I send you the correspondence with Governor Lopez, which is by no means satisfactory, but from the last clause in his letter I am sanguine of arranging my matters satisfactory. The further negotiation will be conducted verbally and only the results put in writing.

I inclose the contract which I have made for 6,000 muskets, which I hope you will be pleased with. I have ascertained that a further supply of arms can be obtained in Havana, and am negotiation for their purchase. As this is not properly within the scope of my duties I would be glad to receive the sanction of your authority (privately), for I consider that I render most important service when I get arms for our troops. The parties wish to deliver 1,000,000 pounds of powder. Does the Confederacy want it, and what shall I give for it? The fact is, general, that all contracts should be-annulled so soon as we can get cotton here to buy what is needed, for nearly everything is here or can be got here very promptly.

I am pleased to say that my position here is daily bringing me into connection with those who can be used with great advantage to the Confederacy.

The reason why I mark this private is for what follows, and which is in my possession through influence which I could hardly have hoped to secure so soon after my arrival.

Mr. Bustamente arrived here from New York en route to the city of Mexico. He was sent by the Government to purchase arms in New York, and carried letters from Mr. Corwin; he has purchased 65,000 stand of arms, and they are expected here very soon. The bills of leading are here (I mean of course Matamoras), and the sum $700,000 is to be paid when the arms are delivered. An assessment has been made on each State in Mexico for its quota of the amount, and I have it from good authority that the amount will not be forthcoming and that not one-half will be ready for the payment. On understanding this I mad a proposition to the authorities to let me in as a partner, and the answer was,"If we can pay for all, we require all; but the Confederate States shall have all we cannot pay for," wither which I was of course much pleased.

Now, general, what shall I do, and how shall I do it? The matter is of great importance to us in a political view, and I shall obtain full documentary information of the whole affair, that they may, through the proper authority, be laid before the Emperor Napoleon, that he may see what kind friend he has in the Lincoln Government, as I shall prove the connection of Corwin with it.* I think sometimes that I will, by a bold dash, seize the vessel and take the arms, but there are many objections to it; the vessel will be in neutral waters and not liable to capture, and it would be a most violent breach of faith with my neighbors. The best way is to be prepared to take advantage of the poverty of the contracting parties and get our share, which I am satisfied will be a large one. There will be time to get your answer, which I hope will be sent by swift express, and I will thank you to inform me, if we need arms, how many we need. What resource, other than cotton, have we to pay for them with? Shall I press every bale of cotton I can find on this side of the river for that purpose with the promise of it being returned? And when will it be returned? And any other suggestions that may occur to you.

The Mexican authorities are much astonished as to how I goon my information, but as it was so exact they no resource than to tell me

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* See Magruder to Cooper, March 3, p. 1004.

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