Category Archives: Foreign Relations

The Erlanger Loan

March 18, 1863 – Confederate commissioner John Slidell and representatives of Emile Erlanger, head of France’s most influential bank, negotiated a loan to the Confederacy for $15 million to help finance the war.

Confederate envoy John Slidell | Image Credit: Wikimedia.org

The loan was to be secured by the Confederate sale of 20-year war bonds that could be exchanged for cotton, the South’s most lucrative commodity. The cotton was to be sold to bondholders at 12 cents per pound while the market rate was 21 cents per pound, making the potential margin for profit enormous.

Confederate officials complained about Erlanger’s insistence on high interest rates and a five percent commission; some even accused him of extortion. Nevertheless, they approved the loan in the hope that France would recognize Confederate independence.

The Confederates were desperate to raise money, and with depleted specie reserves, the government had turned to bond sales. When these sales further drained the specie out of the South, the government printed paper money that quickly depreciated and caused prices to soar. It was hoped that this loan would not only finance the war but help stabilize the southern economy.

The first bond issue took place on March 19 in London, Amsterdam, Paris, and Frankfurt. By day’s end, the bonds were heavily oversubscribed at 90. The enthusiasm caused by this issue quickly raised the bond price 95.5 percent. This allowed agents to purchase some badly needed supplies for the war effort.

However, Federal agents in Europe began spreading rumors that Confederate securities were a poor risk and bid up the cost of war supplies so high (using gold the Confederacy did not have) that the Confederates could no longer afford to buy them. They also played on investors’ fears by alleging that President Jefferson Davis had supported bond repudiation in his home state of Mississippi before the war.

The bond price soon plummeted due to fears that the Confederacy would repudiate its debts if it won the war; military defeats this summer also worked to drive the prices down. Many investors lost fortunes, but Erlanger cleared $6 million in interest and commissions, leaving the Confederacy with $9 million in European currency to pay for the war. This was about the best deal the credit-starved Confederacy could hope for.

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References

Faust, Patricia L., Historical Times Illustrated Encyclopedia of the Civil War (New York: Harper & Row, 1986, Patricia L. Faust ed.), p. 246; Foote, Shelby, The Civil War: A Narrative: Volume 2: Fredericksburg to Meridian (Vintage Civil War Library, Knopf Doubleday Publishing Group, Kindle Edition, 2011), p. 156; Long, E.B. with Long, Barbara, The Civil War Day by Day (New York: Da Capo Press, Inc., 1971), p. 329-30; Thomas, Emory M., Historical Times Illustrated Encyclopedia of the Civil War (New York: Harper & Row, 1986, Patricia L. Faust ed.), p. 259; Time-Life Editors, The Blockade: Runners and Raiders (Alexandria, VA: Time-Life Books, 1983), p. 122-24

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Foreign Affairs: Seward Rejects Mediation

February 6, 1863 – Secretary of State William H. Seward unilaterally declined an offer by French Emperor Napoleon III to mediate the conflict between the U.S. and the Confederacy.

Horace Greeley, the influential editor of the New York Tribune, had been publishing editorials in his newspaper calling for an armistice to negotiate a peace that would restore “the Union as it was.” William C. “Colorado” Jewett, a mining speculator with a questionable reputation, informed Greeley after returning from France that Napoleon had offered to mediate a peace between the warring factions.

Greeley responded by going to Washington to try getting the French minister to the U.S., Henri Mercier, to mediate on Napoleon’s behalf. Mercier offered his services on February 3, proposing that officials of the U.S. and the Confederacy come together in a neutral country to discuss a possible peace, and that Mercier would “chair” the meeting.

President Abraham Lincoln neither accepted nor declined the offer. Senator Charles Sumner, chairman of the Foreign Relations Committee, wanted to continue the war until the Federals achieved total victory. Seward considered arresting Greeley for violating the Logan Act, which barred American citizens from negotiating with a foreign nation on behalf of the U.S. government.

U.S. Secretary of State William H. Seward | Image Credit: Wikimedia.org

Three days later, Seward officially turned down Mercier’s request, explaining that the Lincoln administration would not under any circumstances abandon the effort to preserve the Union, and would also not relinquish any authority to France as the proposal seemed to have implied. Lincoln endorsed Seward’s rejection. Seward took offense to “interference by a foreign power in a family dispute.” Many Republicans in Congress also expressed anger toward the French trying to involve themselves in what they considered to be a domestic insurrection.

Great Britain would not go so far as to offer mediation services. In an address to the British Parliament, Queen Victoria declared that Britain had not tried to “induce a cessation of the conflict between the contending parties in the North American States, because it has not yet seemed to Her Majesty that any such overtures could be attended with a probability of success.”

James Mason, the Confederate envoy in Britain, continued working to gain Confederate recognition. This included delivering a prominent speech at the Lord Mayor’s banquet in London calling for the British to recognize Confederate independence. However, Commander James H. North of the Confederate navy wrote to Navy Secretary Stephen R. Mallory from Glasgow, Scotland:

“I can see no prospect of recognition from this country… If they will let us get our ships out when they are ready, we shall feel ourselves most fortunate. It is now almost impossible to make the slightest move or do the smallest thing, that the Lincoln spies do not know of it.”

Part of the reason the British government was so reluctant to recognize Confederate independence was Lincoln’s Emancipation Proclamation, which proved very popular among the British people. Mass meetings took place on the 19th at Liverpool and Carlisle in support of Lincoln’s decree. Therefore, recognizing the Confederacy would defy the will of many British subjects.

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References

Catton, Bruce, The American Heritage Picture History of the Civil War (New York: American Heritage Publishing Co., 1960), p. 253; Denney, Robert E., The Civil War Years: A Day-by-Day Chronicle (New York: Gramercy Books, 1992 [1998 edition]), p. 259, 261-62; Donald, David Herbert, Lincoln (Simon & Schuster, Kindle Edition, 2011), Loc 8767-78; Foote, Shelby, The Civil War: A Narrative: Volume 2: Fredericksburg to Meridian (Vintage Civil War Library, Knopf Doubleday Publishing Group, Kindle Edition, 2011), p. 157; Fredriksen, John C., Civil War Almanac (New York: Checkmark Books, 2007), p. 261-63; Long, E.B. with Long, Barbara, The Civil War Day by Day (New York: Da Capo Press, Inc., 1971), p. 318-20, 322

Foreign Recognition or Mediation

October 22, 1862 – The leaders of Great Britain expressed new reluctance to recognize Confederate independence, and Emperor Napoleon III of France proposed foreign mediation between the two warring factions.

Lord Palmerston | Image Credit: Wikimedia.org

When British Prime Minister Lord Palmerston learned of Robert E. Lee’s defeat at Antietam and return to Virginia, he wrote to Foreign Secretary Lord John Russell, “These last battles in Maryland have rather set the North up again. The whole matter is full of difficulty, and can only be cleared up by some more decided events between the contending armies.”

Many British officials had been leaning toward recognizing the Confederacy, but the recent defeats in Maryland, Mississippi, and Kentucky made them reconsider. Also, the Emancipation Proclamation was highly popular among the British subjects, which made the government even more hesitant.

But some British leaders still strongly supported the Confederacy. On the 7th, British Chancellor of the Exchequer William E. Gladstone delivered a speech at Newcastle, in which he initially praised northerners: “They are our kin. They were… our customers, and we hope they will be our customers again.” He claimed that Britain did not have “any interest in the disruption of the Union.”

But then Gladstone declared:

“We may have our own opinions about slavery; we may be for or against the (Confederacy). But there is no doubt that Jefferson Davis and other leaders of the South have made an army. They are making, it appears, a navy. And they have made what is more than either; they have made a nation.”

Amid loud applause, Gladstone said, “We may anticipate with certainty the success of the Southern States so far as regards their separation from the North is concerned.”

The Newcastle speech held significant merit because Gladstone was the third ranking member of the British government. An editorial in the British Economist contended that the speech “echoes the general sentiment of the country, and probably the real opinion of most members of the (British) Government.” However, it also defied Britain’s declaration of neutrality, and as such it prompted Gladstone to later declare that it was his greatest political blunder.

After Gladstone’s speech, cotton prices fell and U.S. support rose in Britain. Palmerston discussed the matter at a cabinet meeting on the 22nd and then wrote to Russell, “We must continue to be mere lookers-on till the war shall have taken a more decided turn.”

The topic came up at another meeting a week later, with Russell and Gladstone both urging reconsideration of Confederate recognition. But Palmerston maintained the situation had changed since last month, “when the Confederates seemed to be carrying all before them… I am very much come back to our original view that we must continue merely to be lookers-on…” The cabinet rejected Russell’s and Gladstone’s request.

Meanwhile, Pope Pius IX wrote a letter to the Cardinals of New York and New Orleans that was published in the Catholic press, asking them to try helping to bring peace; the Pope supported Confederate independence. Less than a week later, Napoleon III of France met with Confederate envoy John Slidell at St. Cloud, where Napoleon suggested forming a joint council of France, Britain, and Russia to mediate a peace between the U.S. and the Confederacy. Napoleon said:

“My own preference is for a proposition of an armistice of six months. This would put a stop to the effusion of blood, and hostilities would probably never be resumed. We can urge it on the high grounds of humanity and the interest of the whole civilized world. If it be refused by the North, it will afford good reason for recognition, and perhaps for more active intervention.”

Napoleon directed Drouyn de l’huys, his Minister of Affairs, to write the French ambassadors at London and St. Petersburg. Since the lack of southern cotton imports was devastating the European economy, it was proposed that the ambassadors work with the Queen of England and Emperor of Russia to “exert their influence at Washington, as well as with the Confederates, to obtain an armistice.”

The governments of Britain and Russia considered the matter. Russia, which favored the U.S., refused to participate because the proposal seemed too much in favor of the Confederacy. Britain also declined, maintaining the neutrality policy. France, which had been inclined to recognize the Confederacy, followed Britain’s lead in continuing its neutrality until the military situation changed.

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References

Catton, Bruce, The American Heritage Picture History of the Civil War (New York: American Heritage Publishing Co., 1960), p. 253; Davis, Jefferson, The Rise and Fall of the Confederate Government: All Volumes (Heraklion Press, Kindle Edition 2013, 1889), Loc 18052-60; Foote, Shelby, The Civil War, A Narrative: Fort Sumter to Perryville (New York: Vintage Books, 1958), p. 791-92; Fredriksen, John C., Civil War Almanac (New York: Checkmark Books, 2007), p. 218-19, 226; Linedecker, Clifford L. (ed.), The Civil War A to Z (Ballantine Books, 2002), p. 123; Long, E.B. with Long, Barbara, The Civil War Day by Day (New York: Da Capo Press, Inc., 1971), p. 282; McPherson, James M., Battle Cry of Freedom: The Civil War Era (Oxford History of the United States Book 6, Oxford University Press, Kindle Edition, 1988), p. 552, 556; Pollard, Edward A., Southern History of the War (New York: C.B. Richardson, 1866; revised version New York: The Fairfax Press, 1990), p. 581; Time-Life Editors, The Blockade: Runners and Raiders (Alexandria, VA: Time-Life Books, 1983), p. 125-26; White, Howard Ray, Bloodstains, An Epic History of the Politics that Produced and Sustained the American Civil War and the Political Reconstruction that Followed (Southernbooks, Kindle Edition, 2012), Q462

The Enrica Escapes Great Britain

July 31, 1862 – Charles Francis Adams, U.S. minister to Great Britain, urged British Foreign Secretary Lord John Russell to prohibit the newly constructed screw steamer Enrica from leaving Liverpool because it was suspected of being a Confederate commerce raider.

The Enrica, later the C.S.S. Alabama | Image Credit: BlogSpot.com

U.S. agents in Britain had protested for weeks that the Confederates were paying for the construction of a warship in a British harbor, which violated international law because Britain had proclaimed neutrality in the conflict. When Lord Russell finally decided to stop the ship from leaving Liverpool, Confederate operatives notified James D. Bulloch, the Confederate agent overseeing the Enrica’s construction.

Bulloch responded by taking the Enrica out of Liverpool on a trial run on July 29, two days before Russell finally acted. Visitors aboard the ship were transferred to a tug, and the Enrica moved out onto the high seas, headed for the island of Terceira in the Azores. The ship steamed north around Ireland to avoid the U.S.S. Tuscarora, watching for her potential escape. The British colors above the ship were then lowered and replaced by the Confederate flag.

At the Azores, the Enrica was fitted with guns and loaded with ordnance and supplies from Captain Alexander McQueen’s merchant bark the Agrippina. Confederates christened the Enrica the C.S.S. Alabama, designed to attack Federal merchant shipping at sea. She proceeded to Nassau in the Bahamas, where her career as a feared commerce raider began. The birth of the Alabama would cause great tension between the U.S. and Britain for many years to come.

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References

Catton, Bruce, The American Heritage Picture History of the Civil War (New York: American Heritage Publishing Co., 1960), p. 260; Denney, Robert E., The Civil War Years: A Day-by-Day Chronicle (New York: Gramercy Books, 1992 [1998 edition]), p. 198-99; Foote, Shelby, The Civil War, A Narrative: Fort Sumter to Perryville (New York: Vintage Books, 1958), p. 792; Fredriksen, John C., Civil War Almanac (New York: Checkmark Books, 2007), p. 186-87; Long, E.B. with Long, Barbara, The Civil War Day by Day (New York: Da Capo Press, Inc., 1971), p. 245; McPherson, James M., War on the Waters: The Union and Confederate Navies, 1861-1865 (Littlefield History of the Civil War Era, The University of North Carolina Press, Kindle Edition, 2012), p. 114; Time-Life Editors, The Blockade: Runners and Raiders (Alexandria, VA: Time-Life Books, 1983), p. 122

Cotton Exportation and the Federal Blockade

July 28, 1862 – Confederates tried currying favor with France, and Great Britain suffered a severe economic downturn due to the lack of southern cotton.

Confederate envoy John Slidell | Image Credit: Wikimedia.org

On July 16, Confederate envoy John Slidell met with Emperor Napoleon III of France for 70 minutes. Slidell requested that France recognize Confederate independence and use warships to help break the Federal blockade. In exchange, Slidell pledged several hundred thousand bales of badly needed cotton and an alliance with France against Benito Juarez’s regime in Mexico.

Slidell understood that Napoleon favored the Confederacy. However, the emperor was reluctant to provoke the U.S. (which supported Juarez) without Britain taking the lead. Napoleon told Slidell that he would consider the matter. Slidell wrote to Richmond, “I am more hopeful than I have been at any moment since my arrival in Europe.”

By this month, the lack of southern cotton was crippling Britain. The cotton supply was one-third its normal level, and nearly 75 percent of cotton-mill workers were unemployed or underemployed. Poverty spread throughout the working-class sections of the country as it starved for cotton, and this only helped the Confederacy. Thomas Dudley, the U.S. consul in Liverpool, wrote to Secretary of State William H. Seward:

“The current is against us and strong; and threatens to carry everything with it… They are all against us and would rejoice in our downfall… I think at this time we are more in danger of intervention than we have been at any previous period… if we are not successful in some decisive battle within a short period this government will be forced to acknowledge the Confederacy or else be driven from power.”

U.S. Secretary of State William H. Seward | Credit: Wikispaces.com

Seward sought to help alleviate the cotton shortage by writing to Charles Francis Adams, U.S. minister to Britain at London:

“We shall speedily open all the channels of commerce, and free them from military embarrassments; and cotton, so much desired by all nations, will flow forth as freely as before… The President has given respectful consideration to the desire informally expressed to me by the Governments of Great Britain and France for some further relaxation of the blockade in favor of that trade. They are not rejected, but are yet held under consideration, with a view to ascertain more satisfactorily whether they are really necessary, and whether they can be adopted without such serious detriment to our military operations as would render them injurious rather than beneficial to the interests of all concerned.”

Confederate officials hoped the cotton shortage would compel Britain and France to declare that the Federal blockade was “ineffective,” and thus subject to being broken by foreign powers under international law. But instead, Britain and France asked the Federal government to send them more cotton through northern channels, after it had been seized by Federal forces in areas under military occupation. This not only dimmed Confederate hopes for foreign recognition, but it encouraged Federal forces to seize as much cotton as possible as they advanced into the South.

Meanwhile, a pro-secessionist mob attacked and destroyed the offices of the St. Croix Herald, a newspaper published in St. Stephen, New Brunswick (British Canada), just across the border from Maine. The Herald had consistently supported the U.S., and had been attacked in December as well. This was a rare instance of secessionists destroying a Unionist newspaper, and not the other way around. With the printing press thrown into the St. Croix River, publication was suspended for several months.

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References

CivilWarDailyGazette.com; Davis, Jefferson, The Rise and Fall of the Confederate Government: All Volumes (Heraklion Press, Kindle Edition 2013, 1889), Loc 17522-38; Denney, Robert E., The Civil War Years: A Day-by-Day Chronicle (New York: Gramercy Books, 1992 [1998 edition]), p. 194; Fredriksen, John C., Civil War Almanac (New York: Checkmark Books, 2007), p. 182; Long, E.B. with Long, Barbara, The Civil War Day by Day (New York: Da Capo Press, Inc., 1971), p. 240; McPherson, James M., Battle Cry of Freedom: The Civil War Era (Oxford History of the United States Book 6, Oxford University Press, Kindle Edition, 1988), p. 548, 553; White, Howard Ray, Bloodstains, An Epic History of the Politics that Produced and Sustained the American Civil War and the Political Reconstruction that Followed (Southernbooks, Kindle Edition, 2012), Q362

Birth of the C.S.S. Florida

March 22, 1862 – The steamship Oreto left England, destined to become the menacing Confederate commerce raider C.S.S. Florida.

The C.S.S. Florida | Image Credit: Wikipedia.org

The C.S.S. Florida | Image Credit: Wikipedia.org

The Oreto, a twin-bladed screw steamer, had been under construction at Liverpool. U.S. officials expressed suspicions that the ship was being built for the Confederate navy. Those suspicions were supplemented by the fact that Liverpool was largely a pro-Confederate city that a U.S. diplomat claimed had been “made by the slave trade, and the sons of those who acquired fortunes in the traffic, now instinctively side with the rebelling slave-drivers.”

Building or arming warships for belligerent powers such as the Confederacy violated Great Britain’s Foreign Enlistment Act. The U.S. consul at Liverpool, Thomas H. Dudley, had discovered the ship’s true purpose as a commerce raider before she left port, but Confederate naval agent James D. Bulloch produced forged papers claiming that a Palermo merchant, not the Confederate government, owned the Oreto. The U.S. minister to Britain, Charles Francis Adams, presented Dudley’s evidence that the ship violated British law to the Foreign Office, but it was not acted upon before the Oreto was taken out of port, ostensibly just for a trial run.

Bulloch hosted a group of guests aboard the steamer on March 22. The new ship was commanded by a British captain, bore the British flag, and carried no armaments. After a short cruise in the harbor, all the guests but one were removed to smaller boats and the vessel left Liverpool. The lone remaining guest was John Low of the Confederate navy, and the ship headed for Nassau in the Bahamas to be fitted with four seven-inch guns.

She was later rechristened the C.S.S. Florida, a powerful Confederate commerce raider under Commander John N. Maffitt.

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References

Catton, Bruce, The American Heritage Picture History of the Civil War (New York: American Heritage Publishing Co., 1960), p. 260; Delaney, Norman C., Historical Times Illustrated Encyclopedia of the Civil War (New York: Harper & Row, 1986, Patricia L. Faust ed.), p. 520-21; Denney, Robert E., The Civil War Years: A Day-by-Day Chronicle (New York: Gramercy Books, 1992 [1998 edition]), p. 145; Fredriksen, John C., Civil War Almanac (New York: Checkmark Books, 2007), p. 126; Jones, Virgil Carrington (Pat), Historical Times Illustrated Encyclopedia of the Civil War (New York: Harper & Row, 1986, Patricia L. Faust ed.), p. 264; Long, E.B. with Long, Barbara, The Civil War Day by Day (New York: Da Capo Press, Inc., 1971), p. 187; McPherson, James M., Battle Cry of Freedom: The Civil War Era (Oxford History of the United States Book 6, Oxford University Press, Kindle Edition, 1988), p. 546; McPherson, James M., War on the Waters: The Union and Confederate Navies, 1861-1865 (Littlefield History of the Civil War Era, The University of North Carolina Press, Kindle Edition, 2012), p. 112; Time-Life Editors, The Blockade: Runners and Raiders (Alexandria, VA: Time-Life Books, 1983), p. 121

End of the Trent Affair

January 8, 1862 – The government of Great Britain received the official news that the U.S. would release Confederate envoys James Mason and John Slidell, thus averting an international crisis.

Confederate envoys James M. Mason and John Slidell | Image Credit: CivilWarDailyGazette.com

Confederate envoys James M. Mason and John Slidell | Image Credit: CivilWarDailyGazette.com

Mason, Slidell, and their secretaries had been imprisoned at Fort Warren in Boston Harbor after being seized by Federals while traveling aboard the British steamer R.M.S. Trent. Federal Captain Charles Wilkes of the U.S.S. San Jacinto had sought to prevent the men from going to Europe and obtaining foreign recognition of Confederate independence.

The British had reacted to the seizure with outrage, with the U.S. finally backing down in late December and agreeing to give the envoys up to their care. Although the two-month affair had been somewhat humiliating for U.S. foreign relations, it actually benefited the Federals because Britain had withheld vital supplies from the Confederacy in case they would be needed in a war against the U.S.

Lord Richard Lyons, British minister to the U.S., arranged for Commander W. Hewett to take the English screw sloop-of-war H.M.S. Rinaldo to pick up Mason and Slidell. Lyons informed Hewett that the envoys had “no official character. It will be right for you to receive them with all courtesy and respect as gentlemen of distinction, but it would be improper to pay them any of those honors which are paid to official persons.”

Without fanfare, Federal authorities released Mason, Slidell, and their secretaries on New Year’s Day. They boarded the tugboat Starlight, which took them to Provincetown on Cape Cod where they were taken aboard the Rinaldo. Hewett reported that the men were picked up “without form or ceremony… The gentlemen remarked that their only wish was to proceed to Europe.”

Though originally scheduled to be taken to Halifax, Nova Scotia, the envoys were instead taken to the Danish island of St. Thomas. From there they continued on to Southampton, England, aboard the British mail packet La Plata. Hewett had instructions not to “convey them to any part of the coast of the States which have seceded from the Republic.”

When the British learned of the envoys’ surrender a week later, they hailed it as a diplomatic victory over the U.S. However, Prime Minister Lord Palmerston maintained that Secretary of State William H. Seward’s response of December 27 listed “many doctrines of international law” that Britain refuted, and Foreign Minister Lord John Russell wrote to Seward challenging his legal arguments. Nevertheless, there would be no war between the U.S. and Britain, much to the Confederacy’s disappointment.

Mason and Slidell finally arrived in England on January 30. They were warmly greeted at Southampton, but when their train arrived at London, the reception was much colder. Only the London Times reported their arrival:

“We sincerely hope that our countrymen will not give these fellows anything in the shape of an ovation. The civility that is due to a foe in distress is all that they can claim. The only reason for their presence in London is to draw us into their own quarrel. The British public has no prejudice in favor of slavery, which these gentlemen represent. What they and their secretaries are to do here passes our experience. They are personally nothing to us. They must not suppose, because we have gone to the verge of a great war to rescue them, that they are precious in our eyes.”

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References

CivilWarDailyGazette.com (January 1); Denney, Robert E., The Civil War Years: A Day-by-Day Chronicle (New York: Gramercy Books, 1992 [1998 edition]), p. 107, 119; Donald, David Herbert, Lincoln (Simon & Schuster, Kindle Edition, 2011), Loc 6916; Foote, Shelby, The Civil War, A Narrative: Fort Sumter to Perryville (New York: Vintage Books, 1958), p. 220; Fredriksen, John C., Civil War Almanac (New York: Checkmark Books, 2007), p. 95, 102; Long, E.B. with Long, Barbara, The Civil War Day by Day (New York: Da Capo Press, Inc., 1971), p. 156-57, 164; White, Howard Ray, Bloodstains, An Epic History of the Politics that Produced and Sustained the American Civil War and the Political Reconstruction that Followed (Southernbooks, Kindle Edition, 2012), Q162; Wikipedia: Trent Affair