It so happened that there was at Charleston, at that time, a wellestablished commercial house, doing business under the The firm of Fraser, name of John Fraser & Co. The head of this firm was Trenholm & Co. George A. Trenholm, of Charleston. Another prominent member [220] *was Charles K. Prioleau, also a citizen of the United States. Before or about the time the insurrection broke out, and, as the United States believe, in anticipation of it, this house established a branch in Liverpool, under the name of Fraser, Trenholm & Co. Prioleau was dispatched thither to take charge of the Liverpool business, and became, for purposes that may easily be imagined, a naturalized British subject. George A. Trenholm remained in Charleston, and, in due course of time, became the Secretary of the insurgent Treasury, and a member of the so-called Government at Richmond. An arrangement was made by which the cotton of the insurgent authorities was to be sent to Fraser, Trenholm & Co., to be drawn against by the purchasing agents of the insurgents.1 The first amount (five hundred thousand dollars) was placed to their credit in Liverpool, somewhere about the month of May, or early in June, 1861; and, under the name of "depositories," Fraser, Trenholm & Co. re mained a branch of the Treasury of the insurgent Government. [221] *Thus there was early established in Great Britain a branch of the War Department of the insurgents, a branch of their Navy Department, and a branch of their Treasury, each with almost plenary powers. These things were done openly and notoriously. The person's and places of business of these several agents were well known to the communities in which they lived, and must have been familiar to the British officials. If there was any pretense of concealment in the outset it was soon abandoned. On the 22d of July, 1861, Huse writes to the officer in charge of the insurgent Ordnance Department, complaining of the activity of the agents of the United States in watching and thwarting his movements. "It is difficult," he says, "for a stranger to keep his actions secret when spies are on his path." He says that he shall have ready, by the 1st of August, some of the goods that had been ordered on the 17th of the previous April, and more by the 1st of October, and that "the shipping of the articles will be left in the hands of the Navy Department." On the 18th of September, the steamer "Bermuda" ran the blockade, and arrived at Savannah with "arms and munitions on board."3 [222] She came * from Fraser, Trenholm & Co., consigned to John Fraser 4 112 & Co. Information of the character and purposes of this steamer, and of the nature of her freight, had been given to Lord Russell by Mr. Adams on the 15th of the previous August, and he had declined to "interfere with the clearance or sailing of the vessel." On the fourth day after her arrival at Savannah her consignees offered to charter her to the insurgents, and the offer was accepted.' 196 1" Of twenty steamers, which were said to have been kept plying in 1863 between Nassau and two of the blockaded ports, seven belonged to a mercantile firm at Charleston, who had a branch house at Liverpool, and through whom the Confederate Govcrument transacted its business in England." "The name of the Charleston firm was John Fraser & Co.; that of the Liverpool house, Fraser, Trenholm & Co. Of the five members of the house, four, I believe, were South Carolinians, and one a British subject."-Bernard's Neutrality of Great Britain, page 289 and note. The British subject referred to by Mr. Bernard was Prioleau, naturalized for the purpose. * Huse to Gorgas, Vol. VI, page 33. 3 Lawton to Cooper, 20th September, 1861, Vol. VI, page 36. + Adams to Russell, Vol. I, page 760. 5 Russell to Adams, Vol. I, page 762. Benjamin to John Fraser & Co., 27th September, 1861, Vol. VI, page 37. The experience of the "Bermuda," or the difficulties which she encountered in running the blockade, seem to have induced the insurgent authorities to think that it would be well to have some surer way for receiving the purchases made by their agents in Liverpool. The stringency of the blockade established by the United States, and the nature of the coast that was blockaded, made it necessary to have a set of agents in the West Indies also. The coast of the United States, from Chesapeake Bay to the Mexican Character of the frontier, is low, with shoaly water extending out for some disblockaded coast. tance to sea. A range of islands lies off the coast, from Florida to Charleston, and islands also lie off Wilmington and *the coast to the north of it. The waters within these islands are [223] shallow, affording an inland navigation for vessels of light draught. The passages to the sea between the islands are generally of the same character. The outlying frontier of islands, or of shallow waters, is broken at Wilmington, at Charleston, and at Savannah. At these three points large steamers can approach and leave the coast; but these points were at that time guarded by the blockading vessels of the United States, so as to make the approach difficult. Vessels not of light draught and great speed were almost certain of capture; while vessels of such draught and speed could not carry both coal and a cargo across the Atlantic. or To avoid this risk 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,1 which could carry coal enough for the short passage into the waters that connected with either Charleston, Savannah, o Wilmington. The first order from Richmond that is known to have been given for such a shipment is dated the 22d of July, 1861.2 The attention of the Tribunal of Arbitration is *invited to the [224] accompanying map, showing how admirably the tion of Nassau and British ports of Nassau and Bermuda were adapted for the illegal purposes for which it was proposed to use them. Nassau was surrounded by a cluster of British islands, so that even a slow-sailing blockade-runner, pressed by a pursuing man-of-war, could in a short time reach the protection of British waters. Bermuda had the advantage of being more directly off the ports of Wilmington and Charleston. Neither Nassau nor Bermuda, however, was more than two days distant from the blockaded ports for the swift steamers that were employed in the service.3 Geographical situa Bermuda. 3 On the 4th of October, 1861, Mr. Benjamin, writing from Richmond, and signing himself as "Acting Secretary of War," addressed Mr. Mallory as "Secretary of the Navy," and asked if he could " spare an officer from his department to proceed to Havana and take charge of funds there, to be used by agents of this department in the purchase of smallarms and ammunition."4 *Mr. Lewis Heyliger, of New Orleans, was apparently desig- [225] nated for this purpose. On the 30th of November, 1861, he takes 1 Huse to Gorgas, 15th March, 1862, Vol. VI, page 69. 2 Walker to Huse and Anderson, Vol. VI, page 31. 3" The British Island of New Providence, in the Bahamas, became the favorite resort of ships employed in these enterprises. Situated in close neighborhood to the coast of Florida, and within three days' sail of Charleston, it offered singular facilities to the blockade-runners. The harbor of Nassau, usually quiet and almost empty, was soon thronged with shipping of all kinds; and its wharves and warehouses became an entrepot for cargoes brought thither from different quarters. Agents of the Confederate Government resided there, and were busily employed in assisting and developing the traffic.-Bernard's Neutrality of Great Britain, page 299. 4 Benjamin to Mallory, Vol. VI, page 39. a letter from Mr. Benjamin to Mr. Helm, the agent of the insurgents at Cardenas, in Cuba, saying that he is "an active and accomplished business man ;" that he is to aid Helm, "whether in the disposal of the cotton or the arrangements for the shipments;" and that "the articles first in importance, and to be sent in preference to everything else, are small-arms and cannon powder. "1 Heyliger went to Cuba, and in a few days after was transferred to Nassau to take charge of "the British Steamer Gladiator, Commander G. G. Bird, with a cargo for the Confederate States." He remained there as the agent, treasury depositary, and representative of the insurgents during the rebellion. What was done at The Gladiator was a steamer bought and fitted out in England under an agreement made at London, October 24, 1861, between Mr. T. O. Stock, a subject of Her Majesty, and Mr. Caleb Nassau. Huse.3 The evident object of this agreement was to enable her to sail under the British flag, although owned by the insurgents. She was to take out five hundred tons of goods, and was "to proceed to a port [226] in the *Confederate States or an intermediate port." No concealment of her object or destination was made in England. She arrived at Nassau from London on the 9th of December, 1861.5 The day after she arrived there a United States vessel of war came into the port. Heyliger, finding that this vessel would not leave, and that therefore the Gladiator, which was slower than the man-of-war, could not leave with safety, represented to the British authorities that such a course "would tend to cut off the trade" which the insurgents desired to divert to Nassau, and that he thought "some step should be adopted to remind him [the commander] that he is infringing on the laws of hospitality." He reported this to Richmond and added, "I have reason to know that these arguments have not been without their effect, inasmuch as the matter was incidentally discussed at a meeting of the Council the other day; and I really believe that in the course of a week or two some action will be taken to impress the captain of the enemy's vessel with the conviction that his absence will be preferable to his company." "We have succeeded," he continued, "in obtaining a very important modification of the existing laws, viz: the privilege of [227] breaking bulk and transshipment." *That modification was all that the insurgents wanted. That privilege converted the port of Nassau into an insurgent port, which could not be blockaded by the naval forces of the United States. Further stay of the United States vessels of war was therefore useless. The United States ask the Tribunal to find that this act, being a permission from the British authorities at Nassau, enabling a vessel chartered by the insurgents, and freighted with articles contraband of war, to diverge from its voyage, and to transship its cargo in a British port, when not made necessary by distress, was a violation 'of the duties of a neutral. On the 27th of January, 1862, Maffitt, an officer in the service of the insurgents, (the same who afterward commanded the Florida,) was sent to take command of the Gladiator as an insurgent vessel, (although under British colors,) and on the 30th of January, 1862, a portion of the 1 Benjamin to Helm, Vol. VI, page 43. 2 Helm to Heyliger, 20th December, 1861, Vol. VI, page 51. 3 See the agreement, Vol. VI, page 42. 4 Adams to Seward, Vol. I, page 769. 7 5 Whiting to Seward, 10th December, 1861, Vol. VI, page 44. 7 Benjamin to Maffitt, 27th January, 1862, Vol. VI, page 57. Gladiator's valuable cargo was transshipped to the "Kate," a small steamer sailing under British colors, and eventually all went in the same way. In the dispatch announcing the transfer to the "Kate," Heyliger said: "You may readily imagine how intensely disgusted the Yankees are at this partiality, as they style it. It is called another flagrant violation of neutral rights. * My relations with *the authorities here are of the most friendly character. I receive [228] many marked attentions, which I value as going to show the increased cordiality of feeling toward the Confederate Government." The United States are not able to say what "effect" the colonial authorities of Nassau induced Heyliger to think would come from his "arguments." They point out, however, to the Tribunal of Arbitration the fact, that in about one month after that time, viz, on the 31st day of January, 1862, Earl Russell informed the Lords Commissioners of the Admiralty that " during the continuance of the present hostilities * no ship of war or privateer belonging to either of the belligerents shall be permitted to enter or remain in the port of Nassau, or in any other port, roadstead, or waters of the Bahama Islands, except by special leave of the Lieutenant Governor of the Bahama Islands, or in case of stress of weather."2 * * * An order more unfriendly to the United States, more directly in the interest of the insurgents, could not have been made, even if founded upon Heyliger's friendly intimations to the Colonial Authorities. Under the construction practically put upon it, the vessels of war of the United States were excluded from this harbor for any *purpose, [229] while it was open for free ingress and egress to vessels of the insurgents, purchased, or built, and owned by the authorities at Richmond, bringing their cotton to be transshipped in British bottoms to Fraser, Trenholm & Co., in Liverpool, and taking on board the cargoes of arms and munitions of war which had been dispatched thither from Liverpool. The Tribunal of Arbitration will not fail to observe that this was no British commerce which had existed before the war, and which the neutral might claim the right to continue. It was to a large extent the commerce of the authorities at Richmond-carried on in their own vessels, and for their own benefit-and consisted of the export of cotton from the South on account of the so-called Government, and the return of arms, munitions of war, and quartermaster stores from Great Britain, for the purpose of destroying the United States-a nation with which Great Britain was at peace. The United States confidently insist that Great Britain, by shielding and encouraging such a commerce, violated its duties as a neutral toward the United States. The United States denied permission to It is a most unpleasant duty of the United States to call the attention of the Tribunal of Arbitration to the fact that, at the deposit on asi to very time of this affair of the Gladiator, another matter was going *on in the same port, which furnished [230] a commentary on the ideas of neutrality entertained by the Colonial Authorities. san. The day after the arrival of that vessel, the United States Consul at Nassau wrote to his Government thus: "The coal which is being landed here for Government has caused great excitement among the Nassau masses, and a deputation visited Governor Nesbitt yesterday to remonstrate against its being landed." The remonstrances were successful. Heyliger to Benjamin, 30th January, 1862, Vol. VI, page 48. 2 Vol. VI, page 175. Whiting to Seward, Vol. VI, page 44; Vol. I, page 696. 27 1 On the same day the Colonial Secretary wrote to the Consul that the coal could be admitted only "on the express condition and understanding that such coal should not afterward be reshipped or otherwise used in any manner which may, in the opinion of the law authorities of the Colony, involve a breach of Her Majesty's Proclamation of the 13th of May last, and particularly that such coal shall not be used for the purpose of coaling, or affording facilities for coaling, at this port, the vessels of war of the United States Navy, during the continuance of the hostilities." The sincerity of the desire of the Colonial Authorities to obey Her Majesty's Proclamation may be estimated from the following facts: [231] 1. That that Proclamation inhibited Her Majesty's *subjects from "breaking, or endeavoring to break, any blockade lawfully or actually established by or on behalf of either of the said contending parties; yet the Colonial Authorities finding that the Gladiator, which had been chartered to break a blockade established by the United States, would probably be intercepted by the vessels of the United States, permitted the cargo to be transshipped into smaller steamers, with the avowed purpose of breaking that blockade; 2. That Her Majesty's Proclamation also inhibited British subjects from "carrying military stores or materials, or any article or articles considered and deemed to be contraband of war, according to the law or modern usage of nations, for the use or service of either of the said contending parties;" yet the Colonial Authorities welcomed the Gladiator, sailing under the British flag with contraband of war in violation of the Proclamation, and permitted her to shift her illegal cargo into other vessels, in like manner using the British flag for the purpose of transporting it to and on account of a belligerent. 3. That Her Majesty's Proclamation made no mention of coal, and that coal is not regarded by Her Majesty's Government as an article necessarily contraband of war;33 yet the [232] Government of the *United States was forbidden by the same authorities, in the same week, to deposit its coal at Nassau, ex cept upon the condition that it would not use it. The United States have no reason to suppose that either of these partial decisions met with the disapproval of Her Majesty's Government. On the contrary, Earl Russell, on the 8th of January, 1862, in reply to a complaint from Mr. Adams that the port of Nassau Complaints to Earl was used as a depot of supplies by the insurgents, officially Russell and his reply. informed that gentleman that he had received "a report from the receiver general of the port of Nassau stating that no warlike stores have been received at that port, either from Great Britain or elsewhere, and that no munitions of war have been shipped from thence to the Confederate States."4 The United States with confidence assert, in view of what has been already shown, that, had Earl Russell seriously inquired into the complaints of Mr. Adams, a state of facts would have been disclosed entirely at variance with this report-one which should have impelled Her Majesty's Government to suppress what was going on at Nassau. The foregoing facts were all within the reach of Her Majesty's Government, although at that time not within the reach of the [233] Government of the United States. The failure to discover them, after Mr. Adams had called attention to them, was a neglect of the diligence in the preservation of its neutrality, which was "due," Thompson to Whiting, Vol. VI, page 45. 2 Vol. I, page 44. 3 Lord Granville to Count Bernstorff, 15th September, 1870. |