 William Seward was a believer in manifest destiny. He long supported Western expansion, and he believed that the United States should and would eventually absorb Northern territories. During the presidential election of 1860, he gave speeches calling for the annexation of British territories in Canada. His vision was for a United States that encompassed all of North America. During the war, William Seward would be occupied by his duties as Secretary of State. And he would have little time to worry about Canada. But he still imagined an eventual annexation of British Canada. Immediately after the war, from 1865 through 1869, he worked on plans to propagandize in favor of U.S. annexation. Much like Texas asked for annexation after it broke away from Mexico, William Seward believed that the Canadian territories would also welcome U.S. annexation, at least with a little push in the form of propaganda pieces in Canadian newspapers. In 1867, William Seward took lead in the U.S. purchase of Alaska from Russia, believing it to be merely the first step in the eventual absorption of all of Canada. Obviously, Seward's dream would not be realized. But it is one that he believed in long before the Civil War to achieve for years after. In 1861, at the very outset of the war, Britain was not ignorant of Seward's desires. He'd publicly vocalized to support for the annexation of certain British territories in Canada, and Northern newspapers published editorials in support of Seward's plan. During the secession crisis, even before the war actually started, one might think that Canada would take a back seat to more pressing matters. And this is largely true. But Seward toyed with ideas of taking Canadian territory now as a means of compensating for the loss of territory in the South, as well as, at one point, advocating war with European powers in North American territories as a way of uniting the Union and Confederacy in a common cause. Combine this history with Seward's unique manner of diplomacy, an approach that several British leaders described essentially as bully tactics, and the threat of a US invasion of Canada started to be taken increasingly seriously in Britain. As the Lincoln administration was hoping that Britain would reject any recognition of Confederate sovereignty inside with the United States' supremacy in North America, Seward was cultivating the impression, perhaps intentionally, perhaps not, that if the European powers didn't fall in line, the US would turn its military on them, starting with Canada. Seward likely wasn't even aware of the effect he was having in diplomatic affairs, but the European ministers who dealt with him consistently saw the Secretary of State, and by extension the United States government, as an aggressive threat. I'm Chris Calton, and this is the Mises Institute podcast, Historical Controversies. In the previous few episodes, we've covered the Union disaster of Ball's bluff and the subsequent political ramifications in the form of the Joint Committee on the Conduct of the War. In the history of the war, you usually have two strains, military history of the war and the political history of the war. Military histories sell books, so that's usually what you find in the popular literature, but until very recently, professional academics have considered the military aspect of the history to be beneath scholarly interest, and they focused instead on the political history. Obviously, both military and political history are important, and I have, and will continue to tell both sides of the story, but today's episode is one of the best examples of the political side of the war effort and the potential ramifications that political decisions have in military affairs. I don't want to talk that much about civil war diplomacy, because it's a lot of history that didn't amount to very much. Suffice it to say that the Union government was concerned with preventing major European powers from recognizing the Confederacy as a sovereign nation, and the Confederate government was concerned with obtaining recognition of their sovereignty as well as gaining allies against the United States. Some Confederate leaders believed that Britain could be convinced to ally with them against the US, but others, such as Robert E. Lee, believed that the war would have to be won alone. Confederate diplomacy is usually referred to as cotton diplomacy, based on the concept of so-called king cotton from a speech delivered by James Hammond to the US Senate in 1858. The idea for the Confederacy was that the European economy, particularly Britain's economy, was so dependent on southern cotton that they could use it as a bargaining chip to get the cotton dependent powers on their side. During the war, the Confederate government essentially became the world's largest cotton merchant, but they figured that if they needed to, they could refuse to sell the cotton, which would exert pressure on Britain to ally with them. But at the outset of the war, this isn't quite what they were doing yet. They had the plan in mind, but it was more of an ace in the whole idea. So Confederate diplomats wanted to first see what they could get without resorting to cotton diplomacy. Ultimately, by the way, the cotton diplomacy would prove to be a disaster for the Confederacy, as European powers found supplies of cotton elsewhere, and the Confederacy's withholding of their staple product deprived them of resources that could have helped them fight the war. But I'll go more into that much later on when I talk about the economics of the two countries in more detail. The primary countries that the Union and the Confederacy were concerned with were Britain and France, though Russia was also a concern, and other minor countries were still in communication with the United States at least. Just as a piece of trivia, the King of Siam actually offered to send President Lincoln a supply of war elephants, which Lincoln instructed William Seward to politely refuse on his behalf. Elephants were not practical when they were used in war. They had to be ridden by people holding mallets and large spikes that would be used to kill the elephant if it got out of control and started trampling people, so they served armies better for their intimidation factor than their practical function. Lincoln also noted that steam power had made them obsolete, but it's still an interesting bit of trivia that the King of Siam made such an offer. And just since I like this kind of trivia, prior to the Civil War, Jefferson Davis actually spearheaded a plan to import camels into the United States to form the Camel Corps, and they actually did bring these camels into Texas and the Southwestern territories, but this was started very shortly prior to the Civil War, so the Camel Corps idea was interrupted by the war and camels were reported as having been seen in the Southwestern United States as late as 1891. But anyway, none of that actually matters, I just get sidetracked with cool tidbits like that. But for this podcast, the only thing that I really find interesting in Civil War diplomatic history is the early tension between Britain and the US in the Civil War, climaxing in yet another Union misstep known as the Trent Affair. In April of 1859, Queen Victoria appointed Richard Bickerton Pimmel, second Lord Lyons, as the British minister to the United States. After Lincoln took office and appointed William Seward, his Secretary of State, Seward and Lyons were the figures chiefly responsible for communication between the two countries and their personalities did not fit well together. Right off the bat, Seward wasn't seen in very good light by the European ministers. He had a history of making provocative foreign policy statements toward the European powers, and he was really only appointed as Secretary of State as a form of political patronage, which was common before Lincoln took office and was maintained by Lincoln as well. Before the bombardment of Fort Sumter, like I said in the introduction, Seward even proposed a plan to wage war with some European countries in order to use it as a common cause to reunite the North and the South, so he didn't exactly have a history that made him seem like an attractive diplomat, and he would only make things worse throughout his 1861 communications with Britain. When Seward took office, Lord Lyons even mentioned his concerns about Seward's history of making pugnacious statements toward Britain, and Seward reassured him that he was just putting on a strong public face, and he was really very conciliatory and private. This was all true enough, I think. Seward was one of the hardest working members of the Lincoln Cabinet in trying to avoid war with the South prior to Fort Sumter, but this does not mean that he had good judgment when he was dealing with diplomatic affairs. At best, people didn't know when to take something he said seriously and when not to. During the presidential campaign of 1860, Seward, a senator at the time, attended a dinner in honor of the Prince of Wales where he told the Duke of Newcastle that he, Seward, was going to make a lot of insulting statements about England in order to help his own political career in the United States, but the Duke should know that he didn't mean that he wanted war. But instead of being comforted by Seward's private assurances, Newcastle said, quote, There was no fear of war except from such a policy as he indicated, and that if he carried it out and touched our honor, he could some fine morning find he had embroiled his country in a disastrous conflict as the moment when he fancied he was bullying all before him, end quote. When Seward became Secretary of State in 1861, this statement was remembered, and it was enough of a concern that the U.S. Minister to Britain, Charles Francis Adams, had to make excuses for it, calling the statement a quote, mistake founded on a bad joke, end quote. Now this is all probably true. Seward I don't think actually wanted war with England. Even when he was advocating war with Spain and France, it seems that he fully expected that once the South rejoined the Union in order to wage the war, they get in the war with a reunified nation and little to no bloodshed. This isn't a defensive Seward, I just want to try to highlight the complexities of his personality, though I think anybody might see this story as pause for concern as to how politicians, even today, might be inclined to advocate unnecessary war for political purposes. It's kind of a scary thought. But in any case, I don't think Seward actually wanted war, but he obviously had very poor diplomatic insights and even though his statements against European powers probably were not very serious to Seward, many British political leaders were concerned by them at the time and this had an effect on British U.S. relations. So this is what Lord Lyons was dealing with at the outset of the Civil War, a Secretary of State who was difficult to deal with, confusing to understand, and diplomatically inept. Lyons, by contrast, was boringly professional. He was the kind of guy who wasn't very popular because he was so devoted to his duty to the Queen that he avoided any kind of vices and was pretty much humorless. So out of all the people in British politics, he was among the most inclined to take Seward's statements incredibly seriously. So here's the first policy, a Secretary of State, that Seward mishandled. Before the war officially started, when in March, just after Lincoln took office, Seward advocated using the U.S. Navy to collect customs duties at southern ports. Now it's worth mentioning here that this is one of the justifications for the Northern Tariff Thesis for the war, distinct from the Southern Tariff Thesis. The Southern Tariff Thesis is the idea that the South seceded an objection to the tariff, and I spent a lot of time showing why I disagree with that in the last season, and I mentioned briefly several months back that I also rejected the Northern Tariff Thesis, which is the idea that the Union waged to the war because they didn't want to lose out on tariff revenues. This theory for the Union motivation originated because of a testimony given by a former Confederate officer about a conversation he allegedly had with Lincoln prior to the war, in which Lincoln said that if he let the South go in peace, where would they get their revenues? But this conversation was revealed after the war was over, after Lincoln was dead, and it can't be confirmed by anybody since it supposedly took place in private. So I think this is an apocryphal story. But the Northern Tariff Thesis survived even as historians acknowledged that this conversation with Lincoln probably never took place. And they've referred to a passage in Lincoln's first inaugural address where he says he is intent on enforcing the laws of the country, such as the collection of customs duties. But this was not done for the purpose of raising revenue. It was done at Seward's urging to create a de facto blockade of the South before the two countries were at war. International law would not allow one country to blockade the ports of another country unless they were at war, so in March the Lincoln administration couldn't technically blockade the South without earning the ire of the major powers in Europe. But by ostensibly blockading the ports for the collections of customs duties, the Union government could try to squeeze the South economically before the war was officially declared. This was explicitly Seward's reasoning, by the way. So the Northern Tariff Thesis is bunked. In a conversation at a dinner with Lord Lyons, as well as the ministers from France and Russia, this de facto blockade actually came up. Seward was explaining to the French and Russian ministers his plan to blockade the South without violating international laws, and Lord Lyons spoke up to say that the policy would force other governments to either recognize the Confederacy as a sovereign nation, or to accept that their own commerce was going to be interrupted by the U.S. government. Basically, Lyons was giving Seward the hint that this policy would encourage the recognition of the Confederacy, which the Union government did not want to happen. But Seward, who had been drinking, blew a gasket. He started going on about how Europe should be involved in American affairs, because, quote, if the Union was dissolved, not a government in Europe would remain standing, end quote. Lyons had a cooler head, and he decided not to engage any further with Seward at this dinner party. But afterwards, he sent word to London to not dismiss the Confederate diplomats too readily. Seward had basically pushed Britain a little closer to taking the side of the Confederacy. International law would not allow Britain to immediately recognize the Confederacy's independence, but Lyons warned the British leaders not to outright reject their sovereignty just yet, either. It was shortly after this, on April 1st, that Seward brought up the plan to wage war against Spain or France. Seward was trying to take advantage of Spain's decision to annex Santo Domingo on March 30th, and he gave his recommendation on April 1st, which later became described as Seward's April Fool's Day Madness. He wanted to go to war with Spain and France. France was encouraging Spain's annexation of Haiti, which it was already preparing to do after taking Santo Domingo. Lincoln refused to even consider Seward's plan, but the contents leaked out and made it to the foreign ministers. Here again, Seward looked like he was threatening war against Europe. Even though the memorandum was advocating war with Spain and France, it was threatening toward Britain and Russia as well. The memorandum said, in response to Spain's annexation of Santo Domingo and France's encouragement, I would demand explanations from Spain and France. I would seek explanations from Great Britain and Russia and send agents into Canada, Mexico, and Central America to rouse vigorous continental spirit of independence on this continent against European intervention, and if satisfactory explanations are not received from Spain and France, would convene Congress and declare war against them. End quote. So the part of this that was the primary concern to Lyons was Seward's advice to send people to Canada to foment revolution against Britain. Lyons believed that even though Seward was concerned with Spain, the action could result in a war with Britain in Canada. Through April, Lyons felt like he needed to meet with Seward more frequently to try to avoid war, but he didn't even know how to deal with the man. If he was too nice, he would look weak. But if he was too uncompromising, he might provoke another outburst from Seward, like he demonstrated at the dinner party. Canada responded by taking a neutral stance in the war. Canadians were torn. On the one hand, Canada was far more anti-slavery than the northern United States. Many fugitive slaves settled in Canada where they were safe from the fugitive slave law, and Canada sympathized with the Lincoln administration. But when the United States asked to buy weapons from Canada, the country refused. Why would they sell weapons to the United States when U.S. newspapers and the Secretary of State were at this point advocating the annexation of parts of Canada to compensate for the loss of territory in the South? So Canada decided to stay neutral in the coming civil war. But just as the Lincoln administration, and Seward especially, viewed Americans in the northern states as being pro-Confederacy if they showed anything short of full support for the war, they also interpreted Canada's neutrality as evidence for their support of the Confederacy. Seward poured even more fuel on the fire after he received word that the Confederates had purchased a steamer called a peerless from Toronto. He had no proof of the purchase, and therefore it was a violation of international law for the United States to block the ship. But Seward spoke to Lord Lyons and said that he intended to order the Navy to block peerless from traveling anywhere anyway, which Lyons took as just one more example of the quote, arrogant spirit and disregard of the right and feelings of foreign nations, end quote. As it turned out, Seward's information was bad, and the steamer had not only not been purchased by the Confederacy, but it had been purchased by his own government. So Seward ordered the Navy to stop one of their own ships and did so in a way that gave the middle finger to Britain. At this point Lyons was thoroughly fed up with Seward, and for the next several months every message he sent to Britain was full of criticisms of the US Secretary of State. This translated into disdain for the United States government overall, which isn't unreasonable since the Secretary of State is essentially the chief foreign representative of the country. Lyons' opinion of the rest of Lincoln's cabinet wasn't any better, writing to his superiors in Britain that most of them were quote, if possible still more ignorant of Europe and some much more violent, end quote, then even Seward himself. Thus he advised Britain to adopt an official policy of neutrality, and on May 13th, Queen Victoria officially announced that Britain would remain neutral in the Civil War. But even though the country was officially neutral, the relationship between Britain and the United States was tense, and Britain could abandon neutrality and ally with the Confederacy at any time. On May 20th, Lyons sent a lengthy dispatch, 39 pages back home, detailing not only that he believed that the United States was a threat to Britain, but that he had no hope that the situation would change. He couldn't understand why the US was so intent on provoking Britain when it had just started a wage war against the South, but nonetheless Lyons wrote quote, the conviction has forced itself upon my mind that it may be impossible to deter this government from offering provocations to great Britain, that neither our honor nor our interest will allow us to brook, end quote. But Seward was equally baffled by Britain's unwillingness to side fully with the United States. He was completely unaware of how his behavior had driven Britain to the position of cautious neutrality. The day after Lyons sent his pessimistic assessment of the situation in the United States, Seward sent a dispatch to Charles Francis Adams, who was in London. In it, he blamed France and Britain for quote, trying to save cotton at the cost of the union, end quote. Three weeks previously, the British Foreign Secretary, Seward's counterpart basically, John Russell had decided to meet unofficially with Confederate envoys. This was a big deal, and Seward was concerned by it. He wrote to Adams quote, this government considers that our relations in Europe have reached a crisis in which it is necessary for it to take a decided stand on which not only its immediate measures, but its ultimate and permanent policy can be determined and defined, end quote. He told Adams that as long as Britain was meeting with Confederate diplomats, Adams should have no contact with them. He was worried that any meeting would be interpreted as a tacit recognition of Confederate sovereignty. But if the American Civil War led to any hostilities with Britain, it would be Britain's fault, not Seward's. When he sent the inflammatory letter to Adams, he marked it as confidential, with orders that Adams not reveal its contents to anybody. But then Seward immediately went out and had the letter published for the world to read. This was the mess that Seward had made in his first three months as Secretary of State. Over the summer, things would only get worse. In Britain, Charles Francis Adams was meeting with Lord Russell to do his best to put out Seward's fires. After the proclamation of neutrality, Seward ordered Adams to demand an explanation from Russell. Instead, Adams behaved more diplomatically when he met with Russell at his home on May 18th. This was wise of Adams, though the meeting still didn't go great. But Lord Russell, unlike Lord Lyons, was actually staunchly on the side of the Confederacy. He didn't care for the United States to begin with, and he believed that the Confederate fight for independence was noble. He even compared the Confederate secession to the Greek Revolution of 1821, in which the Greeks fought for their independence from the Ottoman Empire. In other words, Russell believed that the Confederates had just as much of a right to seek independence as any other country. But even though Adams handled his meeting with Russell more professionally than Seward wanted him to, Russell was still cool toward Adams. He told Adams that he would give no promise that Britain would not at some point recognize the Confederacy as a sovereign nation. One concern in Britain was the policy announced by Lincoln to officially blockade the southern ports. Now that the war had started, he no longer needed to use custom revenues as a justification to get around international law, and the policy to treat Confederate privateers as pirates. This distinction is important to understand, so you can see why Lincoln's policy was taken so seriously by Britain. A pirate was simply a criminal who committed crimes in international waters. International law dictated that countries should hang pirates. Privateers, by contrast, were kind of like mercenaries or private contractors. They were granted licenses by their government called letters of marquee to raid the ships of an enemy government. They were used commonly in war, but international law actually recognized privateering as legal so long as they possessed a letter of marquee and were only raiding ships from the country they were at war with. When caught, the difference between a pirate and a privateer was a life and death distinction. Pirates were hanged, privateers were prisoners of war. So Lincoln's policy in treating Confederate privateers as pirates was based on his obvious refusal to recognize the legitimacy of the Confederacy. If he treated them as privateers, he was recognizing the validity of their letters of marquee and therefore the legitimacy of the issuing government. But these two policies, the blockade and the treating of Confederate privateers as pirates, forced Britain to declare neutrality probably even if lions hadn't been urging it to out of his dissatisfaction with Seward. Britain traded with both the Union and the Confederacy. If they sided with the Union, as Adams was working for, they would also have to treat Confederate privateers as pirates. Lincoln's blockade also made it easier for Britain to adopt neutrality because it was a tacit admission that the Confederacy was a sovereign nation. International law only stipulated that blockades were legal if they were used against an enemy nation during a war. Lincoln was still maintaining that secession was illegal and that Confederate secession was a rebellion, a term that gave him constitutional license in certain matters. But if the Union war was merely a suppression of rebellion, then a blockade should have been illegal. This was a legal contradiction that ultimately made it easy for Britain to adopt an officially neutral position on the war. But this meant that the Confederacy and the Union were on equal footing internationally and that opened the door for Britain to eventually ally with the Confederacy if they deemed it necessary to do so. It also meant that Britain could trade with the Confederacy, which is how the Confederacy was able to build its navy by the way. They purchased British ships that were not military vessels and then brought them to the Confederacy to mount cannons on them, but more on that in later episodes. So this is the context of Adams' meeting with Russell on May 18th, combined with Russell's sympathy for the Confederacy. Adams handled the meeting probably as well as anybody in his position could have given the circumstances. On June 10th, he finally received Seward's dispatch from May 21st, and Adams was appalled. He considered it, quote, so arrogant in tone and so extraordinary and unparalleled in its demands that the United States appeared almost ready to declare war with all the powers of Europe, end quote. He was fighting an uphill battle against Seward's diplomatic incompetence. Lord Lyons at this point was looking for any evidence of a planned U.S. invasion of Canada, something that had been talked about since Seward first proposed the idea of annexing Canada during the presidential campaign of 1860. A man named George Manning claimed to have overheard a conversation on May 31st in which one of Seward's son was talking about the purchase of newspapers in Quebec for the purpose of running articles advocating U.S. annexation. The conversation, if it actually took place, this is hearsay, involved an elaborate conspiracy for how to propagandize for annexation, how Seward would finance it, and who would be made territorial government after the deed was done. Manning claimed to have read a letter from Seward himself giving details of the plan. We can speculate as to whether the story is true or not. The situation of a man eavesdropping on this vast conspiracy sounds pretty absurd to me, but the conspiracy itself is actually more plausible than it may seem, as Seward had a long wanted to annex Canada, and immediately after the Civil War he worked very hard to annex certain Canadian territories, so the idea that Seward was trying to annex part of Canada in 1861 isn't as silly as it probably sounds, but whether or not the story Lyons was told was true, he certainly believed that it was, and he forwarded the story to Lord Russell. But nobody else in Britain took the story seriously, and many of them were quite flabbergasted with Lyons' obsession with Seward and the possibility of an invasion of Canada. But Lyons was undeterred, and he continued to worry about Canada's vulnerability. But while British leaders were confused about why Lyons was so concerned with Seward, Lyons' French counterpart, Henry Mercier, the French minister to the United States, had a similar experience with Seward, leading him to the conclusion that Seward was a demagogue who, quote, can sail only on the sea of popular emotion and who always tries to stir up passion in order to exploit it, end quote. The two ministers decided to team up to try to get the United States to sign the Declaration of Paris, which was drafted after the Crimean War, which they hoped would stifle any aggressive actions against European powers in their American territories. But Seward refused to see them together, saying that no two European countries, quote, ought to consult together upon the course to be pursued against a great nation like the United States, and announced that they were acting in concert on the subject, end quote. Seward was acting like they were teaming up against the United States, but this was actually common practice in Europe. Seward didn't care. He invited Mercier to have dinner with him later that evening, but he would only speak to Lyons alone for the time being. Lyons asked that the U.S. adhere to the Declaration of Paris. In it, privateering was abolished, and the seizing of any goods under a neutral flag, such as the British flag, was outlawed. Seward wouldn't even consider it. Adhering to the Declaration of Paris meant recognizing that the Confederates had belligerent rights. He said that he could not accept Britain's recognition of the Confederacy's belligerent rights, and he wrote to the minister in Paris, saying the same thing of France's recognition of belligerent rights. Shortly after his rejection of the Declaration of Paris, Seward published a statement, quote, the fountains of discontent in any society are many, and some lie much deeper than others. Thus far, this unhappy controversy has disturbed only those which are nearest to the surface. There are others which lie still deeper, that may yet remain long undisturbed. If they should be reached, no one can tell how or when they could be closed. It was for an intervention that opened, and that alone could open, similar fountains in the memorable French Revolution, end quote. Was Seward threatening to intervene in British or French affairs to try to foment revolution there? That's what European powers were wondering in response to this statement. It was tactless. But Seward seemed to have realized that his statement did not go over well. He wrote to Adams and Britton saying that his statement had been misunderstood, and he didn't want war. Then he called Alliance to meet with him again. But instead of apologizing or making things better, Seward opened the meeting by patting himself on the back for saving British-US relations. Because he refused to accept Britain's recognition of the Confederacy's belligerent rights, he was able to add a section in Lincoln's address to Congress on July 4th in which Lincoln said quote. The forbearance of this government had been so extraordinarily and so long continued as to lead some foreign nations to shape their action as if they supposed the early destruction of our national union was probable. While this on discovery gave the executive some concern, he is now happy to say that the sovereignty and rights of the United States are now everywhere practically respected by foreign powers and a general sympathy with the country is manifested throughout the world end quote. So Seward was saying that he mended the relationship between the US and Britain by having Lincoln say that Britain and other countries were fully respecting the sovereignty of the United States and that they were sympathetic to the US cause, which at this point was absolute nonsense. But then to make matters even worse, Seward went on to describe the lines all the way that US privateers would damage British commerce if they went against the United States. Remember that the Declaration of Paris that the US refused to sign would have abolished privateering. So Seward's idea of mending fences after his ambiguously threatening statement was to pat himself on the back for accomplishing something that had not been accomplished. Getting Lincoln to make claims about Britain that simply weren't true and then to essentially threaten Britain again. He even closed the meeting by telling Lyons that he shouldn't object to the closure of Confederate ports because such a statement would be interpreted as a threat to the United States and would have quote an unfortunate effect. So with this, Lyons was only all that much more assured that he should see Seward as a problem and he wrote to Britain warning the government to not slow down its defensive preparations. Over the next few months the British government would debate whether they needed to send reinforcements to Canada. The parliament was divided. Some people thought Seward was blustering and didn't take him seriously. But it is interesting to note that the people who actually had contact with Seward, such as the Duke of Newcastle, were more likely to share Lyons' concerns. Ultimately the British government decided on a compromise by sending very small reinforcements to Canada. Basically just enough to signal to the US that it was not going to passively allow an invasion of its North American territory. But concerns over Canada increased after another major misstep by the United States. After the United States refused to sign the Declaration of Paris, Lord Russell sent a man named Robert Bunch to convince the Confederacy to sign it. Unlike the United States, the Confederacy did sign the Declaration of Parents, though they admitted the clause abolishing privateers. Still this was a good display of diplomacy toward Britain and the rest of Europe for the Confederacy. But this wasn't really much of an issue in itself. But the day after the Confederate Congress agreed to the Declaration of Paris, a merchant from Britain, Robert Muir, who had become a naturalized US citizen, was arrested in New York by secret service agents as he loaded up on a ship destined for Liverpool. Muir was carrying with him papers from Bunch to deliver to the British Foreign Office. One of the letters claimed that the British consul had started to move toward British recognition of the Confederacy. The Union government claimed that Bunch's negotiations were illegal and they demanded that Britain recall him. They also claimed that Muir had been issued an improper passport. This was a very new system at the time, so he was not traveling legally. Lord Russell refused to recall Bunch, who had only been carrying out his orders. Russell sent word through Charles Adams that the Queen was still intent on a policy of neutrality. But unofficially, the so-called Bunch Affair was seen as one more move by the Lincoln administration to engineer an excuse to wage war with Britain. Russell and one other cabinet member, Henry Palmerston, called for even more troops to be sent to Canada. At this point, nobody doubted Seward's bellicosity, but they did not believe Canada needed reinforcements simply because the United States would have its hands full fighting the South. By now, the first battle of Bull Run had taken place and the news of the Union defeat had spread quickly throughout Britain. But Seward almost immediately issued a public statement that seemed to vindicate Russell and Palmerston. He published a circular on October 14th, arguing that Europe was ready to recognize the Confederacy, and in response to this, the governors of the Great Lakes States needed to organize defenses along the northern border. Even in the United States, newspapers were criticizing Seward's public statements to the governors. One newspaper called the circular quote, an ill-considered but characteristic piece of humbug and clap-trap. At this point, Britain's trust in the United States was at an all-time low. But the story would climax in November and December when the infamous Trent Affair would bring the United States and Britain to the brink of a war. The Trent Affair will be the topic of the next episode. Historical Controversies is a production of the Ludwig von Mises Institute. If you would like to support the show, please subscribe on iTunes, Google Play, or Stitcher and leave a positive review. You can also support the show financially by donating at Mises.org slash supportHC. If you would like to explore the rest of our content, please visit Mises.org. That's M-I-S-E-S dot O-R-G.