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No. 10.

Mr. Sprague to Captain Fretlmg.

CONSULATE OP THB U.N1TED STATES,

Gibraltar, December 10, 1862.

Sir: I have the honor to acknowledge the receipt of your despatch of to-day's date, and, in reply, I beg to state that I am not instructed by thif government of the United States to enter into the question proposed in your said despatch, as to which I may, however, observe that there can be Do doubt that the sale of the steamer Sumter is in fact a sale for the purpose of avoiding a capture by the cruisers of the United States. Such sale for such purpose within the jurisdiction of a neutral state is, I apprehend, illegal and opposed to t he strict law of neutrality, if sanctioned by the government of such neutral state.

In conformity with the touor of my instructions contained in the official telegram of yesterday, of which I have bad the honor to remit a copy to his excellency the governor, I have only to protest in the name of my government against any such sale in this port of the said steamer Sumter, as is proposed, and to point out the consequences following upon such sale. It only remains for me to reiterate that protest, and respectfully to request the attention of his excellency the governor thereto.

I have the honor to be, sir, your obedient servant,

HORATIO J. SPRAGUE,
, United State* Contul.

Captain S. Freeldjq, R. A ,

Colonial Secretary, &(c., &(c.,&(c., Gibraltar.

No. 11.

Captain Freeling to Mr. Sprague.

Secretary's Office, December 10,18G2.

Sir: I am directed by the governor to acknowledge the receipt of your letter of this day's date, and, in reply, to remark that your protest of yesterday wag made on the ground that the Sumter was a prize made from the federals by the confederates, and therefore truly the property of the former.

Now, however, you state a different ground, viz: that the sale is for the purpose of avoiding a capture by the cruisers of th« United States, and therefore illegal.

The governor wishes to know upon which of these two grounds you now make your protest, as your last seems somewhat incompatible with the first which he received from you yesterday.

I have the honor to be,&c,

S. FREELING,

* Colonial Secretary.

Horatio J. SrRAODE, Esq ,

United States Consul, Gibraltar.

No. 12.

Mr. Sprague to Ciptain Freeling.

Consulate Of The United States Of America,

Gibraltar, December 11, 1862.

Sir: I beg to acknowledge the receipt of your letter of the 10th instant, in reply to my communication of the same date, on the subject of the proposed sale of the steamer Sumter.

The telegram from his excellency the minister plenipotentiary of the United States bt the court of Madiid. of which I had the honor to forward a copy to his excellency the governor on the 9th instant, contains the instructions upon which I have acted in protesting against the above sule. as I necessarily had to consider it my duty to do so.

I am, however, quite unable to 6ee the incompatibility of what was stated by me in my letter of yesterday, with the grouud set forth for the protest iu question, as it was 6imp]y put forward as an observation, which appeared to me to bear upon the question, and not to be inconsistent with the views set forth in the telegram. I have the honor to be, sir, vour obedient servant,

HORATIO J. SPRAGUE,

United States Consul.

Captain S. Frekukg, R. A.,

Colonial Secretary, Gibraltar.

No. 13.

[Official notice in the Gibraltar Chronicle of December 10, 1862. J
NOTICE.

Secretary's Office,

Gibraltar, December 10,1862. His excellency the Govfrxor has received a protest from the United States consul in this city against the sale of the confederate steamer Sumter, on the ground, as stated by him, of her being a prize. No proof of this being the case has been furnished, but the Governor deems it right to notify this protest to the public. By command:

S. FREELING, Colonial Secretary.

No. 14.

[Official notice from the Gibraltar Chronicle of December 11,1862.]

NOTICE.

Secretary's Office,

Gibraltar, December 11, 1862.

With reference to the notice in yesterday's Chronicle, his excellency the Governor has received the following statement from the officer commanding the Sumter:

"The Sumter was Bought and Paid for at New Orleans by the confederate government; that the owners of the then steamer Habana (the Sumter) agreed to the price and terms of sale; and that she was purchased before any vessels had been seized in New Orleans by the confederate government." By command:

S. FREELING, Colonial Secretary.

No. 15.

The Gibraltar Chronicle of the 11th December has a supplement containing the advertisement of the sale of the Sumter, as heretofore copied, with the addition that "The above sale is postponed until Friday, the 19th instant."

No. 17.

Mr. Adams to Mr. Sprague.

Legation Of The United States,

London, December 17,1862.

Sir: I have to acknowledge the reception of several telegrams, together with letters, »u<i especially that of the 6th of December, all relating to the project of sale of the steamer bumter in the port of Gibraltar.

I have-not written in reply to these communications, for the reason that I could not perceive any action yet tak^n in the premises that can be made the basis of agitation here, lhe a<lvertisement put into the columns of the Gibraltar as well as the Liverpool newspapers is wholly devoid of a responsible character It is clear that no owner has yet appeared vested with sufficient power to act at all in the premises. Under such circutnstances I cannot pee the force of a remonstrance to the British government which in bused upon no act to be complaint*! of beyond a newspaper advertisement, and which suggest* no practical remedy. In this sense your lett -r to Commander Bryson appeirs to me to have been written with great judgment. It is scarcely to be presumed that her Majesty's government is not fully conscious of the conditions under which the Sumter enjoys its protection. It is as a vessel of a recognized belligerent that she obtained the privilege of remaining where she is until now. Any change in her chancter cannot lie effected without the knowledge and consent of the authorities at Gibraltar You will therefore, first of all, confine yourself to the simple duty of watching all the proceedings. Iu case of any attempt at a merely fraudulent transfer for the sake of escaping harmless from our cruisers and resuming her former career, you will call their attention to the fact, deny the validity of any such proceeding, and invoke their interference. Should it appear to you, on the other hand, that the purchasing parties arc foreigners acting in good faith for the conversion of the vessel to some legitimate and peaceful trade, I see no better way of getting rid of a burdensome labor of vigilince upon a property of little value than to acquiesce in it. On the other hand, should you have reason to suspect a spurious transaction for the sole purpose of extricating the vessel from its present position in order to replace it in a more effective attitude of hostility to the United States, you will do well to remonstrate with the local authorities, and to send a copy of your remonstrance, together with the evidence on which you rest it, to this legation.

Under the present aspect of the case I do not. feel as if I had proof of ill intention in my hands sufficient to enable me to give to the commanders of our vcssels-of-war any specific instructions. So much must depend on the shape which the matter may take, that I cau only say to you this: that only in the contingency of positive fraud above spoken of, clearly shown, as well as of refusal of the British authorities to interfere, so far as todotain the vessel for time enough to make a representation here, should I think it advisable for our own vessels to interpose. And even then, should she sailjmder a British flag, it can ouly be done on the high seas, and under a preliminary search to investigate her true character. Should the papers be of such a kind as to subject her to the suspicion of being yet rebel property, with only a fraudulent cover, she might then be taken and sent home for adjudication in the United States court.

I have the honor to be, sir, your obedient servant,

CHARLES FRANCIS ADAMS.

Hobatio J. Spragob, Esq.,

United Statu Conml, Gibraltar.

No. 18.

Dbcsmbee 19, 1862.

Sumter sold this day by public auction for nineteen thousand five hundred dollars. Purchaser, an English engine jr, arrived yesterday from Southampton.

SPRAGUE, Gibraltar.

Mr. Adams, American Minister, London.

No. 19.

Ban Boqus, December 23,1862—2.45 p. m.

Sumter flying British flag. Is loading. Probably be conveyed (convoyed f) to sea if necessary.

SPRAGUE.

Adams, American M%nittsr, London.

Mr. Adams to Mr. Seward.

No. 281.] Legation Of Tub United States,

London, December 25, J8l>2. Sir: I transmit herewith a copy of Lord Russell's note to uie of the 19th instant, in reply to my representation, dated the 20th of November, in the case of the "290." The material portion, consisting of the answer to the two demand* which I was instructed to make, is of course withdrawn at once from my province, and awaits the decision of the President. But upon the collateral topics introduced by his lordship into the discussion, I am preparing a note explaining and re-enforcing my view, which cannot be completed in season to send by the present opportunity. The pressure on the force of the legation, as well as on my own time, during this week, renders it impossible to get the papers ready.

I have the honor to be, sir, your obedient servant,

CHARLES FRANCIS ADAMS.

Hon. William H. Seward,

Secretary of State, Washington, D. C.

Earl Russell to Mr. Adams.

Foreign Office, December 19, 1862. Sir: I have the honor to acknowledge the receipt of your letter of the 20th ultimo, in which, under instructions from your government, you submit, for the consideration of her Majesty's government, papers confirmiug the truth of the allegations which you made to me some time ago as to the intention with which the vessel formerly known as the "290," but now called the Alabama, was fitted out at Liverpool; and you observe that those allegations are now fully proved by the hostile proceedings of that vessel since she left the United Kingdom.

You pass in review the history of the Alabama, both before and since she sailed from Liverpool, and you state that the facts being admitted, they present to the consideration of all civilized countries a series of novel questions of the gravest character. You say that it is obviously impossible to reconcile the toleration by any one nation of similar undertakings in its own ports to the injury of another nation with which it is at peace with any known theory of moral or political obligation; and you add, with some further observations in the same sense, that the reciprocation of such practices could only in the end lead to the utter subversion of all security to private property upon the ocean.

You, however, say that it is by no means your desire to imply an intention on the part of her Majesty's government to countenance any such idea. You admit that you are aware of the measures adopted at a very early date with reference to the Alabama, and of the orders subsequently issued to detain that vessel as soon as legal opinions were obtained—orders which it was not possible for the authorities to execute, because, at the very moment when they were issued, the Alabama made her escape from Liverpool.

You finally state that you have been instructed to solicit redress for the national and private injuries sustained by the proceedings of this vessel, as well as a more effective prevention of any repetition of them in British ports hereafter.

Before I proceed to examine the justice of these demands, it will be convenient that I should advert to the circumstances to which you call my attention as having occurred soon after the breaking out of the French revolutionary war. You observe that on that occasion remonstrances were addressed by the British government to that of the United States respecting the fitting out of privateers in United States ports with an intent to prey upon British commerce, and that the demands of the British government were admitted by the United States, and were formally recognized in the 7th article of the treaty between the two countries of the 19th of November, 1794.

But an examination of the actual occurrences, and of the history of that remarkable period, presents a state of facts materially different from those relating to the Alabama.

. Those facts may be shortly stated as follows:

The revolutionary government of France had openly avowed its determination to disregard all the principles of international law which had been acknowledged by civilized states, and that government proceeded to put in force its determination by claiming to equip, as a matter of right, and by actually equipping privateers in the neutral ports of the United States, by sending those privateers forth from those ports to prey upon British commerce, by bringing prizes into the neutral ports, and by there going through some scant forms of adjudication.

This was the avowed system upon which the agents of belligerent France claimed to act, and upon which, owing to the temporary superiority of her naval force, they did, for a short period, act in the neutral ports and waters of the United States, notwithstanding the remonstrances of the United States government.

It was these several facts, namely, the open and deliberate equipment of' privateers in American ports by the French, the capture by those privateers of British vessels in United States waters, and the bringing them as prizes into United States ports, which formed collectively the basis of the demands made by the British plenipotentiaries. Those demands had reference not to the accidental evasion of a municipal law of the United States by a particular ship, but to a systematic disregard of international law upon some of the most important points of neutral obligation.

This is apparent from the whole correspondence of the British government with the government of the United States, and from the replies of Mr. Jefferson to Mr. Hammond, the British minister. Consequently, neither the complaints of the British government in 1793 nor the treaty of 1794 have any bearing upon the question now under discussion.

With regard to the claim for compensation now put forward by the United States government, it is, I regret to say, notorious that the Queen's proclamation of the 13th of May, 1861, enjoining neutrality in the unfortunate civil contest in North America, has, in several instances, been practically set at naught by parties in this country. On the one hand, vast supplies of arms and warlike stores have been purchased in this country, and have been shipped from British ports to New York for the use of the United States government; on the other hand, munitions of war have found their way from this country to ports in possession of the government of the so-styled Confederate States.

These evasions of the neutrality prescribed by the Queen's proclamation have caused her Majesty's government much concern, but it is not difficult to account for what has occurred.

Such shipments as I have spoken of may be effected without any breach of municipal law; and commercial enterprise in this country, as elsewhere, is always ready to embark in speculations offering a prospect of success, or in which, at all events, the promise of gain is supposed to be greater thau the risk of loss.

British subjects who have engaged in such enterprises have been left by her Majesty's government to abide by the penalty attaching to their disregard of the Queen's proclamation of neutrality, that penalty being, by international law, the condemnation as prize of war of vessel and cargo if captured by a belligerent cruiser, and duly condemned in a competent prize court.

Her Majesty's government have nevertheless availed themselves of every fitting opportunity to discourage these enterprises, and I have the honor to refer you, in illustration of the truth of this, to the answer which I caused to be returned on the 6th of July to a memorial from British merchants and shipowners at Liverpool, and of which I furnished you confidentially with a copy in my note of the 4th of August.

It is right, however, to observe that the party which has profited by far the most by these unjustifiable practices has been the government of the United

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