War of the Rebellion: Serial 125 Page 0997 UNION AUTHORITIES.

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number of rebels at the present time at Toronto. They are assembled there because it is a good point from which to make their observations and attacks on any locality on the frontier of the United States.

There are $3,000,000 on deposit in Toronto which is controlled by certain agents appointed by the rebel Government. The board of a large number of refugees is paid by these agents, and where any expedition is started off the transportation of the parties connected with it is furnished by these agents. Among the number now in Toronto are several whom this Sullivan represents as being concerned in the attempt recently made in New York to burn the hotels and shipping in that city. Parties of five or six are sent to the United States and directed to hire themselves out in different localities, in any kind of employment they can obtain, and while so employed to procure all the information of the neighborhood possible, of the people, their character standing and property, and whether favorable or unfavorable to the Government of the United States. They are directed to set fire to any property to which they can get access without being discovered; to steal, to find out family secrets, and to do any and everything they can to injure the people and property of the loyal States. Every kind of instrument or invention calculated to destroy vessels, steam-boats, or buildings is manufactured by the rebels here and carried into the United States, and by their secret agents applied, if possible, to the purpose for which it was designed. Mr. Sullivan stated to me that he saw a torpedo invented to throw in the coal bin of a steam-boat. It resembled to exactly a piece of coal that no one would detect it, and it would be shoveled up thence into the fire, and thus destroy the boilers and, of course, the boat. Every one of these agents, when they go into the United States, have a Canadian passport certifying that they are British subjects domiciled in these Provinces. The Canadian Government have authorized certain parties living in different sections of the upper and lower Provinces, to issue passports, signed by the secretary of state and the Governor-General. These parties issue these passports at a percent-age, and are not, perhaps very scrupulous as to the nationality of the men who apply for one. I am however, informed that some of these rebels are provided with passports, and that men born in the Southern States pass to and for from Canada and the United States as British subjects protected by the passports of this Government.

That the information I have received s in its main features reliable and that it is really of serious importance I can scarcely doubt, and I have the honor to inclose a copy of a communication from Lieutenant Colonel B. H. Hill, dated Detroit, December 5, 1864, in which the information of a large collection of rebels and Toronto is confirmed by intelligence received by Colonel Hill, and that the colonel apprehends that some desperate attempts will be made to attack Detroit as soon as the ice is formed in the river.

I have communicated a copy of Colonel Hill's letter to the Government of Canada, and have asked that the suggestions of the provost-marshal-general be favorably received and acted upon.

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

D. THURSTON,

U. S. Vice-Consul-General, British, North American Provinces.