No. 22.
General Schenck to Mr. Fish.


[For Inclosure 2 in No. 21, see p. 481.]

Your 181, received last night, has been by some accident wet and blurred, but I hope to make it all out to-day. Meantime your telegram, which came Sunday night, was the occasion of a strictly confidential interview with Granville yesterday. He objected to this Government making first movement, but that point is now conceded. They object to having Arbitrators express opinion on indirect claims, when the two Governments agree that they are not to be the subject of award.

After consideration by Cabinet the following paper was given me last night confidentially as the draught of a possible communication to be made to me, if the United States have promised to assent to it and will previously put Her Majesty’s Government in possession of the terms of the assent:

Her Majesty’s Government adhere to their view that it is not within the province of the Arbitrators to consider or to decide upon the claims for indirect losses, viz, the transfer of the American shipping, the increased premiums of insurance, and the prolongation of the war, and that consequently the Government of the United States ought not to press for a consideration of such claims. They are, however, ready to state that, in the event of the Government of the United States agreeing that the Arbitrators are not to have regard, in any award that they may make, to the above-mentioned claims, Her Majesty’s Government will, on their part, agree that the view which they have heretofore presented of the inadmissibility of such claims shall still continue to be their principle of action and conduct in all like cases and in similar circumstances; and that they are ready, in pursuance of the recognition of such principle, to give assurance to the United States that, if Great Britain should, at any time hereafter, be a belligerent, while the United States is a neutral, claims of that nature, in similar cases and similar circumstances, will never be advanced against the United States, such an assurance for the future being reciprocally given by both parties. An arrangement such as is here sketched out might be carried into effect by an exchange of notes, which shall be communicated to and recorded by the Arbitrators.

In submitting this draught of their proposal, I should inform you that I have insisted on this language, “the United States agreeing to refrain from pressing for compensation or for any pecuniary award for the above-mentioned claims.”