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The position assumed by the United States government is this, that it is entitled to prohibit, or place under restrictions equivalent to prohibition, the exportation from New York to Nassau of articles which are neither in their own nature contraband of war nor made contraband for the purpose of the present hostilities, by any general and public declaration of that government, with a view thereby to prevent British subjects, resident at Nassau, or making that colony a depot for purposes of commerce, from trading in those articles with the so-styled Confederate States. The inference that the articles, though having really and bona file a British destination, are likely to be afterwards used for the purposes of the trade between Nassau and the so-sty led Confederate States, is drawn, as explained by Collector Barney, from the magnitude of the consignments, from a comparison between the amount of the trade in similar articles carried on between New York and Nassau in former times and the amount during the present war, from the notorious existence of an extensive trade during the war between the so-styled Confederate States and Nassau, and from the known or reputed connexion of certain merchants or mercantile houses in England and at Nassau with that trade. The possibility or probability being thus arrived at that such a use may be made of some of these articles after their arrival at Nassau, it is concluded that the United States government are entitled to stop them at New York. From this conclusion her Majesty's government dissent.

The trade between Nassau and the so-styled Confederate States is subject to those limitations which the law of nations has established as legitimate as the trade between Great Britain and any other part of the world. Even if the government of the United States were in a condition to ask other nations to assume (which is very far indeed from being the case) that every port of the coasts of the so-styled Confederate States is effectively blockaded, British subjects at Nassau would still have a perfect right to sell goods to all such shippers, whether of the so-styled Confederate States or others, as might be able to resort to Nassau for the purpose of buying them there; and the dealers at Nassau, or their principals in Europe, in making such sales are not chargeable with any, the slightest, violation of neutrality. If contraband articles are shipped for any port of the so-styled Confederate States they are liable to seizure according to the law of nations; if articles not contraband are shipped for any blockaded place they also may be seized upon the high seas according to the law of nations. But the liability of the trade between Nassau and the so-styled Confederate States, or any part of it, to be intercepted upon the high seas by a maritime capture, according to the rules of international law, does not render the dealing in the articles which supply that trade, by British subjects within British jurisdiction, less lawful and innocent than if there were no such liability; much less does it justify a belligerent government in superadding to the known belligerent rights of blockade and of inaritime capture an embargo within its own ports upon any part of the trade of a neutral nation with one of its colonial possessions, merely because this may possibly tend to cripple or embarrass another lawful trade between that country and the country of the other belligerent.

The doctrine of the United States on this subject has always been the same as that of Great Britain, namely, that neutral governments are under no obligation to stop a contraband trade between their subjects and a belligerent power, and that the only penalty of such a trade is the liability of contraband shipments to be captured on the high seas by the other belligerent.

The false assumptions which seen to pervade the views of the United States government with respect to Nassau are, that it is a violation of neutrality for a British colony to carry on any active trade with the so-styled Confederate States during the existence of the blockade, and that, in aid of the inefficiency of the

blockading force, an embargo may lawfully be placed on a particular trade of British commerce at New York.

You will furnish Mr. Seward with a copy of this despatch.

I am, with great truth, &c., &c.,

Hon. WILLIAM STUART, &c., &c., &x.

RUSSELL.

FRANCE.

No. 91.]

Mr. Dayton to Mr. Seward.

[Extract.]

PARIS, December 6, 1861. SIR: I felt it a duty to call on Mr. Thouvenel to-day, in reference to the views and position of France, as respects our unfortunate difficulty with England. I had understood that the French government had expressed its views to Lord Cowley, and thought, therefore, that it would have no objections to doing the same to me. Mr. Thouvenel said at once that the taking of Messrs. Slidell and Mason off a British ship was the affair of England, not theirs, but he had no hesitation in saying that it was the opinion of the French government that the act was a clear breach of international law; that the French government could not permit the application of such a principle to their ships. He added that all the foreign maritime powers with which he had conferred agreed that the act was a violation of public law. He said, furthermore, that he had at once communicated these views to Mr. Mercier. In view of what had been the past conduct of the British and French governments in our affairs, and their joint action in the affairs of other nations, I thought it best to ask bluntly whether, in the event of a war with England, we were to expect France to go beyond the expression of her opinion? Whether she would or would not be a neutral power? He said, of course, it was not their affair; they would be spectators only; though not indifferent spectators; the moral force of their opinions would be against us. I told him that had I known he had communicated his views through Mr. Mercier, I should not have troubled him with this interview.

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With much respect, I have the honor to be your obedient servant,

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SIR: I enclosed you by the despatch bag yesterday a copy of the "Constitutionnel," containing an article (marked) of a very obnoxious character. That article, as you will observe if you have had time to look it over, advocates the policy of France making common cause with England against us. It looks likewise to the early recognition, by France and Great Britain, of the south as an independent power. The Constitutionnel is understood here to have a semi-official character. * I intended to have said this to you yesterday, but time failed me.

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General Scott will have arrived in the United States doubtless before this despatch; will you say to him that I last evening received a note from Mr. Thouvenel, naming two o'clock to-day to receive him; at which hour I attended at the foreign office and returned his thanks, &c.

Mr. Thouvenel was quite disappointed at not seeing him, and said that the Emperor had promptly assented to give him a private interview. I explained at the same time that his departure for his own country had been sudden and unexpected. The general's letter, as I have heretofore said, has made here a good impression. The belief is that he is peacefully disposed, and I have no doubt that his sudden return to the United States will be considered as having been made in the hope of exercising a mollifying influence upon the temper and policy of his countrymen. It is well that it should

be so.

I have the honor to be, with much respect, your obedient servant,
WILLIAM L. DAYTON.

His Excellency WILLIAM H. SEWARD,
Secretary of State, &c., &c., &c.

Mr. Seward to Mr. Dayton.

No. 94.]

DEPARTMENT OF STATE, Washington, December 26, 1861.

SIR: Your despatch of December 6 (No. 91) was duly received. In previous papers of this date I have already exhausted what is needful to be said on the several subjects discussed in it, except one, namely: that of the confidential note of Mr. Thouvenel to Mr. Mercier, read by him to me, and my reply thereto, read by you to Mr. Thouvenel.

Important events roll on so rapidly, each crowding the other so entirely out of view, that this government can see no reason to desire any further prosecution of the subject opened in those papers.

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You have rightly conjectured that the subject of our relations with Great Britain, as affected by recent events, at present engages the chief attention of the government, so far as foreign affairs are concerned.

I am, sir, your obedient servant,

WILLIAM L. DAYTON, Esq., &c., &c., &c.

WILLIAM H. SEWARD.

No. 100.]

Mr. Seward to Mr. Daylon.

DEPARTMENT OF STATE, Washington, January 2, 1862.

SIR: In bringing up arrears of correspondence, it is a pleasant duty to acknowledge the receipt of your despatch, of the 25th of November, No. 86, and to express to you the President's satisfaction with your proceeding in regard to the reply to Mr. Thouvenel's confidential conversation.

I am, sir, your obedient servant,

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SIR: Your despatch of January 2 (No. 97) is before me.

Its subject is the condition of our affairs abroad. This foreign aspect must of course have somewhat changed when the action of this government in regard to the search and detention of the British steamer Trent became known in Europe. Recent military occurrences here will probably have some modifying influences there. Practically, the whole coast of the insurrectionary States is falling into the possession of the federal forces. The expedition under Burnside is in Albemarle sound, and we trust that it will produce some decisive results.

The government is co-operating with the Baltimore and Ohio Railroad Company in restoring this important communication between Baltimore and the Ohio, which will soon be effected.

But the great events of the day are, first, the determined vote of Congress to sustain the government by a tax of one hundred and fifty millions of dollars, which will be adequate to preserve the national finances during the vigorous prosecution of the war.

And secondly, the removal of the obstructions raised by the insurgents on the banks of the Cumberland river, to prevent the entrance of federal columns into eastern Tennessee. The victory of General Thomas at Mill Spring was a very gratifying affair; but its brilliancy is surpassed by its strategic importance. You will see at once that it opens the way to eastern Tennessee, and so to the cutting off of supplies and reinforcements for the insurgent army of the Potomac. You will not err in assuming that this great movement is one having no isolated purpose, but that it is a part in a general system which contemplates the bringing of all the federal forces promptly into activity, with a view to the complete restoration of the federal authority throughout the country. It is not in our power to control the policies of European cabinets. They acted precipitately in May last, and thus aggravated and prolonged our troubles. It is to be hoped that they will allow themselves now to understand the resources and the energies which have enabled us to recover from those injuries and to hem in the insurrection on all sides, so that it must be soon exhausted and defeated. The spirit of the nation, however, is sufficiently roused so as to enable us to meet and overcome all adverse designs, of whatever kind, from whatever quarter.

I am, sir, your obedient servant,

WILLIAM L. DAYTON, Esq., &c., §c., &c.

WILLIAM H. SEWARD.

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