Mr. Prevost to Mr. Seward.
Sir: The United States steamer Mohongo arrived here on the 1st instant, and is still in port.
The report copied from the New York papers in the Panama Star, that President Johnson had sent to Congress the correspondence between the chargé d’affaires at Guayaquil and the Department of State, relative to the non-payment of the instalment due to the United States by the government of Ecuador, under the convention of November, 1862, has created some sensation among the people and the local authorities of this place. The newspaper report, coupled with the presence of a man-of-war in the port may have the moral effect of bringing the supreme government to something approximating a rational sense of justice, and thus induce them to pay the dividend within the period promised by Mr. Bustamente, to wit, in the months of July and August next, of which your excellency was advised in my despatch No. 11.
It is now believed that the Spanish squadron has entirely retired from the waters of this coast, yet the government are going on with their fortifications, although they have disbanded all their volunteer forces.
The commercial houses have all reopened their doors, vessels are now arriving, notwithstanding the pretended obstructions in the river, and all the families who had gone into the interior to shield themselves from Spanish guns are now returning to their homes.
With expressions of profound respect and consideration, I have the honor to remain, your obedient servant,
Hon. William H. Seward, Secretary of State, Washington, D. C.