I have no cypher from Mr Morris and have seen none from him. I must therefore again request you to forward me one, under cover to Messrs Barclay and Harrison, with directions to those gentlemen to forward your letters by private hands, and not by the post, for I fear that one you sent to Mr Jay has been intercepted. No delicacy is preserved by this Court on this head. This practice is not confined to us, but extends to the correspondence of all the corps diplomatique. It has happened, that in the hurry of resealing letters thus examined, papers belonging to the department, in which they were opened, have been carelessly enclosed by the Secretary, and returned to the Minister by the person to whom the letters were addressed. Without a cypher it will be impossible for me to be so punctual as may be expected, for at present I am obliged to send most of my letters by private hands, or by the French Ambassador's couriers to the sea-ports, which circumstance often retards their arrival in America.

Our situation with respect to money matters is still critical. The drafts which Dr Franklin is obliged to pay are so frequent, that he has not been able to obtain cash to enable Mr Jay to discharge the bills accepted by him here, for which M. Cabarrus, as has been mentioned in former letters, is nearly forty thousand dollars in advance. Happily there are few bills due until the middle of next month, which will give Dr Franklin time to endeavor to save our credit here, and to this Ministry to reflect on the consequence of denying us this small succor. The Count de Florida Blanca has been lately solicited on this subject by the French Ambassador, and without giving hopes of affording the sum demanded, he promised to do what the urgency of their own wants permit him to do for us. In this conversation he appeared dissatisfied, that Congress had taken no notice of the desire he had expressed of obtaining one of the vessels constructing in the Eastern ports, for the United States, and complained, that no returns had been made by the States to the proofs the King had manifested, of his favorable disposition towards them. In fact their own necessities are evident.

In addition to what I have heretofore mentioned on this head, I have lately been informed from good authority, that a person to whom the Crown is indebted twelve millions of reals, in order to obtain payment, has been constrained to propose to purchase the salt belonging to his Majesty, to the amount of twentyfour millions of reals, for the payment of which, after deducting the sum due to him, he is obliged to advance immediately five millions of reals, although he has little hopes of disembarrassing himself shortly, of such an immense quantity of an article, for which there is little demand at present. The Minister, to soften the harshness of his refusal to make further advances, informed the Count de Montmorin, that M. Del Campo's instructions would be ready in a few days, and that Mr Jay might then commence his conferences on the subject of the proposed treaty. If I may be allowed to hazard a conjecture again on this subject, I must repeat what I have often mentioned already, that Spain seems desirous to retard this business until a general treaty takes place. Perhaps it may not be unworthy the attention of Congress, to prepare eventual resolutions should this prove to be the intentions of the Court.

Since commencing this letter, we have the agreeable news of the capitulation of Mahon, in twentyeight days after the trenches were opened. The garrison are prisoners of war, and, including sailors, &c., amount to two thousand six hundred men. Sickness, which reduced their number of effective men to one thousand three hundred, unwholesome provision, fatigue, and despair of succor, are the motives assigned by the Governor, for the surrender of this important place, which has cost Spain two hundred killed, and three hundred wounded. The joy of the Court is excessive. The Count de Florida Blanca has the merit of having planned this expedition. It is said, the fortifications are to be entirely ruined, and the port rendered incapable of receiving large vessels. The officer charged with the despatches, announcing this event, accuses our allies of having shown a backwardness and reluctance to assist in this siege, which has excited much indignation here. The Princess of Asturias said publicly at dinner, that the Spaniards had taken Fort St Philip's in sight of four thousand spectators, (meaning the French troops.) I had this from a foreign Minister who was present. I am persuaded the charge is without foundation, but still it will have a bad effect, and augment a national animosity, which prevails too much already.

It is probable that the siege of Gibraltar will now be pushed with more vigor. It is the King's favorite object, and the Duc de Crillon, I know, is of opinion that it may be taken. His late success will give weight to his opinion. I have been told that the Irish who obtained permission to return to the sea-ports, after being exiled from thence for several months, will again be ordered to quit them. This circumstance induces me to believe, that strong efforts will be made to take Gibraltar. The Spanish fleet has returned to Cadiz, where it will not remain long, the magazines being abundantly provided, and although there is no great number of workmen, or docks, for the repairs of vessels of the line, yet as few of the vessels have suffered in their cruise, these inconveniences will not be felt. The Count de Guichen was ready for sea the 28th ultimo, and only waited for a wind. His fleet consists of ten sail of the line, which has under its convoy fifty sail of transports; five of the first mentioned are destined for Cadiz, to join the Spanish fleet, which will then be superior to any the enemy can assemble in the seas of Europe. Admiral Rodney was still in the Channel the 22d ultimo, and will probably push for the West Indies, without any transports; the convoys for the West and East Indies, and America, not being yet in readiness. It is said that great reinforcements are to be sent to these quarters. Lord George Germain, it is said, will resign, and be succeeded by Mr Ellis.

The Russian and Imperial Ministers, still interpose their good offices to mediate a peace. The neutral Ministers say here, that Lord Stormont, in a late conversation with the first mentioned, declared with heat, that his Sovereign would treat with France on the subject of our independence, when a French army was in possession of the Tower of London, and not before, and that they would negotiate with Spain for the cession of Gibraltar, in exchange for the city of Madrid. I should not commit this extravagance to paper if I had not heard it mentioned by the Count de Montmorin, and other Ministers.

Mr Adams has demanded a categorical answer from the States-General to the proposition made them on behalf of the United States. The Dutch Secretary here informs me, that his letter was well received. The Dutch Minister at this Court has invited me to his house, since the presentation of the above mentioned demand. I have lately had conversation with the Swedish Minister, which I hope will enable me two months hence to give you some information of the disposition of his Court. This Minister is exceedingly well disposed to forward a connexion between Sweden and America, as is the Baron de Ramel, formerly Minister here, now Vice Chancellor of Sweden, to whose good offices I believe I owe the countenance and civilities of its representative here.

The cedula for the bank will appear shortly. I shall take care to forward that, and any other paper that I think worthy your attention. I have sent the Madrid Gazette to Mr Harrison, and have desired him to forward it in future. This gentleman is every way deserving your esteem and notice. He acts at present as Consul for America at Cadiz, and has been very useful there. His good sense and agreeable manners, have acquired the good will of natives and foreigners.

I have the honor to be, &c.

WILLIAM CARMICHAEL.