Referring to your statement of several days ago that there would probably be a meeting of the Council of State soon after your return to Raleigh, in which the matter of the Transcontinental Railroad Company would be taken up, and your desire that I should be present, I want to say that I will be required by some private, as well as professional, business to go over to Waynesville, and possibly to Webster this week, leaving Asheville tomorrow and probably not returning before next Sunday, the 13th instant. Any day after that,- giving sufficient time, of course, for me to reach Raleigh,- I can be able, as far as I now see, to meet you and the Council.

Confidentially, things do not look near so well to me as they did a fortnight ago. Very late advices from London are to the effect that the negotiations for floating the bonds are progressing satisfactorily; but the danger I apprehend is from the New York end of the line. To make this intelligible to you, let me briefly recapitulate the situation:

The Transcontinental Railroad Company, over two years ago, entered into a contract with the North Carolina Transcontinental Construction Company, composed almost altogether of New York men,- some of whom -- like General DuPont, of Delaware,-who having very large interests in NewYork, and being a capatalist of very large resources and high reputation,- gave character to the stability of the Construction Company. That Construction Company took up the work of undertaking to finance the road abroad and succeeded in getting into close touch with very strong financial interests in London and on the Continent. Numerous, and unavoidable, delays occurred, growing principally out of the deaths of Mr. Mason, the active Agent of the Construction Company, and Mr. Lantry, the practical railroad man and Manager of the Company, necessitating, to some extent, the reorganization of the Construction Company.

Last summer and Fall when I was in London, negotiations were resumed, and I had been led to believe that they would be speedily completed, and even now there is no difficulty on the other side, so far as the money is concerned, but unhappily there have grown up dissentions and disagreements among the New York members of the Construction Company, which, so far, have prevented a consummation of the financial operations with the foreign capitalists. William Breese, who is now in New York, and who has been most active and efficient in this matter, being the local representative of the Construction Company locally, is making, together with some others, most strenuous efforts to get those differences adjusted so that a united front may be presented to our hoped-for friends in Europe. His last letters to me are not very encouraging, and he is inclined to think that our Railroad Company will have to force the New York men to surrender their contract, and that we will have to form a new construction Company, free from the dissentions which I have mentioned. He seems to have no doubt that such a Construction Company and new alliances on this side, with abundant strength and unanimity, can be organized, but that, of course, will take time. I have no connection with the Construction Company, but do represent as its General Counsel, the Transcontinental Company, about which I am most solicitous, and about its relation to the state.

I have written Mr. Breese very fully, and endeavored to have him impress upon the New York people that we must be put in possession of definite and reliable information of the status of affairs when the Council of State meets, for, I, for one, would be unwilling to go before that Council and make any statement in which anything should be concealed or evaded; that, in view of the liberal and generous action of the State towards the Construction Company, upon the faith of the Railroad Company, it would not be wise, or right, for us to insist that the State should continue to aid us unless we were in a position to give reasonable assurances that we would be able to go on within a reasonable time with practical work. I have, also, written Mr. Breese to hold himself in readiness to attend the Council of State whenever it shall be called. His New York address is Care of the North Carolina Transcontinental Construction Co., 149 Broadway. I give you this address so that when it shall be decided to hold a meeting of the Council of State, you will have your Secretary to notify him of it. He is much more familiar with the condition of the Construction Company, and many of the details of the negotiations abroad, than I am, and I think it but fair to the state and to all parties concerned, that we should have a reliable statement from the Construction Company.

I have taken the liberty thus to state the situation to you so that you can see the immense consequence to us of having all the data and information ready for the Council. I have advised the New York people that unless they were in condition to furnish me this information, or furnish it to the Council of State, I should not insist on behalf of the Railroad Company that the convicts should be retained on the work; but for reasons which would be obvious to you, I would be very glad that the opportunity would be presented to us to return the convicts, without having them withdrawn without our consent. I have no doubt you will at once see the importance of this to the Railroad Company, in view of the fact that we may have to take up the matter of a new contract with a new Construction Company.

What I have said here is for your eye and ear alone for the present, unless, in your judgment, public interests require you to otherwise make use of it.