Secretary Bayard thinks this raises the gravest possible question between the two countries. Bayard is deeply in earnest in his determination to resist the position taken by Mexico and expresses full confidence as to the popular approval of his course. The case, Bayard thinks, is too clear for equivocation and he has no idea of retreating from the position taken by the department weeks ago when it demanded Cutting=s release.

The secretary [REST OF THIS LINE OBSCURED] does not necessarily imply that the Mexican governemt will refuse to set him at liberty and go to war. Speaking of this feature Secretary Bayard said: ABoth countries are pledged by a treaty of 1848 to exhaust every possible means in effecting a peaceful settlement of all political questions, and should Mexico persist in her present attitude, the question would then arise as to what action should be taken by this country to enforce acquiescence in its demands. A rupture of diplomatic relations would naturally follow as other questions had added fuel to the flames on the Mexican border.@

In Mexican affairs the state department acted with great promptness and vigor and Bayard makes no concealment of his determination to insist upon full satisfaction in the Cutting affair, not so much for Cutting=s sake as because it involves the question whether American citizens in Mexico are to be protected in their rights.

The excitement over the Cutting imbroglio is much intensified [REST OF THIS LINE OBSCURED] says that is known positively that Gov. Mecerahas ordered the Paso del Norte authorities in case of an attack from Texas, to cut off the prisoner=s head and deliver it to the Americans. The statement is given for what it is worth. Eight hundred Mexican troops are said to have left Lagos for Paso del Norte. It is asserted that a second demand has been made and that the American officials have been notified to leave Mexico. Large crowds gather at every street corner, and the arrival of Company F of the 10th United States Infantry at Ft. Bliss, which was assigned here two months ago, has caused a rumor to the effect that eight carloads of United States soldiers were on the spot. The bad effect of these difficulties upon business is at last becoming very apparent and everything looks like war from a Mexican standpoint.

DENVER, COLORADO, AUGUST 17. An El Paso special says: Consul Brougham is waiting the coming of General Sedgwick and is prepared to give him all needed assistance in making a most thorough investigation. Cutting says he will be able to prove to General Sedgwick=s entire satisfaction that he never circulated any copies of the El Paso Herald containing the second libel in Paso del Norte. Upon this personal circulation hangs at present the Mexican claim of the legality of Cutting=s imprisonment.

What are the facts? This man, Cutting, is a tramp printer, who alternates type-sticking with Aediting@ alleged newspapers. Many printers and newspaper men in Kansas know him, and all vouch for him as a noisy, contentious, quarrelsome, notoriety seeking vagabond. This creature goes into a Mexican town and libels a Mexican citizen. Being arrested under the law he squeals, and signs what is called a Areconciliation,@ and falls back to the American side of the river and prints his libel again on the American side, sends the paper over to Mexico, and then goes over himself and is again arrested, as he doubtless expected and desired to be, and then Afalls back on his government.@ The Mexican authorities have proceeded under the forms of their law and claim to be backed by the stiputations of the existing treaty. Whether they are wrong or right, is a question to be determined legally, and there is no doubt but that the matter can be so adjusted without any bullying or bloviating in two weeks, and the question determined whether Cutting shall serve out his term, or be restored to further annoy his native country.

The talk about the injuries suffered by the Americans at the hands of Mexican officials is largely wind. The Mexican Central company has been engaged for years in building its roads in Mexico; the higher employees have been and are still Americans, and there have not been a dozen cases of serious complaint. If this country wants Mr. Cutting=s valuable person, there is a way to get him without war.

Mexico=s Proposition.

NEW YORK, August 14. A special from Washington says: In yesterday=s consideration in behalf of Cutting=s case, the most important matter discussed was a proposition received Wednesday evening from the Mexican government. In brief it is this: The Mexican government makes a proposition that if the state dsepartment will send to the City of Mexico an able lawyer as special envoy of this government to confer with the attorney general of Mexico as to the proper interpretation of the law under which Cutting is held, they believe an amicable solution of the problem can be arrived at. After a two hours= discussion of this subject by the cabinet, it was unanimously agreed that the proposition be accepted and a representative be sent to the City of Mexico as soon as possible. This government is not to be bound by any report that its representative may make, but upon this report there can be established an additional foundation for further diplomatic procedure. Pending the agreement neither government will take action. It is not improbable that both governments will mass troops upon the border for the purpose of preserving order during the period employed in consultation.

[MORE JOTTINGS...FROM WEDNESDAY=S DAILY.]

DENVER, Aug. 23. An El Paso special says that at 11:30 this morning Cutting was taken efore Judge Castenedas, when the official minutes of the Chihauhan court, which had arrived this morning, were read to him, reciting the decree discharging him from further custody. The decree of the court is based entirely on the fact that Medina, the offending party, waived his right to a civil suit for damages, the court holding that this ended the proceedings of the state. When released by the court, Cutting replied: AAs long as I am not further detained as a pensioner, I accept my liberty and I request that a copy of the decree of the supreme court be given me for my future use.@

Daulin, the official interpreter, the mayor, and sevearal Mexican officers entered the Casino and a few words were exchanged between the parties, the evident intention being the arrest of Cutting. The latter in reply to some remark said to Daulin with his finger raised: AI will meet the five principals in this matter later.@ This was said in an impressive manner, just as a man might say: AWhen I get you alone, we will have this thing out.@

It was instantly interpreted and the mayor and Daulin cried out, APues yo e an muvo delitos,@ Ais a new offense.@

Several of the Mexicans stepped toward him, but the car having opportunely arrived, Cutting=s American friends closed in around him and hurrying him to the car he was, as rapdily as the time table allows, driven across the border.