[Inclosure in No. 15.] The commissioners of customs to the lords commissioners of the treasury. CUSTOM-HOUSE, May 1, 1862. Mr. Hamilton having, by his letter dated 21st ultimo, transmitted to us, with reference to our reports of 22d February last, and 4th ultimo, copy of a letter from the Foreign Office, stating that Her Majesty's minister at Turin reports that he has been informed by M. Ratazzi that, after making every inquiry, the Italian government have no knowledge whatever of the vessel Oreto, which, it has been alleged, was fitting out at Liverpool for the Southern States of America, but which vessel our collector at that port had informed us he had every reason to believe was intended for the Italian government, We report That, having called upon our collector at Liverpool for his further observations, he has transmitted to us a copy of the declaration made by the owner of the Oreto at the time of registry, by which it appears that the owner is a native of Palermo; and the collector has stated that he has received no information respecting the vessel since his former report, and that, although she may have been destined for the use of the Confederate States, no act had been committed by the master or owners which would have justified any interference with the vessel by this department. We believe it frequently happens that vessels clear for ports to which the owners have no intention that they shall proceed, but our officers have no power to interfere in any case except there may be a breach of the provisions of the law. [10] (Signed) THO. F. FREMANTLE. *Declaration referred to above. Official number of ship, 44,200.-Date of registry, March 3, 1862. Length from the fore part of stem under the bowsprit to the aft side of the head of the stern-post.... Main breadth to outside plank. Depth in hold from tonnage-deck to ceiling at midships........... Carvel. None. Shield. Wood. Feet. Tenths. time desiring to avoid the appearance of being indifferent to a cool and continuous infringement of our neutrality, on the 2d of June I addressed to Captain McKillop a letter, in which I advised him to take one of two courses; either to concert measures for bringing the Oreto down from Cochrane's Anchorage, or to go up there and watch her day by day in his own ship. This latter I recommended as the preferable plan. 5. On the 4th of June I brought the subject before the executive council. The inclosed extract from the minutes of that body contains the resolution of the council, which was forthwith carried into effect. In conformity to this the Bulldog sailed up to Cochrane's Anchorage. Captain McKillop placed one of his officers in charge of the Oreto, and lay at a little distance from her while she, with a revenue officer on [13] board, *took in her cargo. On the 7th of June she came down, (whether by the orders of Captain McKillop or not I am ignorant.) On the 8th of June I received the letter from Captain McKillop, and on the 9th that officer left in the Bulldog for Halifax. 6. Up to this time, as your grace will observe, the agents of the Oreto and all concerned in her had received ample intimation of the suspicion and proof of the vigilance of the government. She had been watched, warned, and visited. I was in hopes that she would profit by her experience and leave the colony without giving us or herself further trouble. But these hopes were disappointed. The arrival of Captain Hickley in the Greyhound, from Anguilla Bay, was nearly coincident with the return of the Oreto from Cochrane's Anchorage. As the successor of Captain McKillop in the command of the station, Captain Hickley felt himself bound to continue that gallant officer's examination of the Oreto. On the 10th of June he visited the vessel. One of the agents who had personally obtained my permission that the Oreto should clear in ballast for Havana without delay, met him on board, and, just as Captain Hickley's attention was drawn to some shot or shell that was discharging over the ship's side, promised him that she should forthwith leave the harbor empty. On hearing this Captain Hickley withdrew without prosecuting his investigation any further. The 11th and 12th passed over, but the Oreto still remained in port. Near her lay two steamers, one of them the notorious Nashville, which were to freight her with cargo, and one (if not both) of which had followed her from Cochrane's Anchorage. On the 13th of June Captain Hickley visited her again, and then the crew (which had shipped for Palermo, the Mediterranean, and the West Indies) refused to raise her anchor until informed where she was bound to. On the 16th they came on board the Greyhound with formal complaints, in consequence of which Captain Hickley seized her, but released her on the 17th, in compliance with my opinion and that of the attorney general. The details of the incidents which I have last mentioned will be found in the papers. 7. Throughout these occurrences I was averse from proceeding to extremities. Not that I considered the conduct of the Oreto to be entirely free from suspicion, or indeed from discourtesy to a neutral government. But I was unwilling to assume a hostile air; and, moreover, I felt that, however suspicious appearances were, it might be exceedingly difficult to bring either the Oreto or her crew within the scope of the foreign enlistment act. 8. But when, having been several times dissuaded by me from seizing the vessel, and having, after seizure, released her in deference to my views, Captain Hickley, in his letter of the 16th June, reiterated the expression of his professional opinion not only that the Oreto was equipped as a vessel of war, but that she could be made ready for battle with the enemy in twenty-four hours; that other vessels then lying in the harbor could steam out with her and help to arm her within a few miles off this port; and that her real destination was openly talked of, I thought that a strong prima facie case was made out for a judicial investigation, even although the evidence were insufficient to warrant her condemnation. And I thought it better to sanction an appeal to the law in favor of our neutrality, and in deference to the honest convictions of a gallant and experienced officer, than to allow the Oreto to leave our shores unchallenged and unobstructed on an expedition of pillage, piracy, and destruction. 9. These reflections were strengthened by others. I felt that if the Oreto were allowed to take in arms, ammunition, and a crew here, a similar impunity must be in future conceded to any other vessel belonging to either of the two belligerent states. The consequences of dealing out this even-handed justice would, in the existing state of popular feeling, be highly inconvenient and embarrassing. The boon obtained by a confederate vessel would be claimed by a Federal vessel. If granted it would be granted grudgingly and sulkily, and it was more likely that it would not be granted at all; hence would arise disputes, jealousies, and angry altercation. More than this, we have reason to believe that armed Federal vessels are lying at a very short distance from this port. Indeed, I am informed that frequently boat's crews belonging to armed vessels of the United States Government land near the town at night for the purpose of ascertaining the position and number of southern vessels stationed in the port. The refusal to accord to northern vessels the same indulgence which has been accorded to those of the South, might, under these circumstances, provoke an affray between the ships of the two contending federations, and involve, not only this colony, but even the mother country, in a very serious collision. 10. These reasons, which are fully explained in my letter to Captain Hickley, of 17th June, mainly induced me to withdraw my opposition to Captain Hickley's [14] *meditated seizure of the Oreto. But they would not have sufficed to modify my repugnance to such a course had he persisted in his original intention of taking the Oreto either to Bermuda or to Halifax. To this course of action I had expressed a strong objection in my letter of 16th of June, and in his reply of the 17th Captain Hickley professed his willingness to abandon it. 11. The Queen's advocate has now received instructions to prosecute the Oreto in the colonial court of vice-admiralty. But the issue of the prosecution is by no means clear. Should any technical difficulties of procedure or insufficiency of evidence place the case beyond the scope of the foreign enlistment act, and cause the failure of the prosecution, I presume Her Majesty's government will be disposed to shield Captain Hickley from any pecuniary loss to which the conscientious discharge of an unpleasant duty may have exposed him. 12. Your grace will see that it is easy to do very much in the way of equipping a vessel for hostile purposes, arming her and enlisting a crew, without establishing a case of such strong testimony as would justify her condemnation by a court of competent jurisdiction; and although it is repugnant both to our policy and our sense of justice to strain the letter of the law, even on the side of a reasonable inference against the rigid rules of technical evidence, yet it is easy to see that a strict adherence to these rules may be suspected to be the result, and may produce the fruits of a deliberate collusion with the enemies of a state on terms of amity with our own country, 13. In the present instance the notorious sympathies of the colony and the supposed sympathies of England with the southern confederacy have, I doubt not, led the consul, and may lead the Government of the United States, to imagine that the Oreto has all along received a collusive and dishonest support from the authorities of the place. Nothing could be further removed from the truth than this belief; still it would be exceedingly awkward were the reasonableness of these suspicions to be tested by the experience of any vessel which arrived equipped to act on the Federal side, and expecting to find her arms and ammunition here. 14. It is the desire of preventing such a contingency, or, if that be impossible, of being adequately instructed to meet such contingencies in future, which has compelled me to trouble your grace at so great length, and with documents so voluminous as these I now transmit. I have, &c., (Signed) C. J. BAYLEY. [Inclosure 2 in No. 17.] Mr. Whiting to Governor Bayley. UNITED STATES CONSULATE, NASSAU, NEW PROVIDENCE, May 9, 1862. SIR: I have the honor to communicate to your excellency several facts of importance, deeming it to be my duty so to do, as representative of the Government of the United States of America. The tug Fanny Lewis, which arrived here from Liverpool on the 6th instant, has on board, I am credibly informed by letters received from that port, a large quantity of powder for the rebel States of America, or for the so-called Confederate States. On the 28th ultimo the steamer Oreto also arrived off this port from Liverpool, and now lies at Cochrane's Anchorage, where, it is believed, and so reported by many residents here, that she is being prepared and fitted out as a confederate privateer, to prey on the commerce of the United States of America. Iinclose for your excellency's perusal a slip from the Wilmington, North Carolina, paper of the 20th April. cannot but think that your excellency will consider it proper that some inquiry should be made to ascertain how far the vessels alluded to are preserving the strict neutrality so earnestly enjoined by Her Majesty's late proclamation, and I am confident that I pay but a deserved tribute to your excellency's high character when I [15] express my firm belief that no illegal steps will be allowed to those who seek to subvert the Government which I have the honor to represent. I am, &c., (Signed) SAML. WHITING, United States Consul General Anderson. [Inclosure 3 in No. 17.] Report by the attorney general. Assuming the cargo of the Fanny Lewis to be such as is stated by the United States consul, it is, nevertheless, one that can legally be imported here from the Opinion of Attorney United Kingdom, and its future presumed destination does not invest it with any character of illegality which calls for, or would authorize, any action with respect to it on the part of the executive or other authorities of the colony. 2. With respect to the Oreto, the consul's allegation is to the effect that it is believed and reported by many residents here that she is being prepared and fitted out where she now lies, at Cochrane's Anchorage, which is within the limits of the port of Nassau, as a confederate privateer. Now, if such is the fact, an offense against the foreign enlistment act has been committed, all parties implicated in which are liable to be criminally proceeded against for misdemeanor, and the vessel may be seized by any naval or revenue officer; but to justify proceedings either against the parties or the vessels, the matter must not rest on repute or belief alone, but the authorities must have positive facts to ground their proceedings on, and unless the consul can adduce such, or they can be obtained through other channels, no steps can be taken either for the arrest of the vessel or those on board of her. (Signed) G. C. ANDERSON. [Inclosure 4 in No. 17.] Mr. Nesbitt to Mr. Whiting. COLONIAL SECRETARY'S OFFICE, SIR: I am directed by his excellency the governor to acknowledge the receipt of your letter of this date, and to inform you, in reply, that his excellency will cause inquiries to be made into the circumstances alleged in your letter. I have, &c., [Inclosure 5 in No. 17.] C. B. NESBITT, Mr. Nesbitt to Messrs. Adderley & Co. COLONIAL SECRETARY'S OFFICE, GENTLEMEN: I am directed by the governor to notify you that if you are arming, or putting arms on board, the steamer Öreto, his excellency will enforce the rules laid down in the Queen's proclamation, for, coupling that fact with the description given to his excellency by the captain of Her Majesty's ship Bulldog of the build of the Oreto, his excellency cannot fail to infer that she is a vessel of war intended to act against the United States; and as Her Majesty's government have expressed their deliberate intention of observing and preserving neutrality in the Queen's possessions, his excellency will use his strongest efforts to prevent either of the belligerent powers from arming or equipping vessels of war in this port. I have, &c., C. B. NESBITT, Messrs. Adderley & Co. to Mr. Nesbitt. NASSAU, NEW PROVIDENCE, May 10, 1862. SIR: We beg to acknowledge the receipt of your communication of yesterday's date, informing us that if we were arming or putting arms on board of the steamer Oreto his excellency would enforce the rules laid down in the Queen's proclamation. Denial by Messrs. vessel was being Adderley that the armed. In reply we beg to state, for the information of his excellency the gov 159 Geo. III, c. 69, s. 7. ernor, that we have neither attempted to arm or put arms on board of the British steamer Oreto, consigned to our firm, nor are we aware of there being any intention on the part of the owners to arm that vessel. We have, &c., HENRY ADDERLEY & CO. [Inclosure 7 in No. 17.] Commander McKillop to Governor Bayley. BULLDOG, Nassau, May 28, 1862. SIR: Several steamers having anchored at Cochrane's Anchorage, I sent an officer yesterday to visit them and muster their crews, and ascertain what they were and how employed. The officer reports that one steamer, the Oreto, is apparently fitting and preparing for a vessel of war. Under these circumstances, I would suggest that she should come into the harbor of Nassau to prevent any misunderstanding as to her equipping in this port, contrary to the foreign enlistment act, as a privateer or war vessel. I am, &c., H. F. MCKILLOP. [Inclosure 8 in No. 17.] The attorney general, Nassau, to Mr. Nesbitt. ATTORNEY GENERAL'S OFFICE, Further opinions of Attorney General Anderson. SIR: I have the honor to acknowledge the receipt of your letter of this day's date, in which, by direction of his excellency the governor, you call on me for a further and more detailed report in the matter submitted to me in your note of yesterday on the proposed proceeding of ordering the British steamship Oreto to be removed from Cochrane's Anchorage, where she now lies, to the port of Nassau. My reply of yesterday was necessarily short, as your note was received at a late hour, and I was anxious to send an immediate answer in order that any action in the matter referred to might be prevented; but my intention at the time was to make a more detailed report this morning, which I was about commencing when I received your second letter. The points submitted in your letter of to-day differ in some degree from the question asked in your note of yesterday. In the latter the sole question put to me was "whether it was contrary to law to order the Oreto to come down to the harbor ?" and the reason assigned for asking the question was that the commander of the Bulldog had reported her to have "the appearance of a 'privateer arming herself;" my answer to which was to the effect that I did not think an order for the removal of the vessel aforesaid should be given on the circumstances stated, as such order, if disobeyed, could not legally be enforced unless some violation of law had been committed in reference to the vessel which would justify her seizure. On this you remark that, as it was never his excelleney's intention to seize the vessel, such a contingency should be put out of view. I would, however, respectfully state that it was quite impossible, in dealing with the question as submitted to me by you, to keep out of view the contingency referred [17] to, as, if there was no probability of the contingency arising, there could be no cause to exercise the power, supposing it to exist, of ordering the removal of the vessel. With these preliminary remarks, I now proceed to state my opinion of the law applicable to the points raised in your letter of this morning. Any British or foreign trading-vessel has a right, in carrying on her lawful commercial pursuits, to use as anchorage-places any of the harbors, roadsteads, and anchorages in the colony; she can, however, only lade or unlade cargo at such places as may be authorized for the purpose by the revenue department and in the presence of a revenue officer; and as the revenue department is, by the trade act 17 Vict., cap. 3, placed under the jurisdiction and management of the governor and the executive council, it will be lawful for the governor, acting with the advice of the council, to prohibit the lading of cargo on board of the Oreto otherwise than in the harbor of Nassau; but beyond exercising the powers conferred on him by the trade laws, his excellency has no power to compel the removal of the Oreto from her present anchorage unless some act has been done in respect of her which would constitute a violation of law and subject her to seizure. This brings me to the question whether there is anything disclosed in your communication which would, in a court of law, justify the forcible removal of |