(Letter F.) Washington City April 1st 1836.

Messrs. S F Austin B T. Archer and W. H. Wharton Commissioners of Texas.

Gentleman

In compliance with your two several letters of Instruction to me dated at New Orleans January 21st and 22d ulto. I proceeded to New York, and report the following as the result of my operations.

I found in the City of New York a Steam Boat called the Sandusky which had been fitted for sea, and was for sale at $20,000. I employed a person to take her out in the Bay that I might have an opportunity of fair examination of her engine etc, and on trial discovered serious and insurmountable objections to her engine, which was double geared, and not calculated to work with safety in rough weather at sea. I then inquired for others, and found the Steam Boat "Frank," about one year old of 170 Tons, draws 4 1/2 feet water, price $25,000, and will require an expenditure of about $3,000. to prepare her for sea service. Her boiler is old, she has but little furniture, and would not bear more than one nine pounder on her deck. I found the "American Eagle," about the same size, a little deeper hold, with a new engine, two years old, little furniture, a fast boat, rather stronger than the "Frank," but would not bear a heavier armament, price $30,000 will require about $2,500. to put in order for sea service. I also found the Steam Boat "Constellation" for sale and can be purchased for $14,000. she is much larger than either of the others, has large and powerful engine, and a great deal of furniture, Her boilers were new last July, and good judges tell me that her engine alone is worth more than the price of the boat. The hulk is 11 years old, but the builder tells me she was built of live oak and cedar at his yard in 1825, and he believes the timber to be sound. She draws 5 1/2 feet of water, and it would require $10,000 or $12,000 to put her in good order for sea service. In getting advice on the subject from persons who are fully competent, I have been advised to purchase her, take out the furniture and engine, and sell the old hulk, which would probably bring $2,000, and build a new hulk expressly for sea navigation, and the purposes desired, and she can then carry 5 eighteen pounders if necessary, It will take about 6 weeks to repair her, using the old hulk, and to build a new one would cost $18,000 or $20,000, giving a large and complete Steam Ship for 35,000, at the utmost, capable of carrying 600 passengers, if necessary. And this can be completed in 60 days. The ship builders in New York have had much trouble with their workmen recently and it would be better therefore to build, or repair at Salem in Conn, or some Eastern port. I would be happy to receive the instruction of the Commissioners in relation to the course I am to pursue, and give me some discretionary powers on the subject— I have employed an experienced Captain to aid me in my examinations, and he has prepared a model for a new hulk, which can be used if thought proper to build.

The Brig "Chanticleer" is a very superior coppered and copper fastened vessel, for sale in the City of New York, built for the African Slave trade, pierced for 14 guns, and can be got ready in 2 weeks, for sea. An experienced and excellent man can be engaged to take command of her, and she can be purchased, provisioned and got ready for sea for $20,000.

If the Commissioners should come to conclusion in favor of the negociacion for the Milam Furtrading and Land Company, I would propose that it be conditional with them, forthwith to advance the funds necessary to purchase and fit out the "Chanticleer," and pay the expenses of fitting out the 308 men raised by Col. Macomb, and that I be authorized to send out the same with all possible despatch— That they also be required to advance the cash on my drafts of $20,000, and advance the additional sum necessary to purchase the Steam Boat "Constellation," build a new hulk and fit her out, with all possible dispatch, and I be authorized to attend to the execution of the same. The contract can be executed by the Commissioners here, and delivered me, to be delivered to the applicants of the Company, on their acceptance of the terms, and Mr. Hall can receive a letter from the Commissioners, stating their terms.

Allow me to say something in this communication, relative to my compensation, for my services. In my first letter of instructions, it was left to be determined on my arrival in Texas. Since that time it has occurred to me that, it may occasion difficulty, as an express law must necessarily be enacted for the purpose, and as it was my original suggestion to pursue this course, and I did not anticipate the serious and unavoidable delays that have taken place, I would now respectfully request, in order that these difficulties may be obviated, that it be fixed by the Commissioners at once—

A. J. Yates.