Mr. Harvey to Mr. Seward.

No. 284.]

Sir:The news of the naval combat between the United States steamer Kearsarge and the notorious Alabama, and the complete destruction of the latter, created much sensation here yesterday when it became known in the city by a telegram to me, which was immediately communicated to the authorities and to the commercial exchange.

The Alabama received her first equipment of arms and munitions from English ships, in one of the remote and secluded ports of the Azores islands and her first depredations were committed not very far from the same spot. Attempts were made by her commander subsequently to repeat the outrage which he perpetrated at Angra bay two years ago, but the precautions taken here prevented their success; consequently that cruiser was well known in these parts, and had given our own and the Portuguese officials no small trouble. For this reason a very general interest was excited when the facts became partially understood, and to satisfy it fully I caused all the information in my possession to be given to the public through the principal newspapers.

Besides the ordinary effect to be anticipated from such an event, it is quite certain that the rates of insurance on American vessels and cargoes, which had been inflated by various combinations in Europe, will at once collapse and find their proper level.

Still it is to be hoped that vigilance on this side of the Atlantic will not be relaxed, because preparations are making at various points to send out more formidable cruisers than the late Alabama; they only wait for a fitting opportunity and a convenient pretext.

I have the honor to be, sir, your obedient servant,

JAMES E. HARVEY.

Hon. William H. Seward, Secretary of State.