The tzar wrote to Edward that he desired to form with him an alliance of friendship conformable to the precepts of the Christian religion and of every wise government; that he was anxious to do any thing in his power which should be agreeable to the King of England, and that the English embassadors and merchants who might come to Russia should be protected, treated as friends and should enjoy perfect security.

When Chanceller returned to England, Edward VI. was already in the tomb, and Mary, Bloody Mary, the child of brutal Henry VIII., was on the throne.  The letter of Ivan IV. caused intense excitement throughout England.  Every one spoke of Russia as of a country newly discovered, and all were eager to obtain information respecting its history and its geography.  An association of merchants was immediately formed to open avenues of commerce with this new world.  Another expedition of two ships was fitted out, commanded by Chanceller, to conclude a treaty of commerce with the tzar.  Mary, and her husband, Philip of Spain, who was son of the Emperor Charles V., wrote a letter to the Russian monarch full of the most gracious expressions.

Chanceller and his companions were received with the same cordial hospitality as before.  Ivan gave them a seat at his own table, loaded them with favors and gave to the Queen of England the title of “my dearly beloved sister.”  A commission of Russian merchants was appointed to confer with the English to form a commercial treaty.  It was decided that the principal place for the exchange of merchandise should be at Kolmogar, on the Bay of Dwina, nearly opposite the convent of St. Nicholas; that each party should be free to name its own prices, but that every kind of fraud should be judged after the criminal code of Russia.  Ivan then delivered to the English a diploma, granting them permission to traffic freely in all the cities of Russia without molestation and without paying any tribute or tax.  They were free to establish themselves wherever they pleased to purchase houses and shops, and to engage servants and mechanics in their employ, and to exact from them oaths of fidelity.  It was also agreed that a man should be responsible for his own conduct only, and not for that of his agents, and that though the sovereign might punish the criminal with the loss of liberty and even of life, yet, under no circumstances, should he touch his property; that should always pass to his natural heirs.

The port of St. Nicholas, which, for ages, had been silent and solitary in these northern waters where the English had found but a poor and gloomy monastery, the tomb, as it were, of hooded monks, soon became a busy place of traffic.  The English constructed there a large and beautiful mansion for the accommodation of their merchants, and streets were formed, lined with spacious storehouses.  The principal merchandise which the English then imported into Russia consisted of cloths and sugar.  The merchants offered twelve guineas for what was then called a half piece of cloth, and four shillings a pound for sugar.