CHASE, Secretary of the Treasury to Hon, William H. Seward, August 22, 1863

Mr. Chase to Mr. Seward.

Sir: I have the honor to return to you the letter of Lord Lyons, covering the complaint of Messrs. Tootal, Broadhurst & Lee, transmitted with your letter of 7th instant. This correspondence was sent to the collector at New York for his report, of which I send a copy.

The question at issue is the expediency and propriety of the Treasury instructions to Collector Barney, of May 23, 1862, of which I send you a copy. It is difficult to perceive upon what grounds British merchants can claim in American ports any rights not conceded to American merchants. It may be, however, that some merchants of every nation may hesitate to give the bond required on the supposition that the last clause of the second paragraph of the Treasury Circular may impose responsibility for acts of parties not employed by them, and not in any way under their control. Such is not the construction given to the requirement in this department; and to remove all pretext of complaint, the collector at New York and other ports will be instructed to require only substantial security that such goods, wares, or merchandise shall not be transported to any place under insurrectionary control, and shall not, in any way, be used to give aid or comfort to such insurgents with or by the consent, permission, or connivance of the owners, shippers, carriers, or consignees thereof. This will exonerate exporters after the goods have arrived at the port of destination and have been disposed of in good faith, otherwise than in aid of the rebellion by the consignees, from all responsibility for the acts of persons who do not derive their control over the goods directly from the exporter.

With great respect,

[Untitled]

Sir: I am in receipt of your letter of the 8th instant, enclosing to me a letter to you from the Secretary of State, which last covered a despatch from Lord Lyons in regard to shipments, or proposed shipments, of goods from this port to Nassau, by Messrs. Tootal, Broadhurst and Lee, and at your request have the honor to report thereon.

I have caused inquiry to be made at the proper bureau of this office, and cannot learn that those gentlemen ever shipped, or proposed to ship, any goods from this port to Nassau, or elsewhere in the Bahamas. It is possible, however, that they may have done either the one or the other. At all events, if they have, (and this will meet the main point of your inquiry,) no unusual terms have been imposed, or suggested, in respect to any shipment of goods, either made or proposed to be made by those gentlemen to the Bahamas or elsewhere.

I return herewith the letter of the Secretary of State.

Very respectfully, your obedient servant,