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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.

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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.

The Gladiator was a steamer bought and fitted out in England under an agreement made at London, October 24, 1861, between

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What was done at

Mr. T. O. Stock, a subject of Her Majesty, and Mr. Caleb Nassau. Huse. 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.

5 Whiting to Seward, 10th December, 1861, Vol. VI, page 44.
Heyliger to Benjamin, 27th December, 1861, Vol. VI, page 55.
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."

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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."

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 coal at Nas. 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.

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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.

1 Heyliger to Benjamin, 30th January, 1862, Vol. VI, page 48.

2 Vol. VI, page 175.

3 Whiting to Seward, Vol. VI, page 44; Vol. I, page 696.

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." 1

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 natious, 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;3 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 Govern

ment.

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.

Vol. I, page 44.

3 Lord Granville to Count Bernstorff, 15th September, 1870.
Russell to Adams, Vol. VI, page 57.

from Great Britain to the United States; and it taints all the subsequent conduct of Great Britain toward the United States during the struggle.

On the 31st day of the same month, instructions issued from the Foreign Office, prescribing the amount of hospitalities to be extended to the belligerents.

Instructions as to

These instructions have already been referred to. They provided that: 1. No ship of war or privateer of either belligerent was to hospitalities to the be permitted to enter any port, roadstead, or water in the belligerents. Baliamas except by special leave of the Lieutenant Governor, or in case of stress of weather; and in case such permission should be given, the vessel was nevertheless to be required to go to sea as soon as possible, and with no supplies except such as inight be necessary for immediate use. 2. No ship of war or privateer of either belligerent was to be permitted to use British ports or waters as a station or place of resort for any warlike purpose, or for the purpose of obtaining any facilities of warlike equipment. 3. Such ships or privateers entering British waters were to be required to depart within twenty-four hours after entrance, except in case of stress of weather, or re- [234] quiring provisions or things for the crew or repairs; in which cases they were to go to sea as soon as possible after the expiration of the twenty-four hours, taking only the supplies necessary for immediate use; they were not to remain in port more than twenty-four hours after the completion of necessary repairs. 4. Supplies to such ships or privateers were to be limited to what might be necessary for the subsistence of the crew, and to enough coal to take the vessel to the nearest port of its own country or to some nearer destination; and a vessel that had been supplied with coal in British waters could not be again supplied with it within British jurisdiction, until after the expiration of three months from the date of the last supply taken from a British port.1

Lord Palmerston's threats.

Almost simultaneously with the announcement by Earl Russell of an imaginary condition of affairs at Nassau, Lord Palmerston stated to Mr. Adams that "it would not do for the United States ships of war to harass British commerce on the high seas, under pretense of preventing the Confederates from receiving things that are contraband of war." Thus, Great Britain, in the month of January, 1862, through Earl Russell and Lord Palmerston, and the instructions to the Admiralty ex*cluding United States vessels of [235] war from the port of Nassau, except by permission of the Governor, virtually said to the United States: "You complain that the insurgents make illegal use of Nassau, to your injury, in violation of the Queen's Proclamation, and of our duties as a neutral. We deny the fact; at the same time we exclude your vessels from that port, the place where you can best establish the truth of your allegations, and we warn you not to attempt to prove them by examining too closely, on the high seas, the vessels which sail under the British flag."

Having now shown how the operations of the insurgents began at Nassau, and how they were facilitated by the co-operation and complicity of the local authorities, it will not be necessary to trespass on the patience of the Tribunal of Arbitration by a similarly minute examination of the doings at that port for the rest of the year 1862. Other vessels, freighted with contraband of war, followed the Gladiator. The Economist and the Southwick came closely upon her track, and Heyliger was 2 Earl Russell to Lord Lyons, Vol. II, page 591.

Vol. IV, page 175.

directed to do with their cargoes as he had done with the Gladiator's.1 Huse was also instructed to continue his purchases, and to send to the

West India Islands, where the steamers could break bulk.2 Huse [236] called the attention of his principals to the efficiency of the blockade; said that the vessels which brought the cargoes across the Atlantic could not enter the blockaded ports; urged them to continue the system of transshipment; and complained of the activity of the United States officials.3 It was considered important to have a naval officer in charge of the transshipments, and Maffitt was detailed for the purpose. He arrived there on or about the 21st of May, and reported that he had assumed command of the Manassas, [Florida;] which had arrived there from Liverpool on the 28th day of April; said that his "ambition was great;" and promised to give "annoyance to the enemy." In May the supply of coal for the insurgent vessels fell short, and Heyliger went to Bermuda to buy some. The steps taken about this time for the detention of the Florida will be alluded to later.

at Nassau for British

The cargoes of contraband of war that were thus transshipped were entered on the manifests as for St. John's, New Brunswick. Contraband of war It could not but have been well known at the custom-house fraudulently cleared that this was a fraud; yet the customs authorities winked ports. at the fraud, and gave the vessels clearances as British vessels sailing for British ports.7

[237] *Heyliger continued to report the transshipment and forwarding of these arms and military supplies. He noticed the arrival and departure of the "Kate," and other vessels, on account of the insurgent authorities, and on the 26th of July, 1862, he reported that the "Steamer Scotia, a private venture,” was about to leave with a large supply of rifles, powder, and other ammunition. He did not report any other "private venture," so far as known to the United States.

Resume

for the

The operations of Huse during this year, and his shipments through Heyliger, are detailed as follows in a letter to Colonel Gorgas, insurgent Chief of Ordnance, to the insurgent Secre- year 1862. tary of War, dated December 3, 1862.9"The purchase of ordnance and ordnance stores in foreign markets on Government account are made by Major Caleb Huse, C. S. Artillery, who resides in London, and whose address is No. 38 Clarendon Road, Notting Hill, London, West. Major Huse was detailed for this duty in April, 1861. He has purchased arms to the amount of 157,000, |stands?] and large quantities of gunpowder, some artillery, infantry equipments, harness, swords, per

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cussion caps, saltpeter, lead, &c. In addition to ordnance stores, [238] using a rare forecast, he has purchased and *shipped large supplies of clothing, blankets, cloth, and shoes for the quartermaster's department, without specific orders to do so. To pay for these purchases, funds have been from time to time sent to him by the Treasury Department, on requisition from the War Department, amounting in the aggregate to $3,095,139 18. These have been wholly inadequate to his wants, and have fallen far short of our requisitions. He was consequently in debt at latest advices to the Benjamin to Heyliger, 22d March, 1862, Vol. VI, page 71. 2 Benjamin to Huse, 10th March, 1862, Vol. VI, page 68. 3 Huse to Gorgas, 15th March, 1862, Vol. VI, page 69. 4 Randolph to Heyliger, 11th April, 1862, Vol. VI, page 72. 6 Maflitt to Randolph, 21st May, 1862, Vol. VI, page 83. Heyliger to Randolph, 28th June, 1862, Vol. VI, page 87. 7 Hawley to Seward, 27th June, 1863, Vol. VI, page 127.

8 Heyliger to Randolph, Vol. VI, page 92.

9

Gorgas to Seddon, Vol. VI, page 104.

S. Ex. 31-7

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