Postwar Adjustments and Alabama Claims
Northerners were outraged at British tolerance of non-neutral acts, especially the building of warships. The U.S. turned a blind eye to the Fenian raids some Irish veterans attempted against Canada. The U.S. demanded vast reparations for the damages caused by British built commerce raiders (especially CSS Alabama ), which Lord Palmerston bluntly refused to pay.
The dispute raged for years and went to arbitration at Geneva. After Palmerston's death, Prime Minister William Ewart Gladstone, wanting Britain and the USA to be at peace, yielded to the demand, but lowered strongly its amount.
In 1872, the U.S. was awarded $15,500,000 pursuant to the terms of the Treaty of Washington (1871), and the British apologized for the destruction caused by the British-built Confederate ships, while admitting no guilt.
Read more about this topic: Britain In The American Civil War
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