The Minister of France in Mexico to the Minister for Foreign Affairs. MEXICO, December 28, 1865. Mr. MINISTER: The despatch which your excellency did me the honor to write to me the 14th of November last, reached me on the 13th instant. The same day I began active measures for the purpose of obtaining that the convention which I had signed for the settlement of our claims should be modified in what concerns the bonds to be delivered to our countrymen. I at first met with a brisk opposition. The emperor and Mr. Castillo maintained, which is true, that the remittance of obligations analogous to those of the second loan in place of bonds of the first, would become more onerous on the Mexican treasury, the conversion and the establishment of premiums having occasioned considerable outlay. However, I showed myself so pressing that I carried the point next day. I have had it understood that it was requisite to place the Emperor Napoleon and his government in position to declare to the French Chambers that the affair of the claims is decidedly settled. That there might be no doubt about it, and that the concession I asked for should have a thorough official character, I passed on this subject an exchange of notes with Mr. Castillo. The clause in virtue of which a sum of 23,560,000 francs in bonds of the first loan at par was to be paid over to us, having become impracticable in consequence of the conversion, it rests established that this sum shall be remitted to us in obligations of the second series remaining without definite employment. The minister for foreign affairs has given instructions in this sense to the Mexican minister at Paris, and the Mexican commission will have to remit the obligations as soon as the convention shall be ratified. I shall wait till your excellency lets me know what change must be made in the draft of the convention. Accept, &c., &c. DANO. The Minister of France in Mexico to the Minister for Foreign Affairs. MEXICO, January 18, 1866. Mr. MINISTER: Your excellency knows already that I have obtained that the Mexican government should pay us in obligations of the second series of the second loan. The lega tion of Mexico at Paris has received the same notification, but the under secretary of state for finance has not yet transmitted the order to deliver to us the bonds, which, according to him, should not be remitted until after the official ratification of the convention. I have combatted this pretension, which would occasion fresh delays. The two governments having agreed upon the modifications to be inserted in it, the convention should be considered as ratified morally. Mr. Cesar being absent at this time, the emperor sends to me from Chapultepec a telegram, by which he advises me that Mr. Langlai has it in his power to give the orders necessary to the Mexican commission of finance. I caused this telegram to be taken to the counsellor of state on the mission, who as I supposed does not think himself authorized to order anything because he has not any official character. However, I beg him to write to Mr. Fould or to Mr. Germing, annexing to his letter the telegram in which the emperor Maximilian expresses his intentions. To-morrow I will endeavor beside to send by telegraph, through Mr. Castillo, a formal order to remit the bonds. Accept, &c. DANO. The Minister of France in Mexico to the Minister for Foreign Affairs. MEXICO, February 9, 1866. Mr. MINISTER: Mr. Castillo informs me that instructions are to be sent to the commissioner of finance of Mexico at Paris to place in your hands the 47,120 bonds of the second series, representing the 23,560,000 francs which pay off the indemnities. The minister for foreign affairs asks me at the same time that the convention of September 17 be ratified by the Emperor of the French, to be afterwards endued with the like formality by the Emperor Maximilian, when the proper modifications have been added to the draft of some of the articles. Accept, &c., &c. DANO. The Minister for Foreign Affairs to the Minister of France in Mexico. PARIS, January 14, 1866. The situation in which we are now placed in Mexico must not be prolonged, and circumstances require us to take, in this respect, a definitive resolution, which the Emperor has ordered me to communicate to you. Our expedition had only for object primitively to follow out the revindication of our credits and indemnities due to our subjects. If at any time we have deemed it of advantage to give our aid to the efforts of a nation which aspired to the recovery of order and wellbeing under a regular government; if our legitimate interests counselled us to second the prince who consecrated himself to this generous task, our co-operation was to be confined within precise limits, which it was the object of the convention of Miramar to determine. The reciprocal arrangements indicated in that act fixed the measure and conditions upon which it was permitted to us to allow the forces of France to assist in the consolidation of a friendly government. It would be superfluous to dwell on the reasons which place the court of Mexico, notwithstanding the integrity of its purposes, in admitted impossibility henceforth to fulfil these obligations. On the one side every appeal to credit would be without fruit; on the other we cannot, outside of stipulations agreed upon, take upon ourselves exclusive charge of the Mexican government, provide by our army for its defence, and from our finances for the service of its administration. The advances which we have several times consented to must not be repeated, and the Emperor will not ask fresh sacrifices from France. Our occupation must therefore come to an end, and we should prepare for it without delay. The Emperor charges you, sir, to fix this in concert with our august ally, after a frank discussion, in which Marshal Bazaine is naturally called to take part, shall have determined the means for guaranteeing, as far as possible, the interests of the Mexican government, the security of our credits, and the claims of our countrymen. The desire of his Majesty is that the evacuation should begin toward the coming autumn. You will please, sir, to read this despatch to his excellency the minister for foreign affairs, and leave him a copy. I charge Baron Saillard to add thereto, verbally, all necessary explanations, and to report to me at an early day the answer, through which you will inform me of the definitive arrangements which will have been concluded. Accept, &c., &c. DROUYN DE LHUYS. The Minister for Foreign Affairs to the Minister of France in Mexico. PARIS, January 15, 1866. I think it a duty to enter here into some developments for your complete information upon the subject to which my despatch dated yesterday relates. The settlement of our claim, such as results from the convention which you signed in Mexico the 27th September, 1865, and which has received, in its essential provisions, the approval of his Majesty, assures to our countrymen an acceptable reparation for the damages they have undergone. This convention will, we doubt not, be loyally executed. Thus will be attained, in what most nearly affects us, the purpose of our expedition, and satisfaction will be given for the grievance which constrained us to take up arms. I need not recall the considerations which led us not to lose sight of the object of our expedition, but to use it to profit by proffering to Mexico important chances of a needed regeneration. This thought, the legitimacy of which we affirm anew, the disinterestedness and high political bearing thereof, determined the support we have lent to the enterprise courageously undertaken by the emperor Maximilian. Resolved to second his efforts, it was our duty, at any rate, to regulate the conditions of our co-operation by the measure of the French interests, about which, before all, we should preoccupy ourselves. The Emperor, through wise forecast, wished to preserve his government from the allurements of a generous thought by defining the nature and in advance restricting the extent of assistance which it was permissible to us to grant. We had to stipulate at the same time for the equivalent resources which should be placed at our disposal, and for the quotient and the coming in of the sums intended to defray our expenditures. Such was the object of the convention of Miramar, which was to be the regulator of our rights and our reciprocal duties. It would have no interest now to recall the circumstances which prevent the Mexican government from henceforth fulfilling the obligations which that act imposes on it, and which threaten to cast upon us, without any of the equivalents promised, the burden of a new establishment. I will not dwell upon the remarks which abound, in this respect, in my correspondence with the legation of the Emperor, and it would seem superfluous to me now to seek out in idle discussion the causes of a situation which my duty only obliges me to state. In equity, the chances of the bilateral contracts which bound us to the Mexican government being no longer to be executed by it, we are ourselves released from the obligations we had contracted. However, sir, we perhaps would not have thought of availing ourselves of the privilege given us by the non-execution by the Mexican government of the engagements of the treaty of Miramar to declare ourselves exonerated from ours, if our resolution in that respect were not controlled by a consideration of fact which admits no discussion. The Mexican government is powerless to furnish to us those financial resources which are indispensable to keep up our military strength; and, besides, it even calls upon us to take charge of a large part of the expenses of its internal administration. These embarrassments are not new, and at various intervals we have attempted to meet them by facilitating loans, which have placed large sums at the disposal of Mexico. To-day any such recourse to credit is admitted to be impossible. What remains to us to do, in view of the established emptiness of the Mexican treasury and of demands which its poverty casts back on us? The provisions of our budget do not furnish us any means of supplying this deficit. If Mexico cannot pay the troops which we maintain in its territory, it will be impossible for us to keep them there. As for asking from our country new credits for this object, I have already explained this to you. As I have told you, public opinion has pronounced, with irrefutable authority, that the limit of sacrifices is reached. France will refuse to add anything to them, and the Emperor will not ask it. Far from me be the idea of misconstruing the efforts accomplished by the emperor Maximilian and by his government. The emperor has resolutely encountered the difficulties inherent to every new establishment, and which the peculiar condition in which Mexico was placed, perhaps, rendered still more arduous. His impulsion has been felt throughout; and if it has not been given to him to operate to the extent of his good intentions, and so rapidly as he conceived them, the transformation which the administration of the country calls for, incontestable results do not the less attest the activity of his initiative. In the provinces as in the capital, wherever the emperor, and the empress, so gallantly associated in the work of her august husband, have been able to make themselves personally known, their sympa thetic reception by the people bears witness of their confidence-of the hopes with which they cling to the restoration of the empire. The emperor has himself proclaimed the close of the civil war, if, indeed, the resistance to his authority merited that name. This situation, encouraging in many respects, leaves me to ask whether the well-understood interests of the emperor Maximilian are not here found to be in accord with the necessities to which we are bound to yield. Of all the reproaches heard from dissidents in the interior and adversaries abroad, the most dangerous to a government which is being established is certainly that of being sustained only by foreign force. Without question, the suffrages of Mexicans have met this imputation. It subsists, however, and it is well understood how advantageous it will be to the cause of the empire to take away this weapon from its adversaries. At the moment when these various considerations oblige us to look to the close of our military occupation, the government of the Emperor, in its solicitude about the important work in which it took the initiative, and in its sympathy for the emperor Maximilian, was obliged to take into strict account the financial situation of Mexico. That situation is serious, but it is not desperate. With energy and courage, with firm and sustained will, the Mexican empire can triumph over the difficulties which lie in its way; but success can only be had at this price. This is the conviction we have extracted from the careful and scrupulous examination of its obligations and of its resources, and you must endeavor to impress this upon the mind of the emperor Maximilian and his government. Accept, &c. DROUYN DE LHUYS. The Minister for Foreign Affairs to the Minister of France in Mexico. PARIS, February 16, 1866. SIR: At the time I am writing this despatch to you Baron de Sallard must have reached Mexico. The instructions from the government of the Emperor are, therefore, known to you. His Majesty has himself taken care, in his speech at the opening of the legislative session, to inform the great bodies of the state of these resolutions. To-day I have only to confirm the general directions contained in my despatch of 14th and 15th January, and to recommend to you to settle, without delay, with the Mexican government the arrangements intended to realize the views of the Emperor. The wish of his Majesty is, as you know, that the evacuation should begin towards next autumn, and be accomplished as promptly as possible. You will have an understanding with Marshal de Bazaine to fix on the successive periods in accord with the emperor Maximilian. I cannot here develop the various considerations which must be taken into account in the conduct of this operation, some of a nature purely military and technical, and essentially in the province of the marshal commander-in-chief; others, more political in character, are remitted to your appreciations in common, enlightened by the perfect knowledge which you have of local circumstances, and the necessities which they impose. It is equally important, also, sir, to strike the balance of the financial situation and deter mine the guarantees which the security of the debt due to us requires. The provisions of the treaty of Miramar not having been realized, recourse must be had to other combinations to secure the reimbursement of our advances, and at the same time to provide, in the interest of the Mexican credit, for the regular payment of the arrearages of the debts contracted by the loans of 1864 and 1865. Mr. Langlas will receive by this courier, from the minister of finance, detailed instructions, which he will communicate to you; you will also have an understanding with him, in order to assure their execution. The government of the Emperor has thought the simplest and least onerous combination for the Mexican government would consist in placing in our hands the custom-houses of Vera Cruz and Tampico, or others which should be deemed more suitable. One-half the returns should be ours, to be applied, one portion to payments of interest, at three per cent., on our credits, estimated on a capital of two hundred and fifty millions, and the rest as a partial guarantee of the interest due the holders of bonds of the loans of 1864 and 1865. Administered under our care, it is allowable to hope that these custom-houses would furnish still, after the previously assented to deductions, important resources. You will, therefore, have to make with the Mexican government such necessary arrangements that this delegation be regularly conferred upon us. These points settled, and French interests thus guarded, the government of the Emperor will none the less continue to evince, in an efficient manner, all the sympathy which inspires his Majesty for the sovereign of Mexico personally, and towards the generous task to which he has devoted himself. You will please, sir, to make, in the name of his Majesty, this assurance to the Emperor Maximilian. Accept, &c., &c. DROUYN DE LHUYS. The Minister of France in Mexico to the Minister for Foreign Affairs. MEXICO, March 9, 1866. Mr. MINISTER: I am in receipt of the despatches your excellency has done me the honor to address to me, dated 14th and 15th January. I am going to state positively that the well-settled purpose of the Emperor is that the evacuation commence towards the coming autumn; and that I am at the disposal of the emperor Maximilian to settle this point formally, in conformity with he instructions I have received, but that, meantime, Marshal Bazaine is taking measures to guarantee, as far as possible, all the interests involved. Your excellency already knows the intentions of the commander-in-chief of the expeditionary corps. The evacuation, commenced in November next, will be finished in the autumn of 1867; that is to say, will be entirely accomplished in eighteen months. Accept, &c., &c. Mr. Seward to Mr. Bigelow. DANO. No. 492.] DEPARTMENT OF STATE, SIR: I have to acknowledge the receipt of your despatch of the 14th of June instant, No. 338, which gives me the report of a debate in the Corps Legislatif on the Mexican question, with your comments thereon. I have been exceedingly interested in the debate, but it does not seem to call for any new instruction. We are already aware that the understanding which has now happily been reached between the United States and France on the subject of Mexican affairs is not entirely satisfactory to some sanguine persons in the United States. Your despatch shows that it is equally unsatisfactory to many sanguine meu in France. If, however, as we now assume, the French government shall entirely withdraw its forces, and desist from the further intervention in Mexico, in the manner and at the times heretofore agreed upon, we may expect and trust that Mexico will thereafter relieve both France and the United States of all concern about her affairs, and resume with renovated spirit her progress toward wellorganized and discreet self-government. I am, sir, your obedient servant, JOHN BIGELOW, Esq., &c., &c., fr. WILLIAM H. SEWARD. Mr. Seward to Mr. Bigelow. DEPARTMENT OF STATE, No. 493.] SIR: I have to acknowledge the receipt of your despatch of the 14th of June, No. 336. The President appreciates the frankness and benevolence of the sentiments which Mr. Drouyn de Lhuys has expressed on the subject of the republics of Hayti and St. Domingo. Had affairs in the latter republic remained unchanged, we would now have very cheerfully concurred with France and with Great Britain in recommending to the two republics the establishment of amicable relations— a measure essential to the welfare, if not the safety, of both states. revolution; however, which has recently occurred in St. Domingo, has involved the subject in new and unforeseen difficulties. We trust that a government will be established there upon foundations which will prove permanent. In that case I shall revert anew to the subject. I am, sir, your obedient servant, JOHN BIGELOW, Esq., &c., &c., &c. The WILLIAM H. SEWARD. Mr. Bigelow to Mr. Seward. No. 344.] LEGATION OF the United States, Paris, July 6, 1866. SIR: The war of which I announced to you the commencement scarcely three weeks since, appears to be approaching a sudden and unexpected termination. Austria, after sustaining a series of rapid and disastrous defeats from the Prussians, has withdrawn what a month ago was the only formidable obstacle to a conference by offering to cede Venetia to the Emperor of France. The following announcement of this event appeared in the Moniteur yesterday morning: "An important event has just taken place. The Emperor of Austria, having kept intact the honor of his arms in Italy, complying with the ideas expressed by the Emperor Napoleon in his letter addressed on June 11 to his minister of foreign affairs, cedes Venetia to the Emperor of the French, and accepts his mediation to bring about peace between the belligerents. "The Emperor Napoleon hastened to respond to this appeal, and immediately made an application to the kings of Prussia and Italy to procure an armistice." Though the Austrian army seems to have been utterly demoralized by the succession of defeats which it experienced during the first days of July, and by its utter rout at Sadowa; and though the capital of the empire is thought to be in peril, the sudden surrender of Venetia to the Emperor of France has given rise to no little speculation. The result confirms an impression which I formed some weeks since, and which I think I communicated to you, that the war was a sort of feigned issue between the larger powers, to quiet certain disputed titles which have more or less disturbed the harmony of Europe since 1815, and that its end was foreseen by those who are to gain most by the result from the commencement. It remains to be seen what answer Prussia will make to the Emperor's appeal, but it is hardly to be supposed that he will impose terms which it will not be for her interest to accept, especially when she comes to reflect that the Emperor, in case of refusal, might be disposed to throw his own sword into the balance with the swords of Austria and of Italy, thus returning the compliments paid him by Prussia in 1859, when his army threatened the Quadrilateral. It is to be presumed that the Emperor has invited the belligerents to unite in |