Her Majesty's government see with much satisfaction that, as regards the principal part of that line, the imperial government is willing to acquiesce in the claim of Shere Ali, and they rely on the friendly feelings of the Emperor when they lay before him, as I now instruct your excellency to do, a renewed statement of the grounds on which they consider that Shere Ali's claim to the remainder of the line of boundary, referred to in my dispatch of the 17th of October, to be well founded.

The objections stated in Prince Gortchacow's dispatch apply to that part of Shere Ali's claims which would comprise the province of Badakshan, with its dependent district of Wakhan, within the Afghan state. The imperial government contend that the province of Badakshan, with its dependency, not having been formally incorporated into the territories of Shere Ali, is not legitimately any portion of the Afghan state. To this Her Majesty's government reply that the Ameer of Cabul, having attained by conquest the sovereignty over Badakshan, and having received in the most formal manner the submission of the chiefs and people of that province, had the right to impose upon it such a form of government as he might think best adapted to the position of affairs at that time. In the exercise of this right he appointed a local governor, and he consented, experimentally, to receive a fixed portion of the revenues of the country, instead of taking upon himself its general financial and other administration. But the Ameer expressly reserved to himself the right of reconsidering this arrangement, which was, in the first instance, made only for one year, of at at any time subjecting Badakshan to the direct government of Cabul, and of amalgamating the revenues thereof with the general revenue of the Afghan state. Her Majesty's government cannot perceive anything in the circumstances calculated to weaken the claims of Sizere Ali to the absolute sovereignty of Badakshan. The conquest and submission of the province was complete; and it cannot reasonably be urged that any experimental form of administration which the Ameer, with the acknowledged right of sovereignty, might think fit to impose on Badakshan, could possibly disconnect the province from the general territories south of the Oxus, the sovereignty of which the Russian government has, without hesitation, recognized to be vested in the Ameer of Cabul.

Her Majesty's government have not failed to notice in portions of the statements of the Russian government, to which I am now replying, that its objection to admitting Badakshan and Wakhan to be under the sovereignty of Shere Ali, is rested in part on an expressed apprehension lest their incorporation with the remainder of Afghanistan should tend to disturb the peace of Central Asia, and specifically should operate as an encouragement to the Ameer to extend his possessions at the expense of the neighboring countries. I alluded, in my dispatch of the 17th of October, to the success which had attended the recommendations made to the Ameer by the Indian government, to adopt the policy which had produced the most beneficial results, in the establishment of peace in countries where it had long been unknown; and Her Majesty's government see no reason to suppose that similar results would not follow on the like recommendations. Her Majesty's government will not fail to impress upon the Ameer, in the strongest terms, the advantages which are given to him in the recognition by Great Britain and Russia of the boundaries which he claims, and of the consequent obligation on him to abstain from any aggression on his part, and Her Majesty's government will continue to exercise their influence in the same direction. Her Majesty's govern ment cannot, however, but feel that if Badakshan and Wakhan, which they consider the Ameer justly to deem to be part of his territories, be assumed by Russia or England, or by one or either of them, to be wholly independent of his authority, the Ameer might be tempted to assert his claims by arms; that perhaps in that case Bokhara might seek an opportunity of acquiring districts too weak of themselves to resist the Afghan state; and that thus the peace of Central Asia would be disturbed, and occasion given for questions between Great Britian and Russia which it is on every account so desirable to avoid, and which Her Majesty's government feel sure would he as distasteful to the imperial government as to themselves. Her Majesty's govern ment therefore hope that the imperial government, weighing these considerations dispassionately, will concur in the recognition which they have made of Shere Ali's rights, as stated in my dispatch of October, and by so doing put an end to the wild speculations so calculated to distract the minds of Asiatic races, that there is some marked disagreement between England and Russia, on which they may build hopes of carrying out their border fends, for purposes of self aggrandizement.

Her Majesty's government congratulate themselves on the prospect of a definite settlement, as between the two governments, of the question of the boundaries of Afghanistan, the details of which have been so long in discussion.

Your excellency will read and give a copy of this dispatch to Prince Gortchacow.

I am, &c.,

GRANVILLE.

No. 5.]

G.

Prince Gortchacow to Count Brunnow.

[Communicated to Earl Granville by Count Bruñnow February 5.]

ST. PETERSBURG, January 2, 1873.

M. LE COMTE: Lord Augustus Loftus has communicated to me the reply of Her Britannic Majesty's principal secretary of state to our dispatch on Central Asia of the 19th of December. I inclose a copy of this document. We see with satisfaction that the English cabinet continues to pursue in those parts the same object as ourselves— that of insuring to them peace and, as far as possible, tranquillity.

The divergence which existed in our views was with regard to the frontiers assigned to the dominions of the Shere Ali. The English cabinet includes within them Badakshan and Wakhan, which, according to our views, enjoyed a certain independence. Considering the difficulty experienced in establishing the facts in all their details in those distant parts; considering the greater facilities which the British government possesses for collecting precise data; and, above all, considering our wish not to give to this question of detail greater importance than is due to it, we do not refuse to accept the line of boundary laid down by England.

We are the more inclined to this act of courtesy as the English government engages to use all its influence with Shere Ali in order to induce him to maintain a peaceful attitude, as well as to insist on his giving up all measures of aggression or further conquest. This influence is indisputable. It is based not only on the material and moral ascendency of England, but also on the subsidies for which Shere Ali is indebted to her. Such being the case, we see in this assurance a real guaranty for the mainteLance of peace.

Your excellency will have the goodness to make this declaration to Her Britannic Majesty's principal secretary of state, and to give him a copy of this dispatch.

We are convinced that Lord Granville will perceive in it a fresh proof of the value which our angust master attaches to the maintenance and consolidation of the most friendly relations with the government of Her Majesty Queen Victoria.

Receive, &c.,

GORTCHACOW.

No. GS.]

No. 336.

Mr. Schuyler to Mr. Fish.

LEGATION OF THE UNITED STATES,

St. Petersburg, March 18, 1873. (Received April 9.) SIR: I have the honor to inform you that Governor Orr arrived here on the evening of March 15. Yesterday, by appointment, I called with him on Prince Gortchacow, who received us very cordially, and informed Governor Orr that he had already spoken to the Emperor, who would receive him the next day. As the interval between arrival and audience is often a week or ten days, this dispatch was, I think, intended as a special compliment to the representative of the United States.

Governor Orr accordingly had an audience from the Emperor to-day, and, with the delivery to him of the archives of the legation, my duties as chargé d'affaires cease. I trust I have been able to perform them to the satisfaction of the Government.

I have, &c.,

EUGENE SCHUYLER.

No. 1.]

No. 337.

Mr. Orr to Mr. Fish.

LEGATION OF THE

UNITED STATES,

St. Petersburg, March 18, 1873. (Received April 9.)

SIR: I respectfully report that I arrived at St. Petersburg on Saturday evening, March 15. On Sunday Mr. Schuyler addressed a note to Prince Gortchacow, informing him of my arrival, and inquiring when I could have an interview with him to arrange the time for the presentation of my credentials to the Emperor. The prince replied that afternoon, stating that he would grant the interview at half past twelve o'clock on Monday.

I called at that hour, was introduced by Mr. Schuyler, and had a short but agreeable interview with the prince. He referred to the Catacazy affair, and expressed regret at its occurrence. He said that Catacazy was a shrewd man, of good ability, and a fine writer, who had been with him. four or five years in the foreign office, who he thought would be of great service in America, but that he turned out a meddlesome fellow, greatly lacking in judgment. He was therefore no longer in the service of the government.

The prince inquired how Baron d'Offenberg had been received by our Government, and when I said to him that his reception was most hearty and cordial, and that his general bearing had been so discreet that he had made many friends outside of official circles, as well as within them, he expressed the highest satisfaction.

The prince informed me that the Emperor would grant me an audience to present my credentials at half past one o'clock to-day, (Tuesday.) I accordingly went to the palace at that hour and was received by His Majesty the Emperor Alexander. On presenting my credentials I delivered a very brief address to His Majesty, (of which I inclose herewith a copy, marked A.) The Emperor, in reply, heartily reciprocated the sentiments of kind feeling, good fellowship, and enduring peace between the two governments. The Emperor referred to the Catacazy affair as an unpleasant incident, which had happily passed away, and expressed his gratification on being assured that the reception of Baron d'Offenberg by our Government had been cordial, and that his general conduct had so warmly commended him in official and unofficial circles. The Emperor then adverted to the visit of the Grand Duke Alexis, his son, to America, and said that his sensibilities were deeply touched by the hospitable and distinguished reception given him by the American people, and that these demonstrations were accepted by him, not so much as a personal tribute to the Grand Duke, as a manifestation of friendship and respect to the Russian government, as their oldest and most steadfast friend in Europe. The interview was not protracted, but all of its incidents were cordial and pleasant.

From the remarks both of the Emperor and of Prince Gortchacow, I am of the opinion that the Catacazy affair has left no unpleasant feelings behind it.

I have, &c.,

JAMES L. ORR.

A.

Copy of address delivered by Governor Orr to His Majesty the Emperor. YOUR IMPERIAL MAJESTY: I respectfully ask leave to present to yon my credentials as envoy extraordinary and minister plenipotentiary from the Government of the

United States to the Government of Your Imperial Majesty. It is my pleasing duty in presenting them to express to Your Majesty the continued friendship cherished by President Grant and his administration for Your Majesty and for the great empire of Russia.

It is his earnest desire to cultivate the harmony and good correspondence so happily existing between the two governments.

It is nearly one hundred years since these relations of cordial friendship were inaugurated, and no reason can exist why they should not be perpetuated indefinitely in the future.

While residing near your court Your Majesty may be assured of my ready co-operation in fostering the ancient good-will and kind relations between the two governments. Permit me to express my sincere wishes for the continued good health of Your Majesty and for the growing prosperity of your empire.

No. 2.]

No. 338.

Mr. Orr to Mr. Fish.

LEGATION OF THE UNITED STATES,

St. Petersburg, March 18, 1873.

(Received April 9.) SIR: At my interview on Monday last with Prince Gortchacow, after saying that he had no doubt our intercourse would be such as to maintain pleasant relations between the two countries in future, Prince Gortchacow then referred to Mr. Schuyler, and said that his relations to the government had always been most cordial and satisfactory, and the government had been much pleased with the manner he had performed his duties. The prince added that he would be glad if these words were repeated to our Government.

I felt it due to Mr. Schuyler, as he has been acting here for several months as chargé d'affaires, with all the responsibilities of the mission upon him, that I should communicate in this dispatch the foregoing appreciation of his services by the minister of foreign affairs here.

I have, &c.,

No. 339.

JAMES L. ORR.

No. 5.1

Mr. Orr to Mr. Fish.

LEGATION OF THE UNITED STATES,

St. Petersburg, May 2, 1873. (Received May 21.) SIR: I have the honor to inform you that the Japanese embassy, of which the Hon. Iwakura was chief, arrived here on the 1st of April. They were received by officials, and great ceremony and cordiality was shown them during their stay. The facts, as far as can be definitely ascertained, are as follows: The chief object of the mission was to enter into more close diplomatic relations with the Russian government, and the question concerning the Saghaline Island was raised. Part of this island has for a long time belonged to Russia, has been under her control, and is at present one of her penal colonies. She is now endeavoring to get complete mastery of it; and, it is said, to accomplish this, proposed to cede part of the Coreil Islands to the empire of Japan. Nothing, however, has been decided as yet. Count Struve is the new Russian minister to Japan, and will take charge in June.

I have, &c.,

JAMES L. ORR.

No. 87.]

XXVIII.-SALVADOR.

No. 340.

Mr. Biddle to Mr. Fish.

LEGATION OF THE UNITED STATES

San Salvador, November 11, 1872. (Rec'd Dec. 7.)

SIR: I have the honor to transmit to you herewith a copy and translation of an "exposition" addressed to the National Constituent Congress by the ministry of the government of Salvador, reviewing the policy of the administration, and submitting for its sanction the late war-measures of the President, at variance with the letter of the constitution of 1871. I also append the resolution of the convention approving the entire course of President Gonzalez, as stated in the aforesaid memorial.

A project has been presented to the nation from the convention for the formation of a bank, of which I annex a copy and translation. The late revolutions and foreign wars have embarrassed the finances of the state and commercial prosperity, and the creation of a bank separate from the government, with securities from abroad, for hypothecations, loans, discounts, and circulation, is thus suggested as a safe basis for monetary transactions. I also annex a copy of a decree of the President of the republic, consonantly to the above resolution of the convention, dated the 4th instant, in which he prescribes the establishment of a bank as aforesaid, with stipulations as authorized by the Congress. The fourteenth article thereof establishes The Bank for Hypothecation of Real Estate of Salvador so soon as the subscription for a moiety of its stock is completed, and agencies are to be established in all the departments of the republic, to be organized according to the regulations.

Also, an agency is to be at once placed in London, to represent the bank in its relations and operations with foreign stockholders and with other persons or establishments. The office to be performed by three employés, one to be named by the foreign shareholders, another by the national shareholders, and the last by the government. If the directory of the bank shall deem it convenient hereafter to establish other agencies in other foreign places, it may do so, the government approving, and with the same terms as for that at London.

I have, &c.,

[Inclosure 1.-Translation.]

THOMAS BIDDLE.

CONSTITUENT CONGRESS.

Exposition of the Salvadorean cabinet to the National Constituent Congress, submitting for its approval the measures taken in consequence of the extraordinary situation in which the republic was placed.

REPRESENTATIVES: By the disposition of the Marshal President of the republic and consonantly to the terms of your convocation, the undersigned ministers of state have the honor to relate and to submit to you the policy and measures which the government has been obliged to dictate, owing to the exceptional circumstances through which the nation has passed, whose great interests it was impossible to preserve without displaying the activity which the intrigues and machinations of the disaffected rendered necessary.

Notorious are the motives, as flimsy as hurtful to Salvador, which served as a pretext to the ex-President of Honduras, Don José Maria Medina, to openly take a hostile