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The master-at-arms of the ship is John Claggart, who is smart, educated, and appraising. Since warfare has changed and there is little use for hand-to-hand combat, his position has become something akin to "ship's policeman." He is not generally popular with the crew; as a result, there is much gossip about him. It is rumored that he, like many others, may be serving in the navy in order to avoid a jail sentence; but no information is given about his previous life.
Claggart is small and not built for hard work, which he avoids. He has come to seamanship only recently and rather mysteriously; as a result, he is pallid, unlike most of the hardened sailors. Since he speaks with a little accent, many believe he is not even British.
Claggart started in the lowest ranks of the navy, and through sobriety, deference, and the unexplained circumstances of some particular affair, he has risen to his present position. Through a net of various connections on shipboard, he knows just about everything that goes on.
Billy enjoys his new life as foretopman. His job aloft is not at the highest point, but he is comfortable with his position. He is alert, friendly, and sometimes laughed at for his earnest duty. Early on he sees another sailor whipped severely for laziness and decides that he will never be remiss in his duty. Still, he finds himself reprimanded for little things and is at a complete loss for the real reason behind it. The other sailors laugh at him for his confusion.
There is an older sailor, the wry Dansker, who has a terribly scarred face from battle. He has had a lot of experience in the navy, including time with Nelson. Most of the other sailors don't care for Dansker and stay away from him, but Billy likes him. Unexplainably, the old, worldly sailor befriends the terminally innocent Billy. He calls Billy "Baby Budd," and the other sailors follow suit.
The next day at the midday meal, Billy spills some soup, just as Claggart walks by. Claggart comments, "Handsome done, my lad!" Billy takes this as a friendly comment, but as Claggart walks away, his face becomes distorted. Then he viciously lashes at a drummerboy, who notices Claggart's angry visage.