Phelps and Mrs. Greenhow, and also with other rebel emissaries who were in this city but are now within the lines of the enemy, such as G. Donellan; that he is strongly recommended by them as a safe, confidential and reliable agent for carrying out their treasonable designs, especially for sending important military and naval information to rebels; that accordingly he has been engaged in sending such information, and that plans for cipherse evidently concocted by himwith reference to continuing such treasonable practices were found in his possession; that, bound as he is to the insurgent States by every tie of blood, of honor, of sentiment of society and of interest both personal and political, - a man of subtle intellect, finished education, practical energy, polished mannerse and attractive address, - he is too dangerous to be permitted to go at large conveying important information to that enemy which we keep an army in the field to subdue. I therefore respectfully recommend as a military necessity that Michael Thompson be kept in close confinement until the conclusion of the war.

All of which is respectfully submitted by your obedient servant.

E. J. ALLEN.

HDQRS. CITY GUARD, PROVOST-MARSHAL'S OFFICE,
Washington, D. C. January 9, 1862. (Received 11th.)

Brigadier General A. PORTER, Provost-Marshal, Washington, D. C.:

GENERAL: In accordance with the request of the Honorable William H. Seward, Secretary of State, directed to you and requesting you to reporton the case of Lewis Linn McArthur law student and confidential clerk of Michael Thompson. I have the honor to report that the said McArthur was arrested and confined in the Old Capitol under the following circumstances, to with:

When engaged in the arrest of Michael Thompson on December 21, 1861, my operative noticed the similarity of some writing on the desk of his law student (McArthur) to certain treasonable correspondence signed by Michael Thompson found on the steamer Lucretia in course of transmission to the rebel States. McArthur on being asked if the said writing was his replied in the affirmative, on which his arrest was immediately effected. An examination of the correspondence above mentioned demonstrated that fourteen of the letters found on board the Lucretia and directed to parties in the rebel States were in the handwriting of McArthur, signed by Michael Thompson, their contents being unquestionably treasonable. On searching McArthur's desk a paper was found in his handwriting signed by Thompson in cipher - a plan for a new cipher. The object of certain signs used in it is stated to be-

To mislead and confound the impertinent scoundrel into whose hands it might improperly fall and who might desire to read, decipher, understand and pry into State and individual secrets. I think this the easiest alphabet for us, and at the same time the most difficult for the enemy to decipher.

On a search of McArthur's trunk a rebel flag was found therein. The following extracts are from two unfinished drafts found in his desk in his handwriting addressed to his grandfather:

I hope, however, that this state of things will soon change. Indeed I am perfectly satisfied that we are on the eve of great political developments which will put a veto on this war and hurl the abolition fanatics from their thrones. The ultras will carry the day in Congress and the issue of this war will be slavery or no slavery. The masses of the people will never acquiesce in that.