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saw the ship before the coals and provisions were taken into her; there were no munitions of war in her; that is to say, she had no guns, carriages, shot, shell, or powder; had there been any on board I must have seen it. I piloted the ship out of the Mersey to Point Lynas, off Anglesea, where I left her, and she proceeded down channel, since

which she has not returned. From the time the vessel left the river until I left [35] her *she held no communication with the shore, or with any other vessel, for the

purpose of receiving anything like cargo on board. I frequently saw Mr. Lloyd, the tide surveyor, alon de the ship while in the river. (Signed)

WM. PARRY. Sworn before me, at the custom-house, Liverpool, this 23d August, 1862. (Signed)

S. PRICE EDWARDS, Collector.

No. 29.

Earl Russell to Mr. Adams.

FOREIGN OFFICE, August 29, 1862. SIR : With reference to the case of the steamer Oreto, which you are probably aware has been seized at Nassau, and is to be tried before the admiralty court of the Bahamas for a breach of the foreign-enlistment act, I have the honor to inclose, for your information, copies of a report, and its inclosure, from the commissioners of customs with refer. ence to a suggestion I had made to the treasury that a competent officer should be sent to Nassau to give evidence as to what occurred at Liver. pool in the case of that vessel.'

· I am, &c.,
(Signed)

RUSSELL.

No. 39.
Earl Russell to Mr. Stuart.

FOREIGN OFFICE, August 30, 1862. Sir: With reference to my dispatch of the 2d instant, I inclose, for your information, copies of further papers respecting the Oreto.'

· I am, &c.,
(Signed)

RUSSELL.

No. 31.

The Queen s advocate to Mr. Layard.

5 ARLINGTON STREET, LONDON, September 3, 1862, 10 o'clock. (Received September 3.) MY DEAR LAYARD: The attoney general and I met at the former's chambers at 1 o'clock to-day. If the person who is to be sent to Nassau be in town we could see him to-day on the subject of the evidence (mentioned in your letter of the 20th) as to the equipment of this vessel. If he be not in town, had we not better see the solicitor for the treasury, or somebody ejusdem generis, upon the subject to-day!

Failing both these propositions, it would remain to fix another day,

I No. 28.

but this is not easy in vacation time, for my colleagues at least; but in this event what day occurs to you as most likely to find the customhouse officer (or whoever is to be sent) as prepared with his evidence !

I have, &c., (Signed)

ROBERT PHILLIMORE.

No. 32.

Mr. Layard to the Queen's adrocate.

FOREIGN OFFICE, September 3, 1862. Mr. Layard presents his compliments to Her Majesty's advocate general, and, with reference to his note of this morning, begs leave to in. close a report from the commissioners of customs which seems to show that no good would result from sending a custom-house officer to Nassau

to give evidence in the case of the Oreto. [36] * Should the Queen's advocate and the attorney general concur

in this opinion, Mr. Layard would inform the law officers officially that the conference with the Liverpool custom-house officer was no longer necessary.

No. 33.

The Queen's advocate to Jr. Layard.

DOCTOR'S COMMONS,

September 3, 1862. (Received September 3.) The Queen's advocate presents his compliments to Mr. Layard, and with reference to his note of this morning begs to state that the Queen's advocate has conferred with the attorney general, and that they have together perused the inclosures marked 1, 2, 3, 4, and 5, contained in the letter from the treasury of the 26th August last, and are of opinion that it will not be necessary to send a custom-house officer from Liverpool to Nassau to give evidence in the case of the Oreto.

At the same time they are desirous of pointing out to the attention of Mr. Layard that the evidence of the custom-house officer negatives only the arming of the Oreto, and the putting warlike stores on board of her, and is silent as to any other circumstances of suspicion, such as any peculiarities in the equipment of the vessel, her being pierced for guns, or the like, and as to any statement of the captain or others as to her real destination.

No. 31.

Mr. Layard to the secretary to the treasury.

FOREIGN OFFICE, September 4, 1862. SIR: I am directed by Earl Russell to transmit to you a copy of a memorandum by Her Majesty's advocate general, stating that the

No. 33.

attorney general and he have perused the inclosures Nos. 1, 2, 3, 4, and 5, in your letter to Mr. Hammond of the 26th ultimo, and that they are of opinion that, under the circumstances therein stated, it will not be necessary to send a custom-house officer to Nassau to give evidence in the case of the Oreto. It is observed, however, in the memorandum that the papers inclosed in your letter are silent as to various other suspicious circumstances in regard to that vessel ; and I am to request that, in laying the memorandum before the lords commissioners of Her Majesty's treasury, you will move their lordships to communicate it to the commissioners of customs for such observations as they may have to offer thereupon.

I am, &c.,
(Signed)

A. H. LAYARD.

No. 35.

The secretary to the admiralty to Mr. Layard.

Release of Oreto,

ADMIRALTY, September 15, 1862. (Received September 16.) SIR: I am commanded by my lords commissioners of the admiralty to send you herewith, for the information of Her Majesty's secretary of state for foreign affairs, a copy of a letter, Government costo dated the 4th instant, from Vice-Admiral Sir Alexander Milne, reporting the release of the Oreto steamer.

I am, &c.,
(Signed)

W. G. ROMAINE.

amount to £143.

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l'ice-Admiral Sir A. Milne to the secretary to the admiralty.

NILE, OFF CAPE RACE, September 4, 1862. SIR: With reference to my letter of the 24th July last, I beg you will acquaint their lordships that I learn, by telegraph via Halifax, that the Oreto has been released, and we pay our costs, amounting to £145. By next mail I shall be able to furnish their lordships with further particulars.

I have, &c.,
(Signed)

ALEX. MILNE.

(No. 36.]
Sir F. Rogers to Jr. Hammond.

DOWNING STREET, September 16, 1862.

(Received September 16.) SIR: With reference to the correspondence between the Foreign Office and this office respecting the steamer Oreto and the gun-boat known as No. 290, I am directed, by the Duke of Newcastle, to transmit to you the copies of two dispatches from the governor of the Bahamas, the first reporting that the judges of the vice-admiralty court had decreed the restoration of the Oreto, the second inclosing a copy of the decree.

His lordship will not fail to observe that this decision of the vice-admiralty court of the Bahamas will place the governor of that colony in some difficulty in acting on the instructions conveyed to him in consequence of your letters of the 31st of July and the 1st of August last, which were to the effect that he should seize the gun-boat No. 290, iu case she should put into Nassau.

It is, therefore, for his lordship's consideration whether any further or different instructions should be forwarded to him by the mail of the 27th instant.

I am, &c.,
(Signed)

FREDERIC ROGERS.

(Inclosure 1 in No. 36.)

Governor Bayley to the Duke of Newcastle.

GOVERNMENT House, Nassau, August 11, 1862. MY LORD DUKE: Adverting to my dispatch of 21st June, I have now the honor to

inform your grace that on the 2d of August the judge of the vice-admiReport from Gor: ralty court decreed the restoration of the Oreto, but at the same time Liberation of the adjudged each of the parties to the suit to pay their own costs. This Viestendererseduti adjudication was made on the ground that there were circumstances of

suspicion strong enough to justify Captain Hickley in seizing the Oreto as a vessel intending to arm in the service of a foreign belligerent power.

2. The liberation of this vessel suggests the probability of certain contingencies against which it is expedient to provide.

3. I do not think it likely that we shall ever obtain stronger proof against any vessel than was produced against the Oreto of an intention to arm as a belligerent. Therefore we may assume that no prosecution of the same kind will be instituted, or if any be instituted that it will fail. The natural consequence will be that many vessels will leave England partly equipped as men-of-war or privateers, and intending to complete their equipment here. But the notoriety of this practice will induce Federal men-ofwar to frequent these waters, and virtually blockade these islands, in greater force than they have hitherto done; and when they are assembled in numbers it will be vain to reckon on their observing any respect for territorial jurisdiction or international usage. I should neither be surprised to see Federal ships waiting off the harbor to seize these confederate vessels, nor to see the confederate ships engaging with Federal men-of-war within gun-shot of the shore. The only means of preserviug the peace and the neutrality of these waters will be afforded by the presence of an adequate naval force. I imagine that two small armed vessels, mounting from twelve to sixteen guns

each, would be sufficient for the purpose. At present we have only one in harbor, the Petrel, of eleven guns.

4. There are loud and general complaints among the colonists of the manner in which, as they express themselves, parts of these islands are blockaded. Certainly, it

is impossible to imagine a stricter principle of interpretation than that wbich, in [38] these days *of Armstrong guns, confines the right of territorial sovereignty to

three miles from the shore, and makes no distinction between the outward or seaward islands and those which form the inner belt of a large group like the Bahamas. So long as the Americans regard the three miles' distance from the shore of any of our islands as the extent of our sovereignty, so long will these seas, wbich belong to a British colony, be virtually blockaded by their squadron. And there is this peculiar unfairness in this mode of computation: The Americans, I am informed, assert that their own territorial sovereignty extends twenty miles beyond the extreme capes and headlands of their coast. If this be true, we are placed on a footing of signal disadvantage in all questions of international rights which may arise between the two nations at critical times like the present; and this disadvantage is most sensibly felt in this part of the world.

5. However, this part of the subject is of wider scope than that on which I dommenced this dispatch, and will doubtless engage the attention of Her Majesty's gorernment.

6. Meanwhile I solicit from your grace such instructions as your grace may conceive necessary to meet the more immediate consequences of the Oreto's liberation.

I have, &c.,
(Signed)

C. J. BAYLEY. P.S.- August 18.–Since the first part of this dispatch was written, yellow fever, which had previously shown itself among several sailors belonging to merchantmen in the harbor, has extended to Her Majesty's steamer Petrel.

One officer and two seamen of that ship have died, and five or six are now sick in hospital. Speaking to me on the subject, Captain Watson remarked that no vessel mounting fewer than sixteen guns ought to be sent to this port during the hot season of the year, on account of the ventilation necessary for preserving the health of the men. During the cool season this is not an object of paramount importance.

C. J. B.

[Inclosure 2 in No. 36.!

Governor Bayley to the Duke of Newcastle.

GOVERNMENT HOUSE, Nassau, August 14, 1862. MY LORD DUKE: Reverting to my dispatch of the 11th instant, I now have the honor to inclose two copies of the admiralty judge's decree in the case of the Oreto, which Mr. Lees informs me are quite correct.

I have, &c
(Signed)

C. J. BAYLEY.

(Inclosure 3 in No. 36.)

Decree in the case of the British steamship Oreto.

In the vice-admiralty court of the Bahamas. Our Sovereign Lady the Queen vs. The British Steamship or Vessel Oreto, (whereof

James Alexander Duguid is, or lately was, master,) her tackle, &c., &c. I, Joshua Anderson Brook, registrar of the vice-admiralty court of the Bahamas, do hereby certify that the annexed contains a true copy of the decree pronounced by the worshipful the Honorable John Campbell Lees, judge and commissary of the said court, in the above case, on the 2d day of August, in the year of our Lord 1862, as remains of record in the registry of this honorable court.

Given at the city of Nassau, in the island of New Providence, under the seal of the said court, this 13th day of August, anno Domini 1871, and of our reign the thirty-fifth.

J. A. BROOK, Registrar.

In the vice-admiralty court of the Bahamas. Our Sovereign Lady the Queen vs. The British Steamship or Vessel Oreto. The British steamship Oreto has been seized by the commander of Her Majesty's sbip Greyhound, on the alleged ground, as appears by the libel, that James Alexander. Duguid, now or lately master of the said ship, and others exercising authority over

her, have, without leave of Her Majesty the Queen, and within the jurisdiction of [39] *the Bahamas, attempted to equip, furnish, and fit out the said steamship Oreto,

with intent that she should be employed in the service of certain persons exercising, or assuming to exercise, the powers of government in certain States claiming to be designated and known as the Confederated States of America, to cruise and commit hostilities against the citzens of the United States of America, Her Majesty the Queen being, at the time, at peace with the said United States, and' have thereby acted in violation of the provisions of the act 59 Geo. III, cap. 69, commonly known as the foreign-enlistment act.

Now, to support the libel, it is necessary that proof should be given

1st. That the aforesaid parties having charge of the Oreto, while the vessel was within the jurisdiction of the vice-admiralty court of the Bahamas, attempted to equip, furnish, and fit her out as a vessel of war.

2dly. That such attempt was made with the intent that she should be employed in the service of the Confederated States of America; and,

3dly. That such service was to cruise and commit hostilities against the citizens of the United States of America. Witnesses have accordingly been produced to prove that the Oreto is constructed for and fitted as a war-Fessel ; that acts have been done in her, since she came to Nassau, which constitute an attempt to equip, fit, and arm her as a vessel of war. That from certain conversations which were overheard between the master of the vessel and a person who came out passenger in her, and from certain acts done by this person, there is proof that she was intended for the service of the Confederated States of America, and to cruise against the citizens of the United States.

H. Ex. 282-18

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