SIR: Herewith you will receive copies of the following papers:

A. Letter of George Moore, Esq., Her Britannic Majesty's Consul in Richmond to this department, dated 16th February, 1863.

B. Letter from the Secretary of State to Consul Moore, 20th February, 1863.

C. Letters patent by the President revoking the exequatur of Consul Moore, 5th June, 1863.

D. Letter enclosing to Consul Moore a copy of the letters patent revoking his exequatur.

It is deemed proper to inform you that this action of the President was influenced in no small degree by the communication to him of an unofficial letter of Consul Moore, to which I shall presently refer.

It appears that two persons named Malony and Farrell, who were enrolled as conscripts in our service, claimed exemptions on the ground that they were British subjects, and Consul Moore, in order to avoid the difficulty which prevented his corresponding with this department, as set forth in the paper B, addressed himself directly to the Secretary of War, who was ignorant of the request made by this department for the production of the Consul's commission. The Secretary of War ordered in investigation of the facts, when it became apparent that the two men had exercised the right of suffrage in this State, thus debarring themselves of all pretext for denying their citizenship; that both had resided here for eight years, and had settled on, and were cultivating farms owned by themselves. You will find annexed the report of Lieutenant Colonel Edgar, marked E, and it is difficult to conceive a case presenting stronger proofs of the renunciation of native allegiance, and of the acquisition of de facto citizenship, than are found in that report. It is in. relation to such a case that it has seemed proper to Consul Moore to denounce the government of the Confederate States to one of its own citizens, as being indifferent “to cases of the most atrocious cruelty.” A copy of his letter to the counsel of the two men is annexed, marked F.

The earnest desire of this government is to entertain amicable relations with all nations, and with none do its interests invite the formation of closer ties than with Great Britain. Although feeling aggrieved that the government of Her Majesty has pursued a policy, which, according to the confessions of Earl Russell himself, has increased the disparity of strength which he considers to exist between the belligerents, and has conferred signal advantages on our enemies in a war in which Great Britain announces herself to be really, and not nominally, neutral, the President has not deemed it necessary to interpose any obstacle to the continued residence of British Consuls within the Confederacy, by virtue of exequaturs granted by the former government. His course has been consistently guided by the principles which underlie the whole structure of our government. The State of Virginia having delegated to the government of the United States, by the Constitution of 1787, the power of controlling its foreign relations, became bound by the action or that government in its grant of an exequatur to Consul Moore. When Virginia seceded, withdrew the powers delegated to the government of the United States, and conferred them on this government, the exequatur granted to Consul Moore was not thereby invalidated. An act done by an agent while duly authorized continues to bind the principal after the revocation of the agent's authority. On these grounds, the President has hitherto steadily resisted all influences which have been exerted to induce him to exact of foreign consuls that they should ask for an exequatur from this government as a condition of the continued exercise of their functions. It was not deemed compatible with the dignity of the government to extort, by enforcing the withdrawal of national protection from neutral residents, such inferential recognition of its independence as might be supposed to be implied in the request for an exequatur. The consuls of foreign nations, therefore, established within the Confederacy, who were in possession of an exequatur issued by the government of the United States, prior to the formation of the Confederacy, have been maintained and respected in the exercise of their legitimate functions, and the same protection and respect will be accorded to them in future, so long as they confine themselves to the sphere of their duties and seek neither to evade nor defy the legitimate authority of this government within its own jurisdiction.

There has grown up an abuse, however, the result of this tolerance on the part of the President, which is too serious to be longer allowed. Great Britain has deemed it for her interest to refuse acknowledging the patent fact of the existence of this Confederacy as an independent nation. It can scarcely be expected that we should by our own conduct, imply assent to the justice or propriety of that refusal. Now, the British Minister accredited to the government of our enemies, assumes the power to issue instructions to, and exercise authority over the consuls of Great Britain residing within this country; nay, even to appoint agents to supervise British interests in the Confederate States. This course of conduct plainly ignores the existence of this government, and implies the continuance of the relations between that Minister and the Consuls of Her Majesty, resident within the Confederacy, which existed prior to the withdrawal of these States from the Union. It is further the assertion of a right on the part of Lord Lyons, by virtue of his credentials as Her Majesty's Minister at Washington, to exercise the power and authority of a Minister accredited to Richmond, and officially received as such by the President. Under these circumstances, and because of similar action by other ministers, the President has felt it his duty to order that no direct communication be permitted between the consuls of neutral nations in the Confederacy and the functionaries of those nations residing within the enemy's country. All communication, therefore, between Her Majesty's Consuls or Consular Agents in the Confederacy and foreign countries, whether neutral or hostile, will hereafter be restricted to vessels arriving from, or dispatched for neutral ports. The President has the less reluctance in imposing this restriction, because of the ample facilities for correspondence which are now afforded by the fleets of Confederate and neutral steamships engaged in regular trade between neutral countries and the Confederate ports. This trade is daily increasing in spite of the paper blockade which is upheld by Her Majesty's government in disregard, as the President conceives, of the rights of the Confederacy, of the dictates of public law, and of the duties of impartial neutrality.

You are instructed by the President to furnish a copy of this dispatch, with a copy of the papers appended, to Her Majesty's Secretary of State for Foreign Affairs.

SIR: I have the honor to request your favorable consideration of the following enactment, in as far as it regards British subjects.

I observe that the Legislature of Mississippi has passed an act to amend an act entitled an act to revise and reduce into one the militia and volunteer laws of that State.

Section twelve runs thus:

Also the following order has appeared thus:

I would, therefore, now crave your opinion as to the construction of this order, if I am to understand that any act of Congress is to be subservient to the Legislature of Mississippi.

I put this question, as a case has arisen this morning, claiming my interference to protect a British subject, in accordance with the Queen's proclamation of neutrality, from enrolment in that State.

SIR: Your letter of the 16th inst., in relation to certain enactments and military orders in the State of Mississippi, has been received. In that letter you also make reference to the complaint of a British subject, alleging ill-treatment at the hands of officers enforcing the conscript law in Mississippi.

Before replying to the subject-matter of your letter, it is deemed necessary to inquire into the extent of the authority vested in you by Her Majesty's commission as her Consul in Richmond. The exequatur granted on that commission by the government of the United States was conferred at a date when that government had the right to act on such matters as the agent of the States that have since formed the Confederacy, and the exequatur has, therefore, not been questioned. It was supposed to have reference solely to consular functions in Richmond, or at furthest in the State of Virginia.

As your letter, however, initiates a diplomatic correspondence with this department on the subject of the laws and regulations of the State of Mississippi, it becomes necessary to request that your consular commission, as well as any other authority you may have received to act in behalf of the government of Her Britannic Majesty be officially submitted to this department, in order that the precise nature and extent of your functions may be ascertained, before further correspondence can be held with you as Her Majesty's Consul at the port of Richmond.

WHEREAS, George Moore, Esq., Her Britannic Majesty's Consul for the port of Richmond and State of Virginia, (duly recognized as such by exequatur issued by a former government, which was, at the time of the issue, the duly authorized agent for that purpose of the State of Virginia,) did recently assume to act as consul for a place other than the city of Richmond, and a State other than the State of Virginia, and was thereupon, on the 20th day of February last, (1863,) requested by the Secretary of State to submit to the Department of State his consular commission as well as any other authority he may have received to act in behalf of the government of Her Britannic Majesty before further correspondence could be held with him as Her Majesty's Consul at the port of Richmond; and whereas, The said George Moore has lately, without acceding to said request, entered into correspondence as Her Majesty's Consul with the Secretary of War of these Confederate States, thereby disregarding the legitimate authority of the government;

These, therefore, are to declare that I do no longer recognize the said George Moore as Her Britannic Majesty's Consul in any part of these Confederate States, nor permit him to exercise or enjoy any of the functions, powers, or privileges allowed to the Consuls of Great Britain. And I do wholly revoke and annul any exequatur heretofore given to the said George Moore by the government which was formerly authorized to grant such exequatur as agent of the State of Virginia, and do declare the said exequatur to be absolutely null and void from this day forward.

In testimony whereof, I have caused these letters to be made patent, and the seal of the Confederate States of America to be hereunto affixed.

SIR: The President of the Confederate States has been informed that in consequence of your assuming to act in behalf of the government of Her Britannic Majesty on matters occurring in the State of Mississippi, you were requested to submit to this department your consular commission, as well as any other authority held by you to act in behalf of Her Majesty's government, before further correspondence could be held with you as British Consul for the port of Richmond. He has further been informed that you have not acceded to this request, and that, in disregard of the legitimate authority of the government, you have again lately corresponded, as Her Majesty's Consul for this port, with the Secretary of War of the Confederate States. The President considers it as inconsistent with the respect which it is his office to enforce towards the government, that you should any longer be permitted to exercise the functions, or enjoy the privileges of a consul in these Confederate States. He has consequently thought proper by the letters patent, of which I enclose you a copy, to revoke the exequatur heretofore granted to you and to make public these letters patent.

CAPTAIN: The communication from the Secretary of War, asking information respecting the conscription of Nicolas Malony and Eugene Farrell, has been received; and in reply, I submit the following: Nicolas Malony is a native of Ireland. He does not know exactly how long since he came from Ireland to this country. He has been a resident of Greenbrier county, Virginia, for eight years. He bought land in said county, and after the several payments were made, he received the deed for the land, and that deed was recorded in the Clerk's office of Greenbrier county three years ago. From the time of purchase till he was conscribed, he resided upon, and cultivated the land. His family still resides upon it. He has also exercised the right of suffrage. He was assigned (as a conscript) to this battalion in December, 1862.

Eugene Farrell is a native of Ireland. Does not know the exact time when he came to this country. He bought land in Fayette county, Virginia, and after the payments were made, be received the deed for the land. That deed was recorded in the Clerk's office of Fayette county; he afterwards exchanged his land in Fayette for land in Greenbrier. He afterwards sold one half of his land in Greenbrier to his brother, and his family still resides upon the half reserved. He has been a resident of Virginia for eight years and has exercised the right of suffrage. He was assigned to this battalion, as a conscript, in December, 1862. From time of purchase to time of conscription, he resided upon and cultivated his land.

MY DEAR SIR: I have just received your letter of 30th April, and I have at once addressed a letter to the Secretary of War on the subject of Malony and Farrell, of which I transcribe a copy herewith.

I am really at a loss to account for the dilatory proceedings of the War Department, not to make use of any harsher term; however, I cannot help saying to you, unofficially, that the apparent apathy and indifference with which the War Department seems to regard cases of the most atrocious cruelty, quite baffle all my preconceived opinions of my own kindred race.

I have lived thirty-two consecutive years (from 1826 to 1858 ) in despotic countries, and I am compelled to bear witness that I have met in those foreign countries more official courtesy and consideration from the local authorities, on my representation of grievances, than I meet at the hands of my own blood and lineage.

These reports, which I am obliged to send home, do not tend to the consummation which, perhaps, some of us desire.

I will say no more, for it grieves me to write this.

SIR: Since my No. 24, of 6th instant, further information has reached the Department, illustrating most forcibly thee necessity for the action taken by the President on the subject of Her Britannic Majesty's Consuls, resident within the Confederacy, as explained in that dispatch.

On the 18th May, Mr. Cridland, who bad occasionally acted as Consul in Richmond during temporary absences of Consul Moore, sought an interview at the Department, and, on being admitted, called my attention to an article in the Richmond Whig of that date, which announced that Mr. Cridland was about to depart for Mobile with the commission of Consul, and that he was accredited to Mr. Lincoln, not this Government. Mr. Cridland assured me that the statement was erroneous, that he was going to Mobile as a private individual, unofficially, to look after certain interests of the British Government that had been left unprotected by the withdrawal of Consul Magee. He further stated as he was going there unofficially he had not conceived that there was any impropriety in doing so without communicating his intention to the Department, and hoped that such was my own view of the matter. I informed him that all neutral residents were at liberty to travel within the Confederacy and to transact their business without other restrictions than such as the military authorities found it necessary to impose for the public safety, and that this Department saw no reason to interpose any objection to his going to Mobile to transact business unofficially. He then said that he had called at the office of the Whig to make a similar explanation to the editor of that paper, with a view to the correction of the erroneous impression created by its article, and accordingly on the next day an article appeared in that journal announcing that it had received the assurance from Mr. Cridland that he was going to Mobile “to look after British interests in that quarter in an unofficial way,” and that he was “without commission from the Queen or exequatur from Washington.”

I was, therefore, quite surprised at receiving from the Secretary of the Navy official communication of a telegram received by him from Admiral Buchanan, informing the Secretary that Mr. Cridland had been officially introduced to him by the French Consul as Acting English Consul at Mobile, and had shown the Admiral “an official document signed by Lord Lyons, appointing him Acting English Consul at Mobile.” I append copies of this telegram, and of the two articles above referred to, extracted from the Richmond Whig.

These, however, are not the only exceptionable features which mark this affair. Other circumstances, to which your attention is invited, have been brought to the notice of the Department by official communications from the Governor of Alabama.

On the 11th November last, the Bank of Mobile, as agent for the State of Alabama, addressed a communication to Consul Magee, at Mobile, informing him that that State would owe, during the ensuing year, to British subjects, interest-coupons on the State bonds to the amount of some forty thousand pounds sterling; that this interest was payable in London at the Union Bank and at the counting house of the Messrs. Rothschilds, and requesting to know whether the Bank would be allowed to place in the hands of the Consul, in coin, the sum necessary for transmission to England, at the expense of the State, for the purpose mentioned.

On the 14th November, Consul Magee replied that he had sent to Her Britannic Majesty's Consul, at Now Orleans, to ask if Her Majesty's steamship Rinaldo could not be sent to Mobile, to receive the specie and take it to Havana, to be forwarded thence by the Consul General of Great Britain to London.

The specie was not conveyed by the Rinaldo, but by Her Majesty's ship, “Vesuvius,” and was accompanied by a certificate of the President of the Bank stating that the remittance of the “thirty-one kegs of specie containing each five thousand dollars, together $155,000, * * * * is for the purpose of paying dues to British subjects from the State of Alabama, and is the property and belongs to the subjects of Her Britannic Majesty.”

The shipment was accompanied by a letter addressed by the Bank, as agent of the State of Alabama, to W. W. Scrimgeour, Esq., Manager of the Union Bank of London, directing its appropriation to the payment of the interest due to British and other foreign holders of the State bonds, with the statement of the dates at which the several instalments of the interest would become due and of the places in London where they were to be paid.

So little doubt seems to have been entertained of the propriety of this transaction by all that were engaged in it, that the Commander of the “Vesuvius” informed the Commander of the United States blockading squadron that the British Consul had money to send by him, and no objection nor protest was made. Among the papers annexed you will find the account given by Commodore Hitchcock himself of his conversation with the Commander of the “Vesuvius,” written after the dismissal of Consul Magee, and, therefore, at a period when the Commodore could certainly have no motive for giving a coloring to his narrative, adverse to what was then known to be the view of his Government on the subject.

Under these circumstances, the “Vesuvius” received and conveyed the specie which has since been received in England, and, as stated in the public journals, paid in whole or in part to British subjects, thus establishing the bona fides of the conduct of all the parties to the transaction.

It now appears that no sooner was the intention of making this remittance communicated to Her Britannic Majesty's Minister, at Washington, than he took active measures to prevent it, by sending dispatches to Mobile forbidding the shipment. They, however, failed to arrive before the departure of the “Vesuvius” with the specie, whereupon Consul Magee was dismissed from office for receiving and forwarding it; and the vacancy thus created in the office of British Consul, at Mobile, was filled by Lord Lyons by the issue of a commission to Mr. Cridland, and his departure for Mobile under the circumstances already explained.

These facts are of a character so grave as to have attracted the earnest attention of the President, and it is my duty to apprise you of the conclusions at which he has arrived, in order that you may lose no time in laying them before her Majesty's Government, in the hope that a renewed examination of the subject, and a knowledge of the serious complications which the present anomalous relations between the two Governments may involve, will induce the British Cabinet to review its whole policy connected with those relations, and to place them on the sole footing consistent with accomplished facts, that are too notorious and too firmly established to be much longer ignored.

By the principles of the modern public code, debts due by a State are not subject to the operations of the laws of war, and are considered so sacred as to be beyond the reach of confiscation. An attempt at such confiscation would be reprobated by mankind. The United States alone in modern times have courted such reprobation, and just detestation has been universally expressed of their confiscation laws passed during the pending war. The Government of Great Britain on the contrary, has at all times manifested its abhorrence of such breaches of public faith, and in the Crimean war gave to the world a memorable example of its own high regard for public honor by paying over to its enemy money which it well knew would be immediately employed in waging hostilities against itself. The States of this Confederacy are emulous of examples of honor, and they accordingly refrained, on the breaking out of hostilities, from even the temporary sequestration of the dividends of their public debt due to their enemies. It was not until they had received notice of the confiscation law passed by the United States on the 6th August, 1861, that they consented to the temporary sequestration of the property of their enemies, and even then the sequestration was declared to be for the sole purpose of securing a fund to indemnify the sufferers under the confiscation law of the United States.

The following clause of our law, exempting public debts from its operation, is extracted as a proof of the sacred regard for public faith manifested by these States under strong temptation to retaliate and under all the exasperation of the savage warfare then actually waged against them:

Such being the obligations imposed on States in regard to the payment of public debts towards even their enemies, no deeper reproach can stain their name than the refusal to do justice to neutral creditors. The observance of plighted public faith concerns mankind at large; in it all nations have a common interest; and the belligerent who perverts the weapons of legitimate warfare into an instrumentality for forcing his enemy to dishonor his obligations and incur the reproach of being faithless to his engagements, wages a piratical and not an honorable warfare, and becomes hostis generis humani. Public honor is hold sacred by international law against the attack of the most malevolent foe, and as susceptible of loss only by the recreancy of its possessor.

What possible lawful interest could the United States have in preventing the remittance of the specie due to the creditors of the State of Alabama? Blockades are allowed by the law of nations as a means of enforcing the submission of an enemy by the destruction of his commerce, the exhaustion of his resources, and consequent forced abandonment of the struggle. The remittance of the specie in the present case, far from retarding these ligitimate objects, tended, on the contrary, to promote them by the diversion of the money from application to military purposes. The United States could not have desired that the specie should remain within the Confederacy save with one of two motives: 1st, to dishonor the State of Alabama by giving color to the reproach that it was regardless of public faith, and on this comment has already been made; or, secondly, in the hope that by the fortunes of war the money would come within the reach of spoliation under its confiscation law. It is scarcely necessary to observe that the desire to enrich itself, by plunder, at the expense of neutral creditors, is as little consonant with respect for public law and the rights of neutrals, as the purpose forcibly to prevent the State of Alamaba from redeeming its plighted faith.

Whatever may be the value to which these views may be justly entitled, it is certain that there are but two aspects in which the State of Alabama can be regarded by Her Majesty's Government. Alabama is either one of the States of the former Union engaged in armed rebellion against the legitimate authority of the United States, or is an independent State, and a member of this Confederacy, engaged in lawful war against the United States. An examination of the effect of either of these relations upon the facts connected with the dismissal of Consul Magee and the appointment of Mr. Cridland, will now be presented in vindication of the action which the President deems it his duty to take on this subject.

1. If the British Government think proper to assume (although the contrary is deemed by this Government to be fully established by convincing reason and victorious arms,) that the State of Alabama is still one of the United States, then the Government of the United States is bound towards Great Britain, as well as to all other neutral nations, to render all legitimate aid in the collection of their just claims against that State. Although by the Constitution of the United States its Government may be without power to enforce the payment of a debt due to foreign subjects or powers by an unwilling State, none can doubt its duty to interpose no obstruction to the payment of such debt; and no more legitimate ground of complaint could be afforded to Great Britain against the Government of the United States, than an opposition made by that Government to the payment of a just debt due by Alabama to the subjects of Great Britain. In this aspect of the case, therefore, the British officials at Mobile were doing a duty which ought to have been equally acceptable both to the United States and Great Britain, when they facilitated the transmission of funds by that State for that purpose to England, where the debt was made payable, and merited applause rather than a manifestation of displeasure.

2. If, on the contrary, the State of Alabama be regarded (as in right, and fact she really is) an independent State engaged in war against the United States, as a foreign enemy, then the President cannot refrain from observing that the action of Her Britannic Majesty's Minister at Washington savored on this occasion rather of unfriendly co-operation with an enemy than of just observance of neutral obligations. For, in this view of the case, a minister accredited to the government of our enemies has not only assumed the exercise of authority within this Confederacy, without the knowledge or consent of its government, but has done so under circumstances that rather aggravate than palliate the offense of disregarding its sovereign rights. His action further conveys the implication that this Confederacy is subordinate to the United States, and that his credentials, addressed to the Government at Washington, justify his ignoring the existence of this government, and his regarding these States as an appendage of the country to which he is accredited. Nor will Her Majesty's Government fail to perceive that, in no sense can it be considered consonant with the rights of this government, or with neutral obligations, that a public minister should be maintained near the cabinet of our enemies, charged both with the duty of entertaining amicable relations with them, and with the power of controlling the conduct of British officials resident with us.

Nor will the application of the foregoing remarks be at all impaired if Her Majesty's Government, declining to determine the true relation of the State of Alabama to the United States, choose to consider that question as still in abeyance, and to regard that State as simply a belligerent whose ulterior status must await the event of the war. In this hypothesis, the objection to delegating authority over British officials residing with us, to a minister charged with the duty of rendering himself acceptable to our enemies is still graver than would exist in the case of hostile nations equally recognized as independent by a neutral power. For in the latter case the parties would have equal ability to vindicate their rights through the usual channels of official intercourse, whereas in the former the belligerent which enjoys exclusively this advantage is armed by the neutral with additional power to inflict injury on his enemy.

The President has, in the facts already recited, seen renewed reasons for adhering to his determination, mentioned in my preceding dispatch, of prohibiting any direct communication between consuls or consular agents, residing within the Confederacy, and the functionaries of their governments residing amongst our enemies. He further indulges the hope, (which Her Majesty's Government cannot but regard as reasonable, and which he is, therefore, confident will be justified by its action,) that Her Majesty's Government will choose some other mode of transmitting its orders and exercising its authority over its agents within the Confederacy, than by delegating to functionaries who reside among our enemies, the power to give orders or instructions to those who reside among us.

Finally, and in order to prevent any further misunderstanding in Mr. Cridland's case, that gentleman has been informed that he cannot be permitted to exercise consular functions at Mobile, and it has been intimated to him that his choice of some other State than Alabama for his residence would be agreeable to this government. This intimation has been given in order to avoid any difficulty which might result from the doubtful position of Mr. Cridland, who is looked on here as a private individual, and who in Alabama represents himself as “Acting English Consul.”

The President is confident that Her Majesty's Government will render full justice to the motives by which these measures are prompted, and will perceive in them a manifestation of the earnest desire entertained by him to prevent the possibility of any unfortunate complications having a tendency to impair the amity which it is equally the interest and the desire of this government to cherish with that of Great Britain.

The President wishes a copy of this dispatch to be placed by you in the hands of Earl Russel.

The French Consul, Mr. Portz, in his official capacity as acting English Consul, introduced me to Mr. Cridland, who has shown me an official document, signed by Lyons, appointing him the acting English Consul at Mobile. Am I to recognize him as such?

DEAR SIR: The State of Alabama is very anxious to insure to its creditors their dues to the utmost fraction, notwithstanding the obstacles now thrown in the way by the United States Government to prevent creditors [debtors] in the Confederate States from meeting their obligations.

This State will owe the coming year, in payment of its interest-coupons on bonds due British subjects, some forty thousand pounds sterling, which coupons are payable at the Union Bank, and at the counting house of the Messrs. Rothschilds, in London. The State is not only anxious, but determined, if possible, to continue to protect its credit, and promptly meet its obligations as heretofore; also to fulfil, strictly, its promises to its foreign creditors, both in regard to the payment of its dues, as well as to its promised places of payment. With this view, will you allow me to invoke your kind aid in behalf of the State and this Bank, which has acted as the fiscal agent of the State for many years past in the payment of its foreign interest, to fulfil its obligations, which is of the utmost importance in every point of view, both to the State of Alabama and to its foreign creditors. I have now to ask the favor of your ascertaining from the British Minister at Washington. (or through any other channel,) if this Bank can be allowed to place in your hands, the sum necessary, in coin, for transmission to England by the first favorable opportunity, at the expense of the State, for the purpose mentioned.

SIR: Your favor of the 11th, current, duly received, and, referring to its contents, I beg leave to inform you, that I sent yesterday, by an opportunity, to New Orleans, a dispatch to H. B. M. Consul there, stating the gist of your desire, and asked if H. M. S. “Rinaldo,” Captain Hewitt, now at New Orleans, could not be sent to this place, in order to receive from you the specie, take it hence to Havana, and allow the Consul General of Great Britain to forward it per steamer to London.

If I fail here, I will invoke the aid of Lord Lyons at Washington.

DEAR SIR: I do hereby certify that the thirty-one kegs of specie, marked B. M., containing each five thousand dollars, together $155,000, handed over to you by this institution, for the purpose of having the same delivered to H. Bell, Consul General at Havana, and to be transmitted thence to England, to the consignment of the Union Bank of London, by the British mail steamer, is for the purpose of paying dues to British subjects from the State of Alabama, and is the property, and belongs to the subjects of Her Britannic Majesty.

DEAR SIR: This institution deposited in the French Consul's hands, for safe-keeping, in May last, thirty-one kegs of specie, containing each five thousand Mexican dollars, together $155,000, appropriated by the State of Alabama to pay the British and other foreign holders of State bonds, the interest due on sums as follows:

The arrival of H. B. M. ship “Vesuvius,” Lieutenant Crooke, affords the opportunity of sending this forward; and the said specie has been turned over to H. B. M. acting Consul here, James Magee, Esq., who has shipped it by said vessel to James G. Crawford, Esq., H. B. M. Consul General at Havana, and who is requested to ship the same by the British mail steamer to your consignment, for the purpose of paying it over to the parties holding the said interest-coupons under such arrangements as have heretofore existed with you by this Bank.

The charges for freight from this port, and all expenses belonging thereto, you will please pay to the debit of this Bank.

Sir: Your communication of the 4th instant, has this moment been received by flag of truce.

In relation to your connection with the transaction of shipping specie from Mobile, I know very little. The commander of the “Vesuvius” told me he came to transact government business with the British Consul, and that he believed he (the Consul) had some money to send by him. To which, I replied “We cannot examine an English man-of-war. We trust all you do will be right and proper. You could go up to the city, if you wished, where we do not go.” Further than this, I have no knowledge.

SIR: It becomes my duty to inform you that the President has determined to permit no direct communication between consuls or consular agents of foreign countries residing within the Confederacy, and the functionaries of such foreign governments residing in the enemy's line. The passage in future of consular couriers, messengers, or of consuls or consular agents themselves, through the Confederate lines to the enemy is accordingly prohibited, and foreign officials will be allowed to communicate with their governments only directly or through neutral countries.

SIR: The conduct of the British Consular Agents in the Confederacy has compelled the President to take the decisive step of expelling them from our country, and it is deemed proper to put you in possession of the causes which have produced this result, that you may have it in your power to correct any misrepresentations on the subject. To this end, it is necessary to review the whole course of the British Government, and that of the Confederacy, in relation to these officials.

When the Confederacy was first formed, there were in our ports a number of British Consuls and Consular Agents, who had been recognized as such, not only by the Government of the United States, which was then the authorized agent of the several States for that purpose, but by the State authorities themselves. Under the law of nations, these officials are not entitled to exercise political or diplomatic functions, nor are they ever accredited to the sovereigns within whose dominions they reside. Their only warrant of authority is the commission of their own government; but usage requires that those who have the full grade of Consul should not exercise their functions within the territory of any sovereign before receiving his permission in the form of an exequatur; while consular agents of inferior grade simply notify the local authorities of their intention to act in that capacity. It has not been customary upon any change of government, to interfere with these commercial officials, already established in the discharge of their duties, and it is their recognized obligation to treat all governments which may be established, de facto, over the ports where they reside, as governments de jure. The British Consular officials gave no cause of complaint on this score, and the President interposed no objection to the continued exercise of their functions. On other grounds however, various causes of complaint subsequently arose, and, in the case of Consul Moore, it was found necessary to revoke his exequatur, for his disregard of the legitimate request of this department that he should abstain from further action as consul until he had submitted his commission for inspection, and because of his offensive remarks touching the conduct of the Confederate authorities in relation to two enlisted soldiers, as fully explained in a published dispatch of this government. Attention was also called in that dispatch (which was communicated to the British Cabinet,) to the objectionable conduct of British functionaries in the enemy's country, who assumed authority within the limits of the Confederacy, thereby implying that these States were still members of the Union to which those functionaries were accredited, and ignoring the existence of this government within the territory over which it was exercising unquestioned sway. Notwithstanding the grave character of this complaint, the President confined himself to reprehending this conduct and to informing the British Government that he had forbidden, for the future any, direct communication between British Consuls here and British officials in the United States. And here it may not be improper to observe that although this dispatch was published at the time of its date, and, was communicated to the Foreign office in London, Her Majesty's Ministers made the strange mistake of asserting in the House of Commons that Mr. Moore's dismissal was connected, in some way, with alleged cruelties committed on one Belshaw, of whose existence the department was ignorant till the publication of the debate, and concerning whom no representation exists on its files.

Soon after that dispatch was forwarded, the President was apprised by the Governor of Alabama that Her Majesty's Government had visited with severe displeasure and had removed from office the British Consular Agent at Mobile, because he had received and forwarded from Mobile, on an English man-of-war, money due by the State of Alabama to British subjects for interest on the public debt of the State; and that the British Minister at Washington, after failing in active efforts to prevent the remittance of this money had assumed the power of appointing a consular agent within the Confederacy to replace the officer at Mobile, who had incurred censure and punishment for the discharge of a plain duty to British subjects, which happened to be distasteful to the United States. A copy of the dispatch on this subject communicated to the British Government is enclosed, and you will perceive the action of the President was marked by extreme forbearance, and that he confined himself to refusing permission that Mr. Cridland should act under Lord Lyons' instructions, and to expressing the confident hope that Her Majesty's Government would, in the future, choose some other mode of transmitting its orders and exercising its authority over its agents within the Confederacy, than by delegating to functionaries, who reside among our enemies, the power to give orders or instructions to those who reside among us.

In his answer to this dispatch, (of which a copy is also enclosed,) Earl Russell, while acknowledging the justice of our remonstrance against the assumption of authority by Lord Lyons, defends the action of the British Government in the matter of the Mobile Consulate by maintaining that the transmission of the specie by Consul Magee, under the circumstances above explained, “had the character, in the eyes of Her Majesty's Government, of aiding one of the belligerents against the other.” This Statement clearly assumes that the transmission of specie from one of these States to Great Britain in payment of a public debt to British subjects is an act of hostility against the United States, which British officials cannot promote with due regard to neutral obligations, because it “aids, one of the belligerents against the other.” No reason is given for this conclusion, which appears to us at variance with all received notions of international law. The States of the Confederacy have under the most adverse circumstances made great efforts and sacrifices to effect punctual payment of their debt to neutrals, these efforts do not seem to us to be properly characterized as being belligerent acts against our enemies. We can but regret that Her Majesty's Government have determined so to regard them, and to discourage the discharge of a duty in which British subjects are so deeply interested.

Within the last few days the President has been informed by communications addressed to the State and Confederate authorities by two out of the three British Consular Agents remaining here, that they had received instructions from their government to pursue a course of conduct in regard to persons of British origin now resident within the Confederacy, which it has been impossible to tolerate. It seems scarcely probable that the instructions of Earl Russell have been properly understood by his agents, but we have no means of communicating with the British Government for the correction of misunderstandings. You are aware that Great Britain has no diplomatic agent accredited to us, and that Earl Russell having declined a personal interview with Mr. Mason, the latter, after some time spent in an unsatisfactory interchange of written communications, has been relieved of a mission which had been rendered painful to himself, and was productive of no benefit to his country. The President was, therefore, compelled to take the remedy into his own hands.

A brief statement will suffice for your full comprehension of the matter. In April, 1862, Congress passed a law directing a draft for the army of “all white men who are residents of the Confederate States, between the ages of eighteen and forty-five years, and not legally exempted from military service.” The draft was made, as stated in the law, in view of the absolute necessity “of placing in the field a large additional force to meet the advancing columns of the enemy now invading our soil;” in other words, all residents capable of bearing arms were called on to protect their own homes from invasion, their own property from plunder, their own families from cruel outrage. You will observe, that the call was not made until after a year of war, during which it had been entirely within the power of all foreigners to depart from a country threatened with invasion, if they preferred not to share the common lot of its inhabitants.

Upon the promulgation of this law objection was made by several foreign consuls to its application to the subjects of their sovereigns, and the President directed that its provisions should not be so construed as to impose forced military service on mere sojourners, or temporary residents, but only on such as had become citizens of the Confederacy de jure, or had rendered themselves liable, under the law of nations, to be considered as citizens de facto by having established themselves as permanent residents within the Confederacy, without the intention of returning to their native country.

To this very liberal interpretation of the law in favor of foreign residents, it was not supposed that objection could be taken, but on the 12th November, 1862, Consul Bunch, at Charleston, wrote to the department as follows:

No reply was deemed necessary to this dispatch, (nor to a similar one from Consul Moore dated on the 14th November,) notwithstanding the very questionable assumptions, both of law and fact, contained in it, because there seemed to be no substantial point at issue between the two governments, and discussion could, therefore, serve no useful purpose. Earl Russell was not understood to insist on anything more than that British subjects, resident within the Confederacy, should be allowed a reasonable time to exercise the option of departing from the country, if unwilling to be enrolled in its service; and, in point of fact, this option had never been refused them, and many had availed themselves of it. Nor was it “believed that Her Majesty's Government expected a very favorable response to their appeal to this government for the exercise of the comity between “independent” States supposed to be involved in this subject, whilst Great Britain was persistently refusing to recognize the independence which alone could justify the appeal.

Since the date of these two letters, numerous requests have been made by British Consular officials for the interposition of this government in behalf of persons, alleged to be British subjects, wrongfully subjected to draft. Relief has always been afforded when warranted by the facts, but it soon became known that these gentlemen regarded their own certificates as conclusive evidence that the persons named in them were exempt from military service, and that these certificates were freely issued on the simple affidavit of the interested parties. Thus, Consul Moore was deceived into claiming exemption for two men who were proven to be citizens of the Confederacy, and to have been land-owners and voters for a series of years prior to the war.

Much inconvenience was occasioned before these abuses could be corrected, but they afterwards assumed a shape which forbade further tolerance. The correspondence of the acting British Consuls at Savannah and Charleston, already referred to, asserts the existence of instructions from their government, under which, instead of advising British subjects to resort to the courts of justice, always open for the redress of grievances, or to apply to this government for protection against any harsh or unjust treatment by its subordinates, they deem it a duty to counsel our enlisted soldiers to judge for themselves of their right to exemption, to refuse obedience to Confederate laws and authority, and even exhort them to open mutiny in face of the enemy.

This unwarrantable assumption by foreign officials of jurisdiction within our territory, this offensive encroachment on the sovereignty of the Confederate States, has been repressed by the President's order for the immediate departure of all British Consular Agents form our country, as you will perceive by a perusal of the enclosed copy of the notice addressed to one of them, Acting Consul Fullarton.

But a few months have elapsed since the utmost indignation was expressed by the British Government against the United States Minister at London, for issuing a safe conduct to be used on the high seas by a merchant vessel; and the ground of this denunciation was his exercise of direct authority over subject-matter within the exclusive territorial jurisdiction of the Queen. It is difficult, therefore, to conceive on what basis Her Majesty's Government have deemed themselves justified in the much graver encroachment on the sovereignty of these States, which has been attempted under instructions alleged to have emanated from them.

It is not my purpose here to discuss the nature and extent of the claims of the Confederacy on the allegiance of persons of foreign origin residing permanently within its limits, (easy as would be the task of demonstrating the obligation of such residents, under the law of nations, to aid in the defence of their own homes and property against invasion,) because, as already observed, the liberal construction of the law in their favor which has been sanctioned by the President dent, and the indulgence of the Government in permitting them, for many months to exercise the option of avoiding service by departing hum the country, deprive the discussion of any practical interest. I have been induced to place the whole subject fully in your possession, by reason of a statement made by Consul Fullarton to the Governor of Georgia, that in the event of the failure, of his remonstrances to produce the exemption of all British subjects from service, he is instructed to state that “the governments in Europe, interested in this question, will united in making such representations as will secure to aliens this desired exemption.”

The menace here implied would require no answer if it were not made professedly under instructions. It is scarcely necessary to say to you that the action of the President in repelling with decision any attempt by foreign officials to arrogate sovereign rights within our limits, or to interfere of their own authority with the execution of our laws, would not be affected in the slightest degree by representations from any source, however exalted. This is the only point on which the President has had occasion to act and on this point there is no room for discussion.

The exercise of the Droit de renvoi is too harsh, however, to be resorted to without justifiable cause, and it is proper that you should have it in your power to explain the grounds on which the President has been compelled to enforce it. Lest also the Government of His Imperial Majesty should be misled into the error of supposing that the rights of French citizens are in any manner involved in the action of the President which has been rendered necessary by the reprehensible conduct of the British Consular Agents, you are requested to take an early occasion for giving such explanation to M. Drouyn de L'Huys as will obviate all risk of misapprehension.

SIR: Your letters of the 1st and 3d instants, have been received. You inform this Government that, “under your instructions you have felt it to be your duty to advise British subjects that whilst they ought to acquiesce in the service required so long as it is restricted to the maintenance of internal peace and order, whenever they shall be brought into actual conflict with the forces of the United States, whether under the State or Confederate Government, the service so required is such as they cannot be expected to perform.”

Your correspondence with the Governor of Georgia leaves do doubt of the meaning intended to be conveyed by this language. In that correspondence you state that “under instructions, you have felt yourself compelled to advise those drafted to acquiesce until called from their homes or to meet the United States forces in actual conflict; but, in that event, to throw down their arms and refuse to render a service directly in the teeth of Her Majesty's proclamation and which would incur the severe penalties denounced in the neutrality act.”

In a communication from the acting British Consul, in Charleston, to the military authorities, he also has informed them that, “he has advised the British subjects generally to acquiesce in the State militia organizations, but at the same time he informed them that in the event the militia should be brought into conflict with the forces of the United States, either before or after being turned over to the Confederate Government, the services required of them would be such as British subjects could not be expected to perform.”

It thus appears that the Consular Agents of the British Government have been instructed not to confine themselves to an appeal for redress, either to courts of justice or to this Government, whenever they may conceive that grounds exist for complaint against the Confederate authorities in their treatment of British subjects, (an appeal which has in no case been made without receiving just consideration but that they assume the power of determining for themselves whether enlisted soldiers of the Confederacy are properly bound to its service; that they even arrogate the right to interfere directly with the execution of the Confederate laws, and to advise soldiers of the Confederate armies to throw down their arms in the face of the enemy.

This assumption of jurisdiction by foreign officials within the territory of the Confederacy, and this encroachment on its sovereignty cannot be tolerated for a moment, and the President has had no hesitation in directing that all Consuls and Consular Agents of the British Government be notified that they can no longer be permitted to exercise their functions or even to reside within the limits of the Confederacy.

I am directed, therefore, by the President to communicate to you this order, that you promptly depart from the Confederacy, and that in the meantime you cease to exercise any Consular functions within its limits.