In the summer of 1865, there was in Liverpool, and spread all over England, a substantial
amount of Confederate property.Technically, it was of course by that time United States property,
consisting of imported cotton, as well as munitions and supplies, that
were already paid for, and had been destined to run the blockade. The majority of these
transactions had been made by James D. Bulloch and Charles K. Prioleau.
The majority of the cotton was in the hands of Fraser & Trenholm, and immediately caught the
attention of Thomas H. Dudley, the U.S. consul in Liverpool. Dudley, as during the war, did not
confine his activities to Liverpool. Consuls from all over Great Britain, on the advice of the
U.S. State Department, turned to Dudley for assistance. Some of the property, although in small
amounts, was successfully claimed by the U.S., but by far the majority was held by the Fraser
Trenholm Company, and became part of seemingly endless legal proceedings. Indeed they were
still incomplete when Dudley left the Consulship in 1872.
In the late summer of 1865 Dudley sued Fraser Trenholm for recovery of the cotton that they
still held for the Confedrate Government. Shortly afterwards Consul Morse, in London stepped in,
and made a compromise agreement with Fraser Trenholm, which authorised them to sell ALL
Confederate property in their hands, and to keep the first £150,000 ($750,000) of the
proceeds, with the balance going to U.S. Government coffers
Dudley was furious, and protested that the deal
was far too generous for the Liverpool firm. The deal was then repudiated by Secretary Seward,
who then withdrew all powers from Consul Morse, and broadened Dudley`s responsibilities to cover the sale
of all Confederate property in England.
The result of this change was protracted legal proceedings, that eventually bankrupted
Fraser Trenholm, and cost the United States virtually all of the funds recovered.
In hindsight, it is probable that the deal arranged by Morse, would have turned out
most satisfactorily for all parties concerned.
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