Gladstone, the Chancellor of the Exchequer and the third member of the Cabinet in importance, was well aware of Palmerstons and Russells attitude and, feeling certain that such would develop into the policy of the government, anticipated this probable event in a speech at Newcastle on October 7, wherein he expressed positively the view of the Prime Minister and Foreign Secretary as well as that of most of the aristocracy and higher middle class. There is no doubt, he declared, that Jefferson Davis and other leaders of the South have made an army; they are making, it appears, a navy; and they have made what is more than eitherthey have made a nation. We may anticipate with certainty the success of the Southern States so far as their separation from the North is concerned.
An exchange of confidential letters between members of a ministry is a different affair from an announcement to the public of a policy which has not been fully determined upon, and, soon after the delivery of this speech, it was felt that Gladstone had committed an indiscretion; yet for the moment Palmerston and Russell were bent on the policy of mediation and probable subsequent recognition of the independence of the Confederate States. On October 13, Russell sent to his colleagues a confidential memorandum putting the question whether it is not a duty for Europe to ask both parties in the most friendly and conciliatory terms to agree to a suspension of arms.
Fortunately for the North there were differences in the Cabinet, and Gladstones speech provoked a quasi-reply from Sir George Cornwall Lewis, the member of the Cabinet ranking next in importance to the Chancellor of the Exchequer. Addressing his constituents on October 14, he in effect