OFFICE OF THE U. S. ATTORNEY

Portland, November 5, 1861.

Honorable WILLIAM H. SEWARD, Secretary of State.

SIR: Having been by your letter of the 3rd ultimo requested to examine the papers upon which Cyrus F. Sargent, of Yarmouth, in this Stte, late of New Orleans, La., was arrested together with such as were submitted to you asking his release and such additional testimony as might be offered and to report my opinion of the merits of the case I have complied with your request, and have the honor to submit my report together with the papers transmitted to me and such affidavits as I have deemed it advisable to take.

I am informed that the prisoner Sargent, whose wife deceased last May, has under his care a family of young children now requiring his special attention on account of the srous illness of one of them. I have therefore telegraphed to y ou the conclusion to which I have arrived upon examining the case in order that his detenion in nprison might not be attributable for a single day to mere delay in forwarding a report and the evidence to Washington.

The information upon which Sargent's arrest was orderea letter from William G. Hoben of August 30 ultimo and a letter of D. L. Eaton of September 11 ultimo, referring to George Woods, of Pittsburg, Pa., as authority for its statements. The charges in these letters are these: First, he was one of a business firm who had a contract for the supply of rebel regiments; second, they were building a vessel at Yarmouth to carry material (of war) to the coast of Texas; third, while in Yarmouth they denounced the Gopvernment and avowed syjmpathy with treason; fourth, they were about to leave the State with the purpose of going to New Orlenas.

Proceeding to investigate the grounds of these charges, I addressed letters to Messrs. Hoben, Eaton and Woods recapitulating the information accredited to them and asking them to state such facts in support of these charges as were within their own knowledge or to refer me to persons who had knowledge of such facts whose affidavits might be taken, at the same time assuring them that all communications and affidavits should be regarded as cofidential. From Mr. Hoben I received no reply, no reply and it appears from Mr. O. B. Pratt's affidavit that he has been absent from Yarmouth about six weeks and is now supposed to be in Washington. Messrs. Eaton and Woods have replied and I forward their letters as a part of my report.

Mr. Woods appears to have no knowledge whatever as to either of the charges except that he completely negatives the second. He refers, however, to Captain Calvin Humphreys, late of the ship State of Maine, and to the postmaster at Yarmouth as persons likely to have knowledge of facts tending to substantiate the first and third charges. Captain Humphrey as appears by the affidavit of Mr. Ingraham is absent on a voyage from Europe to the Chincha Islands, and I judge that the friendly nature of his relations with the prisoner and the sympathy for the rebel cause attributed to him by Mr. Woods will not authorize the expectation that this testimony when obtaine dwill be any more conclusive against t that already obtained. However that may be it does not seem to me expedient to suspend a decision of the case to await his uncertain return and doubtful testimony.

I have taken the testimony of the postmaster referred to in Mr. Woods' letter, Mr. Otis B. Pratt, of Yarmouth, and forward it as a part of the case. In reference to the first charge he seems to have no actual