have seized for those purposes would be to attempt to convert the unlawful seizure into a sale and would subject the party so offending to the pains and penalties of treason, and the Government would not hesitate to bring the offender to punishment. I am, sir, your obedient servant, WILLIAM H. SEWARD. OFFICE OF THE SUPT. OF THE METROPOLITAN POLICE, Hon. WILLIAM H. SEWARD, Secretary of State. SIR: On the arrival of the family of Mr. Faulkner and of Dr. Gustavus Holland, of Texas, I immediately telegraphed you and requested to be informed whether it was the desire of the Government to detain either of them (supposing at the moment that Mr. Faulkner was himself in company). Not receiving a reply I deemed it proper to act on the rumors rife and made an examination of the papers of Dr. Holland on the morning of Wednesday. Nothing, however, was found on him that was calculated to sustain the unfavorable report of his being a bearer of dispatches from Messrs. Mann, Yancey and company to the Confederate States of America. But I found on him copies of four letters (evidently made in the counting room of the writer) of the dates of March 23 and 27 and April 27 and 27, addressed to "Jefferson Davis, President of the Confederate States of America," on the subject of loaning money by capitalists in Europe to the Confederate States of America, and refusing to do so until a full recognition of the repudiated debt of Mississippi should be made. I am having copies of these letters made and will forward them to you to-morrow. Meanwhile a little incident has occurred that induced me to bring the doctor before me this evening when he informed me that an entire change has taken place in his views of the policy the South should pursue in the few days he has been here, and desired me to inform you that he is anxious to exert himself in restoring his Southern friends to reason; that he can convince them that they need expect no help from Europe; that he induced Mr. Gregory to make the motion in Parliament for the recognition of the Southern Confederacy under wrong information, &c. He expresses himself willing to call on you in Washington, where he can inform you further both in relation to things in Europe and at the South if you desire it. He was about to leave the city for Texas in a day or so, but will now await your pleasure. It would probably be best to notify me of your wishes in the matter, when I could communicate them to him. If you desire to address him direct you can do so by sending to Saint Nicholas Hotel. Ve JOHN A. KENNEDY, OFFICE OF THE SUPT. OF THE METROPOLITAN POLICE, Hon. WILLIAM H. SEWARD, Secretary of State. SIR: As I advised you in my note of yesterday I herewith inclose copies of four several letters of the dates respectively of March 23 and 27 and April 27 and 27 from Edward Haslenwood, of 7 Lothbury, East Chelsea, London, to Jefferson Davis, President of the Southern Con Oct. Nov. Feb. Mar. Apr. May 11, 1861.-The Secretary of State, Hon. William H. Seward, replies to Lord Lyons, transmitting a letter of explanation from the Secretary of the Navy. Arrest of J. R. and F. D. Flanders, editors at Malone, N. Y., for disloyal utterances. 14, 1861.-The President authorizes the suspension of the writ of habeas 26, 1861.-The General-in-Chief directs the transfer of the political pris- 15, 1861.—Brig. Gen. E. V. Sumner, U. S. Army, arrests William M. Gwin, 14, 1862.-President Lincoln issues Executive Order, No. 1, transferring the power to make extraordinary arrests from the State to the War Department. 27, 1862.-Secretary Stanton appoints Maj. Gen. John A. Dix, U. S. Army, and Hon. Edwards Pierrepont a special commission to examine state prisoners. President Davis suspends the writ of habeas corpus in Norfolk and vicinity. 13, 1862.-President Davis suspends the writ of habeas corpus in New Orleans and other parts of Louisiana at the request of Governor Moore and others. 8, 1862.-President Davis suspends all civil jurisdiction and the writ of habeas corpus in the Department of East Tennessee. 9, 1862.-A court of inquiry ordered in the case of Hon. John Minor Botts, of Virginia, arrested as a suspect by the Confederate authorities. 3, 1862.-President Davis suspends the writ of habeas corpus in portions of Western Virginia. Miscellaneous Union Correspondence, etc., Relating to Political Arrests During the First Year of the War. DEPARTMENT OF STATE, Washington, May 16, 1861. G. HEINEKEN, Esq., SIR: I have received your letter* of yesterday's date asking me to give you in writing my reasons for considering an acceptance on your part of Governor Letcher's proposal to purchase the steam-ships Yorktown and Jamestown, recently seized by his orders and now in his possession, an act of treason. With this request I readily comply. An insurrection has broken out in several of the States of this Union including Virginia designed to overthrow the Government of the United States. The executive authorities of the State are parties in that insurrection and so are public enemies. Their action in seizing or buying vessels to be employed in executing that design is not merely without authority of law but is treason. It is treason for any person to give aid and comfort to public enemies. To sell vessels to them which it is their purpose to use as ships of war is to give them aid and comfort. To receive money from them in payment for vessels which they *Not found. have seized for those purposes would be to attempt to convert the unlawful seizure into a sale and would subject the party so offending to the pains and penalties of treason, and the Government would not hesitate to bring the offender to punishment. I am, sir, your obedient servant, WILLIAM H. SEWARD. OFFICE OF THE SUPT. OF THE METROPOLITAN POLICE, Hon. WILLIAM H. SEWARD, Secretary of State. SIR: On the arrival of the family of Mr. Faulkner and of Dr. Gustavus Holland, of Texas, I immediately telegraphed you and requested to be informed whether it was the desire of the Government to detain either of them (supposing at the moment that Mr. Faulkner was himself in company). Not receiving a reply I deemed it proper to act on the rumors rife and made au examination of the papers of Dr. Holland on the morning of Wednesday. Nothing, however, was found on him that was calculated to sustain the unfavorable report of his being a bearer of dispatches from Messrs. Mann, Yancey and company to the Confederate States of America. But I found on him copies of four letters (evidently made in the counting room of the writer) of the dates of March 23 and 27 and April 27 and 27, addressed to "Jefferson Davis, President of the Confederate States of America," on the subject of loaning money by capitalists in Europe to the Confederate States of America, and refusing to do so until a full recognition of the repudiated debt of Mississippi should be made. I am having copies of these letters made and will forward them to you to-morrow. Meanwhile a little incident has occurred that induced me to bring the doctor before me this evening when he informed me that an entire change has taken place in his views of the policy the South should pursue in the few days he has been here, and desired me to inform you that he is anxious to exert himself in restoring his Southern friends to reason; that he can convince them that they need expect no help from Europe; that he induced Mr. Gregory to make the motion in Parliament for the recognition of the Southern Confederacy under wrong information, &c. He expresses himself willing to call on you in Washington, where he can inform you further both in relation to things in Europe and at the South if you desire it. He was about to leave the city for Texas in a day or so, but will now await your pleasure. It would probably be best to notify me of your wishes in the matter, when I could communicate them to him. If you desire to address him direct you can do so by sending to Saint Nicholas Hotel. Very truly, yours, &c., JOHN A. KENNEDY, OFFICE OF THE SUPT. OF THE METROPOLITAN POLICE, Hon. WILLIAM H. SEWARD, Secretary of State. SIR: As I advised you in my note of yesterday I herewith inclose copies of four several letters of the dates respectively of March 23 and 27 and April 27 and 27 from Edward Haslenwood, of 7 Lothbury, East Chelsea, London, to Jefferson Davis, President of the Southern Con I federation, on the subject of obtaining European loans for the South. These copies are made from manuscript copies furnished at the office of Mr. Haslenwood, the sheets bearing the printed heads of his office. have engaged with Doctor Holland in whose possession they were found that no use should be made of them to his personal annoyance or disadvantage. Very truly, yours, &c., JOHN A. KENNEDY, [Inclosure No. 1.] 7 LOTHBURY, EAST CHELSEA, LONDON, March 23, 1861. His Excellency JEFFERSON DAVIS, President of the Southern Confederation. SIR: It must be evident to you that the principal difficulty with which the South has to contend is the want of money and the want of credit. As long as Mississippi forms part of the Southern Confederacy and as long as the bonds of Mississippi issued through the Planters' and the Union banks are unsettled no loan can be negotiated in Europe. Mississippi must either go out or settle with her creditors. Within a few days you shall have a letter showing how other nations have compromised their debts and that the repudiation difficulty can be arranged. I remain, your obedient servant, EDWARD HASLENWOOD. [Inclosure No. 2.] 7 LOTHBURY, EAST CHELSEA, LONDON, March 27, 1861. JEFFERSON DAVIS, President of the Southern Confederacy. SIR: On Saturday last I forwarded a few lines to you on the subject of the future credit of the Southern Confederacy and how far it would be injured by the course heretofore pursued by Mississippi with regard to her bonds. Outside of that letter I did not put any superscription beyond your name and address because I felt that it might become the ground for detention of the same by any of the postmasters of the Northern States who might wish to embarrass your movements. Annexed to this letter you will find a copy* of the law of the London Stock Exchange which will hopelessly exclude any new loan until Mississippi shall make satisfactory arrangements with her creditors, and it is of no use to try the Continent because it is a standing rule with them never to take any loan which has been openly refused here. I am a member of the London Stock Exchange. I know perfectly the work. ings of the rule. I also know how futile your hopes will be of raising any money here except upon the conditions I mentioned, that the Mississippi debt must be acknowledged and settled. Moreover, I am one of the committee for settling the debts of Spanish America and have made arrangements for the debts of Peru, Chili, Buenos Ayres, Venezuela, New Grenada and Central America and in a future letter I will give you the benefits of my experience and show to you the nature of the compromises of other nations in the settlement of their debts. I am also the secretary of the committee appointed by the Mississippi bondholders having special reference to that class issued through the Planters' Bank, though I do not now address you in my official capacity. I am well aware of the difficulties of the question for raising money for the South, but I do not regard them as insurmountable provided *Not found. that the two debts of Mississippi are arranged for. Hopeless without it and among the difficulties are the non-recognition of the Southern Confederacy by the United States and by European nations, the probabilities of war between the North and South, the fact that the entire income of the South depends almost upon one staple; that the condition of their exchanges is such that any money advanced would take the form of a direct shipment of gold coin thus reducing the bullion in the Bank of England and prolonging the rate of discount at 7 per cent. per annum. Slavery.-There are armies of annuitants who would not lend a sixpence on the slaves on principle; anyhow the rate would have to be very high because at all times the Southern sixes were only equal to Northern fives under the best circumstances. But the greatest difficulty is repudiation. Apparently it would seem to be unfortunate that you, the principal exponent and defender of repudiation, should have been chosen as the head of the Southern Confederacy. I regard it in quite another light. One word from you showing the necessity for retracing the steps of Mississippi would have more effect than a volume from any other man. Remember there is more joy over one error repaired than over myriads to If you have not the courage to do this then your position is a mistake. To-morrow I will send you much valuable information foreshadowing a solution to your difficulties. I remain, yours, very truly, EDWARD HASLENWOOD. [Inclosure No. 3.] 7 LOTHBURY, EAST CHELSEA, LONDON, April 27, 1861. JEFFERSON DAVIS, President of the Southern Confederacy. SIR: According to the promise contained in my former letters I will give to you the outline of a compromise for both debts of Mississippi drawn from my experience in these matters. The first step is to obtain power from the legislature to the executive to make satisfactory arrangements with her bondholders within the means of the State. The question is not how much does Mississippi owe but how much can she pay? What is the maximum annually she hopes to set aside for redeeming her credit? What is the minimum she can guarantee? Above all things let her acknowledge as a debt the whole of the principal and the whole of the arrears of interest and make one common homogeneous debt of it, and then the sum the State can pay annually; whether it is large or small let it be equally divided over the whole debt. The system is to call a public meeting of the bondholders, obtain their consent to the acceptance of an arrangement on any basis proposed, appoint a representative or a committee to settle the details and immediately after the issue of the new bonds the Stock Exchange of London is open to the negotiation of any new loan or industrial enterprise of the State. Among the very large number of the compromises which I have effected as one of the committee of Spanish-American bondholders I have never failed in convincing the creditors that they ought to accept the offer, provided that first of all I was myself convinced of the justice of the compromise. I have always been an advocate where the debt is very large and the revenue small that a fixed percentage of the total receipts should be set aside and taken by the creditors in full each year for the interest of that year. This prevents any great accumulation of unpaid arrears against the State, and also induces the creditors to benefit the State if in any way in their power. Any proposition should be accompanied by statistics showing the position of the State for the past |