timelets

In the naval battle of Copenhagen in 1801 Nelson lead the attack of the British fleet against a joint Danish/Norwegian enemy. The British fleet of the day was commanded by Admiral Sir Hyde Parker. The two men disagreed over tactics and at one point Hyde Parker sent a signal (by the use of flags) for Nelson to disengage. Nelson was convinced he could win if he persisted and that's when he 'turned a blind eye'.

In their biography, Life of Nelson, published just eight years later, Clarke and M'Arthur printed what they claimed to be a Nelson's actual words at the time:

"Putting the glass to this blind eye, he [Nelson] exclaimed, I really do not see the signal."
The first recorded use of the phrase in the form we normally use it today is in "More letters from Martha Wilmot: impressions of Vienna, 1819-1829." These were reprinted in 1935 and this quotation is recorded as being sent by Ms. Wilmot in 1823:
turn a blind eye and a deaf ear every now and then, and we get on marvellously well."

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also mentioned in UCB "History of Information".