British subject. The motives stated in the application were probably the real ones, since the applicant appears to have continued to reside in England.

It would be a waste of time to follow the Government of the United States into the details of the various shipments made from England on confederate account. Both belligerents were left free to purchase and ship munitions of war, and both availed themselves of that liberty. The suggestion that such transactions were in progress called for no inquiry on the part of the British government, and the transactions themselves, had they been known to it, would have called for no interference.

The same observation applies to the expedients for raising money which were adopted during the later years of the war. The Confederate States, being debarred by the blockade from exporting their produce to Europe, endeavored to procure funds in England, France, and

elsewhere, by hypothecating stocks of cotton, stored for exporta[57] tion, and to be delivered after the conclusion of the war. The

agent employed in England for this purpose was a merchant resident at Liverpool. Other agents were employed in Paris. No action or suit at law founded on transactions of this kind could have been sustained in England, either by or against the confederate government; since it had not been recognized by Great Britain. But it was not the duty, nor was it within the legal power, of the British government to prohibit or prevent them, as it could not have prevented its subjects from subscribing to the vast war-loans which were raised from time to time by the Government of the United States, and were largely held in Europe. Those who advanced their money to the Confederate States did so at the risk of losing it, if the confederacy should be overthrown, and they have lost it accordingly.

Pressed by the difficulty of distinguishing between their own operations in Europe and those of the Confederate States in such a manner as to make it appear that the British government was bound to give free scope to the former and repress the latter, the United States appear to imagine that they have found such a distinction in two circumstances. One of these is, that the needs of the Confederacy were, as they allege, more urgent than those of the Union; the former could only obtain their military supplies from abroad; the latter could manufacture some of theirs at home. The other is, that the United States, having the command of the sea, could transport the goods purchased by them freely and openly, or (as it is expressed) "in the ordinary course of commerce;" while the confederates were obliged to "originate a commerce for the purpose "-that is, to get their goods transported by way of Nassau and Bermuda, which are commonly places of no great tradeand further to make use of those concealments by which the traffic in contraband of war, when not protected by a powerful navy, usually tries to elude the vigilance of the enemy's cruisers.

The principle is clearly stated by Heffter, section 148, in the passage cited below, (Annex A.)

It has been fully recognized by the United States. The following extract from a note of Mr Webster's was cited and adopted by Mr. Seward in answering a complaint of the Mexican minister in 1862:

"As to advances, loans, or donations of money to the government of Texas, or its citizens, the Mexican government hardly needs to be informed that there is nothing unlawful in this so long as Texas is at peace with the United States, and that these are things which no government undertakes to restrain.”—Appendix to case of United States, vol. i, p. 589.

Case of the United States, pp. 310-312.

Are we then to understand that, according to the views put forward in the case of the United States, the "strict and impartial neutrality towards both belligerents," which it is the duty of a neutral government to maintain, obliges it to find out which of the two stands in the greater need of supplies, and consists in lending aid, by measures of repression, to the belligerent whose force is the greater and his wants the less pressing of the two, and thus assisting him to crush more speedily the resistance of his weaker enemy? Her Majesty's government is unable to assent to this novel opinion, advantageous as it would doubtless prove to states which, like Great Britain, possess a powerful navy. To hold an even hand between the two; to leave the trade open to both equally, or close it to both alike; to leave the stronger free to profit by his strength, and the weaker to elude, as best he may, the superiority of his enemy on the high seas, has commonly been regarded as the only course consistent with impartial neutrality, and this was the course. steadily pursued by Great Britain.

The transportation of military supplies was equally a contraband commerce, whether carried on openly or covertly, from Liverpool or Londonor from Nassau. It is asserted by the United States that the contraband trade between England and Nassau was "covered by the British flag," and that this, coupled with the protection afforded by Her Majesty's government to the confederate agents in England, "deprived the United States of the benefit of their superiority at sea." Her Majesty's government does not understand the United States as alleging either that any protection was afforded to the agents of the Confederate States in England which was not extended also to those of the United States, or that contraband trade under the British flag was protected against search and capture at sea. Both of these assertions would be unfounded; but the language employed is calculated to produce this erroneous impression on the minds of the arbitrators. The agents of both parties in Great Britain enjoyed alike that protection, and no more, which persons resident or commorant here derive from the laws under which they live. Ships carrying between Liverpool or London and Nassau military supplies destined for the Confederate States were not, in fact, protected by the British flag, but were left to be dealt with on the principles of international law, as administered in the prize-courts of the United States, equally with those bound directly for confederate ports. Her Majesty's government, with a powerful navy at its command, abstained from all interference, confining itself to a remonstrance, conveyed in very moderate terms, when there appeared reason to apprehend that. [58] the United States cruisers, in their eagerness to make prizes, might harass unduly the regular and legitimate commerce of Great Britian,

BLOCKADE-RUNNING AND THE NASSAU TRADE,

Blockade running

The sea-coast of the Southern States being blockaded, though the blockade was for a long time imperfect, importers of goods into those States were exposed, if the goods were contraband, to a double and the Nassau trade. risk of capture, which increased or diminished according to the length of the Voyage. The island of New Providence, from its comparative nearness to the blockaded coast, offered some special facilities for the traffic, and large quantities of goods were sent to it as the war went on, with a view either to their being sold in the island to customers buying for the

Case of the United States, p. 312.

southern market, or to their being forwarded direct to one or other of the blockaded ports. Havana and Cardenas, in the Spanish island of Cuba, were made use of for a like purpose, and a confederate agent is stated to have been resident there. In this there was nothing which the British government was bound or legally empowered to prohibit, nor was any such obligation incumbent on the government of Spain. Persons trading either with the Southern States or with those which adhered to the Union were free to use Nassau, as they were free to use any other port in the British dominions convenient for their purpose. Traffic of the former kind was difficult and precarious, while that of the låtter kind was safe and easy, and could be carried on from Liverpool or Halifax with more convenience and security than from Bermuda or Nassau. But this difference imposed no special obligations on the British government in regard to either the one or the other.

One tangible ground of complaint the United States believe themselves to have discovered in the circumstance that merchant-ships arriving at Nassau were able to break bulk there, and transship their cargoes without a bona fide importation into the colony. It is represented that this became a constant practice with vessels transporting goods for the confederates; and the Government of the United States "asks the tribunal to find" that the permission to do it "was a violation of the duties of a neutral." That the tribunal is invested with no authority to decide this question, either in favor of the United States or against them, it is needless to say.

It is asserted by the United States that the permission was given (or, in other words, that a previously existing prohibition of transshipment within the limits of the colony was removed) by an act of the colonial government. In proof of this it relies upon an intercepted letter, purporting to be written by a confederate agent. That it was an indulgence granted, exclusively or especially, to vessels trading with the Confederate States, is not asserted; though, under the circumstances of the case, it might be expected to work principally in their favor.

No information of such an act on the part of the authorities of the colony ever reached Her Majesty's government. It was not complained of at the time either by the consul at Nassau or by the minister of the United States in London, although the fact that transshipments were taking place was at a later period mentioned as a grievance. From the general character of Mr. Whiting's correspondence, and from his activity in discovering injuries and affronts even where none existed, there can be no doubt that, had the permission been given, and had it possessed the importance which the United States now attributes to it, he would instantly have made it a matter of expostulation and complaint, and it would have been promptly brought to the notice of Her Majesty's government by Mr. Adams. But even the Government of the United States itself, which was in constant correspondence with Mr. Whiting, appears to have known nothing about the matter, and now produces, in support of a complaint which it regards as serious enough to demand a judgment from the tribunal, no evidence beyond a loosely-worded sentence occurring in a letter purporting to be written by a confederate agent; while of this letter, and the time at which it came into the possession of the United States, no better account is given than that it is one of a large number "captured at the taking of Richmond and at other times."

Her Majesty's government has now ascertained on inquiry that the statement is erroneous. The fiscal regulations of the colony prohibited the transshipment of goods within its limits unless the goods were landed

for examination by the officers of customs. Goods so landed might be immediately reshipped from the same wharf for exportation in the same vessel, or in others, at the choice of the shipper. The prohibition (which existed only for fiscal purposes) might, in any case, be dispensed with by permission granted by the receiver-general. This permission had been customarily granted as a matter of course in the case of goods stated to be in transit, and it was accorded frequently during the war. The first application was made on the 19th December, 1861, in the [59] case of the *Eliza Bonsell, a vessel laden, not with contraband of war

but with an assorted cargo; and after a reference to the governor and council, it was granted, the receiver being satisfied that the goods could be examined on board as well as if they had been placed on the wharf. No permission appears to have been granted in the case of the Gladiator, nor does it appear whether her cargo was or was not landed before exportation. The prohibition was not removed or modified, and no change was made in the regulations. Had it been removed, however, the fact would have had no importance, since there was nothing to prevent cargoes landed from being immediately reshipped and distributed into smaller vessels; and the authorities were not at Nassau, any more than at Liverpool, authorized to prevent the exportation or transit of articles contraband of war.

That cargoes were, in fact, frequently transshipped, either with or without an intermediate landing, Her Majesty's government has no doubt, though the statements made in the case of the United States are in many instances not borne out, when compared with the documents produced in proof of them. The Government of the United States has,

Appendix to British case, vol. v, p. 30.

To avoid this risk, it is said, (p. 223,) "it was resolved to send the purchases which might be made in England to Nassau in British bottoms, and there transship them into steamers of light draught and great speed, to be constructed for the purpose. The first offer from Richmond that is known to have been given for such a

shipment is dated the 22d of July, 1861."

The passages referred to as authorities do not show any such system. The letter from Walker to Huse & Anderson of July 22, 1861, suggests that a number of small vessels should be secured under British colors and with British clearance, laden with arms and convoyed by the armed vessel MacRae, which had been placed by the secretary of the navy at the disposal of the war department and was to be sent to England for the purpose. The vessels might make the port of Nassau or some other port equally favorably situated, whence they might clear with probable safety for the coast of Honduras or of Yucatan, and enter upon the coast either of Florida or Louisiana. Nothing is said of transshipment at Nassau. The Gladiator, which was the first vessel that arrived at Nassau with contraband of war on board for the Confederate States, (December 9, 1861,) had originally orders not to land her cargo. It was not until after she arrived at Nassau that it was decided to distribute it into smaller vessels. (See Appendix to case of the United States, vol. vi, p. 56, where the idea of transshipment is spoken as a last resource, and Mr. Benjamin's order to Captain Maffit, p. 57, also Mr. Heyliger's letter, p. 58, which acknowledges the receipt of orders to transship.)

The letter from Huse to Gorgas, March 15,1862, ib., p. 69, besides being long subsequent in date, does not speak of any regularly established plan for transshipment, although he remarks on the difficulty of uniting in one vessel the qualities necessary for crossing the ocean and for running the blockade. In consequence of this Major Huse is quite at a loss what destination to give to the Bahama." The next shipment he means to send to Havana.

Huse (at Liverpool) was not directed to send the cargoes to Nassau, but to some port in Cuba, "to care of our agent, Mr. Helm, and we can get them away with almost entire certainty by breaking bulk there." (Ibid., p. 68.)

The cargo of the Economist was not transshipped. (Ibid., p. 71.)

That of the Southwick was only transshipped on account of the amount of demurrage to be paid under her charter, while she was waiting for an opportunity to run the blockade. (Ibid., p. 73.)

As to the existence of "private ventures," it seems that most of the arms and supplies, mentioned in the correspondence in vol. vi, were contracted for by the confederate government, but it by no means appears, nor is there reason to believe, that all

however, omitted to inform the arbitrators of the means which were adopted by itself, as a belligerent power, to extinguish the traffic with the South, of which it complains. These means consisted in a rigorous extension of the belligerent right to capture neutral vessels on the high seas for the conveyance of contraband and for intended breaches of blockade, an extension previously unknown to international law. Before this war, it had been commonly assumed that, where a neutral vessel was bound from one neutral port to another, a prize-court would not inquire into the destination of the cargo. The American courts introduced the principle that, if sufficient evidence could be discovered (and the evidence deemed sufficient was often very slight) of an intention that the cargo should ultimately be delivered at a port of the bellige rent, the cargo, and in some cases the ship also, became liable to condemnation. Goods, therefore, on the voyage between a British port and Nassau were equally liable to capture with goods on a direct voyage from Nassau itself or from Liverpool to a southern port, if the prize court had any reason to suppose that to a southern port they were intended ultimately to go, and not to the Nassau market for bona-fide sale there. And the ship shared the fate of the cargo, unless there were reason to believe that the owners were ignorant of the ulterior destination of the latter, and had not hired their vessel with a view to it.

These decisions, to which no opposition was offered on the part [60] *of Her Majesty's government, destroyed the advantage which

the proximity of a neutral port offers to the blockade-runner, in diminishing his risk of capture by diminishing the length of his voyage. The only advantage which remained was that of transferring the cargoes, whether by means of a sale in the market or otherwise, to smaller vessels of lighter draught and greater speed, which could make their way into the blockaded ports, not, however, as it appears, by means of the inland waters along the shore, (which were chiefly used during the first year of the war,) but by running past the blockading vessels. In truth, when the blockade of these ports became really effective, the value of a neutral port at the distance of a two days' voyage was lost to the blockade-runner; it was valuable to him only as long as they were not effectually blockaded. To assist the blockade, however, was not the duty of the neutral government.

FALSE IMPORTANCE ASCRIBED TO THE PROCLAMATION OF NEUTRALITY.

False importance

clamation of neu.

In the case of the United States some special importance appears to be ascribed to the fact that the transport of contraband of ascribed to the pro- War and breaches of blockade had been denounced as unlawful in that proclamation of neutrality to which the American government takes so much exception. It can scarcely be necessary to expose so transparent an error. The proclamation of neu

trality.

the vessels loaded with them were chartered by confederate agents. Isaac, Campbell & Co. contracted to deliver the arms sent by the Columbia and Sylph to the Confederate States, and tried to get off their bargain. (Appendix to case of the United States, vol. vi, p. 88.) Part of the Herald again is mentioned as reserved for private cargo, p. 95.

The information possessed by the United States Government and communicated to Her Majesty's government at the time, is given in vol. i of the Appendix to the case of the United States. Mr. Adams in December, 1862, communicated a letter from Mr. Morse, United States consul in London, giving an account of the system pursued. He says that, during the earlier part of the war, the trade was carried on by agents, but at that time by British merchants on their own account, in steamers chartered by them or freighted by private speculators." (Vol. i, p. 731.)