T. H. Dudley to F. H. Morse, November 15, 1866

Mr. Dudley to Mr. Morse.

Sir: Yours of the 13th instant, relating to a settlement you state that you have made, in conjunction with Mr. Gibbs, with Fraser, Trenholm & Co., has been duly received. As you contented yourself with sending me a mere statement of the substance without a copy of the agreement, I was compelled to apply through my solicitors to the other side for what you failed to give me. This accounts for the delay of a day in my answer. Although your letter, which is dated on the 13th instant, states that you hasten to give me the information of the settlement, (which now appears to have been made on the 6th instant, one week before the date of your letter,) we were informed of it by a letter of the attorneys of the other side, dated the 7th instant.

In comparing the report of the agreement rendered by Mr. Hull with your letter, I find it differs from the statement made by you in most important and material points. You state that Fraser, Trenholm & Co. are to give as a “sworn” statement of all rebel property held or controlled by them, &c. No such provision is in the agreement. You state that a portion under three fifths of the just and legal liens they have on the property is to be allowed them; the agreement provides that the claim of Fraser, Trenholm & Co. against the late confederate government is agreed at £150,000, and that this is to be first paid, and if any surplus remain it is to go to the United States.

I regard this agreement or settlement as most unjust and unfair to the government, and the conduct of yourself and Mr. Gibbs in entering into it, under the circumstances and in the manner it was done, as most discourteous and disrespectful to myself. Neither myself nor my attorneys were consulted, or any information given us that such a thing was contemplated. You nor Mr. Gibbs, though both in Liverpool a part of two days, never called on my attorneys or at the consulate. It is not enough for you to say I was absent. If you had dropped me a line at the time when you summoned Mr. Gibbs from Paris it would have found me at home, and I should certainly have remained until you came; or if you had gone to my office and made the matter known to the vice-consul, who was there, or to my attorney, whom you knew, I could and would have been with you in 18 hours. If there had been any desire on your part to have had me present, or to let me know what was being done, there was no difficulty in the way, Mr. Gibbs had been informed by letter before he left Paris that I was coming there. But tire slight or discourtesy to myself in settling these matters, which were intrusted to my conduct by special instructions, from the State Department, and about which I was probably more conversant than any one else, without consulting with me or giving me the least information that it was contemplated, however unpleasant it may be to me, or whatever false position it may place me in to my counsel or before the communities, either in this country or at home, is a mere personal matter and is of but slight importance when compared with the public interest, which I consider you have sacrificed by the injudicious and unfair agreement you have made.

Time or space will not permit me to comment upon this agreement as it deserves; it is unfair to the government both in its language as well as its substance or terms. I will only notice one matter: it gives them £150,000 which belonged to the government of the United States. They are to be paid this first out of the property in their hands. The surplus, if any, is to come to the United States. This sacrifice was unnecessary, and is just the same in practical effect as if you had given away out of the treasury of the United States this amount of money. If you answer that they would have been entitled, under Vice-Chancellor Wood’s opinion, to their liens, I answer that this opinion was delivered in a preliminary stage of the case, and when the facts were not before him, and there is no good reason for saying that even he would have adhered to this opinion upon a final hearing, when all the facts and the whole case were before him; much less that our government would consent to such a ruling, when there was an appeal from him to the chancellor and then to the House of Lords. As the matter stands, even under Vice-Chancellor Wood’s opinion, there is £20,000 secured to the government, and we have their securities for the payment of this sum. This much was certain. By your arrangement you give this up, release the securities, rely upon the individual liability of the firm for whatever, if anything, might be realized over and above £150,000. I have no right to anticipate the final result, or the amount that may ever find its way to the United States treasury from this source under your agreement, if carried into effect. I hope it may be a very large sum, but shall be disappointed in my expectations if it amounts to the sum now secured in the one suit which you now agree to abandon. As 1 was especially instructed by the State Department to institute the suit for an account against the firm of Eraser, Trenholm & Co., and that suit has been commenced and prosecuted under and by direction of the Secretary of State, of which fact you and Mr. Gibbs were both informed by me previous to your making the agreement, and the other suit, called the cotton case, has been conducted under and by direction of the State Department, I must decline for the present to discontinue them, especially when by so doing I shall release the securities which the government now has in one of the cases. I feel I have no authority or right to do so.

I am, sir, very respectfully, your obedient servant,