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By Root 6645 0

Dudley and Freeman Morse, had finally succeeded in placing an agent close to the Confederates’ center of operations.32 Soon Morse and Dudley were able to relay precise descriptions of the blockade runners leaving England, making it easier for the ships to be intercepted.18.3 33 One capture resulted in the loss of the sorely needed provisions Maury had bought for his family.34 Another netted the North a large cache of documents, which on inspection turned out to be two months’ worth of official correspondence between Richmond and the Confederates in England. Among the revelations was James Spence’s employment by the South, which ruined his cover as a disinterested advocate.

The consuls also exposed the Cunard shipping line as the secret carrier of Confederate dispatches between Nassau and England; they even uncovered how the Alabama was able to send and receive messages. “It has all the time been a mystery to me how Capt. Semmes could get his letters and papers,” wrote the agent known only as WFGA. The system turned out to be quite simple. The lighthouse keeper on the Hole in the Wall, at the south end of the Abacos Islands in the Bahamas, was being paid to act as a go-between: every two weeks, the Alabama would sail by and exchanges would be made.35 The Confederate operations might have been completely compromised were it not for the parsimonious attitude of the U.S. State Department. Espionage was an expensive game, and the two consuls were always running out of money. Seward had not increased their budget for some time, his estimation of their work having been colored by one or two blunders that had undermined their credibility.

“Think British Government will prevent iron ships leaving,” Bulloch informed Richmond on February 3, “and am much perplexed; object of armoured ships too evident for disguise.”36 The only Confederate project that had not been compromised was Matthew Maury’s. Using privately financed cotton bonds, he had bought a Scottish steamer called the Japan, which could be easily converted into a fighting ship. A colleague in the Royal Danish Navy was generously helping to oversee the construction on the Clyde. But Northern agents heard rumors about the ship once Maury began to assemble a crew and arrange for the delivery of guns and supplies. He needed fifty seamen and twenty-one officers. There were nine Confederate naval officers scattered around London, living in boardinghouses under assumed names. Maury used his rank to commandeer them for the Japan. That still left eleven vacancies that had to be filled with British officers. It was hardly ideal for the Confederates to be in the minority on their own cruiser, but the imminent threat of exposure left him with no other choice.

Maury was finalizing the last details for the Japan’s departure when permission to sell cotton bonds through the Erlanger banking house finally arrived from Richmond. Erlanger issued the prospectus on March 18. The public’s response was little short of frenzied, which made Spence’s objections look self-serving. By the third day more than $16 million worth of bonds had been sold.37 In his report, James Mason admitted that there had been “a strong opinion in moneyed circles of the City that the enterprise was a hazardous one, and likely to fail in the market.” But the Confederates had managed to overcome the City’s skepticism by touting the loan as a risk-free investment. Mason assured subscribers that no matter which side won the war, the bonds would always have to be honored.38

“Cotton is King at last,” crowed Mason.39 “It is financial recognition of our independence,” John Slidell declared to Richmond.40 His sentiments were echoed in London. Confederate sympathizers raised the issue of recognition in the House of Lords on March 23, but Russell made a forceful speech that put an end to the debate before it had even properly started. Charles Francis Adams was surprised and thought it the best Russell had given on the war.41 He did not know, of course, that Sumner was sending hysterical letters to the Duchess of Argyll and other