How did Britain's proclamation of neutrality, combined with the subsequent building of the "Alabama," create a complex international incident, and what were the potential motivations and repercussions of that neutrality?

From the book

tes on the 13th of April 1861. On the 19th of April President Abraham Lincoln declared a blockade of the southern ports. On the 14th of May the British government issued a proclamation of neutrality, by which the Confederates were recognized as belligerents. This example was followed shortly afterwards by France and other nations. The blockade of the southern ports was not at first effective, and blockade-running soon became an active industry. The Confederates established agencies in England for the purchase of arms, which they despatched in ordinary merchant vessels to the Bahamas, whence…

rpool in two British ships. Captain Semmes there took command of her under a commission from the Confederate government. After a most destructive career she was sunk off Cherbourg by the “Kearsarge” on the 19th of June 1864. On these facts the United States government alleged against Great Britain two grievances, or sets of grievances. The first was the recognition of the Southern States as belligerents and a general manifestation of unfriendliness in other ways. The second was in respect of breaches of neutrality in allowing the “Alabama,” the “Florida” (originally the “Oreto”, the…

nfriendly utterances of British politicians and the material assistance afforded to the Confederates by British traders. The inclusion of the indirect losses and the other matters just referred to caused great excitement in England. That they were within the treaty was disputed, and it was argued that, if they were, the treaty should be amended or denounced. In October 1872 Lord Granville notified to General Schenck, the United States minister, that the British government did not consider that the indirect losses were within the submission, and in April the British counter-case was filed…

. With respect to the “Alabama” claims the British commissioners suggested that they should be submitted to arbitration. The American commissioners refused “unless the principles which should govern the arbitrators in the consideration of the facts could be first agreed upon.” After some discussion the British commissioners consented that the three following rules should apply.

ontended that it must be a diligence commensurate with the emergency or with the magnitude of the results of negligence. The British government maintained that while the measure of care which a government is bound to use in such cases must be dependent more or less upon circumstances, it would be unreasonable to require that it should exceed that which the governments of civilized states were accustomed to employ in matters concerning their own security or that of their citizens. The tribunal adopted the view suggested by the United States. It found that Great Britain was legally responsible…