Meredith, that he would "proceed to make declarations of exchange whenever he conscientiously felt the right to do so," which means whenever he felt disposed to do so "for the purpose," as he also said, "of putting men into the feil. "

What not is the result of this secret intercourse with Mr. Ould but to give him some color of excuse forgoing on ad lib. in making declarations of exchange in total disregard of all just principles which ought to govern this business.

We have had it in our power all along to have had mixable dealings with Mr. Ould by simply allowing him to have his own way, by simply permitting him to take the initiative and "notify" us of his purpose and accepting his permission to follow his dictation as to what we ought to do, whilst he takes the liberty at the same time of disregarding his own proposition and doing something else more to the interest of his employers.

As the commissioner for the exchange of prisoners I beg leave respectfully to repudiate this whole proceeding as irregular and unauthorized, protesting in the strongest terms against the use made by General Butler of a letter addressed to me, but which he never communicated to me, nor did he communicate it to your self until it was forced out of his hands by the necessity he has been placed under of attempting to explain, though ever so feebly, his conduct in this business, in which he has been led into a gross impropriety by a morbid desire to seem before the country to be doing something in the business of exchange. His pretense is to put men into the field who are now at parole camps, but this affords no relief whatever to our prisoners in Richmond, and it is manifest that so long as no declarations are made no particular advance can be gained on either side, each side being supposed to have a corresponding number on parole, not under arms, as the basis of exchange.

It is not out of place to notice the fact here that General Butler in his declaration of exchange has assumed the designation of commissioner of exchange. If he will consult the orders under which he is acting he will find that he is an agent of exchange at City Point, under the cartel, and has no powers beyond that agency. I regard this of no importance in itself, but Generally does, and since he so regards the designation as important he should adhere to the one given him in the orders under which he is acting.

Colonel Ludlow always adhered to his proper designation, that of agent of exchange. General Meredith as appointed commissioner by his orders, but General Butler, by his orders, is agent of exchange at City Point, and has no duties outside of it in connection with the exchange of prisoners.

I have one more fact to state which I wish General Butler to know, and, as I request that a copy of this letter may be furnished to him, I state the fact here.

General Butler has evidently supposed that the order from yourself to suspend his declaration of exchange was based upon some suggestion of mine, but he is mistaken. The Secretary of War will doubtless remember that he himself on the receipt of a copy of that declaration interposed his order to suspend it before seeing me or hearing a word from me on the subject. The impropriety of the declaration was apparent from several points of view. It was improper from the single fact alone that it had been publicly announced, and had been reported by General Butler himself, that the rebels would have no intercourse with him under flag of truce. From this fact alone the Secretary of War was compelled to see at once that of necessity the declaration must be improper.