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On the same day Gen. Butler returned the following reply to the protest:

headquarters Department of the Gulf, New-Orleans, May 12, 1862.
Messrs.: I have the protest which you have thought it proper to make in regard to the action of my officers towards the Consul of the Netherlands, which action I approve and sustain. I am grieved that, without investigation of the facts, you, Messrs., should have thought it your duty to take action in the matter. The fact will appear to be, and easily to be demonstrated at the proper time, that the flag of the Netherlands was made to cover and conceal property of an incorporated company of Louisiana, secreted under it from the operation of the laws of the United States. That the supposed fact that the Consul had under the flag only the property of Hope & Co., citizens of the Netherlands, is untrue. He had other property which could not by law be his property or the property of Hope & Co.; of this I have abundant proof in my own hands. No person can exceed me in the respect I shall pay to the flags of all nations and to the consulate authority, even while I do not recognise many claims made under them; but I wish it most distinctly understood that, in order to be respected, the consul, his office and the use of his flag, must each and all be respected. I have the honor to be, very respectfully, your obedient servant,

Benj. F. Butler, Major-General Commanding.

On the thirteenth of May, a committee of the Associated Banks of New-Orleans requested per-mission to restore their specie to their vaults. The General's reply was as follows:

headquarters Department of the Gulf, New-Orleans, May 14, 1862.
Messieurs: I have given very careful consideration to the matter of the communication handed me, through you, from the banks of the city. With a slight variation, to which I called your attention, you were correct in your understanding of the interview had by me with the banks. Specie or bullion, in coin or ingot, is entitled to the same protection as other property under the same uses, and will be so protected by the United States forces under my command. If, therefore, the banks bring back their specie, which they have so unadvisedly carried away, it shall have safe conduct through my lines, and be fully protected here, so long as it is used in good faith to make good the obligations of the banks to their creditors by bills and deposits. Now, as in the present disturbed state of the public mind, specie, if paid ,out, would be at ,once hoarded, I am contest to leave the time of redemption of all bills to the good judgment of the banks themselves, governed in it by the analogy of the laws of the State and the fullest good faith. Indeed, the exercise of that on both sides, relieves every difficulty and ends at once all negotiation. In order that there may be no misunderstanding, it must be observed that I by no means mean to pledge myself that the banks, like other persons, shall not return to the United States authorities all the property of the United States which they may have received. I come to “retake, repossess and occupy” all and singular, the property of the United States of whatever name and nature. Further than that I shall not go, save upon the most urgent military necessity; under which right every citizen holds all his possessions. But as any claim which the United States may have against the banks can easily be enforced against the personnel, as well as the property of the corporations, such claims need not enter into this discussion. In such form, therefore, as in good faith safe conducts may be needed for agents of banks to go and return with property of the banks, and for no other purpose whatever, such safe conducts will be granted for a limited but reasonable period of time. Personal illness has caused the slight delay which has attended this reply. I have the honor to be your most obedient servant,

Benj. F. Butler, Major-General Commanding. Wm. N. Mercer, J. M. Lapeyre, Committee.

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