immense public ateliers have been established to keep the workmen tranquil. With every day the evil rises, like the steady swell of the tide, and gives greater inquietude to the Government. As a specimen of the tone and temper of the departments you will find inclosed (marked A*) the proceedings of the Council of the Rhone, one of the largest and most important. In 1860 and 1861 the quantity of cotton consumed in France amounted to about 123,725,000 kilograms. From the 1st of January to the 1st of July of the present year it has reached only 11,952,000 kilograms; that is, 17 per cent. only of the previous quantity. Thus in this immense industry and its tributary branches we will h ave a reduction in the enormous proportion of 83 per cent. From the most reliable sources I gather the fact that there are from 130,000 to 150,000 workmen directly employed in making cotton thread and other fabrics, and of persons indirectly connected with the same industry about 1,350,000, making an aggregate of 1,500,000 souls dependent entirely upon the cotton supply. The consequences of this mass of destitution thrown upon the community, and the paralysis of other branches of industry arising from the war and the shutting up of our markets to it, is needless to dwell upon. Hence the pressure upon the French Government is very sever; nor will the state of finances permit so long sustained pressure as England is able safely to endure.
The grain crops and the vines in France, which failed last year in an average crop, have gone much beyond the average this year, and consequently the large supply of Northern grain which found its market here last year, via England, at high rates, will not be needed this year. Although this diminishes the pressure on the finances of France, it diminishes in a still greater degree the available resources of the Northern States of America, whose market here will be curtailed by it. It is supposed that the Emperor, in view of the eventuaut, has sent to Mexico a force more than adequate to settle that question, as upward of 40,000 men independent of the naval force have been dispatched, the chief command having been given to General Forey, who enjoys the full confidence of the Emperor. The intrigues of Corwin and the Washington Government in Mexico are well know and property appreciated here, my first act on landing at Southampton on the 29th of June last being the transmission of a dispatch by telegraph to Mr. Eustis here detailing them, as gathered by me at Havana. That telegram has never reached Mr. Eustis to this day, and had greater credence, from being private. It evidently reached the hands for which it was intended and produced its effect. If, therefore, the entente cordiale should be broken, or the crisis become too severe in the manufacturing districts, the Emperor has prepared for the active interposition which alone would be effectual.
At the risk of becoming prolix I have endeavored to give you an accurate idea of the real attitude of Europe toward us, as far as we know the purposes and plans of its rulers. I may add that the very serious differences between the King of Prussia and his Parliament do not tend to reassure us as to the continued tranquillity of Europe, which seems now in a condition very similar to that which preceded the convulsions of 1848.
In my previous dispatch I alluded to propositions made by leading bankers here in relation to a load based on cotton, on the sale of cotton here. One of these (marked B*) is herewith inclosed. It is made