in charge of United States Legation to William H. Seward, February 10, 1867

Mr. Otterbourg to Mr, Seward

Sir: I have to announce the evacuation of this capital on the 5th instant by the French forces under command of Marshal Bazaine in person, which I communicated on the same day by telegraph to our consul at Vera Cruz, authorizing him to report the fact officially to the department. This event was precipitated by an entire rupture of all relations some five days previous between Prince Maximilian and his excellency. The day preceding his departure the marshal published a farewell address, enclosure No. 1, to the inhabitants of Mexico, which may be regarded both as an apology for what had been done as well as for what should have been done under more propitious circumstances.

With a design of observing events, and of being in a position to act as the condition of affairs might require, the French forces encamped at but a short distance from the capital on the day of the evacuation. Had the imperialists employed, as it was reported to be their intention, unnecessarily severe measures to suppress a movement rumored to be initiated by the liberals in the city, the marshal would have interposed his forces; while if the liberals succeeded in mastering the capital, his excellency would be near by, and prepared to enter into negotiations with the successful party.

General Marquez, the chief of the second military division, took immediate command of the city, of which in an address and proclamation, enclosures Nos. 2 and 3, he advised the population on the morning of the 6th. Inasmuch as by this proclamation General Marquez places the capital under martial law, and assumes irresponsible powers of judgment and exercise of will, I determined to address him a note, of which enclosure No. 4 is a copy. His reply, enclosure No. 5, refers my communication to the minister of foreign affairs for a decision of the points involved in the inquiries directed to the commander-in-chief. The proclamation has awakened much excitement and disquietude among the representatives of the nations who have recognized the empire, and induced a meeting of the diplomatic corps for a discussion of the measures proper to be taken in order to meet the dangers threatened by a state of affairs so suddenly brought into existence. Acting with entire independence of all other foreign agents, from the relative position of the United States and the authorities here, I have found it necessary to recur to different measures which might secure the interests of American citizens, and the honor of the flag that covers them.

The finance minister, from the unsatisfactory results of the forced loan imposed upon capitalists, as communicated to the department in a former despatch, has appealed to a general contribution of one per cent, upon property and values of every kind, enclosure No. 6. The decree authorizing this contribution, though unquestionably designed to obtain resources for the maintenance of civil war, gives but little room for direct protest against its provisions. I have, while awaiting the result of the protest from the foreign ministers against the exaction of this new forced loan, made by a skilful mode of imposition, applicable alike to foreigners and natives, desired citizens of the United States, who have sought advice upon the subject at this office, to return on the 11th instant, the day named for the collection of the first instalment, when I could probably give a decisive opinion as to the most effective course to be adopted. Contrary to all expectations Maximilian still remains in the palace, and there exists the same uncertainty as to his continuance or departure as prevailed previous to the retirement of the French army from the capital. Our reports announce the French to have reached San Martin, 20 leagues from Mexico, on the high road to Puebla, in prosecution of their march towards the port of Vera Cruz.

Official information was last night received of the rumors of Miramon’s complete rout at San Jacinto, a point between Zacatecas and Aguas Calientes, with the loss of his entire army, artillery and military chest. He himself escaped to Queretaro, accompanied by several officers, and was joined at the same city by General Severo Castillo, now in command of Mejia’s division, who had fallen back with his forces from Leon on learning the defeat of his chief.

President Juarez is believed to be at San Luis Potosi with the officers of his government.

The imperial General Tabera has suffered a severe disaster while returning from Toluca, whither he had gone with a column of 1,000 men to cover the withdrawal of the garrison into Mexico. The blow was inflicted by General Velez, an officer who a short time ago pronounced in favor of Ortega against Juarez and the empire.

The most accurate information gives the number of foreign soldiers at present in the service of the empire at 1,500 men of all arms. These men, rejecting the offer of a return to Europe extended by the French government through Marshal Bazaine, have remained at their own risk and peril in this country.

Business enterprise and commercial activity, which for months past have been declining, are now completely paralyzed in consequence of the condition of the political situation and the heavy contribution.

I have the honor to be, very respectfully, your obedient servant,