Lincoln said (emphasis mine):
Executive Mansion, Washington, August 22, 1862.
Hon. Horace Greeley: Dear Sir.
I have just read yours of the 19th. addressed to myself through the New-York Tribune. If there be in it any statements, or assumptions of fact, which I may know to be erroneous, I do not, now and here, controvert them. If there be in it any inferences which I may believe to be falsely drawn, I do not now and here, argue against them. If there be perceptable in it an impatient and dictatorial tone, I waive it in deference to an old friend, whose heart I have always supposed to be right.
As to the policy I "seem to be pursuing" as you say, I have not meant to leave any one in doubt.
I would save the Union. I would save it the shortest way under the Constitution. The sooner the national authority can be restored; the nearer the Union will be "the Union as it was." If there be those who would not save the Union, unless they could at the same time save slavery, I do not agree with them. If there be those who would not save the Union unless they could at the same time destroy slavery, I do not agree with them. My paramount object in this struggle is to save the Union, and is not either to save or to destroy slavery. If I could save the Union without freeing any slave I would do it, and if I could save it by freeing all the slaves I would do it; and if I could save it by freeing some and leaving others alone I would also do that. What I do about slavery, and the colored race, I do because I believe it helps to save the Union; and what I forbear, I forbear because I do not believe it would help to save the Union. I shall do less whenever I shall believe what I am doing hurts the cause, and I shall do more whenever I shall believe doing more will help the cause. I shall try to correct errors when shown to be errors; and I shall adopt new views so fast as they shall appear to be true views.
I have here stated my purpose according to my view of official duty; and I intend no modification of my oft-expressed personal wish that all men every where could be free.
Yours, A. Lincoln.
This article provides some analysis:
Written during the heart of the Civil War, this is one of Abraham Lincoln's most famous letters. Greeley, editor of the influential New York Tribune, had just addressed an editorial to Lincoln called "The Prayer of Twenty Millions," making demands and implying that Lincoln's administration lacked direction and resolve. President Lincoln wrote his reply when a draft of the Emancipation Proclamation already lay in his desk drawer. His response revealed his concentration on preserving the Union. The letter, which received acclaim in the North, stands as a classic statement of Lincoln's constitutional responsibilities. A few years after the president's death, Greeley wrote an assessment of Lincoln. He stated that Lincoln did not actually respond to his editorial but used it instead as a platform to prepare the public for his "altered position" on emancipation.
Why did Lincoln feel the need to write a letter to begin with? And was this truly at the same time that he was preparing to read the emancipation proclamation? I find Greeley's final assessment the most confusing aspect.