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within the ports actually possessed by the United States, and under their undisputed protection and control.

Having thus vindicated the act of Congress under which the proceedings of which Mr. Stuart has complained are supposed to have occurred, the undersigned will next examine the manner in which the act has been directed by the Secretary of the Treasury to be executed.

On the 14th of April, 1862, before the act of Congress was passed, it had been reported to the President that anthracite coal was being shipped from some of the ports of the United States to southern ports within and to other southern ports without the United States for the purpose of supplying fuel to piratical vessels which were engaged in depredating on the national commerce on the high seas. The Secretary of the Treasury, therefore, by authority of the President, who is charged with the supreme duty of maintaining and executing the laws, issued to the collectors of the customs at New York and other ports the following instruction:

"Clear no vessel with anthracite coal for foreign ports nor for home ports south of Delaware bay till otherwise instructed."

It was thereupon represented to the President that this order was unneces sarily stringent and severe upon general commerce, because it prohibited the exportation of coal to ports situated so far from the haunts and harbors of the pirates that the article would not bear the expense of transportation to such haunts and harbors, and thereupon the Secretary of the Treasury, by the President's authority, on the 18th of May issued a new instruction on the subject to the collectors of the customs, which was of the effect following:

"The instructions of the 14th ultimo, concerning the prohibition of the exportation of coals, are so far modified as to apply only to ports north of Cape St. Roque, on the eastern coast of South America, and west of the fifteenth degree of longitude east. Coal may be cleared to other foreign ports, as before, until further directed."

The subject of supplies of coal and other merchandise having, in the meantime, engaged the attention of Congress, with the result of the passage of the law before mentioned, the Secretary of the Treasury, on the 23d of May last, and as speedily as possible after the approval of the law, issued the following instruction to the collectors of the customs of the United States:

"Until further instructed you will regard as contraband of war the following articles, viz: Cannon, mortars, fire-arms, pistols, bombs, grenades, firelocks, flints, matches, powder, saltpetre, balls, bullets, pikes, swords, sulphur, helmets or boarding caps, sword belts, saddles and bridles, always excepting the quantity of the said articles which may be necessary for the defence of the ship and of those who compose the crew, cartridge bag material, percussion and other caps, clothing adapted for uniforms, rosin, sail cloth of all kinds, hemp and cordage material, ship lumber, tar and pitch, ardent spirits, military persons in the service of the enemy, despatches of the enemy, and articles of like character with those specially enumerated.

"You will also refuse clearances to all vessels which, whatever the ostensible destination, are believed by you, on satisfactory grounds, to be intended for ports or places in possession or under the control of insurgents against the United States, or that there is imminent danger that the goods, wares, or merchandise, of whatsoever description, will fall into the possession or under the control of such insurgents. And in all cases where, in your judgment, there is ground for apprehension that any goods, wares, or merchandise shipped at your port will be used in any way for the aid of the insurgents or the insurrection, you will require substantial security to be given that such goods, wares, or merchandise shall not in any way be used to give aid or comfort to such insurgents. You will be especially careful, upon applications for clearances, to require bonds with sufficient sureties for fulfilling faithfully all the conditions imposed

by law or departmental regulations from shippers of the following articles to the ports opened, or to any other ports from which they may easily be and are probably intended to be reshipped in aid of the existing insurrection, namely: liquors of all kinds, coals, iron, lead, copper, tin, brass, telegraph instruments, wire, porous cups, platinum, sulphuric acid, zinc, and all other telegraph materials, marine engines, screw propellers, paddle-wheels, cylinders, cranks, shafts, boilers, tubes for boilers, fire bars, and every article whatever which is, can, or may become applicable for the manufacture of marine machinery or for the armor of vessels."

These are the treasury regulations under which the proceedings of the collector at New York, which are complained of by Mr. Stuart, are supposed to have taken place. It is not apparent to the undersigned that these regulations in any way transcend the authority conferred upon the Secretary of the Treasury and upon the collectors of the United States by the before-recited act of Congress. Nor is it apparent that they are more obnoxious than that act itself is to the objections which have been raised by Mr. Stuart. They do not expressly, nor by any implication, discriminate against Great Britain, her colonies or dependencies, and in favor of any other nation, or even in favor of the United States. They do not discriminate between British ports, British merchants, British vessels, or British merchandise, and the ports, merchants, and vessels of the United States, or those of any other nation. The instructions leave nothing to the caprice of the collector as a subordinate officer, but they are explicit commercial regulations, prescribed by the highest authority. The conditions on which prohibitions are to attach are to be ascertained upon satisfactory evidence, and for the collector's exercise of power in applying them he is responsible to the head of the department to which he belongs. The regulations have no connexion whatever with the blockade, but they affect only persons, vessels, merchandise, ports, waters, and highways, exclusively within the United States and within the territories which are in the absolute and unquestioned possession of the United States, and subject in fact as well as in law to their authority.

Fully admitting the principle for which Mr. Stuart so earnestly conterds, that all proceedings and even regulations and laws of the United States, which affect foreign commerce, must not discriminate to the prejudice of Great Britain, the undersigned finds no adequate grounds for supposing that the principle is violated in these regulations. The instructions issued on the 14th of April and the 18th of May, prohibiting the exportation of coals to ports within geographical limits, which leave freedom of export to the other one-half of the world, may seem to furnish ground for exception. But the prohibition applies to all American and all foreign merchant vessels and cargoes as well as to those of Great Britain, and to all the States which are situated within the assigned limits, as well as to British dependencies situated therein. It is understood to be an accepted maxim that no law reaches in effect beyond the point where the reason of the law fails, especially if the law so extended should be productive of injuries without object and without compensation or benefit. There is not the least reason to suppose that the insurgents of the United States could in any way derive benefit from the exportation of anthracite coal to Archangel, or to Shanghai, or to Japan. Nor is it manifest that the British nation, its merchants and vessels, do not, in common with other nations, their merchants and vessels, derive benefits and advantages from the export permitted to all ports of whatever nation beyond the limits assigned by the Secretary of the Treasury. Nevertheless the President, desirous to remove all possible grounds for misconstruction, has directed that those instructions shall be rescinded, so that the case will stand altogether upon the act of Congress and the general instructions of the treasury, which have been recited.

In regard to the special proceedings of the collector of the customs at New York, which are complained of, the information presented to the undersigned is

vague and uncertain. There is no satisfactory evidence in the papers under consideration that he has in any case made a clearance or exacted a bond which involved any infringement of the law of Congress and the regulations of the treasury. This government will cheerfully examine upon its merits any case of infringement which may be presented to it, and will promptly render the redress which shall be due, if the complaint shall be sustained; and it will further instruct all its collectors that, in performing their duties, they will be governed by not merely the letter but the spirit of the regulations of the treasury, and of the act of Congress, so as to make no injurious or invidious discrimination to the prejudice of Great Britain.

The undersigned avails himself of this opportunity to renew to Mr. Stuart the assurance of his high consideration.

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

WILLIAM H. SEWARD.

Mr. Stuart to Mr. Seward.

WASHINGTON, October 12, 1862.

The undersigned, her Britannic Majesty's chargé d'affaires, has the honor to transmit to the Secretary of State of the United States the accompanying copy of a despatch which he has received from her Majesty's principal secretary of state for foreign affairs, bearing reference to the note which the Secretary of State addressed to the undersigned, under date of the 18th of August last, in reply to representations on the subject of restrictions imposed on the trade in British vessels from the ports of the United States to the Bahamas.

The undersigned avails himself of this opportunity to renew to the Hon. William H. Seward the assurance of his high consideration.

W. STUART.

Earl Russell to Mr. Stuart.

No. 130.]

FOREIGN OFFICE, September 22, 1862. SIR: I have had under my consideration and have consulted the proper law advisers of the crown respecting your despatch No. 172, of the 20th ultimo, in which you enclose a copy of a note you had received from Mr. Seward in reply to the representations you had addressed to him on the subject of the restrictions imposed on the trade in British vessels from the ports of the United States to the Bahamas.

I have now to state to you that the gravity of the circumstances in this case is, in the opinion of her Majesty's government, rather increased than diminished by the grounds on which the proceedings of the New York custom-house are explained and sought to be justified in the letter from Mr. Collector Barney to Mr. Chase, of which a copy is enclosed in Mr. Seward's note, and which proceedings are, as it appears, approved and sanctioned by the government of the United States.

It is admitted in this letter that the prohibitions and restrictions in question are directed exclusively against the commerce of one particular British possession, namely, Nassau. It is therefore clear that, unless they can be justified by the law of nations, they violate the terms of the subsisting commercial treaties between the United States and this country, and furnish ground for international complaint.

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 fide a British destination, are likely to be afterwards. used for the purposes of the trade between Nassau and the so-styled 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 maritime 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 seem 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., &c.

RUSSELL.

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