Smith. After reading his letter I took a view of Galveston, and when I saw behind the town the masts of several blockade-runners, loading and unloading, I thought the reason of the stand he has assumed was quite plain-there was too much money being made.

It was apparent that it was useless to wait longer, and as the doing so might compromise the dignity of our Government, I sailed to New Orleans, intending to put the business when I arrived there in the hands of Major-General Hurlbut. Before leaving, however, I sent General Walker a short note, of which a copy is inclosed, dated April 2. How much he made off me I leave you to judge. At New Orleans I called upon General Hurlbut, explained the affair to him, stated my belief that Walker would not carry out the intention of Slaughter, Ford, and myself by forwarding the propositions to General Smith, and suggested that direct communication be opened with that officer. General H. acceded to the suggestion, and agreed with me that the matter had at least gone far enough to induce Smith to "define his position. " I also suggested that Mr. Worthington should be again sent to Matamoras for the purpose of carrying to Slaughter and Ford the result of my visit to Galveston, and to sound them with a view to ascertaining if the were disposed to act independently of Walker and Smith. Mr. Worthington was of opinion that they could be prevailed upon to take that course if they were assured of sufficient support. Remembering the anxiety those gentlemen had show in the conference at Point Isabel I was of the same opinion. General Hurlbut thought such a result was worth the effort, and accepted the suggestion. If Worthington was able to carry out with him the news of the fall of Richmond, the surrender of Lee, and the flight of Jeff. Davis, I am confident he will succeed. So the business stands unconcluded, and I am not yet out of hope. Of one thing I am sure-the Texas rebels are without heart or confidence, and divided amongst themselves. The soldiers and subordinates are anxious to make peace, and it is almost certain that Kirby Smith will come to terms now, provided he is not too far committed to Maximilian. Another point I am sure of. If Davis and Smith attempt coalition with or annexation to the new empire of Mexico they will be resisted by the rebel soldiers themselves. In view of such a contingency it would be well enough I think to give the commanding officer at Brazos appropriate directions. By Mr. Worthington I sent Slaughter and Ford the letter which concludes the correspondence, dated New Orleans, April 6, 1865, of which I send you a copy.

Very respectfully, your friend and obedient servant,

LEW. WALLACE,

Major-General, Commanding.

[Sub-inclosure Numbers 1.]

BRAZOS SANTIAGO, TEX., March 17, 1865.

Brigadier General J. E. SLAUGHTER,

Commanding at Brownsville:

GENERAL: I cannot help thinking that a good step has been taken toward a satisfactory peace. Upon reflection, however, it is my judgment that something more can be done in the same direction. It is hardly enough to send propositions, let us do more; let us follow them up. With this in mind, I have now the honor to suggest that you consult Colonel Ford and prevail upon him if possible to go with me to Galveston. For this purpose I will gladly give him passage to that port on my steamer. To succeed at all, I beg you both to reflect that some-