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Seward the day before yesterday. In addition to what I have already mentioned, he says that he told Mr. Seward that it would be impossible for France to blame England for precisely the same course that she would herself have pursued in similar circumstances: that of course he could not pretend to give advice on a question concerning national honour without being asked to do so, but that it might be of advantage to the U.S. Government for him to dispel illusions which might exercise a baneful influence on its determination.

      M. Mercier reports the conversation to-day to his Government. I think it as well, at all events for the present, not to put it into an official despatch, but it might perhaps be well that Lord Cowley should know that I am disposed to speak in very high terms of the moral support given to my demands by M. Mercier.

      I am told that the Senate is still more angry about the combined expedition against Mexico than about the Trent affair. They will hardly be so absurd as to manifest their displeasure in such a way as to add France and Spain to their adversaries.

      P.S.—I have kept M. Mercier au courant of all my communications, confidential as well as official, with Mr. Seward, but I have given no information as to either to any one else.

      There was now nothing to be done but to sit and wait for the American reply. It arrived on December 27, in the shape of a note from Mr. Seward of the most portentous length abounding in exuberant dialectics, but the gist of which was contained in the two following short paragraphs:—

      'The four persons in question are now held in military custody at Fort Warren in the State of Massachusetts. They will be cheerfully liberated.

      'Your lordship will please indicate a time and place for receiving them.'

      The question of peace or war had hung in the balance for weeks, but the victory was complete, and British diplomacy achieved a success which was not equalled until Fashoda supplied a somewhat similar case in 1897.

      So far from being intoxicated with his remarkable triumph, as would have been the case with some diplomatists, Lord Lyons communicated the news to Lord Russell in matter-of-fact terms which were typical of his calm and practical nature.

      * * * * *

      Washington, Dec. 27, 1861.

      It is of course impossible for me to give an opinion upon the argumentation in Mr. Seward's voluminous note. Time barely admits of its being read and copied before the messenger goes. But as the four prisoners are given up, immediately and unconditionally, it is quite clear to my mind that you will not wish me to decide the question of peace or war without reference to you. A rupture of diplomatic relations, not followed by war, would be worse than war itself, for after that, nothing but actual hostilities would ever convince the Americans that there was any limit to our forbearance.

      I hope, however, that the Note will, on further examination, be deemed sufficient. In that case it might not be unadvisable to give credit to Mr. Seward, in speaking to Mr. Adams, and the more so perhaps because Mr. Adams is, or at all events was, devoted to Mr. Seward and his policy. I cannot say that my general opinion of Mr. Seward has undergone any change; but without inquiring into his motives, I must allow him the merit of having worked very hard and exposed his popularity to very great danger.

      I shall not be able to give you any information to-day as to the effect produced upon the public. Mr. Seward has begged me to keep the answer a secret until to-morrow. He intends to publish it in the newspapers here to-morrow, and has sent a copy to New York to be published simultaneously there. In the latter case it will be conveyed to the public in Europe, as well as to you, by the same packet which takes this letter. Mr. Seward told me he 'had been through the fires of Tophet' in order to get the prisoners surrendered.

      I have seen with very great satisfaction that you have informed Mr. Adams, in answer to the remonstrances about Mr. Bunch, that H.M. Government must and will hold communication with the Confederate Government. I am also extremely glad that the instructions to the Consuls on the subject have been sent to the Admiral to forward, not to me. In fact, if we are able to maintain peace with the U.S. it will be very desirable to separate the Consuls in the South as much as possible from this Legation. It will hardly be possible for me to keep well with the Government here, if I am supposed to have the direction of communication with the enemy's Government.

      I think it very important, with a view to the preservation of peace, that advantage should be taken of the opportunity to put Canada into a state of defence; and indeed (as I said in a despatch which I wrote in May last) to provide for the security of all our possessions on both sides of this Continent. While Canada, in particular, is apparently defenceless, the Americans will never believe that we contemplate the possibility of war. And it must never be forgotten that when they make peace with the South, they may have a large army to provide with employment, and an immense amount of popular dissatisfaction and humiliation to find a safety valve for.

      My intention is to propose to Mr. Seward that I shall send a man-of-war or a British mail packet to Boston to receive the prisoners. I should propose that they should go in the first instance to Halifax. But I should suggest to the Captain to consult their wishes as far as possible, but certainly not to take them to a Confederate port. Neither of the ships of war at New York would, I suppose, be large enough to take them across the Atlantic, but I do not think I ought to refuse to provide them with a passage to Europe, if they ask for one. This seems due to them, inasmuch as it was the failure of the British flag to afford them protection which lost them their passage on board the Trent. Of course if they go in a mail packet, I shall take precautions against any risk of an 'heroic' Captain applying the doctrines maintained here and bringing the packet before an American Prize Court for adjudication. In any case I shall give a caution to the Commander of the ship which takes them, that they are not to be received with honours or treated otherwise than as distinguished private gentlemen.

      Those who have not seen the Americans near, will probably be much more surprised than I am at the surrender of the prisoners. I was sure from the first that they would give in, if it were possible to convince them that war was really the only alternative. My difficulty has been to make them aware that it was surrender or war, without making such threats as would render the humiliation too great to be borne. This was the object of my confidential communications with Mr. Seward before I gave him your despatch.

      The main point having been gained, it remained to settle how the surrender of the prisoners could best be carried out without causing unnecessary ill-feeling and arousing a popular agitation which might drive the United States Government into committing some high-handed action in order to maintain itself. It was finally decided that, in order to avoid the trouble which Mr. Seward feared from the inhabitants of Boston, they should embark at Provincetown. They were accordingly conveyed in an American ship from Fort Warren to Provincetown, and there embarked on a British warship for Halifax, it having been expressly stipulated that the transfer should not take place at night. From Halifax they proceeded subsequently to Europe.

      * * * * *

      Lord Lyons to Lord Russell.

       Washington, Dec. 31, 1861.

      The Americans are putting the best face they can upon the surrender of Slidell and Mason, and as far as has depended upon me I have done everything to make the pill as easy to swallow as possible. But I cannot disguise from myself that the real cause of the yielding was nothing more nor less than the military preparations made in England. They are horribly out of humour and looking out for some mode of annoying us without danger to themselves. There is a talk of discriminative duties on British goods, of a non-intercourse Act, and other absurdities. What is more serious is a proposal, which it is said will be introduced into Congress next week, to repeal the Act for carrying into effect the Reciprocity Treaty. This would be a direct breach of the treaty, and would of course be an indisputable casus belli. It has often been suggested before, in the old belief that we should bear anything rather than go to war with the U.S. I hope they have had a lesson which will make them wiser.

      I cannot help fearing that it is as necessary as ever, nay more than ever necessary, to be prepared to give a warm reception whether to regular invaders or to filibusters from the U.S. who may make an attempt upon Canada. In fact

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