In the meantime we request of your the favor to give us authority to bring back the treasure within your lines, with the safe- conduct of the same from that point to the city.

We have the honor to be, sir, your most obedient servants,

W. NEWTON MERCER.

J. M. LAPEYRE.

K.

HEADQUARTERS DEPARTMENT OF THE GULF,
New Orleans, May 14, 1862.

Messrs. WILLIAM N. MERCER and J. M. LAPEYRE,

Committee:

MESSRS.: I have given very careful consideration to the matter of the communication handed me through you from the banks of the city.

With a slight variation, to which I called your attention, you were correct in your understanding of the interview had by me with the banks. Specie or bullion in coin or ingot is entitled to the same protection as other property under the same uses, and will be so protected by the U. S. forces under my command. If, therefore, the banks bring back their specie, which they have so unadvisedly carried away, it shall have safe-conduct through my lines and be fully protected here so long as it is used in good faith to make good the obligations of the banks to their creditors by bills and deposits.

Now, as in the present disturbed sate of the public mind specie, if paid out, would be at once hoarded, I am content to leave the time of redemption of all bills to the good judgment of the banks themselves, governed in it by the analogy of the laws of the State and the fullest good faith. Indeed, the exercise of that on both sides relieves every difficulty and ends at once all negotiations.

In order that there may be no misunderstanding, it must be observed that I by no means mean to pledge myself that the banks, like other persons, shall not return to the U. S. authorities all the property of the United States which they may have received.

I come to retake, repossess, and occupy all and singular the property of the United States of whatever name and nature.

Further than that I shall not go, save upon the most urgent military necessity, under which right every citizen holds all his possessions. But as any claim which the United States may have against the banks can easily be enforced against the persona, as well as the property of the corporation, such claims need not enter into this discussion. In such form, therefore, as in good faith safe-conducts may be needed for agents of banks to go and return with property of the banks, and for no other purpose whatever, such safe-conducts will be granted for a limited but reasonable period of time. Personal illness has caused the slight delay which has attended this reply.

I have the honor to be, you most obedient servant,

BENJ. F. BUTLER,

Major-General, Commanding.

[Inclosure Numbers 2.] DEPARTMENT OF STATE, May 30, 1862.

MEMORANDUM.]

Lord Lyons called to-day upon Mr. Seward and said, as perhaps was not extraordinary, the capture of New Orleans, which was