a conference at Paris, although up to this time no official intimation of such a purpose has transpired. If such a conference is held, I do not doubt that it would result in the practical absorption of the smaller states of northern Germany, and a revival of the project first announced by the Emperor, at the peace of Solferino, of an Italian confederation. I will not venture to speculate upon the probable price of France's friendly mediation, but no one seems to doubt that Prussia will be quite as generous to the Emperor, for an adjustment which will make her incontestably the head of the German empire, as Italy was for his aid in 1859. Some days will probably elapse before the answers of Germany and Italy are received, as they must consult each other before either can accept the Emperor's proposal. I understand that the Emperor entertains no doubt of its acceptance. I am, sir, with very great respect, your very obedient servant, JOHN BIGELOW. Hon. WILLIAM H. SEWARD, Secretary of State, Washington, D. C. No. 349.] Mr. Bigelow to Mr. Seward. LEGATION OF THE UNITED STATES, Paris, July 20, 1866. SIR: Prussia has consented to a cessation of hostilities for five days, upon certain conditions, which it is supposed at the ministry of foreign affairs will be acceded to by Austria. If they are, peace will probably be made upon the basis of excluding Austria from the confederation and of subordinating the smaller states of northern Germany to Prussia. M. Drouyn de Lhuys, with whom I have talked upon the subject this morning, says that in justification of the purpose of Prussia to exclude Austria may be stated the great disproportion of people of other races than the German in Austria, through whom Austria exerted an undue influence in the confederation. As to the proposed absorption of the smaller states by Prussia, that would be only to make law what was already practically the fact. Those states had joined Prussia at the first threat of war because their sympathies and interests were with Prussia. Prince Napoleon has gone to Italy, charged by the Emperor to use his influence with that government in promoting the contemplated arrangement. No difficulty is anticipated here from that quarter, provided Prussia can be satisfied. Mr. Drouyn de Lhuys persists in feeling confident that France will not be involved in the quarrel, and that the changes likely to occur in Europe are logical and will prove advantageous. In reply to a question which I addressed him about the Papal question, he said that it was for the interest of Italy, in every point of view, to keep the capital of the church where it is; and he for his own part did not doubt that it would be kept there. I construed his language and manner to signify that nothing would be allowed to occur which would deprive the Pope of his freedom to choose between Rome and any other capital for his residence. His excellency intimated that some stipulation would be taken from the King of Italy on that subject before peace is declared. I have not remarked upon the change which the counsels of the Emperor seem to have undergone during the past week towards the belligerents. This day week it seemed to be the tendency of this government to strike hands with Austria. Prussia, however, showed herself, so irresistible, and her enemies on the other hand so weak, that the idea of associating the fortunes of his empire more intimately with those of Austria was suddenly abandoned. I think it is now pretty well determined by this court to allow Mr. de Bismark to execute the programme which he had traced out for Prussia before the war commenced. Austria, however, seems disposed to try her fortunes once more in the field, and if she should have a substantial success (which is, by the way, not anticipated by this government) the attitude of the belligerents to each other and to foreign powers might be materially changed. I am, sir, with great respect, your obedient servant, Hon. WILLIAM H. SEWARD, Secretary of State, Washington, D. C. JOHN BIGELOW. No. 351.] Mr. Bigelow to Mr. Seward. LEGATION OF The United States, SIR: I have the honor to enclose to you, in two extracts from official journals at Berlin, what is here recognized in official quarters as substantially the preliminary conditions of a peace which were entered into on the 26th of July by Austria and Prussia. Austria assents to a dissolution of the old Germanic Confederation, and to a new organization of Germany proper, to which she shall in no political sense belong. She engages to recognize such federal union as Prussia may establish in connection with the states north of the Main, and any union among themselves which the states south of that river may enter into. I learn that Prussia insists further that Austria shall never become a member of this latter union, though nothing of that has yet transpired in the press. This is at present one of the gravest questions which now divide the belligerents. It is difficult to see how Austria can yield to such a humiliating privation of sovereignty if she has any faculty of resistance left, while Prussia, I am told, is disposed to be very tenacious upon this point.. The manner in which the war has been conducted and in a manner terminated, has been so mysterious and so unprecedented in its most important aspects, as to leave the public mind of this country in a very unquiet state. No one is yet able to see how France is to reap the profit from this war which will compensate her for the great accessions of strength resulting from it to her two most powerful continental neighbors. Without some such compensation they feel that the relative influence of France in the European system is lowered, her security gravely compromised, and the peace that may now be made not likely to be durable. I confess I have not as yet shared these apprehensions. The Emperor of France is the author and apostle of the policy of absorbing the secondary and tertiary Sovereignties by the primary ones. For purposes which nearly concern the dignity and honor of France, as the French understand those words, he wished to have the authority of some leading European power in support of it, and he now has it in Prussia. Austria will be compelled to lend her concurrence. That France will have her compensation sooner or later in the final peace, or under a future treaty, I have no doubt. Without some tolerably satisfactory assurance upon that point the war would have been prevented, an easy thing for France to have managed, or, what would be still easier, it would yet be prolonged. The more completely, however, France shall appear to have suffered by the changes wrought by the war, the more easy it will be for these "rectifications" to be conceded to France, which, in my opinion, were intended in advance to be the price of her forbearance. That no symptoms of any such arrangements have been disclosed by the press is not strange, but rather confirms me in the impression I have expressed. Savoy was not added to France till many months after the peace of Villa-Franca. It came to her then as a present, "not as the price of blood." The Emperor is at Vichy, attended by the minister of foreign affairs and by most of his cabinet. The Prince Napoleon also arrived there yesterday from Italy. Up to last night the negotiations for a peace between Austria and Italy were not as far advanced as between Austria and Prussia. Indeed, a battle between the Italian and Austrian troops yesterday morning was with difficulty prevented. I learned this yesterday at the ministry of foreign affairs. The press makes no allusion to it. My impression is that the obstacles to a peace, however, will all be overcome without more fighting of consequence. Prussia will have all she has yet asked. Italy will get Venetia without conditions, and as much more as possible; and Austria will be reduced to a second-rate power. For such of the secondary states south of the Main as may be left independent for the present, will be reserved the privilege, if it may be called such, which Polyphemus reserved for Ulysses, of being eaten last. I am, sir, with great respect, your obedient servant, Hon. WILLIAM H. SEWARD, Secretary of State, Washington, D. C. JOHN BIGELOW. The Prussian Moniteur publishes the preliminaries of peace, stipulated the 26th July, to obviate in advance, as it states in an article, the evil results which might arise from false interpretations. BERLIN, August 1-Evening. The Emperor of Austria recognizes the dissolution of the Germanic Confederation, and consents to a new organization of Germany, to which Austria remains foreign. The Emperor promises to recognize the limited federal relations which the King of Prussia is to establish in the German countries north of the line of the Main, and gives also his consent to a union of the states situated south of that line; a union, the national representation of which, is reserved for a more definite arrangement with the confederation of the north. These articles correspond exactly to the French propositions of mediation recommended at Vienna the 14th July. Austria has, therefore, consented to a reorganization of Germany, without any obstacle on her part, and without herself taking part in it. The empire of Austria does not form a part of the southern union, and we cannot consider the national and natural bond of union between the north and the south of Germany as destroyed by the line of the Main. The following is the account of the conditions for peace, published by the Provincial Cor respondence, of Berlin, known as an official organ. Most of the details here given have, however, been already received from other sources: "According to the information at present received the principal clauses of the preliminaries of peace appear to be the following: Austria will not suffer, with the exception of Venetia, any loss of territory; but she cedes to Prussia her part of the co-possession of Schleswig-Holstein. Saxony, which alone in the German states figures in the Austro-Prussian preliminaries of peace, preserves also her territorial integrity, with the reserve of ulterior decisions as to her position in the confederation of the north with regard to Prussia. Austria pays to Prussia 40,000,000 of thalers as cost of the war. Of this sum 15,000,000 will be deducted as Austria's share of the cost of the war in the duchies, and 5,000,000 as cost of occupation. Bohemia and Moravia will continue to be occupied by the Prussian troops until the payment of the balance, (20,000,000.) Austria withdraws entirely from the union of the German states, and recognizes the formation of a restricted confederation of the states of the north under the direction of Prussia. The union of the states of the south, and the regulation of their connection with the confederation of the north, are reserved to the free understanding of these states. Austria recognizes the changes of possession to be made in northern Germany. By that is understood the measures which Prussia will take relative to the countries occupied militarily-that is to say, Hanover, Electoral Hesse, the part of Hesse Darmstadt (Oberhessen) situated to the north of the Main, the duchy of Nassau, and Frankfort. The details are not, however, contained in the preliminaries of peace with Austria, as those leave to Prussia a free decision in that respect, stipulating that Austria will recognize what Prussia shall have done." The same journal also says: "France, by her mediation, has acquired great merit for herself by the satisfactory results of the work of peace up to this time obtained. The Emperor of the French accepted, in a generous and disinterested manner, with the hope of a really just and impartial pacification, the mission given to him by Austria. In the important position created for him in the negotiations, the Emperor Napoleon has not sought, neither for himself nor for France, anything but the honor and glory of causing his authority to prevail among the sovereigns in favor of an equitable peace. It has been given to him to contribute to the accomplishment of the great work which he had rigorously commenced for the establishment of a free and united Italy. In the same spirit that presided at that work he has spontaneously offered his hand to Prussia, to lay the solid and secure foundations of a united Germany. The financial situation of Prussia, favorable beyond all expectation, permits the cessation of the forced contributions levied on the country for bread, meat, and forage for the troops; henceforward such things will be paid for by the state. A loan does not appear to be necessary to cover the expenses of the war; a transitory financial measure will, perhaps, be sufficient to acquit the state obligations resulting notably from the contributions imposed on the country." No. 352.] Mr. Bigelow to Mr. Seward. LEGATION OF THE UNITED STATES, SIR: The news of the successful union of the eastern and western hemispheres by electric telegraph reached this legation on the 28th of July, last, at twenty-eight minutes past five in the morning, in the following despatch from Mr. Cyrus W. Field: His Excellency the AMERICAN MINISTER, Paris : FRIDAY-11 p. m. The Atlantic cable is successfully laid. May it prove a blessing to all mankind. CYRUS FIELD, Newfoundland. On the first day of August the Paris papers contained despatches from New York of that date, announcing the recent honor conferred by the President and Congress on Grant and Sherman. I trust the umbilical cord with which the Old World is reunited to its transatlantic offspring may never transmit intelligence less welcome than this to patriotic Americans. No. 357.] LEGATION OF THE UNITED STATES, SIR: There have recently appeared paragraphs in the journals of Paris announcing the contemplated departure from Mexico of the wife of the Archduke Maximilian. These naturally created some degree of discussion and comment generally unfavorable to the imperial cause in Mexico. To check this injurious line of remark, the Memorial Diplomatique, the organ of the so-called Mexican empire in Paris, in its last issue published the following formal announcement: We are authorized to contradict, in the most formal manner, the rumor that the empress of Mexico is on her way to Europe. "The same report was circulated at the time of her Majesty's departure for Yucatan, and it is known that the emperor Maximilian, on a solemn occasion, denounced as an infamous calumny the mere supposition that either he or his august spouse could ever be false to their duty." The Pays, a journal in the same interest, published on the following day this additional denial of the same rumor: has men "A journal, tormented with the desire of producing sensation news, tioned in reference to Mexico a completely absurd rumor started at Paris, by no one knows who, some days go. "There is not one word of truth or reason in the assertion." Yesterday, to the confusion of these positive and indignant friends, the lady in question arrived in Paris, and alighted at the Grand Hotel. She was immediately waited upon by Mr. Drouyn de Lhuys, who passed in her company the greater part of the afternoon. To-day the morning papers publish the following extract from the official journal of Mexico, of the 8th July: "The empress leaves for Europe, where she is going to treat of the affairs of Mexico, and regulate different international matters. This mission, accepted by our sovereign with real patriotism, is the greatest proof of abnegation that the emperor could offer to his new country. We give this intelligence that the public may know the real object of her Majesty's absence." The princess is accompanied by Mr. Martin Castillo, minister of foreign affairs, the Comte del Valle, her grand chamberlain, the Comte de Bouchelles, and other officers and attendants. The most unfavorable conclusions are deduced from this visit, especially by those who are so unfortunate as to hold large amounts of the Mexican loan. It is generally regarded as a final effort to obtain by personal influence and solicitation that indispensable aid for the Mexican empire which has been refused to its accredited diplomatic representative. I am, sir, with great respect, your obedient servant, Hon. WILLIAM H. SEWARD,, JOHN HAY, Chargé d'Affaires ad interim. Secretary of State, Washington, D. C. Mr. Hay to Mr. Seward. [Extract.] No. 358.] LEGATION OF THE UNITED STATES, SIR: According to a suggestion of Mr. Bigelow, who is spending some days with his family at Ems, I called yesterday upon the minister of foreign affairs. I spoke to his excellency of the reports which were currently published in the journals of Paris in reference to the visit of the Princess Charlotte to Francethese reports stating that the stay of Maximilian in Mexico had become conditional upon a modification of the course of action adopted by the French government, and announced in his excellency's recent communications to the Marquis de Montholon and to Mr. Bigelow; several journals further intimating that the princess had succeeded in obtaining a change of that programme. I asked the minister if there had been any modification, or if there were any intended, of the policy of the Emperor's government toward Mexico, heretofore declared. He replied, "there had been no modification of our policy in that matter, and there is to be none. What we announced our intention to do we will do. Of |