The American Civil War created a difficult situation for Great Britain. Although the British had outlawed slavery, the British textile industry was dependent on imports of cotton from the Confederate States. Public opinion was mixed. Many British aristocrats viewed the Civil War as a war of independence and sympathized with the Confederate cause. Many working class Britons sided with the Union. Torn by various interests, Great Britain declared its neutrality in the war. This decision angered both sides. Confederates were upset because Britain refused to recognize the Confederate States as a nation. The Union was angry because Britain recognized the Confederate States as a belligerent party, entitled to the same respects and courtesies as the Union. Throughout the war, diplomatic relations between the United States and Great Britain were tense. Occasionally, these tensions nearly led to war. One such crisis was the Trent Affair. In 1861, the Confederate States made James Mason and John Slidell diplomatic commissioners to Great Britain and France. Mason and Slidell were aboard the British mail ship Trent when it was stopped by the USS San Jacinto, under the command of Captain Charles Wilkes. Mason and Slidell were removed and the Trent was allowed to continue on its way. The actions of the American Navy infuriated the British. They viewed the seizure of Mason and Slidell as a breach of international law and a deliberate insult. Tempers flared on both sides of the Atlantic, and both nations talked of war. Queen Victoria's husband, Prince Albert, helped to ease the tension by removing harsh language from a diplomatic communication. The United States renounced Captain Wilkes's actions and released Mason and Slidell. The tensions subsided. British Canada was also a source of tension. Confederate spies used Canada as a base of operations, with many congregating in Montreal. On October 19, 1864, a small group of Confederate soldiers attacked the town of St. Albans, Vermont. The raiders robbed three banks and attempted to set the town on fire before riding back to Canada. Vermont forces entered Canada and captured some of the raiders, but the Canadian courts later released them. Confederates also captured several Union ships and took them to Canada. Once again, the Confederates were released by Canadian authorities. Canada's inability to prevent these attacks angered Americans, and tensions between the two nations would continue after the war. Loss of Southern cotton crippled the British textile industry, and thousands of Britons lost their jobs. Other British industries benefited from the war, selling materials to both sides. British companies provided the Confederate States with many ships, including the commerce raider the CSS Alabama. The Alabama destroyed numerous American merchant ships before it was sunk in 1864. Americans held Britain responsible for the Alabama's actions, and continued to claim damages for years. Finally, Britain and the United States took the matter to the Geneva Arbitration Commission. In 1872, Britain paid $15.5 million to the United States for the Alabama claims.

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