his excellency the minister of Spain and the State Department, touching my action in regard to the house of Avendano Brothers.

I seek by return mail to give such statement of facts as will enable the Secretary of State to answer fully upon that point his excellency the minister of Spain.

The house of Avendano Brothers has been established in New Orleans so long that its members have become an integral part of the population in interest, in feeling, and by social ties. Before the breaking out of this rebellion its members never thought of seeking the protection of Spain; but since this rebellion all has changed, and now the Spanish consul claims that persons thirty years of age, born of Spanish parents, who have lived here from their birth, and their ancestors before them, are still Spanish subjects, and is issuing certificates of nationality accordingly, so that this city has become almost entirely depopulated as to citizens except of free persons of color, who singularly claim protection of our Government, where so little has been heretofore afforded them.

The house of Avendano Brothers has been largely engaged in running cotton through the blockade and in importing arms and munitions of war.

As I have had the honor to inform the State Department in a communication in relation to the complaints of the Prussian minister, and to which I beg leave to refer the Honorable Secretary for a full development of the condition of things here in this behalf, no cotton was allowed by the Confederates to be shipped uncles arms and munitions of war were returned in the proportion, and have been engaged in breaking every law of neutrality and of national hospitality that can be well conceived.

Somewhere about I captured the Confederate steamer Fox, which had been seized by the Confederates from her Union owners and turned into their service and employed in running the blockade. She had therefore made three trips. She had on board a cargo of arms, powder, lead, quicksilver, acids for telegraphic purposes, crphine for medical stores, to the amount of $300,000, or thereabouts, all of the greatest necessity to the rebels, and had run into the Bayou La Fourche, on the west bank of the Mississippi, from which bayou she might, if she thought proper, run to Vicksburg. She had, besides the invoices, letters of advice, bills of lading, bills of exchange, and other evidences of the transactions of many of the mercantile houses of New Orleans.

The letters of advice, bills of lading, and invoices show the nature of the transaction between these parties and their correspondents at Havana.

The bills of exchange were the produce of shipments of cotton, less the proportion invested in contraband goods. Among, them were the bills of exchange payable to the house of Avendano, the first having been forwarded by some other conveyance, but still unpaid, and these bills of exchange were for one-half the proceeds of the cargoes shipped, the other half being invested in munitions of war.

This vessel also carried a mail containing, amongst other things, the official correspondence between the rebel commissioner Rost, which I forwarded to the State Department, and the rebel ordnance officer in Europe, relating to his movements there, which I forwarded to the War Department, as well as other important letters which