SIR: Your letter of the 30th ultimo was duly received. In referring to the contract between the department and ourselves, you say that, on the 9th of July, 1853, you made known your disapproval of the contract in a communication in answer to a letter from R. G. Rankin; and if we have expended money after that time, on account of the contract, we have done so with a full knowledge of your views. We were not informed, by your letter of the 9th of July, that you had any intention of annulling our contract. We had completed all our arrangements for stocking the road across Mexico prior to the receipt of your letter; and, on account of the same, have expended the sum of ninety-eight thousand dollars, ($98,000;) and our surety for the faithful performance of the contract had been given, and we were bound to be ready to carry the mails. Your letter certainly did not annul the contract; for then our sureties would have been released from all responsibility on our account, and we absolved from all reproach for the failure of the enterprise. On the contrary, the department still considered the contract binding upon us, as is apparent from the subsequent correspondence with Messrs. Harris & Morgan. The steamers belonging to these gentlemen were carrying the United States mail between that city and Vera Cruz. They had addressed you on the subject of a change in the days of departure from each port, so as to connect, by means of our line across Mexico, with the Panama steamers, at Acapulco, running to San Francisco; and thus supplying additional facilities for a more rapid and frequent transmission of intelligence to and from California. The advantage of this arrangement would have been immense to the Atlantic and Pacific cities, without any inconvenience to the department, and moreover without one dollar expense to it; of course, this arrangement was intended to continue only until the appropriation should be made under our contract, when steamers were to be placed on the line between Acapulco and San Francisco.