Montgomery. He was much excited, and was impatient in his answer to Grant. The conversation was held apart between Pemberton and his officers, and Grant, McPherson, and A. J. Smith. The rebels insisted on being paroled and allowed to march beyond our lines here, officers and all, with eight days' rations, drawn from their own store, officers to retain their private property and body servants. Grant heard what they had to say, and left them at the end of an hour and a half, saying that he would send in his ultimatum in writing before evening; to which Pemberton promised to reply before night, hostilities to cease in the mean time. Grant then conferred at his headquarter with his corps and DIVISION commanders, all of whom, except Steele, who advised to unconditional surrender, favored a plan proposed by McPherson, and which Grant finally adopted. The argument against the plan was one of feeling only. In its favor was urged that it would at once demoralize Grant's whole army for offensive operations, while to guard and transport so many prisoners would require a great portion of its strength. Keeping them would also absorb all our steam boat transportation, while paroling them would leave it free to move our troops. Paroling would also save us an enormous expenditure. After long consideration, General Grant relucto these reasons, and at 6 p. m. sent the following letter by the hands of General Logan and Lieutenant-Colonel Wilson:

HEADQUARTERS DEPARTMENT OF THE TENNESSEE,
Near Vicksburg, July 3, 1863.

Lieutenant General J. C. PEMBERTON,

Commanding Confederate Forces, Vicksburg, MISS.:

GENERAL: In conformity with agreement of this afternoon, I will submit the following proposition for the surrender of the city of Vicksburg, public stores, &c.:

On your accepting the terms proposed, I will march in one DIVISION as a guard and take possession at 8 a. m. tomorrow. As soon as rolls can be made out, and paroles signed by officers and men, you will be allowed to march out of our lines, the officers taking with them their side-arms and clothing, and the field, staff, and cavalry officers one horse each. The rank and file will be allowed all their clothing, but no other property. If these conditions are accepted, any amount of rations you may deem necessary can be taken from the stores you now have, and also the necessary cooking utensils for preparing them. Thirty wagons also, counting two-horse or mule teams as one, will be allowed to transport such articles as cannot be carried along.

The same conditions will be allowed to all sick and wounded officers and soldiers as fast as they become able to travel.

The paroles for these latter must be signed, however, while officers are present authorized to sign the roll of prisoners.

I am general, very respectfully, your obedient servant,

U. S. GRANT,

Major-General.

The officers who received this letter stated that it would be impossible to answer it by night, and it was not till a little before peep of day that the proposed reply was furnished:

HEADQUARTERS, Vicksburg, July 3, 1863.

Major General U. S. GRANT, Commanding United States Forces, & c.:k

GENERAL: I have the honor to acknowledge the receipt of your communication of this date, proposing terms of capitulation for this garrison and post.

In the main your terms are accepted, but in justice both to the honor and spirit of my troops, manifested in the defense of Vicksburg. I have the honor to submit the following amendments, which, if acceded to by you, will perfect the agreement between us:

At 10 a. m. tomorrow I propose to evacuate the works in and around Vicksburg, and to surrender the city and garrison under my command, by marching out with my colors and arms, stacking them in front of my present lines, after which you will take possession. Officers to retain their side-arms and personal property, and the rights and property of citizens to be respected.

I am, general, very respectfully, your obedient servant,
J. C. PEMBERTON,

Lieutenant-General.