Papers Relating to the Foreign Relations of the United States, Transmitted to Congress with the Annual Message of the President, December 2, 1872, Part II, Volume II

[Inclosure 1 in No. 13.]

Earl Granville to General Schenck.

Foreign Office , March 20, 1872.

Sir: I have laid before my colleagues Mr. Fish’s dispatch of the 27th ultimo, of which, at my request, and authorized by your Government, you gave me a copy on the 14th instant.

Her Majesty’s Government recognize with pleasure the assurances of the President that he sincerely desires to promote a firm and abiding friendship between the two nations; and, animated by the same; spirit, they gladly avail themselves of the invitation which your Government appear to have given, that they should state the reasons which induced them to make the declaration contained in my note to you of the 3d ultimo, and which I then purposely omitted, in the hope of obtaining, without any controversial discussion, the assent of the Government of the United States.

Mr. Fish says, “What are called the indirect losses and claims are not now put forward for the first time. For years they have been prominently and historically part of the ‘Alabama claims.’ It would be superfluous to quote, or perhaps even to refer to, particular passages in the published instructions of this Government to their Minister to Great Britain, in the notes of that Minister to Her Majesty’s Principal Secretary of State for Foreign Affairs, or in other public papers, to show that the expectation of this Government has, from the beginning of the acts which gave rise to the ‘Alabama claims,’ been that the British Government would indemnify the United States. Incidental or consequential damages were often mentioned as included in the accountability.” This assertion does not appear to me accurately to represent the facts as they are shown in the correspondence between the two Governments. It is true that in some of the earlier letters of Mr. Adams vague suggestions were made as to possible liabilities of this country extending beyond the direct claims of American citizens for specific losses arising from the capture of their vessels by the Alabama, Florida, Shenandoah, and Georgia; but no claims were ever defined or formulated, and certainly none were ever described by the phrase “Alabama claims,” except these direct claims of American citizens.

No mention of any claim for national or indirect losses had been made during the negotiation, commencing with Mr. Seward’s dispatch to Mr. Adams, dated the 27th of August, 1866, and ending with the signature of the Convention of the 10th of November, 1868, by Lord Stanley and Mr. Reverdy Johnson, by the IVth Article of which, power was given to Commissioners “to adjudicate upon the class of claims referred to in the official correspondence between the two Governments as the ‘Alabama claims.’”

The first subsequent mention of any claim for national losses was in a communication, unauthorized by his Government, made by Mr. Reverdy Johnson, in March, 1869, to Lord Clarendon, in which he suggested that the terms of the Convention signed by him with Lord Clarendon, on the 14th of January, which comprised a reference to a Mixed Commission of the “Alabama claims,” should be enlarged so as to include all claims on the part of either Government upon the other, an essential condition of the [Page 437] proposal being that, in case a claim was set up by the United States, founded on the recognition of the Confederate States as belligerents, it should be open to the British Government to advance claims on their part, such as a claim for injury to British interests by the assertion, and exercise of belligerent rights by the United States upon British commerce.

Lord Clarendon at once declined to entertain this suggestion.

In Mr. Fish’s dispatch of the 25th of September, 1869, the Government of the United States intimated that they considered there might be grounds for some claims of a larger and more public nature, though they purposely abstained at that time from making them; but the grounds indicated were not limited to the acts of the Alabama and other similar vessels, or to any mere consequences of such acts, nor were these public claims then described or referred to in any manner as “Alabama Claims.” That expression, the “Alabama claims,” which first occurs in a letter from Mr. Seward to Sir F. Bruce, of the 12th of January, 1867, had always been used in the correspondence between the two Governments to describe the claims of American citizens on account of their own direct losses by the depredations of the Alabama and other similar vessels, and had never been employed to describe, or been treated as comprehending, any public or national claims whatever of the Government of the United States.

Down, therefore, to the time when Her Majesty’s Government proposed the appointment of a Joint High Commission to settle the Fishery Question and all other questions affecting the relations of the United States toward Her Majesty’s possessions in North America, no actual claim against Her Majesty’s Government had been formulated or notified on the part of the United States, except for the capture or destruction of property of individual citizens of the United States by the Alabama and other similar vessels.

When Her Majesty’s Government consented, at the request of the Government of the United States, that the “Alabama claims “should be dealt with by the High Commission, it was in the full confidence that the phrase “Alabama claims” was used by the United States Government in the same sense as it had been used throughout the previous correspondence and in the contentions signed by Lord Stanley and Lord Clarendon.

National claims of an indirect character, such as those referred to in Mr. Fish’s dispatch, could not be comprehended under the term “claims generically known as the Alabama claims.” The possibility of admitting as a subject of negotiation any claim for indirect national losses has never been entertained in this country; and it was therefore without the slightest doubt as to such claims being inadmissible that the British High Commissioners were appointed and proceeded to Washington.

At a meeting of the British and United States High Commissioners on the 8th of March, the latter, after a general statement of the claims of the United States, proceeded to say that, in the hopes of an amicable settlement, no estimate was made of indirect losses, without prejudice, however, to the right of indemnification on their account, in the event of no such settlement being made; and they afterward proposed, by direction of the President, that “the Joint High Commission should agree upon a sum which should be paid by Great Britain to the United States, in satisfaction of all the claims and the interest thereon.”

Mr. Fish says that the President earnestly hoped that the deliberations of the Commission would have resulted in an acceptance by Her Majesty’s Government of this proposition.

Her Majesty’s Government cannot understand upon what this hope was founded.

The position which the Government of this country have maintained throughout all the negotiations has been that they were guilty of no negligence in respect of the escape of the Alabama and the other vessels, and have therefore incurred no liability for any payment, and they still maintain this position.

The only ground on which Her Majesty’s Government could be asked to pay any sum would have been an admission on their part that there had been such negligence as rendered them justly liable to pay a sum in compensation. This would have been an absolute surrender of the position which has always been held by this country, and a confessiou, which could never have been expected from them, that they had been guilty of negligence.

Her Majesty’s High Commissioners, therefore, could only declare at once that a proposal of an “amicable settlement” in this particular form could not be entertained, and Her Majesty’s High Commissioners, on the part of this country, immediately made a counter-proposal, namely, the proposal of arbitration, and this proposal, after being to a certain extent modified on the suggestion of the United States High Commissioners, was accepted by them.

The modification suggested by the United States High Commissioners, and accepted by those of Great Britain, was a concession of no slight importance on the part of this country, namely, that the principles which should govern the Arbitrators in the consideration of the facts should be first agreed upon; and this concession was very materially enhanced when, in order to strengthen the friendly relations between the two [Page 438] countries and make satisfactory provision for the future, they further agreed that these principles should be those contained in the Rules in the VIth Article of the Treaty; for they thus accepted the retroactive effect of rules to which, nevertheless, they felt bound to declare that they could not assent as a statement of principles of international law in force at the time when the “Alabama claims” arose.

The friendly spirit of Her Majesty’s Government was further shown by their authorizing Her Majesty’s High Commissioners to express the regret felt by Her Majesty’s Government for the escape, under whatever circumstances, of the Alabama and the other vessels from British ports, and for the depredations committed by those vessels, and by their agreeing that this expression of regret should be formally recorded in the Treaty.

Nor did Her Majesty’s Government object to the introduction of claims for the expense of the pursuit and capture of the Alabama and other vessels, notwithstanding the doubt how far those claims, though mentioned during the conferences as direct claims, came within the proper scope of the arbitration. They acquiesced in the proposal to exclude from the negotiations their claims on behalf of Canada against the United States for injuries suffered from Fenian raids—an acquiescence which was due partly to a desire on their part to act in a spirit of conciliation, and partly to the fact, stated by Her Majesty’s High Commissioners, that a portion of these claims was of a constructive and inferential character.

The importance of these concessions must not be underrated. Nor can it have been expected by the Government of the United States that concessions of this importance would have been made by this country if the United States were still to be at liberty to insist upon all the extreme demands which they had at any time suggested or brought forward.

Her Majesty’s Government considered themselves justified in treating the waiver of indirect claims, in the event of an amicable settlement, proffered by the High Commissioners of the United States, as one which applied to any form of amicable settlement, and therefore comprised, in like manner, the form of amicable settlement proposed by the British High Commissioners, accepted on the part of the United States, and recognized in the preamble of the Treaty.

Such a waiver was, in fact, a necessary condition of the success of the negotiation.

It was in the full belief that this waiver had been made that the British Government ratified the Treaty.

Her Majesty’s Government are anxious that the considerations which made them hold this belief should be more fully explained to the Government of the United States than can be done in the form of a letter, and I have accordingly embodied them in a Memorandum, which I have the honor to inclose, and which I beg may be read with and considered as part of my present communication.

Her Majesty’s Government do not deny that it is as competent for the Government of the United States as it is for themselves to assert that their own interpretation of the Treaty is the correct one. But what Her Majesty’s Government maintains is, that the natural and grammatical construction of the language used in the Treaty and Protocols is in accordance with the views which they entertain, and sustains their assertion that the terms of reference to the Arbitrators are limited to direct claims, inasmuch as direct claims only have throughout the correspondence been recognized and repeatedly defined under the name of the “Alabama claims.”

There are some passages in Mr. Fish’s dispatch in which he defends the introduction into the American Case of the claims for indirect losses and injuries, which I cannot allow to pass without more special remark.

It is stated that they are put forward in the Case, not as claims for which a specific demand is made, but as losses and injuries consequent upon the acts complained of, and necessarily to be taken into equitable consideration in a final settlement of all differences between the two countries, and as not relinquished in the Treaty, but covered by one of its two alternatives.

Her Majesty’s Government do not perceive what “alternative” in the Treaty can cover these claims.

If, indeed, by this language Mr. Fish is to be understood as referring to the two different modes provided by Articles VII and X of the Treaty, for arriving at the amount of the payment to be made by Great Britain in the event of any liability being established, the answer seems obvious, viz, that these alternatives are applicable only to the settlement of the amount of damages, and not to the measure of liability.

Again, Mr. Fish states that the Treaty was not an amicable settlement, but only an agreement between the Governments as to the mode of reaching a settlement, and that no proffer of withholding an estimate of indirect losses can be claimed as a waiver until the result of the arbitration is arrived at; but he overlooks the fact that the Treaty is called an amicable settlement, not merely in relation to the “Alabama claims,” but as an entirety; and even in relation to the “Alabama claims “alone, it must clearly be taken that the amicable settlement which it professed to provide was arrived at from the moment when the treaty containing the agreement to go to arbitration upon the claims was signed and ratified. If, according to Mr. Fish’s view, an amicable settlement [Page 439] after a reference to arbitration can only be arrived at by an adjudication of the claims, it is obvious that no waiver of any such claims could, under such circumstances, ever be made, for before the time for waiver (on this supposition) had arrived the claims would already have been decided upon.

That Her Majesty’s Government never intended to refer these claims to arbitration, and that jn ratifying the Treaty they never contemplated their being revived in the argument before the Arbitrators, must have been obvious to you from the language used in the debate in the House of Lords on the 12th of June, on the motion for an address to the Queen, praying Her Majesty to refuse to ratify the Treaty.

On that occasion I distinctly stated this to be the understanding of Her Majesty’s-Government, and quoted the very Protocol of the 4th of May, to which I have referred above, as a proof that these indirect claims had “entirely disappeared.” When Lord Cairns, to whose speech allusion has been made in the United States Case, subsequently said that extravagant claims might be put in and take their chance, he was met with expressions of dissent. Moreover, Lord Derby, while criticising the negotiation and the terms of the Treaty in other respects, particularized the withdrawal of indirect claims. “The only concession,” he said, “of which I can see any trace upon the American side is the withdrawal of that utterly preposterous demand that we should be held responsible for the premature recognition of the South as a belligerent power, in company with that equally wild imagination, which, I believe, never extended beyond the minds of two or three speakers in Congress, of making us liable for all the constructive damages to trade and navigation which may be proved or supposed to have arisen from our attitude during the war.”

I observed that you were present in the House of Lords on that occasion, and you informed me, on the 16th of December, that you were present during the speeches of Lord Russell and myself, and that you communicated the next day the full newspaper report of the debate to your Government.

Sir S. Northcote, in the House of Commons, repeated, in other words, the substance of my remarks on the limitation of the terms of reference; and as his speech is printed in the papers on Foreign Relations, recently laid before Congress, it must also have been reported to your Government. But neither on the occasion of my speech, nor of his, nor when the ratifications of the Treaty were exchanged on the 17th of June,-did you call my attention to the fact that a different interpretation was placed on the Treaty and Protocol by Her Majesty’s Government and the Government of the United States; nor, so far as Her Majesty’s Government are aware, was their interpretation, thus publicly expressed, challenged either by the statesmen or the public press of the United States.

Her Majesty’s Government must therefore confess their inability to understand how the intimation contained in my note of the 3d of February last can have been received by the President with surprise.

Mr. Fish urges that the claims for national indirect losses which have been put forward on behalf of his Government involve questions of public law which the interest of both Governments requires should be definitely settled.

Her Majesty’s Government agree with Mr. Fish that it is for the interest of both countries that the rights and duties of neutrals upon some of the points hitherto thought open to serious controversy should be definitely settled, and had hoped that such a settlement had been secured by the Rules to which they have given their assent; but they cannot see that it would be advantageous to either country to render the obligations of neutrality so onerous as they would become if claims of this nature were to be treated as proper subjects of international arbitration.

Whatever construction may be placed upon the 1st Article of the Treaty, it is impossible to sever the terms of reference therein contained from the Rules in the VIth Article; and the measure of liability under the Arbitration, therefore, will be the measure of liability incurred by any neutral State which, after acceding to these Rules, may, “by any act or omission,” fail to fulfill any of the duties set forth in them.

The United States and Great Britain have bound themselves by the Treaty to observe these Rules as between themselves in future.

They have, moreover bound themselves to bring these Rules to the knowledge of other maritime Powers, and to invite them to accede to them. Could it have been expected that those Powers would accept a proposal which might entail upon a neutral such an unlimited liability, and, in some instances, might involve the ruin of a whole country?

Her Majesty’s Government cannot for themselves accept such a liability, nor recommend the acceptance of it to other nations.

Are the Government and people of the United States themselves prepared to undertake the obligation of paying to an aggrieved belligerent the expenses of the prolongation of the war and other indirect damages, if, when the United States are neutral, they can be shown to have permitted the infringement of any one, or part of any one, of the-three Rules through a want of due diligence on the part of their executive officers?

To attach such tremendous consequences to an unintentional violation of neutrality—it [Page 440] might he by a single act of negligence—would be to strike a heavy blow at the interests of peace; for war has scarcely any consequences more formidable to a belligerent than those which might thus be incurred by a neutral; and, while war offers a chance of gain, neutrality would, if such claims as these were once admitted, present without any such compensation the risk of intolerable loss.

With respect to the disclaimer made by Mr. Fish of any expectation or wish, on the part of the United States Government, to obtain any “unreasonable pecuniary compensation “on account of these indirect claims, I think it sufficient here to observe that, on the question of amount, the British people and Government have necessarily been obliged to look to the nature and grounds of the claims as they are stated in the Case of the United States, and have, of course, been unable to form a judgment from any other data of the expectations of those by whom the claims are advanced. If these claims could be considered as well grounded in principle, it appears to Her Majesty’s Government to be capable of demonstration that the magnitude of the damages which might be the result of their admission is enormous. The grounds of these views are more fully stated in the Third Part of the inclosed Memorandum.

Mr. Fish has appealed to the proceedings at the Washington Claims Commission in connection with the Confederate cotton claims. Her Majesty’s Government must, however, observe that there is no analogy between the two cases, as, by the Treaty, the Washington Commission has power “to decide in each case whether any claim has or has not been duly made, preferred, and laid before them, either wholly, or to any and what extent, according to the true intent and meaning of the Treaty;” no similar words being used as to the powers of the Geneva Tribunal.

It is the function of the Washington Commission to decide upon a variety of general claims, not of one kind, nor limited or defined beforehand, and Her Majesty’s Agent was instructed that his duty would prima facie be to present such claims as private individuals might tender for that purpose for acceptance or rejection by the Commission, Her Majesty’s Government not intending to make themselves responsible either for the merits of the particular claims or for the arguments by which they might be supported. The jurisdiction of the Geneva Tribunal was limited to one particular class and description of claims.

The facts are as follows:

On the 11th of November, in pursuance of the general instructions which had been given to Her Majesty’s Agent, a claim upon a bond issued by the so-called Confederate States for a sum forming part of a loan called the “Cotton Loan,” contracted by those States, and for the payment of which certain cotton seized by the United States was alleged to have been hypothecated-by the Confederate Government, was filed at Washington; and on the 21st I learned from you that the United States Government objected to claims of this kind being even presented.

Some delay took place in consequence of unavoidable causes, with some of which you are well acquainted. And there were others, such as the necessity not only of communicating with my colleagues, but with Sir Edward Thornton, and of considering how far, under the same general description, there might be included claims substantially different. The dispatches from Her Majesty’s Agent giving the details of the nature of the claims, and of the demurrer made to it by the United States Agent, did not reach me until the 6th of December. I had, in the mean time, ascertained from Sir Edward Thornton that the expression “acts committed” had been used by mutual agreement in the negotiations which preceded the appointment of the High Commission with a view to exclude claims of this class from the consideration of the High Commissioners; those words being also used in the XIIth Article of the Treaty with regard to private claims. The question was brought before the Cabinet at its next meeting on the 11th, and was finally decided on the 14th, as recorded in a minute by Mr. Gladstone. This decision was that the Confederate cotton claims should not be presented unless in the ease of bonds exchanged for cotton, which had thereby become the actual property of the claimant, and directions were given for a dispatch to be sent to this effect, and on the 16th I informed you that you might write to Mr. Fish that Her Majesty’s Agent would be instructed not to present any claims that did not come within the provisions of the Treaty.

Although it appears that the understanding need not necessarily have extended beyond the rejection by the Commissioners of the claims, under the XIVth Article, by which the Commissioners have power to decide whether any claim is preferred within the true intent and meaning of the Treaty, (as was done with various claims under a similar Article in the Claims Convention of 1853,) Her Majesty’s Government acceded to the construction which the United States Government had put upon that understanding.

Mr. Fish will observe the feeling by which Her Majesty’s Government were guided in coming to their decision on the 14th. They desired to put the most favorable construction upon any understanding which the United States Government might have supposed to exist.

Information reached me the next morning by telegraph of the adjudication, which [Page 441] Her Majesty’s Government had not expected to take place, upon the merits of the claim by the Commissioners. This required a reconsideration of the instructions, and fresh instructions were sent by the mail of the 23d, and also by telegraph, to Sir Edward Thornton to arrange with Mr. Fish that the presentation of claims which appeared to be manifestly without the terms of the Treaty should be withheld, and that when Her Majesty’s Agent was of opinion that a claim belonged to a class that ought not to be presented, it would be desirable that an agreement to that effect should be made and signed by Sir Edward Thornton and Mr. Fish. These instructions were communicated to Mr. Fish.

Her Majesty’s Agent has since acted in accordance with the decision of the Cabinet of the 14th of December. New claims of the like character have been tendered to him by parties who were unwilling to acquiesce in the decision of the Commissioners as applicable to their own cases, but which claims, under instructions from Her Majesty’s Government, have not been presented.

I have now placed in your hands, for examination by the Government of the United States, a statement of the reasons which, in the opinion of Her Majesty’s Government, sufficiently show that claims for indirect losses are not within the meaning of the Treaty; that they were never intended to be included by Her Majesty’s Government; that this was publicly declared before the ratification, when the error, if any, might have been corrected; that such claims are wholly beyond the reasonable scope of any Treaty of Arbitration whatever; and that to submit them for decision by the Tribunal would be a measure fraught with pernicious consequences to the interests of all nations and to the future peace of the world.

I appreciate the desire substantially, if indirectly, expressed by the Government of the United States, to be advised of the reasons which have prompted the declaration made by me on behalf of Her Majesty’s Government on the 3d of February, no less than the friendly and courteous language which has been employed by the United States Secretary of State. The present letter is intended by Her Majesty’s Government, not as the commencement of a diplomatic controversy, but as an act of compliance with that most reasonable desire. They are sure that the President will be no less anxious than they are that the conduct of both Governments should conform to the true meaning and intent of the instrument they have jointly framed and signed, whether that meaning be drawn from the authoritative documents themselves or from collateral considerations, or from both sources combined.

Entertaining themselves no doubt of the sufficiency of the grounds on which their judgment proceeds, they think it the course at once most respectful and most friendly to the Government of the United States to submit those grounds to their impartial appreciation. Her Majesty’s Government feel confident that they have laid before the President ample proof that the conclusion which was announced by me on the 3d of February, and to which I need hardly say that they adhere, cannot be shaken.

I have, &c.,

GRANVILLE.

[Inclosure 2 in No. 13.]

Memorandum.

Part I.—On the waiver of claims for indirect losses contained in the 36th Protocol.
Part II.—On the construction of the Treaty.
Part III.—On the amount of the claims for indirect losses.

part i.

On the waiver of claims for indirect losses contained in the 36th Protocol.

The first Protocol of the Conferences of the High Commission begins with a recital of the powers of the British Commissioners, stating Her Majesty’s purpose in their appointment to be to “discuss in a friendly spirit with Commissioners to be appointed by the Government of the United States the various questions on which differences had arisen between Great Britain and that country,” and to “treat for an agreement as to the mode of their amicable settlement.”

The Protocol of the 4th of May recounts that the American Commissioners stated, on the 8th of March, “that the history of the ‘Alabama,’ and other cruisers which had been fitted out, or armed or equipped, or which had received augmentation of force in Great Britain or in her Colonies, and of the operations of those vessels, showed (1) extensive direct losses in the capture and destruction of a large number of vessels with [Page 442] their cargoes and in the heavy national expenditures in the pursuit of the cruisers; and (2) indirect injury in the transfer of a large part of the American commercial marine to the British flag, in the enhanced payments of insurance, in the prolongation of the war, and in the addition of a large sum to the cost of the war, and the suppression of the rebellion; and also showed (3) that Great Britain, by reason of failure in the proper observance of her duties as a neutral, had become justly liable for the acts of those cruises and of their tenders; that the claims for the loss and destruction of private property which had thus far been presented amounted to about $14,000,000, without interest, which amount was liable to be greatly increased by claims which had not been presented; that the cost to which the Government had been put in the pursuit of cruisers could easily be ascertained by certificates of Government accounting officers; that, in the hope of an amicable settlement, no estimate was made of the indirect losses, without prejudice, however, to the right to indemnification on their account in the event of no such settlement being made.

“The American Commissioners further stated that they hoped that the British Commissioners would be able to place upon record an expression of regret by Her Majesty’s Government for the depredations committed by the vessels whose acts were now under discussion. They also proposed that the Joint High Commission should agree upon a sum which should be paid by Great Britain to the United States, in satisfaction of all the claims, and the interest thereon.”

The British Commissioners abstained “from replying in detail to the statement of the American Commissioners, in the hope that the necessity for entering upon a lengthened controversy might be obviated by the adoption of so fair a mode of settlement as that which they were instructed to propose; and they had now to repeat, on behalf of their Government, the offer of arbitration.

“The American Commissioners expressed their regret at this decision of the British Commissioners, and said further that they could not consent to submit the question of ths liability of Her Majesty’s Government to arbitration, unless the principles which should govern the Arbitrator in the consideration of the facts could be first agreed upon.”

These principles were subsequently discussed and agreed upon, and incorporated in the Draft of the VIth Article of the Treaty.

On the 6th of May, the Commissioners met for their final conference, and Lord de Gray said that. “it had been most gratifying to the British Commissioners to be associated with colleagues who were animated with the same sincere desire as themselves to bring about a settlement equally honorable and just to both countries.”

Mr. Fish replied, that “from the first Conference the American Commissioners had been impressed by the earnestness of desire manifested by the British Commissioners

to reach a settlement worthy of the two Powers. * * * His colleagues and he could never cease to appreciate the generous spirit and the open and friendly manner in which the British Commissioners had met and discussed the several questions that had led to the conclusion of the Treaty, which it was hoped would receive the approval of the people of both countries, and would prove the foundation of a cordial and friendly understanding between them for all time to come.”

Two days afterward the Treaty was signed with the following Preamble:

“Her Britannic Majesty and the United States of America, being desirous to provide for an amicable settlement of all causes of difference between the two countries, have, for that purpose, appointed their respective Plenipotentiaries. * * * And the said Plenipotentiaries, after having exchanged their full powers, which were found to be in due and proper form, have agreed to and concluded the following Articles.”

In the view of Her Majesty’s Government the statement made by the American Commissioners on the 8th of March contained a waiver of the claims for indirect losses contingent on an “amicable settlement” being arrived at; and this waiver consisted of two parts:

First, the affirmative statement that “in the hope of an amicable settlement no estimate was made of the indirect losses.” The words “in the hope of an amicable settlement” are in themselves grammatically general, and, unless qualified by a subsequent limitation, mean, in the hope of any such settlement as the parties shall acknowledge to fall under the phrase “amicable settlement.” Now, this part of the waiver, being a declaration in which the other party had an interest, and, so far, of the nature of the promise, could only be so limited by an express specification following it immediately, or at least before the other party had taken any step in reliance on its general character. But no such specification was made; nor does any specification at all as to the particular form of settlement appear in the Protocol. The phrase consequently retains the general character above described as its literal and grammatical meaning.

It might be said that the concluding words of the phrase—“no estimate was made of the indirect losses”—had a special regard to the form of amicable settlement thereafter proposed by the American Commissioners, viz, the payment of a gross sum. This, however, can only be maintained subject to the qualification that, if the estimate of indirect losses was withheld in the hope that that proposal would be accepted, and if the view of the American Commissioners was that the acceptance of that proposal alone [Page 443] would constitute the “amicable settlement,” in consideration of which the estimate of indirect losses was withheld, then the next step for them, when the proposal was declined, was to present that estimate; or, if not, then in some other specific manner to keep alive the claim. But they did neither; they did not intimate or give notice to the British Commissioners that their hope of an “amicable settlement” had been frustrated or, disappointed, nor did they say anything to the effect of making this first portion of the waiver dependent on the rejected proposal. And thus the phrase “an amicable settlement” is left to stand in its original and grammatical generality.

The second part of the waiver is as follows:

“Without prejudice, however, to the right of indemnification on their account [i. e., on account of indirect losses] in the event of no such settlement being made.” Its precise bearing obviously depends upon the meaning of the words “no such settlement.”

Now the word “such” grammatically qualifies the word “settlement” by referring to the antecedent expression “amicable settlement.” “Such,” therefore, means “amicable;” and the right reserved by the American Commissioners is grammatically a right to revive the question of indirect losses in the event of no amicable settlement being made, and is nothing more.

It is to be observed that at this time no proposal whatever had been made for payment of a gross sum, or for any particular form or mode of settlement.

The only remaining question is whether the Treaty was itself “an amicable settlement,” or, which is the same thing for the purposes of the argument, was in ordine toward an amicable settlement, and a step on the road to it.

This question is answered by the preamble of the Treaty, which declares that the President of the United States had (as well as Her Majesty) given his Commissioners certain powers “in order to provide for an amicable settlement” of certain differences, in which the “Alabama claims” were included; that these powers had been compared and verified; and that in virtue of them the Commissioners had agreed upon the Articles of the Treaty which are then set forth in order. The “amicable settlement” is here distinctly recognized not as a particular solution of the pending questions which had been proposed and set aside, but as an object of negotiation which had been provided for in a manner satisfactory to both parties, and the provision for which was embodied in the Treaty. The reservation, therefore, made by the American Commissioners had not come into play; the waiver remained in full force; and the, indirect losses were excluded by the preamble of the Treaty from the scope of the arbitration.

part ii.

On the construction of the Treaty of Washington.

Upon the construction of the Treaty of “Washington, apart from the Protocols, there appear to be three questions:

First. What claims are described by the words, “the claims generically known as the ‘Alabama Claims?”
Second. What vessels are described by the words, “the several vessels, which have given rise to the claims generically known as the ‘Alabama Claims?’”
Third. What claims are described by the words, “all the said claims, growing out of acts committed by the aforesaid vessels, and generically known as the ‘Alabama Claims?’” (being the words in which the subject-matter of the reference to arbitration agreed upon is defined.)

Each of these questions will be examined separately.

1. What claims are described by the words, “the claims generically known as the ‘Alabama Claims?’”

The word “known” signifies that this collective expression had acquired a definite sense, supposed to be mutually understood, from its use in previous communications, between the same parties.

The word “generically “naturally signifies that all the claims intended were ejusdem generis.

The word “claims” itself naturally signifies demands actually presented or notified, either with or without a full specification of particulars.

The diplomatic correspondence, which preceded the negotiation, must therefore be referred to, to discover, first, what demands had been presented, or notified; and secondly, what had been the previous use of the phrase “the ‘Alabama Claims?’”

The earliest intimation of any claims against this country was in the letter of Mr. Adams to Lord Russell, of 20th November, 1862; which spoke “of the depredations committed on the high seas upon merchant-vessels “by the “Alabama,” and of “the right of reclamation of the Government of the United States for the grievous damage [Page 444] done to the property of their citizens,” by reason of the escape of that vessel from British jurisdiction; and which referred, in support of that alleged right, to the treaty of 1794 between Great Britain and the United States, by which (as Mr. Adams inaccurately represented) “all cases of damage previously done by capture of British vessels or merchandise, by vessels originally fitted out in the ports of the United States,” were agreed to be referred to a commission, to award “the necessary sums for full compensation.” He added, that he had received directions from his Government “to solicit redress for the national and private injuries already thus sustained.”

On the 19th February, 1863; 29th April, 1863; 7th July, 1863; 24th August, 1863; 19th September, 1863, and 23d October, 1863, Mr. Adams presented to Lord Russell a series of definite claims made against the Government of this country by particular American citizens, in respect of ships and property belonging to them, said to have been destroyed by the “Alabama,” intimating, in his letter of the 23d October, that his Government “must continue to insist that Great Britain has made itself responsible for the damages which the peaceful, law-abiding citizens of the United States sustain by the depredations of the vessel called the ‘Alabama.’” He added, (in an important passage containing the first suggestion of arbitration as a mode of thereafter solving the question,) “In repeating this conclusion, however, it is not to be understood that the United States incline to act dogmatically or in a spirit of litigation. They fully comprehend how unavoidably reciprocal grievances must spring up from the divergence of the policy of the two countries in regard to the present insurrection. * * * For these reasons I am instructed to say that they frankly confess themselves unwilling to regard the present hour as the most favorable to a calm and candid examination by either party of the facts or the principles involved in cases like the one now in question. Though indulging a firm conviction of the correctness of their position in regard to this and other claims, they declare themselves disposed at all times hereafter, as well as now, to consider in the fullest manner all the evidence and the arguments which Her Majesty’s Government may incline to proffer in refutation of it; and, in case of an impossibility to arrive at any common conclusion, I am directed to say there is no fair and equitable form of conventional arbitrament or reference to which they will not be willing to submit. Entertaining these views, I crave permission to apprise your Lordship that I have received directions to continue to present to your notice claims of the character heretofore advanced, whenever they arise, and to furnish the evidence on which they rest, as is customary in such cases, in order to guard against possible ultimate failure of justice from the absence of it.”

In a later letter, of 31st October, 1863, Mr., Adams (while presenting other similar demands in respect of property destroyed by the “Florida”) spoke of “the claims growing out of the depredations of the ‘Alabama’ and other vessels issuing from British ports.”

On the 20th January, 1864, he presented another similar claim by the owners of the “Sea Bride,” captured by the “Alabama.” And at later dates the particulars were transmitted by him of certain claims made by persons whose property was alleged to have been destroyed by the “Shenandoah.”

On the 7th April, 1865, (when the war was considered by him as actually or virtually at an end,) Mr. Adams transmitted to Lord Russell certain reports of “depredations committed upon the commerce of the United States” by the “Shenandoah,” and added, “Were there any reason to believe that the operations carried on in the ports of Her Majesty’s Kingdom and its dependencies to maintain and extend this systematic depredation upon the commerce of a friendly people had been materially relaxed or prevented, I should not be under the painful necessity of announcing to your Lordship the fact that my Government cannot avoid entailing upon the Government of Great Britain the responsibility for this damage,” and he proceeded to speak of “the injury that might yet be impending from the part which the British steamer ‘City of Richmond’ had had in being suffered to transport with impunity from the port of London men and supplies, to place them on board of the French-built steam-ram ‘Olinthe,’ alias ‘Stoerkodder,’ alias ‘Stonewall,’ which had, through a continuously fraudulent process, succeeded in deluding several Governments of Europe, and in escaping from this hemisphere on its errand of mischief to the other.” He then went on to complain that, by reason of a series of acts, (the furnishing of “vessels, armaments, supplies, and men,”) which he contended to be almost wholly attributable to Great Britain, or to British citizens, the entire maritime commerce of the United States was in course of being transferred, and had already, to a great extent, passed over to Great Britain, whose recognition of the belligerent character of the insurgents he alleged to be the main and original source of all this mischief; adding, “In view of all these circumstances, I am instructed, whilst insisting on the protest heretofore solemnly entered against that proceeding,” (i. e., the recognition of Southern belligerency,) “further respectfully to represent to your Lordship that, in the opinion of my Government, the grounds on which Her Majesty’s Government have rested their defense against the responsibility incurred in the manner hereinbefore stated, for the evils that have followed, however strong they might have hitherto been considered, have now failed, by a practical reduction of all the ports heretofore temporarily held by the insurgents.”

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It is to be observed that, although the general injury to the commerce of the United States is largely referred to in this letter, Mr. Adams advances no new claim for compensation, on that or any other account, (except for captures made by the “Shenandoah,”) against Her Majesty’s Government; he even intimates that the particular claim for the captures by the “Shenandoah” would not then have been made, if his Government could have felt assured that no farther operations of the like nature would take place.

This letter led to a prolonged controversial argument, in the course of which (on the 4th May, 1865) Lord Russell observed that he could “never admit that the duties of Great Britain toward the United States were to be measured by the losses which the trade and commerce of the United States might have sustained,” and said, “The question, then, really comes to this: Is Her Majesty’s Government to assume or be liable to a responsibility for conduct which Her Majesty’s Government did all in their power to prevent and to punish? A responsibility which Mr. Adams, on the part of the United States Government, in the case of Portugal, positively, firmly, and justly declined. Have you considered to what this responsibility would amount? Great Britain would become thereby answerable for every ship that may have left a British port and have been found afterwards used by the Confederates as a ship of war; nay, more, for every cannon and every musket used by the Confederates on board any ship of war, if manufactured in a British workshop.” To which Mr. Adams replied (20th May, 1865) by a “recapitulation “of nine points, which he said he had desired to embody in his previous arguments. These points (beginning with the recognition of Southern belligerency on the high seas, and alleging this belligerency to have been in fact created, after the recognition, by means derived from Great Britain) mentioned, under the 7th head, “the burning and destroying on the ocean a large number of merchant-vessels and a very large amount of property belonging to the people of the United States.”

The 8th and 9th heads were thus worded:

“8. That, in addition to this direct injury, the action of these British built, manned, and armed vessels has had the indirect effect of driving from the sea a large portion of the commercial marine of the United States, and, to a corresponding extent, enlarging that of Great Britain, thus enabling one portion of the British people to derive an unjust advantage from the wrong committed on a friendly nation by another portion.
“9. That the injuries thus received by a country which has, meanwhile, sedulously endeavored to perform all its obligations, owing to the imperfection of the legal means at hand to prevent them, as well as the unwillingness to seek for more stringent powers, are of so grave a nature as in reason and justice to constitute a valid claim for reparation and indemnification.” Later on, in the same letter, Mr. Adams also said: “Your Lordship is pleased to observe that you can never admit that the duties of Great Britain toward the United States are to be measured by the losses which the trade and commerce of the United States may have sustained. To which I would ask permission to reply, that no such rule was ever desired. The true standard for the measurement would seem to be framed on the basis of the clear obligations themselves, and the losses that spring from the imperfect performance of them;” and “thus it is that, whatever may be the line of argument 1 pursue, I am compelled ever to return to the one conclusion: the nation that recognized a Power as a belligerent before it had built a vessel, and became itself the sole source of all the belligerent character it has ever possessed on the ocean, must be regarded as responsible for all the damage that has ensued from that cause to the commerce of a Power with which it was under the most sacred of obligations to preserve amity and peace.”

It will be seen that, although the general propositions of this letter might be wide enough to include the largest imaginable demands, it nevertheless abstains from putting forward any new claim in a definite or tangible form; and purports rather to recapitulate and adhere to the tenor of the preceding correspondence. And in this sense it was, evidently, understood by Lord Russell, who, in his answer of 30th August, 1865, referred to the suggestion of an arbitration contained in Mr. Adams’s former letter of the 23d of October, 1863; and, while declining “either to make reparation and compensation for the captures made by the ‘Alabama,’ or to refer the question to any foreign State,” offered a reference to a Commission of “all claims arising during the late civil war,” which the two Powers should agree to refer to the Commissioners. And again, on the I4th October, he repeated: “There are, I conceive, many claims upon which the two Powers would agree that they were fair subjects of investigation before Commissioners. But I think you must perceive that if the United States Government were to propose to refer claims arising out of the captures made by the ‘Alabama’ and ‘Shenandoah’ to the Commissioners, the answer of Her Majesty’s Government must be in consistency with the whole argument I have maintained, in conformity with the views entertained by your Government in former times. I should be obliged, in answer to such a proposal, to say: For any acts of Her Majesty’s subjects committed out of their jurisdiction and beyond their control, the Government of Her Majesty are not responsible,” &c.

On the 21st of October Mr. Adams addressed a long letter, with numerous inclosures, to Lord Russell, with reference to the “Shenandoah,” alleging that vessel to have been received by the authorities-at Melbourne with knowledge of an illegal equipment in [Page 446] this country; and insisting that, on that account, Her Majesty’s Government assumed a responsibility for all the damage which it had done, and which, down to the latest accounts, it was still doing, to the peaceful commerce of the United States on the ocean.” A particular claim by the owners of a ship captured by the “Shenandoah” was presented with this letter.

In his letter to Lord Clarendon of the 21st November, 1865, Mr. Adams, under the instructions of his Government, declined Lord Russell’s proposal for a limited reference to Commissioners of such claims as the two Governments could agree upon. “Adhering,” he says, “as my Government does to the opinion that the claims it has presented, which His Lordship has thought fit at the outset to exclude from consideration, are just and reasonable, I am instructed to say that it sees now no occasion for further delay in giving a full answer to His Lordship’s propositions.”

The whole result of this correspondence, down to the change of Administration lit this country in 1866, may be thus summed up:

1. That notwithstanding continual complaints, extending over a vast range of subjects, from the recognition of the belligerency of the Southern States downwards, no “claims” against this country were ever defined, formulated, or presented on the part of the United States, except for the specific losses of American citizens arising from the capture of their vessels and property by the “Alabama,” “Florida,” and “Shenandoah;” and (2) that no such form of expression as “the Alabama claims” had ever, down to this time been used to describe even the claims in respect of those captures, much less to comprehend any more vague and indefinite demands of indemnity to the general mercantile or national interests of the United States.

On the accession of Lord Derby to power, Mr. Seward in a dispatch to Mr. Adams, dated the 27th August, 1866, thus defined the “claims” which it had been the object of the United States to press in the preceding correspondence, and of which he now again instructed Mr. Adams to urge the settlement: “You will herewith receive a summary of claims of citizens of the United States against Great Britain for damages which were suffered by them during the period of our late civil war and some months thereafter, by means of depredations upon our commercial marine, committed on the high seas by the ‘Sumter,’ the ‘Alabama’ the ‘Florida,’ the ‘Shenandoah,’ and other ships of war, which were built, manned, armed, equipped, and fitted out in British ports, and dispatched therefrom by or through the agency of British subjects, and which were harbored, sheltered, provided, and furnished, as occasion required, during their devastating career, in ports of the realm, or in ports of British Colonies in nearly all parts of the globe. The table is not supposed to be complete, but it presents such a recapitulation of the claims as the evidence so far received in this Department enables me to furnish. Deficiencies will be supplied hereafter. Most of the claims have been from time to time brought by yourself, as the President directed, to the notice of Her Majesty’s Government, and made the subject of earnest and continued appeal. That appeal was intermitted only when Her Majesty’s Government, after elaborate discussions, refused either to allow the claims or to refer them to a Joint Claims Commission, or to submit the question of liability therein to any form of arbitration. The United States, on the other hand, have all the time insisted upon the claims as just and valid. This attitude has been, and doubtlessly continues to be, well understood by Her Majesty’s Government. The considerations which inclined this Government to suspend for a time the pressure of the claims upon the attention of Great Britain, are these: The political excitement in Great Britain, which arose during the progress of the war, and which did not immediately subside at its conclusion, seemed to render that period somewhat unfavorable to a deliberate examination of the very grave questions which the claims involve, &c. * * The principles upon which the claims are asserted by the United States have been explained by yourself in an elaborate correspondence with Earl Russell and Lord Clarendon. In this respect, there seems to be no deficiency to be supplied by this Department. * * * It is the President’s desire that you now call the attention of Lord Stanley to the claims in a respectful but earnest manner, and inform him that, in the President’s judgment, a settlement of them has become urgently necessary to a re-establishment of entirely friendly relations between the United States and Great Britain. This Government, while it thus insists upon these particular claims, is neither desirous nor willing to assume an attitude unkind or unconciliatory toward Great Britain. If, on her part, there are claims either of a commercial character, or of boundary, or of commercial or judicial regulation, which Her Majesty’s Government esteem important to bring under examination at the present time, the United States would, in such case, be not unwilling to take them into consideration in connection with the claims which are now presented on their part, and with a view to remove at one time, and by one comprehensive settlement, all existing causes of misunderstanding.”

Mr. Seward proceeded to recommend, in support of these claims, the use of the same general arguments, (including prominently the alleged effect of the recognition of Southern belligerency, and the general injury to the national commerce of the United States,) which had been previously so often employed Mr. Adams. He added: The claims upon which we insist are of large amount. They affect the interest of many thousand [Page 447] citizens of the United States, in various parts of the Republic. The justice of the claims is sustained by the universal sentiment of the people of the United States.”

The claims specified in the inclosure to this dispatch (which is headed, “Summary of claims of citizens of the United States against Great Britain”) relate exclusively to losses sustained by the owners and insurers of divers ships and cargoes captured by the “Alabama,” the “Shenandoah,” the “Florida,” and the “Georgia,” respectively.

This dispatch having been communicated by Mr. Adams to Lord Stanley, his Lordship, through Sir F. Bruce, (Lord Stanley to Sir F. Bruce, 30th November, 1866,) called attention to what he supposed to be an accidental error of Mr. Seward, in mentioning the “Sumter;” which “did not proceed from a British port, but was an American vessel, and commenced her career by escaping from the ‘Mississippi’” Then, after dealing with Mr. Seward’s general arguments, and declining to abandon the ground taken by former Governments, “so far as to admit the liability of this country for the claims then and now put forward,” he expressed his sense of the “inconvenience which arose from the existence of unsettled claims of this character between two powerful and friendly Governments,” and his willingness to adopt the principle of arbitration, provided that a fitting arbitrator could be found, and that an agreement could be come to as to the points to which arbitration should apply. He objected to refer to arbitration the question of the alleged premature recognition of the Confederate States as a belligerent; saying “the act complained of, while it bears very remotely on the claims now in question, is one as to which every State must be held to be the sole judge of its duty.” In another dispatch to Sir F. Bruce, of the same date, he says, “I have confined myself exclusively to the consideration of the American claims, put forward in Mr. Seward’s dispatch to Mr. Adams of the 27th August, and arising out of the depredations committed on American commerce by certain cruisers of the Confederate States. But, independently of these claims, there may, for aught Her Majesty’s Government know, be other claims on the part of American citizens, originating in the events of the late civil war, while there certainly are very numerous British claims arising out of those events, which it is very desirable should be inquired into and adjusted between the two countries. * * * The Government of the United States have brought before that of Her Majesty’s one class of claims of a peculiar character, put forward by American citizens, in regard to which you are authorized by my other dispatch of this date to make a proposal to Mr. Seward; but Her Majesty’s Government have no corresponding class of claims to urge upon the attention of the American Government.” And he, presently afterwards, speaks of “the special American claims, to which my other dispatch alludes,” an expression which is adopted and repeated by Mr. Seward, in his reply to Sir F. Bruce, (12th January, 1867.)

In a further dispatch to Mr. Adams (12th January, 1867) Mr. Seward justifies and reaffirms the sentence in his letter of the 27th August, in which the “Sumter” was mentioned, as “substantially correct,” on the ground that that vessel had been admitted into the British ports of Trinidad and Gibraltar, and “allowed to be sold” (in the latter port) “to British buyers for the account and benefit of the insurgents;” and afterward received under the British flag, at Liverpool. His practical conclusion is that “the United States think it not only easier, but more desirable, that Great Britain should acknowledge .and satisfy the claims for indemnity which we have submitted than it would be to find an equal and wise arbitrator who would consent to adjudicate them. If, however, Her Majesty’s Government, for reasons satisfactory to them, should prefer the remedy of arbitration, the United States would not object. The United States, in that case, would expect to refer the whole controversy, just as it is found in the correspondence which has taken place between the two Governments, with such further evidence and arguments as either party may desire, without imposing restrictions, conditions, or limitations upon the umpire, and without waiving any principle or argument on either side. They cannot consent to waive any question upon the consideration that it involves a point of national honor; and, on the other hand, they will not require that any question of national pride or honor shall be expressly ruled and determined as such.”

To this Lord Stanley (9th March, 1867, to Sir F. Bruce) replied: “To such an extensive and unlimited reference Her Majesty’s Government cannot consent, for this reason, among others, that it would admit of, and indeed compel, the submission to the arbiter of the very question which I have already said they cannot agree to submit. The real matter at issue between the two Governments, when kept apart from collateral considerations, is whether, in the matters connected with the vessels out of whose depredations the claims of American citizens have arisen, the course pursued by the British Government, and by those who acted under its authority, was such as would involve a moral responsibility on the part of the British Government to make good, either in whole or in part, the losses of American citizens. This is a plain and simple question, easily to be considered by an arbiter, and admitting of solution without raising other and wider issues; and on this question Her Majesty’s Government are fully prepared to go to arbitration, with the further proviso that, if the decision of the arbiter is unfavorable to the British view, the examination of the several claims of citizens of the United States shall be referred to a Mixed Commission, [Page 448] with the view to the settlement of the sums to be paid on them.” His Lordship then repeats that, deeming it important “that the adjudication of this question should not leave other questions of claims, in which their respective subjects or citizens may be interested, to be matter of further disagreement between the two countries, Her Majesty’s Government think it necessary, in the event of an understanding being come to between the two Governments as to the manner in which the special American claims (which have formed the subject of the correspondence of which his present dispatch was the sequel) should be dealt with, that, under a Convention to be separately and simultaneously concluded, the general claims of the subjects and citizens of the two countries arising out of the events of the late war should be submitted to a Mixed Commission,” &c. “Such, then,” (he concluded,) “is the proposal which Her Majesty’s Government desire to submit to the Government of the United States; limited reference to arbitration in regard to the so-called ‘Alabama’ claims, and adjudication by means of a Mixed Commission of general claims.”

The first occasion on which these words, “the so-called ‘Alabama’ claims” occurred in the course of the whole correspondence was shortly before the date of this letter; in a letter from Mr. Seward to Sir F. Bruce (12th January, 1867) in which he spoke of Lord Stanley’s previous dispatch of the 30th November, 1866, as setting forth “the views of Her Majesty’s Government of the so-called ‘Alabama’ claims presented in my dispatch to Mr. Adams,” and as concluding with a proposal of “the principle of arbitration, attended with some modification in regard to those claims.” Lord Stanley himself had spoken of” the settlement of the ‘Alabama’ and other claims,” by means of the proposals which he had authorized Sir F. Bruce to make, in a note to Sir F. Bruce, dated the 24th January, 1867. The same phrase, “Alabama claims,” had also been used on one or two occasions, with reference to the same proposed settlement, in articles which previously appeared in some of the English newspapers during the autumn of 1866.

Lord Stanley’s letter of the 9th March, 1867, was, by his direction, read to, and a copy left with, Mr. Seward; and on the 2d May, 1867, Mr. Adams communicated to Lord Stanley the substance of Mr. Seward’s reply, saying that “the Government of the United States adhere to the view which they formerly expressed as to the best way of dealing with these claims. They cannot, consequently, consent to a special and peculiar limitation of arbitrament in regard to the ‘Alabama’ claims, such as Her Majesty’s Government suggest They cannot give any preference to the ‘Alabama’ claims over others, in regard to the form of arbitrament suggested; and; while they agree that all mutual claims which arose during the civil war between citizens and subjects of the two countries ought to be amicably and speedily adjusted, they must insist that they must be adjusted by one and the same form of tribunal, with like and the same forms, and on principles common to all.” (Lord Stanley to Sir F. Bruce, 2d May, 1867.)

The language of this communication led Lord Stanley to think that his proposal might, perhaps, have been understood as applying only “to the claims arising out of the proceedings of the Alabama, to the exclusion of those arising out of the like proceedings of the Florida, Shenandoah, and Georgia.” He therefore wrote to Sir F. Bruce on the 24th of May, 1867, saying, “It is important to clear up this point; and you will, therefore, state to Mr. Seward that the offer to go to arbitration was not restricted to the claims arising out of the proceedings of the ‘Alabama,’ but applied equally to those arising out of the like proceeding of the other vessels that I have named.” Referring again to the terms of his dispatch of the 9th of March, he then directs Sir F. Bruce to inform Mr. Seward that “there was no intention on the part of Her Majesty’s Government to give any preference, in regard to the form of arbitrament, to the ‘Alabama’ claims over claims in the like category,” thinking that there must have been some misapprehension on this point, because “the question of disposing of general claims, in contradistinction to the specific claims arising out of the proceedings of the ‘Alabama,’ and vessels of that class, had not hitherto been matter of controversy between the two Governments.” Shortly afterward, having spoken of “the first or ‘Alabama’ class of claims,” he says, “The one class, or the specific claims, such as those arising out of the proceedings of the ‘Alabama’ and such vessels, depend for their settlement on the solution of what may be called an abstract question, namely, whether, in the matters connected with the vessels, out of whose depredations the claims of American citizens have arisen, the course pursued by the British Government, and those who acted under its authority, was such as would involve a moral responsibility on the part of the British Government to make good, either in whole or in part, the losses of American citizens,” and he repeats his former offer of separate modes of arbitration, as to the two classes of claims, viz, “those of the ‘Alabama’ class,” or “the ‘Alabama’ and such like claims” and the general claims of the citizens of both countries.

Further discussion ensued. Mr. Seward, on the 12th of August, 1867, (in a dispatch communicated by Mr. Adams,) said that he understood the British offer “to be at once comprehensive and sufficiently precise to conclude all the claims of American citizens for depredations on their commerce during the late rebellion, which had been the subject of complaint on the part of the Government of the United States, but that the Government of the United States would deem itself at liberty to insist before the arbitrator that the actual proceedings and relations of the British Government, its officers, agents, and subjects, toward the United States, in regard to the rebellion and the rebels, as they occurred [Page 449] during that rebellion, were among the matters which were connected with the vessels whose depredations were complained of.” He then objected to the constitution of two different tribunals, “one an Arbiter to determine the question of the moral responsibility of the British Government in regard to the vessels of the ‘Alabama’ class, and the other a Mixed Commission to adjudicate the so-called general claims on both sides,” and said that “in every case” his Government “agreed only to unrestricted arbitration.” (Lord Stanley to Sir F. Bruce, 10th September, 1867.)

Lord Stanley, in his reply of the 16th November, (through Mr. Ford, 16th November, 1867,) used further arguments in support of the British proposal, designating throughout the special class of claims as “the so-called Alabama claims.”

After some intermission the correspondence was resumed by a dispatch of Mr. Seward to Mr. Adams, expressing his wish “that some means might be found of arranging the differences now existing between England and the United States,” which was communicated to Lord Stanley on the 15th February, 1868. The questions causing these differences were thus enumerated by Mr. Seward: “1st. The Alabama claims. 2d. The San Juan Question. 3d. The Question of Naturalized Citizens, their rights and position. 4th. The Fishery Question;” and he suggested that “the true method of dealing with all these matters was by treating them jointly, and endeavoring, by means of a Conference, to settle them all.” (Lord Stanley to Mr. Thornton, 15th February,

1868.)

Negotiations followed, in the first instance directed to the third and second of these four questions. On the 20th October, Mr. Reverdy Johnson (who had now succeeded Mr. Adams) called on Lord Stanley “to discuss with me” (says Lord Stanley, in a dispatch of 21st October, 1868, to Mr. Thornton) “the question of the Alabama claims,” proposing a Mixed Commission, to whom “all the claims on both sides” should be referred. Lord Stanley “pointed out the inapplicability of this method of proceeding, as applied to the Alabama claims and others of the same class,” and suggested, as arbitrator, the head of a friendly State. As to the recognition of belligerency, he said that Her Majesty’s Government could not depart from the position which they had taken up, “but that he saw no impossibility in so framing the reference as that by mutual consent, either tacit or express, the difficulty might be avoided.”

On the 10th November, 1868, a Convention was accordingly signed (subject to ratification) between Lord Stanley, on the part of Her Majesty, and Mr. Johnson, on the part of the United States. By Article I of this Convention, it was agreed that “all claims of subjects of Her Britannic Majesty upon the Government of the United States, and all claims on the part of citizens of the United States upon the Government of Her Britannic Majesty, which might have been presented to either Government for its interposition with the other since the 26th of July, 1853, * * and which yet remain unsettled, as well as any other such claims which might be presented within the time specified in Article III,” (viz, within six months from the day of the first meeting of the Commissioners, unless they or the Arbitrator or Umpire should allow a further time,) should be referred to four Commissioners, with provision for an arbitration or umpirage, in case of their being unable to come to a decision on any claim. Article IV was in these terms: “The Commissioners shall have power to adjudicate upon the class of claims referred to in the official correspondence between the two Governments as the ‘Alabama’ claims; but before any of such claims is taken into consideration by them, the two High Contracting Parties shall fix upon some Sovereign or Head of a friendly State as an Arbitrator in respect of such claims, to whom such class of claims shall be referred, in case the Commissioners shall be unable to come to a unanimous decision upon the same.”

Article VI provided that “with regard to the before-mentioned ‘Alabama’ class of claims, neither Government shall make out a case in. support of its position, nor shall any person be heard for or against any such claim. The official correspondence which has already taken place between the two Governments respecting the questions at issue shall alone be laid before the Commissioners, and (in the event of their not coining to a unanimous decision, as provided in Article IV) then before the Arbitrator, without argument, written or verbal, and without the production of any further evidence. The Commissioners, unanimously, or the Arbitrator, shall, however, be at liberty to call for argument or further evidence, if they or he shall deem it necessary.”

Down to this point it is manifest that, in all the communications between the two countries the claims known and referred to as “the ‘Alabama’ claims” were claims for direct damage suffered by American citizens through the acts of the “Alabama” and similar vessels, and such claims only.

When the terms of this convention became known in America, the Government of the United States desired certain alterations to be made in it, none of which had any tendency either to enlarge the category of the claims in question, or to change the sense or application of the phrase “the ‘Alabama’ claims.” The correspondence as to the modifications desired continued till January, 1669, when (Her Majesty’s Government having agreed to the alterations then propose! by Mr. Seward) the amended Convention of the 14th of January, 1869, was signed by Lord Clarendon and Mr. Reverdy Johnson.

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The correspondence of this period throughout maintains and confirms the sense which the words “the ‘Alabama’ claims,” or “the so-called ‘Alabama’ claims,” had now acquired. In Lord Stanley’s dispatch of December 8, 1868, to Mr. Thornton, memoranda of several consultations and conferences with Mr. Reverdy Johnson, prior to the signature of the Convention of the 10th November, were inclosed. “The ‘Alabama’ claims;” “the ‘Alabama’ and other similar claims;” “the so-called ‘Alabama’ and other similar claims” and “the so-called ‘Alabama’ claims, and others included under the same head” are the several varieties of phrase used in these memoranda to describe the subject, ultimately defined in the Fourth Article of that Convention as “the class of claims referred to in the official correspondence between the two Governments as the ‘Alabama’ claims.” In a letter of the 12th November, 1868, Mr. Reverdy Johnson, while communicating a telegraphic dispatch from Mr. Seward, (in which a general approval of the terms of the Convention, afterwards modified in various important points, was accompanied by a stipulation that Washington, and not London, should be the place of meeting of the Commissioners, to which Her Majesty’s Government assented,) said; “I think the change will be disadvantageous to the ‘Alabama’ claimants.” In a dispatch of 30th November, 1868, Mr. Thornton stated the objections then urged by Mr. Seward to the Convention; in which Mr. Seward also spoke of the claims mentioned in Article IV as “the ‘Alabama’ and war claims,” and “the ‘Alabama’ claims,” and of the persons interested in those claims as “the ‘Alabama’ claimants.” Mr. Seward’s dispatch of the 27th November to Mr. Reverdy Johnson (communicated to Lord Clarendon on the 22d December) repeatedly employs the same language. He says, “The United States are obliged to disallow this Article IV. The United States have no objection to the first clause of the Article, which declares that the Commissioners shall have power to adjudicate upon the so-called ‘Alabama’ claims. Indeed, the United States would willingly retain this clause, because of its explicitness with regard to the ‘Alabama’ claims. They did not, in their instructions to you, insist upon such a special direction in regard to the ‘Alabama’ claims; but only because they thought that special mention of these claims might be deemed inconvenient on the part of Her Majesty’s Government; while it could not admit of doubt that these so-called ‘Alabama’ claims were plainly included, as well as all other claims of citizens of the United States, in the comprehensive description of claims contained in Article I. Secondly, it is to be considered by Her Majesty’s Government that the ‘Alabama’ class of claims constitute the largest and most material of the entire mass of claims of citizens of the United States against Great Britain, which it is the object of the Convention to adjust. Upon the ‘Alabama’ claims, as well as all others, this Government is content to obtain, and most earnestly desires, a perfectly fair, equal, and impartial judicial trial and decision. This Government has always explicitly stated that it asks no discrimination in favor of the ‘Alabama’ claims, and can admit of no material discrimination against them in the forms of trial and judgment; but must, on the contrary, have them placed on the same basis as all other claims.” * * * “It probably would conduce to no good end to set forth, on this occasion, the reasons why the ‘Alabama’ claims, more than any other class of international claims existing between the two countries, are the very claims against which the United States cannot agree to, or admit of any prejudicial discrimination. To present these reasons now would be simply to restate arguments which have been continually presented by this Department in all the former stages of this controversy; while it is fair to admit that these reasons have been controverted with equal perseverance by Her Majesty’s Department for Foreign Affairs.”

The general result of this correspondence was that, in the Convention of the 14th January, 1869, other provisions were substituted for those of the IVth and VIth Articles of the Convention of 10th November, 1868, to which the United States Government had objected; and the special mention of the “Alabama” was transferred from those Articles to Article I, which provided “that all claims on the part of subjects of Her Britannic Majesty upon the Government of the United States, and all claims on the part of citizens of the United States upon the Government of Her Britannic Majesty, including the so-called ‘ Alabama’ claims, which may have been presented to either Government for its interposition with the other since the 26th of July, 1853, * * * and which yet remain unsettled, as well as any other such claims which may be presented within the time specified in Article III of this Convention, whether or not arising out of the late civil war in the United States, shall be referred,” &c

On the 22d February, 1869, Mr. Thornton reported to Lord Clarendon the Resolution of a majority of the Committee on Foreign Relations of the Senate of the United States, recommending the Senate not to ratify this Convention, Mr. Sumner, who moved the resolution, having said “that it covered none of the principles for which the United States had always contended.” He also inclosed a Resolution of the Legislature-of Massachusetts, “protesting against the ratification of any Convention which did not admit the liability of England for the acts of the ‘Alabama’ and her consorts”

On the 22d March, 1869, Mr. Reverdy Johnson (without any special instructions) called upon Lord Clarendon, and proposed a further change in the 1st Article of the Convention, which bethought “would satisfactorily meet the objections entertained by [Page 451] the Senate to the Convention, and would secure its ratification by that body.” This new change consisted in the introduction of “all claims on the part of Her Britannic Majesty’s Government upon the Government of the United States, and all claims on the part of the Government of the United States upon the Government of Her Britannic Majesty,” as well as all claims of subjects and citizens, as to which the language of the Convention Would have remained unaltered. Lord Clarendon reports what then took place in his dispatch to Mr. Thornton, (March 22, 1869.) “I remarked to Mr. Johnson that his proposal would introduce an entirely new feature in the Convention, which was for the settlement of claims between the subjects and citizens of Great Britain and the United States, but that the two Governments not having put forward any claims on each other, I could only suppose that his object was to favor the introduction of some claim by the Government of the United States for injury sustained on account of the policy pursued by Her Majesty’s Government. Mr. Reverdy Johnson did not object to this interpretation of his amendment, but said that if claims to compensation on account of the recognition by the British Government of the belligerent rights of the Confederates were brought forward by the Government of the United States, the British Government might, on its part, bring forward claims to compensation for damages done to British subjects by American blockades, which, if the Confederates were not belligerents, were illegally enforced against them.” Lord Clarendon, then, after referring to the proofs which Her Majesty’s Government had given of their willingness to make any reasonable amendments to meet the wishes of the United States, and to the difference in the course of proceeding adopted in America, said “that it did not seem proper for Her Majesty’s Government to take any further step in the matter, or to adopt any amendment to the Convention, even if it had been free from objection.”

Mr. Reverdy Johnson (still without authority) renewed his proposition, in a letter to Lord Clarendon, dated 25th March, 1869, in which he stated that he had reason to believe that the objection of the Senate of the United States to the Convention consisted “in the fact that the Convention provided only for the settlement by arbitration of the individual claims of British subjects and American citizens upon the respective Governments, and not for any claims which either Government, as such, might have upon the other.” “My Government,” he added, “believe, as I am now advised, that it has a claim of its own upon Her Majesty’s Government, because of the consequences resulting from a premature recognition of the Confederates during our late war, and from the fitting out of the ‘Alabama’ and other similar vessels in Her Majesty’s ports, and from their permitted entrance into other ports to be refitted and provisioned during their piratical cruise. The existence of such a claim makes it as necessary that its ascertainment and adjustment shall be provided for as the individual claims growing out of the same circumstances.”

The United States Government, down to this time, had insisted that the new Convention ought strictly to follow the precedent of the Convention of 1853, which contained no provision for any species of public claims. Lord Clarendon, therefore, on the 8th of April, 1869, thus answered Mr. Reverdy Johnson: “Her Majesty’s Government could not fail to observe that this proposal involved a wide departure from the tenor and terms of the Convention of 1853, to which, in compliance with your instructions, you have constantly pressed Her Majesty’s Government to adhere, as necessary to insure the ratification of a new Convention by the Senate of the United States. No undue importance is attached to this deviation; but I beg leave to inform you that, in the opinion of Her Majesty’s Government, it would serve no useful purpose now to consider any amendment to a Convention which gave full effect to the wishes of the United States Government, and was approved by the late President and Secretary of State, who referred it for ratification to the Senate, where it appears to have encountered objections, the nature of which has not been officially made known to Her Majesty’s Government.”

Mr. Reverdy Johnson, on the 9th of April, replied that “the design of the Convention of 1853 was to settle all claims which either Government, in behalf of its own citizens or subjects, might have upon the other. * * * * At that time neither Government, as such, made a demand upon the other. But that, as my proposition assumes, is not the case now. The Government of the United States believes that it has, in its own right, a claim upon the Government of Her Majesty. In order, therefore, to a full settlement of all existing claims, it is necessary that the one which my Government makes, and any corresponding claim which Her Majesty’s Government may have upon the United States, should be included within the Convention of the 14th January, 1869. My instructions, to which your Lordship refers, were to provide for the settlement of the claims mentioned in such instructions by a Convention upon the model of the one for February, 1853. That I did not suggest in the negotiations which led to the Convention of January the including within it any Governmental claims was because my instructions only referred to the individual claims of citizens and subjects. I forbear to speculate as to the grounds upon which my instructions were so limited.”

Her Majesty’s Government adhered to their decision not to entertain at all the suggestion thus made by Mr. Reverdy Johnson; and they intimated (in correction of an erroneous inference drawn by him from the concluding sentence of Lord Clarendon’s [Page 452] letter of the 8th April) that it was not to he supposed that this proposal would be acceptable to Her Majesty’s Government, even if it were made or repeated under positive instructions from the United States Government, and with the prospect of terminating the entire controversy. (Lord Clarendon to Mr. Johnson, 15th April, 1869; and Mr. Johnson’s reply, 16th April, 1869.)

From this incident in the history of the negotiations the following conclusions of fact result:

1.: That Mr. Reverdy Johnson’s instructions from his Government never extended to the assertion or settlement of any other claims than those of individual citizens of the United States against Great Britain.
2.: That in suggesting (for the first time) the possible existence of public claims on behalf of his Government, he acted without authority.
3.: That no such public claims as those of which the existence was suggested by him had ever been presented or notified; nor were, even then, in any manner defined.
4.: That the public claims, of which the possible existence was so suggested, were not claims “growing” or arising (simply) “put of the acts of” the “Alabama,” or any other vessels; but claims “because of the consequences resulting from a premature recognition of the Confederates during the war, and from the fitting out of the ‘Alabama’ and other similar vessels in Her Majesty’s ports, and from their permitted entrance into other ports.”
5.: That the words “Alabama Claims” (or any equivalent form of expression) were never made use of, nor was their use ever proposed to be varied or extended so as to comprehend this new class of (suggested) public claims.
6.: That the idea of a one-sided reference of such supposed public claims of the Government of the United States only was never for a moment advanced or entertained; on the contrary, the essential condition of Mr. Johnson’s proposal was that it should also be open to Her Majesty to advance any public claims whatever which they might conceive themselves to have against the Government of the United States—a claim for injury to British interests, by the assertion and exercise of belligerent rights against British commerce, being expressly anticipated, as a probable or possible set-off to any claim on the part of the United States, founded upon the denial of a belligerent status, at any given period, to the Confederates.
7.: That, although offered under these conditions, the proposal was simply, and without a discussion, declined by Her Majesty’s Government.

It was in Mr. Sumner’s speech, at the meeting of the United States Senate, which refused to ratify the Convention of the 14th January, 1869, that the first conception of public claims, of the nature and magnitude of those now advanced in the “Case” of the United States, was made known to the world. His argument on this head was thus summed up by Mr. Thornton, (19th April, 1869, to Lord Clarendon:) Your lordship will perceive that the sum of Mr. Sumner’s assertions is, that England insulted the United States by the premature, unfriendly, and unnecessary Proclamation of the Queen, enjoining neutrality on Her Majesty’s subjects; that she owes them an apology for this step; that she is responsible for the property destroyed by the ‘Alabama’ and other Confederate cruisers, and even for the remote damage to American shipping interests, including the increase of the rate of insurance; that the Confederates were so much assisted by being able to get arms and ammunition from England, and so much encouraged by the Queen’s Proclamation, that the war lasted much longer than it would otherwise have done, and that we ought therefore to pay imaginary additional expenses imposed upon the United States by the prolongation of the war.” Mr. Sumner himself did not affect to represent the latter portion, at all events, of his suggested demand as “growing out of the acts of” the “Alabama,” or of any other particular vessels; and Mr. Thornton’s comment upon the whole of it shows very clearly the impossibility of ascribing to the acts of any particular vessels alleged to have been fitted out from British ports, either the whole or any ascertainable part of the general losses sustained by American commerce during the war, or even distinguishing between such losses of that kind as were real and those which were apparent only.

So far no step was taken by the United States Government to adopt Mr. Sumner’s views or to advance claims corresponding to them. On the 10th of June, 1869, Mr. Motley renewed to Lord Clarendon the declaration of the wish of his Government “that existing differences between the two countries should be honorably settled, and that the international relations should be placed on a firm and satisfactory basis,” which Lord Clarendon of course reciprocated. Then, after adverting to other subjects, he said that “the Claims Convention had been published prematurely, owing to some accident which he could not explain; and that consequently, long before it came under the notice of the Senate, it had been unfavorably received by all classes and parties in the United States. The time at which it was signed was thought most inopportune, as the late President and his Government were virtually out of office, and their successors could not be committed on this grave question. The Convention was further objected to because it embraced only the claims of individuals, and had no reference to those of the two Governments on each other;” and, “lastly, that it settled no question and [Page 453] laid down no principle. These were the chief reasons which had led to its rejection by the Senate;” and Mr. Motley added “that although they had not been at once and explicitly stated, no. discourtesy to Her Majesty’s Government was thereby intended.”

On the 25th of September, 1869, Mr. Fish revived the whole subject of the controversies between the two Governments within its widest range in a long and elaborate dispatch to Mr. Motley, in which he referred (among other things) to the responsibility of the British Government for (at least) “all the depredations committed by the ‘Alabama’” as indisputable. He stated, toward the end, the President’s concurrence with the Senate in disapproving the Convention of the 14th January, 1869, thinking (in addition to general reasons left to be inferred from the general arguments of the dispatch) that “the, provisions of the Convention were inadequate to provide reparation for the United States in the manner and to the degree to which he considers the United States entitled to redress.” He added: “The President is not yet prepared to pronounce on the question of the indemnities which he thinks due by Great Britain to individual citizens of the United States for the destruction of their property by rebel cruisers fitted out in the ports of Great Britain. Nor is he now prepared to speak of the reparation which he thinks due by the British Government for the larger account of the vast national injuries it has inflicted on the United States. Nor does he attempt now to measure the relative effect of the various causes of injury; as, whether by untimely recognition of belligerency; by suffering the fitting out of rebel cruisers; or by the supply of ships, arms, and munitions of war to the Confederates’; or otherwise, in whatsoever manner. * * * All these are subjects of future consideration, which, when the time for action shall come, the President will consider with sincere and earnest desire that all differences between the two nations may be adjusted amicably and compatibly with the honor of each, and to the future promotion of concord between them; to which end he will spare no efforts within the range of his supreme duty to the rights and interests of the United States. * * * At the present stage of the controversy, the sole object of the President is to state the position and maintain the attitude of the United States in the various relations and aspects of this grave controversy with Great Britain. It is the object of this paper (which you are at liberty to read to Lord Clarendon) to state calmly and dispassionately, with a more unmeasured freedom than might be used in one addressed directly to the Queen’s Government, what this Government seriously considers the injuries it has suffered. It is not written in the nature of a claim, for the United States now make no demand against Her Majesty’s Government on account of the injuries they feel they have sustained.”

Lord Clarendon, understanding this dispatch as intended to revive, and to prepare the way for a new settlement of, the claims previously advanced, spoke of it in his answering dispatch to Mr. Thornton (November 6, 1869) as “a dispatch from Mr. Fish on the ‘Alabama’ claims.” That it was not intended to extend, and that it had not the effect of extending, the signification of that term, as used in the previous correspondence, is plain, (1) from the fact that Mr. Fish expressly disclaimed for his dispatch the office or effect of making any new claim or demand; (2) that it reserved for future consideration the question of reparation for the (supposed) “national injuries “inflicted, by the British Government on the United States; and (3) that it “declined to measure the relative effect of the various (alleged) causes of injury;” the “suffering the fitting-out of rebel cruisers” being only one of three causes enumerated. Lord Clarendon simply contented himself with replying that “Her Majesty’s Government could not make any new proposition, or run the risk of another unsuccessful negotiation, until they had information more clear than that which was contained in Mr. Fish’s dispatch respecting the basis upon which the Government of the United States would be disposed to negotiate.” But, in a paper of observations upon the arguments in this dispatch, which he at the same time (6th November, 1869) transmitted to Mr. Thornton, to be communicated to Mr. Fish, he remarked, under the head of “Indirect injury to American commerce,” “This allegation of national, indirect, or constructive claims was first brought forward officially by Mr. Reverdy Johnson, in his attempt to renew negotiations on the Chinese Convention in March last. Mr. Thornton has shown the difficulty there would be in computing the amount of the claim, even if it were acknowledged, in a dispatch in which he mentions the continual decrease of American tonnage. This is partly, no doubt, to be ascribed to the disturbance of commercial relations consequent on a long war, partly to the fact that many vessels were nominally transferred to British owners during the war to escape capture. * * * * Is not, however, a good deal of it to be attributed to the high American tariff, which makes the construction of vessels in American ports more expensive than ship-building in England, and has thereby thrown so large a proportion of the carrying trade into English hands? There must be some such cause for it, or otherwise American shipping would have recovered its position since the war instead of continuing to fall off.” * * * * * And with regard to “the claims for vast national injuries,” he noticed that Professor Woolsey, the eminent American jurist, had repudiated them as untenable, &c.

This closes the narrative of the communications between the two Governments, anterior [Page 454] to those which had for their immediate result the negotiation of the Treaty of Washington. They show conclusively: (1) that, down to the 26th of January, 1871, (when Her Majesty’s Government, through Sir E. Thornton, proposed to Mr. Fish the appointment of a Joint High Commission to settle the Fishery Question, and all other questions affecting “the relations of the United States toward Her Majesty’s possessions in North America,”) no actual claim had been formulated or notified on the part of the United States against Her Majesty’s Government, except for the capture or destruction of property of individual citizens of the United States by the “Alabama,” and other similar vessels; (2) that the Government of the United States had, in Mr. Fish’s dispatch of the 25th of September, 1869, for the first time intimated to the Government of this country that they considered there might be grounds for some claims of a larger and more public nature, though they purposely abstained at that time from making them; (3) that the grounds indicated, as those on which any such larger and more public claims might be made, were not limited to the acts of the Alabama and other similar vessels, or to any mere consequence of those acts; and (4) that the expression “the ‘Alabama’ claims” had always been used, in the correspondence between the two Governments, to describe the claims of American citizens on account of their own direct losses by the depredations of the Alabama “and other similar vessels;” and had never been employed to describe, or as comprehending, any public or national claims whatever of the Government of the United States.

It was under these circumstances that Mr. Fish, on the 30th of January, 1871, informed Sir E. Thornton that the President thought “that the removal of the differences which arose during the rebellion in the United States, and which has existed since then, graving out of the acts committed by the several vessels, which had given rise to the claims generically known as the ‘Alabama’ claims, would also be essential to the restoration of cordial and amicable relations between the two Governments.” Sir E. Thornton replied (1st February, 1871) that he was authorized by Earl Granville to state that “it would give Her Majesty’s Government great satisfaction if the claims commonly known by the name of the ‘Alabama’ claims were submitted to the consideration of the same High Commission, by which Her Majesty’s Government had proposed that the questions relating to British possessions in North America should be discussed, provided that all other claims, both of British subjects and citizens of the United States, arising out of acts committed during the recent civil war in this country, were similarly referred to the same Commission.” Mr. Fish, in answer to this announcement, on the 3d of February, 1871, after citing the exact terms of Sir E. Thornton’s letter, expressed the satisfaction with which the President “had received the intelligence that Earl Granville had authorized him to state that Her Majesty’s Government had accepted the views of the United States Government as to the disposition to be made of the so-called ‘Alabama’ claims;” and that “if there be other and further claims of British subjects or of American citizens growing out of acts committed during the recent civil war in this country, he assents to the propriety of their reference to the same High Commission.”

Mr. Fish, therefore, and Sir E. Thornton agreed in describing, by the several forms of expression, “the claims generically known as the ‘Alabama’ claims,” “the claims commonly known by the name of the ‘Alabama’ claims,” “the ‘Alabama’ claims,” and “the so-called ‘Alabama’ claims,” and the same subject-matter. What this was is proved, not only by the previous use of the same or similar terms, but also by the fact that, if these words had been now intended to include indefinite public or national claims of the United States Government against Great Britain, and not merely those claims for direct losses which had been previously presented or notified, and any others ejusdem generis, it must of necessity have followed (according to the suggestions which had been made by Mr. Reverdy Johnson, and afterward by Mr. Motley) that any counter claims which the Government of Great Britain might have thought fit to advance, on public or national grounds, against the Government of the United States, must have been in like manner provided for. But the only other claims provided for were those of subjects of Great Britain and citizens of the United States.

In strict conformity with this view, Lord Granville, when enumerating in his instructions to Her Majesty’s High Commissioners (9th February, 1871.) the principal subjects to which their attention would be directed, described these claims as “the claims on account of the Alabama, Shenandoah, and certain other cruisers of the so-styled Confederate States;” saying, “Under this head are comprised the claims against Great Britain for damages sustained by the depreciations of the Alabama, Shenandoah, and Georgia, the vessels which were furnished on account of the Confederate States, and armed outside of British jurisdiction, and the Florida, which, though built in England, was armed and equipped in the port of Mobile.”

The same, or the equivalent words, therefore, as often as they are used in the Protocols of the Commissioners and in the Treaty of Washington itself, ought, upon ordinary principles of construction, to be understood as bearing the same sense. And this seems to be made more clear by the exclusion from the reference of any claims of this country or of the people of Canada on account of the proceedings of the Fenians in the United States. There might certainly have been national claims of Great Britain [Page 455] arising out of those proceedings, (in addition to any particular losses by Canadian subjects,) which could not possibly have been excluded on any just or intelligible principle, if indefinite claims for public or national losses had been intended to be left open to the Government of the United States.

On a careful examination of the language of the Protocols and the Treaty, nothing is found at variance with this conclusion, while very much is found to confirm it.

The 36th Protocol, drawn up after the Commissioners had agreed upon all the terms of the Treaty, for the purpose of recording (so far as they thought it necessary or desirable) the history of their proceedings, begins by stating the proceedings at their first conference, on the 8th March, 1871. On that occasion the American Commissioners spoke (1) of the feeling of the United States, “that they had sustained a great wrong, and that great injuries and losses were inflicted upon their commerce and their material interests by the course and conduct of Great Britain during the recent rebellion in the United States;” (2) of “the history of the Alabama and other cruisers, which had been fitted out, or armed, or equipped, or which had received augmentation of force in Great Britain or in her Colonies, and of the operations of those vessels, as showing (A) extensive direct losses in the capture and destruction of a large number of vessels with their cargoes, and in the heavy national expenditure in the pursuit of the cruisers; and (B) indirect injury in the transfer of a large part of the American commercial marine to the British flag, in the enhanced payments of insurance, in the prolongation of the war, and in the addition of a large sum to the cost of the war and the suppression of the rebellion; and as also showing (C) that Great Britain, by reason of failure in the proper observance of her duties as a neutral, had become justly liable for the acts of those cruisers and their tenders.” So far all is preamble, and as yet there is no mention of claims. General injury to the commerce and material interests of the United States, “by the course and conduct of Great Britain,” direct losses by the captures of the “Alabama” and similar cruisers, and also (an item now first added) by the national expenditure in their pursuit; and indirect public injury, “shown by the history of those vessels and their operations,” are all spoken of; but the “liability,” expressly inferred from the same “history” against Great Britain, is limited to “the acts of those vessels and their tenders.”

The American Commissioners then proceed to speak of “the claims for the loss and destruction of private property which had thus far been presented” as amounting to about 14,000,000 dollars, without interest, “which amount was liable to be greatly increased by claims which had not yet been presented;” and, with respect to the new head of direct losses, now for the first time mentioned, they say that “the cost to which the Government had been put in pursuit of cruisers could easily be ascertained by certificates of Government accounting officers.” Here the word “claims” is used with respect to direct losses only, as it had always been used before, but with notice that direct losses of the Government, in pursuit of the vessels referred to, are now meant to be included in that category, as well as the losses of private citizens. And then follow the words: “That, in the hope of an amicable settlement, no estimate was made of the indirect losses, without prejudice, however, to the right of indemnification on their account, in the event of no such settlement being made.”

Here is a clear waiver of the (assumed) “right of indemnification” for indirect losses in the event of “an amicable settlement” being made. The meaning of the words “an amicable settlement” has been already considered in the First Part of this Memorandum. At present the question is as to the meaning of the words “the claims generically known as the ‘Alabama’ claims.” If no actual claim for these indirect losses had been previously made, it clearly was not made now by treating it as a reserved “right” which would or might be insisted on in the event of no amicable settlement being arrived at. Still less could it, by means of any such reservation, be brought within the category of “claims” already “generically known as the ‘Alabama’ claims.”

The next step in the proceedings corroborates this view. For, after stating their desire for an expression of regret on the part of Her Majesty’s Government, which they obtained, the American Commissioners then proposed “that the Joint High Commissioners should agree upon a sum which should be paid by Great Britain to the United States, in satisfaction of all the claims, and the interest thereon.” All the claims are here spoken of; but it can hardly be possible that, in this proposal, they meant to include indirect losses; because “the right to indemnification” on that account was only to be asserted in the event of no amicable settlement being made; nor were these indefinite claims such as, by any possibility, could be regarded as bearing interest.

In the later passages of this Protocol, which relate to the proceedings resulting in the reference to Arbitration, and in the agreement as to the three “Rules,” no trace occurs of any recurrence to the reserved “right of indemnification,” or to the subject of indirect losses. “The ‘Alabama’ claims” alone are spoken of.

In the 1st Article of the Treaty itself, the words “generically known,” &c., so far as they differ from other forms of expression previously used in respect of the same subject, differ only by defining that subject with greater accuracy, so as more pointedly to exclude indirect losses.

“Generically” is an adverb of classification, with reference to the nature of the subject-matter [Page 456] itself. Claims for direct losses, by the acts of a particular class of vessels, or by a definite expenditure for the prevention of these acts, are, in their nature, of the same category or genus; and it is the very fact of their being capable of being directly connected with the acts of those vessels, as an effect with its cause, which makes them so. Indirect public losses, to which many concurrent causes may have contributed (as, with respect to those now in question, is clearly demonstrated by Mr. Sumner’s speech, and Mr. Thornton’s observations upon it, and also by Lord Clarendon’s memorandum of the 6th November, 1869,) are different in their kind, and open up much wider, and wholly different, fields of inquiry.

The VIIth and Xth Articles of the Treaty appear also to be irreconcilable with any other view of the “Claims “referred. The Arbitrators are to “first determine, as to each vessel separately, whether Great Britain has, by any act or omission, failed to fulfill any of the duties,” &c.; and “shall certify the fact as to each of the said vessels.” This inquiry is addressed, and is limited, to certain imputed “acts or omissions” of this country, not as to any other matters, but as to each, separately, of certain vessels. The Arbitrators, if they should find “that Great Britain’ has failed to fulfill any duty or duties as aforesaid,” have power to “award a sum in gross to be paid by Great Britain to the United States for all the claims referred.” But the power of awarding a sum in gross cannot enlarge or alter the category of the claims referred, or the scope of the inquiry; the foundation of such an award must be some particular failure of duty, considered by the Arbitrators to have been established against Great Britain, by some acts or omissions as to some particular vessels or vessel; and the sum awarded can only be in respect of damages resulting from such failure of duty, as to such particular vessels or vessel. If the Arbitrators should “find that Great Britain has failed to fulfill any duty or duties as aforesaid,” but do not award a sum in gross, a Board of Assessors is then “to ascertain and determine what claims are valid and what amount or amounts shall be paid by Great Britain to the United States, on account of the liability arising from such failure as to each vessel, according to the extent of such liability as decided by the Arbitrators.” It seems impossible that power can have been given to the Arbitrators to award a sum in gross for claims not severable as to each vessel, and which, therefore, the Assessors, when dealing with the case of each vessel in detail, could not entertain or allow.

II. The second question, viz, what vessels are described by the words “the several vessels which have given rise to the claims generically known as the ‘Alabama claims,’” admits of being more concisely treated.

Until Mr. Seward’s dispatch to Lord Stanley, of the 27th August, 1866, the “Alabama,” “Florida,” “Georgia,” and “Shenandoah” were the only particular vessels in respect of whose acts any claims had been made. With respect to more general complaints of the same character, Mr. Adams, in his letter to Lord Russell of the 7th April, 1863, referred only to vessels “supplied from the ports of the United Kingdom,” adding, “So far as I am aware, not a single vessel has been engaged in these depredations excepting such as have been so furnished. Unless, indeed, I might except one or two passenger steamers belonging to persons in New York, forcibly taken possession of while at Charleston in the beginning of the war, feebly armed, and very quickly rendered useless for any aggressive purpose.” In his letter of the 20th May, 1865, when recapitulating his former complaints, he mentioned under this head, only “the issue from British ports of a number of British vessels,” by which a large amount of American property had been destroyed; the action of these British built, manned, and armed vessels; the ravages committed by armed steamers, fitted out from the ports of Great Britain;” and “the issue of all the depredating vessels from British ports with British seamen, and with, in all respects but the presence of a few men acting as officers, a purely British character.”

Mr. Seward, in his dispatch of the 27th August, 1866, (as has been already seen,) spoke of “depredations upon our commercial marine, committed by the ‘Sumter,’ the ‘Alabama,’ the ‘Florida,’ the ‘Shenandoah,’ and other ships of war, which were built, manned, armed, equipped, and fitted out in British ports, and dispatched therefrom by or through, the agency of British subjects, and which were harbored, sheltered, provided, and furnished, as occasion required, during their devastating career, in ports of the realm, or in ports of British Colonies in nearly all parts of the globe.”

As the “Sumter” was (notoriously) not built, manned, armed, equipped, or fitted out in any British port, or dispatched therefrom by or through the agency of any British subjects, Lord Stanley thought that this was a casual and unintentional error, and pointed it out to Mr. Seward (through Sir F. Bruce) as such; especially as the “Georgia,” in respect of which vessel particular claims were scheduled to Mr. Seward’s dispatch, was not named therein; while no such claims’ were scheduled in respect of the “Sumter” or of any other ships, except the “Alabama,” “Shenandoah,” “Georgia,” and “Florida.” Mr. Seward, as has been already seen, justified himself (12th January, 1867) as “substantially correct,” on the ground that the “Sumter” had received certain hospitalities in the British ports of Trinidad and Gibraltar, and had been sold to British subjects at Gibraltar and afterward received at Liverpool.

[Page 457]

As this was the first occasion, so it was also the last, on which mention was made of any ship or ships, not alleged to have been fitted out, armed, equipped, or manned in any British port, but which had merely been allowed to receive limited supplies of coal or other necessaries in British waters, as coming within the category of vessels whose acts could be made the foundation of claims against Great Britain, The words “the vessels which have given rise to the claims generically known as the Alabama claims” cannot possibly be extended to vessels of this character, unless it be on the ground of this one mention of the “Sumter” in the context which has been cited in these two letters of Mr. Seward. In the “Case,” however, presented on the part of the American Government under the Treaty, damages are claimed in respect of five vessels (“Sumter,” “Nashville,” “Retribution,” “Tallahassee,” “Chickamauga,”) which were in every sense American; and which are not alleged to have been built, fitted out, armed, equipped, or manned in any part of the British dominions, and in the 7th volume of the Appendix to that “Case,” further claims of the like character appear to be made in respect of the acts of two other similar vessels, (“Boston” and “Sallie.”)

It may be here observed that, by the general list of claims filed in the State Department of the United States, besides these vessels, not less than eight other American ships (“Calhoun,” “Echo,” “Jeff Davis,” “Lapwing,” “Savannah,” “St. Nicholas,” “Winslow,” “York,”) in respect of whose acts no claim is now made against Her Majesty’s Government, appear to have been also engaged in belligerent naval operations on the part of the Confederate States, which resulted in the destruction of ships and other property belonging to citizens of the United States.

When Lord Stanley (24th May, 1867) spoke of “the proceedings of the ‘Alabama’ and vessels of that class,” and (10th September, 1867) of “claims arising out of the depredations of the ‘Alabama,’” and “of vessels of the like character;” when Mr. Reverdy Johnson (25th March, 1869) spoke of the possible public claim of the United States Government, as resulting (inter alia) “from the fitting out of the ‘Alabama’ and other similar vessels in Her Majesty’s ports, and from their permitted entrance into other ports;” when Mr. Fish (25th September, 1869) spoke of the destruction of American commerce “by rebel cruisers fitted out in the ports of Great Britain,” and injury “by suffering the fitting out of rebel cruisers, or by the supply of ships, arms, and munitions of war to the Confederates;” when Mr. Motley (23d October, 1869) spoke of “the destruction of American commerce by cruisers of British origin carrying the insurgent flag;” it is clear that they did not include, or mean to include, as if belonging to one and the same category of vessels, ships alleged to be of British origin, and ships of American origin, with the fitting out or equipment of which British subjects had been in no way concerned.

In Lord Granville’s instructions to Her Majesty’s High Commissioners, it is also plain that the former class of vessels alone is contemplated. In the narrative of the proceedings of the 8th March, 1871, contained in the 36th Protocol, it seems equally clear that the United States Commissioners had also the same class of vessels in view; for they spoke of “the history of the Alabama and other cruisers which had been fitted out, or armed, or equipped, or which had received augmentation of force in Great Britain or in her colonies;” and they expressed a hope “that the British Commissioners would be able to place upon record an expression of regret by Her Majesty’s Government for the depredations committed by the vessels whose acts were now under discussion.” Her Majesty’s Commissioners (on a later day) replied “that they were authorized to express, in a friendly spirit, the regret felt by Her Majesty’s Government for the escape, under whatever circumstances, of the ‘Alabama’ and other vessels from British ports, and for the depredations committed by them;” which expression of regret was accepted by the American Commissioners as “very satisfactory.”

In the first Article of the Treaty itself, the expression of Her Majesty’s regret, in these identical words, immediately precedes the agreement of reference by which the claims referred are described as “growing out of acts committed by the aforesaid vessels.”

The necessary conclusion appears to be that the vessels intended to be referred to in the Treaty were only such as could, in good faith, be alleged to have been fitted out, or armed, or equipped, or to have received an augmentation of force in some part of the British dominions—the three Rules in the VIth Article of the Treaty being, of course, material to be regarded in determining all questions of fact in any case alleged to be of this nature. The “Sumter,” “Nashville,” and other ships above mentioned have never been alleged to come within any of the terms of this description, unless, indeed, it is now meant to be said that the permission to any Confederate vessel to obtain, in a British port, such limited supplies of coal as were permitted to both the belligerent parties by Her Majesty’s regulations ought to be deemed an improper “augmentation of the force” of such vessel within the meaning of the second Rule.

III. The solution of the third question, viz, what claims are described by the words “all the said claims, growing out of acts committed by the aforesaid vessels, and generically known as the Alabama claims,” (being the words in which the subject-matter of the reference to arbitration agreed upon is defined,) has been anticipated by the conclusions already arrived at. It may be added, however, that the words “growing out of acts committed by the aforesaid vessels” cannot, without forcing them altogether beyond [Page 458] their fair and natural sense, be applied to claims for indirect losses, not resulting from any particular acts committed by any particular ship or ships, but alleged to result (so far as they may be referable at all to naval or maritime causes) from the very existence on the high seas of a naval force belonging to the Confederate States, and recognized “by Great Britain and other neutral powers as having a belligerent character and belligerent rights. If the Confederate States had, in fact, procured all their cruisers from British sources, this criticism would still hold good; much more when several (in fact a considerable majority in number) of the cruisers actually employed by them, and by which losses were inflicted on United States citizens, were otherwise procured.

part iii.

On the amount of the claims for indirect losses.

“The claims as stated by the American Commissioners may be classified as follows:

“1. The claims for direct losses growing out of the destruction of vessels and their cargoes by the insurgent cruisers.
“2. The national expenditures in the pursuit of those cruisers.
“3. The loss in the transfer of the American commercial marine to the British flag.
“4. The enhanced payments of insurance.
“5. The prolongation of the war and the addition of a large sum to the cost of the war and the suppression of the rebellion.

“So far as these various losses and expenditures grew out of the acts committed by the several cruisers, the United States are entitled to ask compensation and remuneration therefor before this Tribunal.”—(United States Case, p. 469.)

Mr. Fish observes that “an extravagant measure of damages” has been supposed, not only by the British press, but also, “most unaccountably,” by some of the statesmen of this country, to be sought through the claim for compensation on account of indirect damages. It will, therefore, be well to present, from United States authority, some part of the evidence which, in the absence of explanation or retraction, has led to this conception. Undoubtedly the Case (p. 476) disclaims an accurate estimate; but it supplies materials which cannot fail to suggest the appropriate conclusion. They are as follows:

From the 4th of July, 1863, Great Britain is declared to have been “the real author of the woes “of the American people, (p. 479.) From this time “the war was prolonged for the purpose “of maintaining offensive operations “through the cruisers,” (ibid.) And the arbitrators are accordingly called upon “to determine whether Great Britain ought not in equity to re-imburse to the United States the expenses thereby entailed upon them,” (ibid.) On all these points, the Case proceeds to state, the evidence “will enable the Tribunal to ascertain and determine the amount.” To this amount interest is to be added up to the day when the compensation is payable, within twelve months after the award, (p. 480.) The rate of interest in New York is 7 per cent., (ibid.;) and “the United States make a claim for interest at that rate” from July 1, 1863, “as the most equitable day.” The interest, therefore, is to be charged at 7 per cent, for a period of from ten to eleven years.

It may be presumed to be incapable of dispute that more than half the expenses of the war were incurred after the first of July, 1863. What was the sum total of those expenses? Upon this point there is, in a form generally if not precisely appropriate, official evidence from America. In the Report of the Special Commissioner of the Revenue for 1869, (p. vi,) they are stated at 9,095,000,000 dollars, including 1,200,000,000 dollars for the suspension of industry. Of this amount 2,700,000,000 are set down to the Confederates.

Thus it appears that the Case does not go beyond the truth (so far as this head of damage is concerned) in stating that the Arbitrators would find the materials sufficiently supplied for estimating the amount which “in equity” Great Britain ought to pay. It may indeed be said that the amount, suggested by the passages and facts to which reference is made, forms an incredible demand. But, in perusing and examining this Case, the business of Her Majesty’s Government has been to deal, not with any abstract rule of credibility, but with actual, regular, and formal pleas, stated and lodged against Great Britain on behalf of one of the greatest nations of the earth. Is it, then, “most unaccountable,” in view of the evidence as it stands, that the press and that statesmen of this country should have formed the idea that “an extravagant measure of damages” was sought by the Government of the United States?

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It appears from the dispatch of Mr. Fish that no such idea has ever been entertained by that Government. Having this authentic assurance so supplied, it may be deemed little material to inquire whether on this important matter the language of the Case has been misunderstood by Her Majesty’s Government, or whether it is now disavowed. If, however, it has been misconstrued, the misconstruction undoubtedly has not been confined to England, but has been largely shared by writers on the Continent of Europe.

Were this Government indeed prepared to acquiesce in the submission of these claims, it would still remain to ask in what way the Government of the United States proposed to guard against the acceptance by the Arbitrators of those enormous estimates which, taken without authoritative comment, the language of the Case suggests. But it is scarcely necessary to observe that the question of more or less in this matter is entirely distinct from the question of principle on which the statements and arguments of Her Majesty’s Government are founded.

[Inclosure 3 in No. 13.]

General Schenck to Earl Granville.

Legation of the United States,
London , 21st March, 1872.

My Lord: At a very late hour last night I received your Lordship’s note of the date of yesterday, informing me that you had laid before your colleagues the copy of Mr. Fish’s dispatch to me of the 27th ultimo, of which I furnished you a copy on the 14th instant.

I have also received, at half past four o’clock to-day, a printed copy of a memorandum, which you refer to in the note as being inclosed, and which you request to have read and considered as part of that communication, being intended, as you inform me, to explain to the United States, more fully than can be done in the form of a letter, and as Her Majesty’s Government is anxious to do, the considerations which caused them to hold the belief at the time of the ratification of the Treaty that a waiver had been made of the claims for indirect damages.

Having informed me that. Her Majesty’s Government, recognizing with pleasure the assurance of the President that he sincerely desires to promote a firm and abiding friendship between the two countries, and being animated by the same spirit, gladly avail themselves of the invitation which you say my Government appears to have given, that they should state the reasons which induce them to make the declaration contained in your note of the 3d ultimo, you add that those reasons were purposely omitted at that time in the hope of obtaining, without any controversial discussion, the assent thereto of the Government of the United States.

Your Lordship then proceeds, in reply to Mr. Fish’s note, to discuss the whole question of the right of the United States, under the provisions of the Treaty, to put forward in their Case presented at Geneva their claims for indirect losses and damages, and to state the grounds for your denial of such right and the arguments by which that denial is sought to be sustained.

And your Lordship closes this full and long statement of views and arguments by expressing the confident feeling of Her Majesty’s Government that they have laid before the President ample proof that the conclusion which was announced in your note of the 3d of February, and by which you think it is hardly necessary to say they adhere, cannot be shaken.

This conclusion I understand to be that “Her Majesty’s Government hold that it is not within the province of the Tribunal of Arbitration at Geneva to decide upon the claims for indirect losses and injuries put forward by the United States.”

Almost every moment of available time since the receipt of your Lordship’s note has been occupied with the copying of it, in order that I may be able to transmit it in time to overtake at Queenstown the mail steamer which leaves Liverpool to-day. I therefore make my acknowledgment of the delivery of your communication brief, and hasten to forward it to my Government at home, that it may have, with the least possible delay, the attention and answer from there which it may be thought to require. I have the honor to be, very respectfully, your obedient servant,

ROBT. C. SCHENCK.