State-one addressed to him by the Prussian minister and the other

by the first secretary of legation of France, relative to a tax on subjects of their respective nations at New Orleans, levied by your order, proportionate to the amounts which they are alleged to have subscribed to a loan to the municipal authorities of that city before it was reduced to the possession of the United States. The Secretary further instructs me to request that you will furnish, for the information of the Department of State, a full report on this subject, particularly as to the character of the loan made to the insurgents, and the loyalty of the parties generally as well, in the special instances referred to.

Very respectfully, your obedient servant,

P. H. WATSON,

Assistant Secretary of War.

[Inclosure Numbers 1.-Translation.] LEGATION OF FRANCE IN THE UNITED STATES, Washington, August 29, 1862.

Honorable W. H. SEWARD, &c.:

SIR: Messrs. Rochreau & Co., Jeannet Quertier & Co., bankers,and Mr. Lewis, a merchant, at New Orleans, have found themselves reached by General Orders, Numbers 55, issued by Major-General Butler, under date of the 4th of this month, and struck with a contribution of 25 per cent. of the amount of the sums subscribed by them, as well for themselves as for their proxies, to the loan issued by the so-called committee of public safety and guaranteed by the city. They have been obliged, under threat of seeing their property seized and sold at public auction, to pay within a period of seven days the sums which were demanded of them; but they have not done so without protesting, as well before General Butler as before the consul of France at New Orleans, against such a contribution.

It is certain, indeed, that in the month of March last, when the city of New Orleans, in virtue of its powers as a municipal corporation, caused bonds to be issued to the amount of about $1,200,000, certain capitalists had a right to consider the purchase of these bonds as nothing but a simple investment. If it be recollected that a that period all possibility of remitting funds to Europe was out of the question, in consequence of the blockade and of the depreciation of exchange, which had fallen to two francs fifty centimes, or three francs the dollar, there can be no astonishment that merchants or bankers, having funds in their hands to invest, as well for themselves as for their constituents, should have become purchasers of the bonds in question without inquiring the use which the city might make of their proceeds, and without surmising that a purely financial operation might one day be considered as an act of hostility, to some extent, against the Government of the United States and be punished as such by a fine.

At all events, measures which carry with them such a character of reprisal, it seems to me, ought not to reach foreigners who have in no manner violated neutrality, and I am confident that the Federal Government, on taking into consideration the observations which I have the honor to submit to you, will be pleased to order the restitution of the sums which the French subjects before mentioned have paid under the compulsion of threats, but with all reservations.