Having waited a week after my interview with Mr. Fox on the 19th. without receiving either of the communications which he then promised me, I called on him on the 25th. to Know the cause and to confer freely again on our affairs if he should be so disposed. As he anticipated the object of the visit we soon entered on it. After some introductory remarks on other topicks he began by asking what was the minimum of our demands respecting the seizures? Could we not agree in some modification of our respective pretensions, some compromise? For example, to adopt some plan which might answer our object without compromitting his government? As I perceived that he alluded principally to our claim to an indemnity I observed, that if the principle was admitted to be with us the indemnity followed of course. But, says he, cannot we agree to suspend our rights and leave you, in a satisfactory mode, the enjoyment of the trade? In that case nothing would be said about the principle and there would be no claim to an indemnity. I told him that I could not agree to such an adjustment: that the right was unquestionably with us; the injury had been severe and unprovoked, and that we could not abandon our claim in either case. He entered into such a view of the subject as shewed a disposition to yield what accommdation he could, in a manner the least objectionable on his part. He did not seem desirous of discussing the question of right nor did he deny that an indemnity was fairly incident to it. He then asked how the fact stood relative to the continuity of the voyage? On what ground did the charges rest of the Congress having made regulations to evade the principle insisted on by the Court of Admiralty? I replied on none whatever: that the question of continuity had never occurred between our governments; that it was a creature of the Court of Admiralty who had set it up as doctrine and supported it by such charges to justify the condemnation: that my government had never admitted the right in his to impose any restraint on the trade of neutrals, with enemies colonies, other than with the parent country; that his government had repeatedly admitted and established that claim by the most solemn acts as had been proved by the documents in his possession: that he must be sensible if my goverment was capable in any case of passing acts to evade a principle, it would not do it in the present one, where it could only serve to create doubts to the prejudice of the U. States, and by giving a new Sanction to the former pretensions of his government, revive a controversy which had been already amicably settled in their favor. I added that I possessed an official document, which fully proved what I had advanced respecting our regulations which with his permission I would send him. He expressed a desire to receive it. Well, says he, I perceive that your minimum and maximum are the same. I replied that I did not see how it could be otherwise; that we only sought, what was strictly just and ought not to be desired to relinquish any portion of that. He then proceeded to insist that our vessels which should be engaged in that commerce, must enter our ports, their cargoes be landed and the duties be paid on them. I said that such restraints were incompatible with our just rights. He urged also that we must unite in a plan to prevent the fraudulent sale and use of enemies vessels. I was apprehensive that any stipulation on that head might lay the foundation of new disputes. He thought that we were interested as Ship-builders in suppressing all such frauds; besides, says he, you must yield something to justify the concessions that are expected from us. I told him that I should be glad to see his project or that he would answer my letters in such a manner as to lay the foundation of a treaty. He assured me that he would do so as soon as he could, but as he had failed to comply with his former promise he was afraid to make another as to time, but gave me reason to expect one in a week or ten days. As I had cause to suspect from his remarks on the whole subject, that an order to prohibit the seizure and condemnation of our vessels had not been issued I asked him explicitly the question. He said that none had been issued; that in truth such a step would be to give up the point in negotiation. I inferred however that the measures which he informed me on the 17th. and 19th. he had taken for that purpose, were of a nature to produce the desired effect. These are I suppose confidential in the Cabinet with the Court of Admiralty &c. The order itself has most probably been withheld for the present that it might be connected with the general subject, on the principle above adverted to by Mr. Fox. I could not however push the enquiry on that point further at the time from motives of delicacy to him, nor did there appear to be any strong reason for it. I cannot suppose that nothing is done in that respect, and am persuaded that the business is so far advancd that if intended as I presume the order must soon be issued.

On the day after the interview abovementioned I sent Mr. Fox a copy of Mr. Gallatin’s letter to you explaining the mode of entering goods and paying the duties on them in the U. States, as I had promised.1 I had not done this to Lord Mulgrave because the state of the business with him would have given it the air of a concession on my part. I availed myself of the opportunity to state explicitly that I could not enter into any adjustment which did not provide a reasonable indemnity for injuries. It seemed to me obvious that that claim formed a principal difficulty in the Cabinet, and I was persuaded that it might have a good effect to give him what would be considered the ultimatum on it. I have not heard from Mr. Fox since tho’ it is presumeable that I soon shall, for I do not suspect him of the want of good faith in his communications with me. It is proper however to add that independent of the real importance of the subject, and the responsibility incident to any concessions which may be made in our favor by the present Ministry of the pretensions of the former, circumstances which are likely to inspire caution and create delay in the Cabinet, the additional one of his being a Member of the House of Commons for the management of the prosecution of Lord Melville cannot fail to increase it.2 I shall nevertheless do everything in my power consistent with propriety to bring the business to as early a conclusion as possible, and to comprize in the adjustment in the manner enjoined by my instructions, the important questions respecting our seamen and boundaries.

You will observe that Mr. Fox insisted in the late interview on restricting the trade with enemies colonies in a greater degree than he had done in the preceeding one. I am convinced that this was produced by the Cabinet deliberations on the subject, for I am strong in the opinion that if left to himself he would meet in arrangements which would place the whole business and indeed all our relations on the most broad and liberal basis, in a firm belief that by so doing he would advance the best interests of his country. But he has to consult and accommodate with others some of whom may perhaps not entertain in all respects the same sentiments, or be equally prepared to encounter in a new scheme of policy antient and deeprooted prejudices. When I get his answer I may remind him of his former concession in this respect, if it should appear that any advantage was likely to result from it. I shall not fail however to pay great attention to this particular object and will certainly not agree to any restraint on the trade which can be avoided or is likely to be disapproved by the President. I am, Sir, with great respect, your very obedient servant