the ground that the piratical craft was an English-built vessel, with the English ensign, and all the outward appearance of an English man-of war; and he found a willing witness in Commander Hewite, an English naval officer of Admiral Milne's command, who obtruded the following letter to shield the officer from censure for remissness: "HER MAJESTY'S STEAMER RINALDO, "DEAR CAPTAIN PALMER: Having heard, in conversation with you, that Commander Preble, of the United States navy, had been dismissed in consequence of allowing the Oreto to pass his vessel, she being at the time employed in blockading Mobile, I beg to offer the following remarks with regard to the Oreto, which you are at perfect liberty to use, should they be productive of anything that would tend to alleviate the censure cast upon Commodore Preble. "When at Nassau in June last, we met the Oreto, and she was reported as an English despatch vessel by my sigual man, as well as by others. She was painted like a British vessel-of-war; and on going on board, I found her fillings the same as our vessels of the same class. Had I met the Oreto at sea, armed and having a pendant, I should have taken ber for one of our ships. I have taken occasion to allude to this subject at some length, and to cite this voluntary testimony from an English officer of Admiral Milne's command, if I mistake not, in order that the commanders of English armed vessels may appreciate the watchful vigilance of our officers, and when approaching our blockading squadrons, that they may be admonished to exercise great caution, and to check or entirely stop their progress until the blockading force is fully satisfied of their true character. Greater vigilance is required as regards English men-of-war, from the fact that the piratical cruisers which are plundering our commerce, one of which, as stated, ran the blockade at Mobile under English colors, and the other which, off the port of Galveston, declared herself to be English, are both English-built vessels, and are understood to be manned almost exclusively by Englishmen. So in regard to almost every vessel engaged in the business of running the blockade, and conveying munitions and aid to the rebels, who are making war upon this government. With scarcely an exception, they are English vessels-many of them, as the Georgiana, the Bermuda, the Memphis, the Caucasian, &c., adapted for armament. While, therefore, our officers will be enjoined to the observance of every courtesy, and to forbear, so far as they can, from the discourtesies complained of, I trust that her Majesty's officers will duly appreciate the circumstances I have referred to, and, when approaching our blockading squadrons, bear in mind |