DIPLOMATIC CORRESPONDENCE. 
 
which you have executed my previous instructions in relation to the unhappy

difference which has arisen between Spain and Peru. 
The frank and liberal sentiments expressed to you by Mr. Pacheco induce 
a hope that on the arrival of a discreet and honorable agent of Peru at Madrid

an accommodation mutually honorable and satisfactory to both countries cau
be 
effected. Mr. Barreda, whom I have already mentioned to you, will embark
on 
the 20th instant, although he has as yet received no especial charge from
the 
president of Peru ; yet I have no doubt that on his arrival in Spain he will
re- 
ceive authority to make all needful explanations. I cheerfully commend him
to 
your confidence and esteem. 
You were altogether right in assuring the Spanish government that our obli-

gations of neutrality will be justly and honorably performed. 
I am, sir, your obedient servant, 
WILLIAM II. SEWARD. 
GUSTAVUS KOERNER, Esq., 4-., 4c., 4-c., Madrid. 
Mr. Koerner to Mr. Seward. 
[Extracts.] 
No. 113.]                      LEGATION OF THE UNITED STATES, 
Madrid, July 18, 1864. 
SIR:  *          *           *          *           *           * 
In the evening papers of yesterday was found a telegram to the effect that

the French consul at Lima (France representing the interests of Spain in
Peru, 
while there are no diplomatic relations between the latter country and Spain,)

has agreed upon a complete settlement of the points in dispute with the govern-

ment of Peru. In a day or two the truth of this news can probably be ascer-

tained here in the Department of State. 
There have been partial disturbances in Barcelona and Valencia. They are

ascribed by the government to merely local grievances and as of no political

importance. But there is certainly more agitation and uneasiness in the coun-

try at present than at any other time since I arrived here. 
I have the honor to be your most obedient servant, 
GUSTAVUS KOERNER. 
Hon. WILLIAM H. SEWARD, 
Secretary of State, 3;c., 4-c., 4-c. 
M1r. Seward to Mr. Koerner. 
No. i14.]                             DEPARTMENT OF STATE, 
TVashington, July 28, 1864. 
SIR: I have the honor to acknowledge the receipt of your despatch of the

2d of July, which is accompanied by a copy of Mr. Pacheco's circular letter

concerning the difficulty between Spain and Peru. 
Regarding this paper as practically reducing that controversy to one of form

or ceremony, and confiding so much in the wisdom of the governments of these

two respected countries as to believe that they will not suffer themselves
to be 
profoundly alienated by such questions, the President is content to leave
the 
subject to their exclusive consideration. 
I am, sir, your obedient servant, 
WILLIAMI  H. SEWARD. 
GUJSTAVUS KOERNER, Esq., 4-c., 4-c., 4-c. 
 
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