Mr. Adams to Mr.
Seward
No. 1022.]
Legation of the United States,
London,
July 27, 1865.
Sir: I have the honor to transmit copies of the
Times and of the Morning Post, containing a report of certain
proceedings in the court of chancery, in regard to a quantity of cotton
which had been received in Liverpool, presumed to belong to the
so-called confederate government. We have been more fortunate in proving
the case of ownership than I had dared to hope.
The decision of the Vice-Chancellor virtually settles this point, that
the government of the United States is entitled to claim all property
that may be found here, proved to have been acquired under the so-called
confederate authority. You will not, however, fail to perceive that it
is upon the presumption that such authority is understood to have been
defacto established, that the rights of the
United States to the succession are conceded.
This distinction seems to me of sufficient importance to require that it
should receive the consideration of the President before taking any
further measures which might commit the government to the recognition of
it. In my conversation with counsel engaged on our side, I have
consequently advised them to exercise great caution in the use of
language, so as to avoid basing such further proceedings as they may
deem it advisable to push in the interval, before I can receive
instructions, upon any direct concession of this point. As there is
reason to believe that more discoveries may be made of property, and
there unquestionably are contingent rights of more or less value under
the contracts of Messrs. Frazer, Trenholm & Co. which have come to
light in the course of these investigations, and are admitted to inure
to the benefit of the United States by virtue of the Vice-Chancellor’s
ruling, if they elect to claim them, it seems desirable that such
instructions as may be prepared should be sufficiently full to embrace
any variety of forms in which the matter may present itself. I am
informed that no further action on the existing cases is to be expected
in the courts until November, so that there will be abundant opportunity
for mature consideration. With respect to such preliminary proceedings
as may be required to uphold claims to any other property that may turn
up, I think that my cautions already given will avail to avoid any
committal of the government in advance of its own directions.
It appears that in anticipation of possibilities, Messrs. Fraser,
Trenholm & Co. had taken care some time ago to give general
retainers to all the most distinguished lawyers in the kingdom, and
among them to Sir Roundell Palmer, the Attorney General. This at the
outset threatened to prove an obstacle to our desire
[Page 434]
to secure his services on behalf of the
United States. It ultimately gave way, however, and we had the benefit
of what is pronounced to have been a brilliant and effective argument
from him on our behalf. I am promised a full report of this, as well as
of all the other proceedings in the case, from the reporter’s notes,
which so soon as it may come to hand I shall do myself the honor to
transmit.
I have the honor to be, sir, your obedient servant,
Hon. William H. Seward,
Secretary of State, Washington, D. C.
[From the
London Daily Telegraph of July 21,
1865.]
[Untitled]
VICE CHANCELLOR’S COURT, JULY 20.
(Before Vice-Chancellor Wood.)
THE UNITED STATES OF AMERICA V.
PRIOLEAU.
This was a very important motion, being the first of a series that
may be expected to arise out of transactions in cotton, once the
property of the late confederate government. The subject of this
suit was 1,356 bales of Texan cotton, valued at £50,000, which was
shipped on the 10th of June last, from the Havana, in the ship
Aline, under English colors, and consigned to Messrs. Frazer,
Trenholm, & Co., the agents of the late confederacy in
Liverpool, where it has lately arrived. The cotton purported to be
owned by one C. G. Ramsay now in America, but was alleged to have
belonged, in fact, to the late confederate government, for whom
Ramsay was an agent. The United States authorities now claimed the
cotton as having belonged to the military department of Texas, and
as having been included by General Kirby Smith in his surrender of
“all public property and material of war.” The ship was consigned to
Messrs. Malcolmson, of Liverpool, and the cotton was therefore
actually in their possession, Messrs. Frazer, Trenholm & Co.
holding the bills of lading. The bill was a novel one, inasmuch as
there was no precedent found where the American government had
previously sued, or been sued, in England. The bill stated that
“divers persons who were some time since in rebellion against the
government of the plaintiffs formed them selves into an association
for the purpose of carrying on the said rebellion under the style of
the government of the Confederate States, and they some time since
caused to be shipped, on board the ship Aline, the cotton in
question; that the said rebellion is now at an end, and the said
association or so-called confederate government has been dissolved,
and the several persons who had formed themselves into the said
association, and on whose account the said cotton was shipped as
aforesaid, have submitted to the authorities of the government of
the United States, and have expressly ceded and made over to the
plaintiffs all the joint and public property of the persons who
constituted the said association, or so-called government.” The
plaintiffs finally prayed for an injunction to restrain Messrs.
Malcolm-son from parting with the cotton, and to restrain Messrs.
Frazer, Trenholm & Co. from instituting any action at law in
respect of their bills of lading.
His honor directed the motion to stand over for defendants to file
their affidavits by Wednesday next, and for witnesses on both sides
to be cross-examined by the special examiner Mr. Dickenson,
plantiffs to be at liberty to amend their bill without prejudice to
notice of motion, giving notice to the other side of any such
proposed amendments in the course of this week, defendants
undertaking to do nothing contrary to the notice of motion in the
anean time.
The Attorney General, Mr. Giffard, Q. C, and Mr. Druce, for the
plaintiffs; Mr. Rolt, Q. C, for the defendants.
[From the
London Times of July 27,
1865].
[Untitled]
VICE CHANCELLOR’S COURT, JULY 26.
(Before Vice-Chancellor Sir W. P. Wood.)
THE UNITED STATES OF AMERICA V.
PRIOLEAU.
This was a motion to restrain the defendant Prioleau (a confederate
agent) and others from parting with or disposing of a freight of
cotton, consisting of 1,500 bales or thereabouts, which had been
shipped from Havana, per the Aline, to be turned into money for the
purposes of the late rebels, and which was now lying in the Mersey
Company’s docks, at Liverpool. The plaintiffs claimed the property
as the lawful governors of the United States. The defendants
insisted that their title as successful runners of the blockade was
a good one; and that even if it were not, the title of the United
States was subject to the rights in the
[Page 435]
cotton of Prioleau, who alleged that he was a
loser of £20,000 and upwards by the confederates.
The attorney general, Mr. Rolt, Mr. Giffard, Mr. James, Mr. Robinson,
Mr. Amphiett, and Mr. North were in the case.
The Vice-Chancellor was clearly of the opinion that the plaintiffs
were entitled to the cotton in question; but whether or not subject
to the agreement between the defunct government and Mr. Prioleau was
a more serious question. The transaction was a transaction between a
government de facto and the citizen of a
country not connected with the belligerents. In the first place it
was for the court to see to whom the cotton belonged at the time
when the transaction was entered upon. Upon the evidence it could
not be doubted but that. it was the property of the so-called
Confederate States. It was the produce of moneys contributed to and
levied as taxes by the government of those States. It was not the
property of any individual State of America; if it had been, the
peculiar constitution of the United States in this respect might
have led to difficult questions. But it was plain that the money
which produced the cotton was levied in more than one State, and was
the property of the government of the revolted confederation. Next
to be considered was this: what was that government ? It was not a
mere band of marauders; not a set of persons plundering a country
and living upon the plunder they levied. It was an actual, a de facto government, exercising authority and
receiving submission as such. It had now come to an end, and its
functions been resumed, and its authority suppressed, by the
plaintiffs. What was the law applicable to this state of things ? It
could not be doubted for a moment. International law, the consent of
all civilized nations, had settled beyond dispute that when a de facto government came to an end, and was
succeeded by another government, the property of the de facto government passed to its successors;
But then arose the question, did not the successors take such
property bound by the agreements and affected by the equities of
their predecessors ? Subject to any argument which might be adduced
on the hearing of the cause, it clearly appeared that the successors
were so bound. It had been attempted to be set up in answer to this,
that the defendants had taken the property with full knowledge that
the confederate government were rebels, and of the rights of the
United States, and must be bound by the knowledge that the United
States were the lawful governors of the so-called confederate
territory. But this proved too much. If it were correct, the United
States might, at any time during the war, have filed a bill to
restrain the departure, and for obtaining possession of any vessel
which as a privateer was acting the part of a pirate as against the
United States, whenever such vessel happened to be in any port of
the United Kingdom. The argument overlooked the fact that the
government which had sent this cotton was, de
facto, a government, and not a mere band of banditti. Here,
again, the argument overreached itself, for the rights against such
banditti would not be in the United States as a government, but in
the private individuals whose property had been plundered. Clearly,
therefore, as at present advised, the plaintiffs must take this
cotton subject to the agreement between the late government and the
defendant Prioleau. But upon that agreement much question might
arise. The expenses of transit should come out of the amount, but
beyond this there was much question. One-half the residue appeared
pretty certainly to be the property of the defunct government under
the agreement, and of course that would pass to the plaintiffs. As
to the other half, more question attached. All these questions,
however, were matters for determination at the hearing, and the
court had nothing to do now but to take care that, considering the
large amount at stake, the plaintiffs were held harmless. The value
of the cotton in round numbers appeared to be about £40,000, and the
order would be, therefore, that Mr. Prioleau be appointed receiver
in the cause, (which would enable him to dispose of the cotton and
pay all proper charges, &c.,) he either
giving security for £20,000 or paying that amount into court, as he
might think fit, before the second day of next term.
