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The captain of the Bellipotent is named Captain Edward Fairfax Vere or, as the men have nick-named him, Starry Vere. In general, he is widely admired.
Vere has picked up a new master-at-arms for the voyage, a man named John Claggart.
The Bellipotent becomes separated from the Mediterranean fleet. While on its solo mission, it sees an enemy ship and takes chase. The ship gets away and Captain Vere is frustrated, pacing up and down the deck.
At this moment, Claggart approaches him and begins to allude to some problems among the crew. Vere is very suspicious of Claggart, but he can't understand why he would make anything up. He asks him to name names. Claggart names Billy Budd.
Vere is astonished. He admires Billy greatly and had even thought of promoting him so that they could work more closely together.
When Claggart begins to list more evidence against Billy, Vere decides that they will continue the conversation in his cabin with Billy present. He debates whether or not Claggart is telling the truth but his intuitions are blocked.
When Billy comes inside Vere's cabin and hears Claggart's accusation, he is shocked. Vere tries to soothe him, but his hand shoots out and he punches Claggart in the face.
Vere is distressed, and the two of them prop the body upright.
Vere has Billy go in the back of the cabin and he calls the surgeon, who immediately can tell that Claggart is dead.
Vere can see what is coming. Unjust as the situation is, Billy is going to hang. He calls a drumhead court made up of an officer of marines, a sea lieutenant, and a sailing master.
Billy testifies before the court in Vere's cabin. He says that it is true that he killed Claggart but that it is not true that he was involved in a mutiny. Vere passionately tells Billy that he believes him.
The court wants to know why Claggart disliked Billy in the first place, but he has no idea. They suggest to Vere that if other men testified it might become more clear. Vere dismisses the idea, saying that it's something for psychologists and theologians to discuss. Right now, there is only the fact that Claggart is dead and Billy did it.
Vere sends Billy to the back room. The court is extremely compassionate toward Billy, as is Vere, but he tells them that, regardless of their private consciences, it is their duty to enforce the law. He reminds them that it is a time of mutiny, and that for this reason the law carries that much more weight.
Vere himself goes to tell Billy that he has been condemned to hang. The narrator speculates that Vere omitted no details, that Billy understood his dilemma, and that Vere perhaps broke down. When Vere emerges, it is clear that the news was harder on him than on the condemned.
Vere announces his decision to the crew, and is extremely formal.
Shortly after Billy's execution, the Bellipotent falls into battle with a French ship called the Atheist. Captain Vere is hit with a musket ball. After the Bellipotent wins the battle, they dock at an English port near Gibraltar. Vere dies there, and just before he passes he is heard murmuring Billy's name over and over again.