No. 28.
General Schenck to Mr. Fish.


Had two hours’ discussion with Granville last night. To-day he hands me, as the result of conference with his colleagues, the following amended proposal. Compare it with their former offer and inform me how far you can assent or must object. I told him I thought it not modified so as to be yet satisfactory, but agreed to submit it to you.

Her Majesty’s Government are ready to engage 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 claims for indirect losses, namely, the transfer of the American shipping, the increased premiums of insurance, and the prolongation of the war, Her Majesty’s Government will, on their part, agree that the view which they have heretofore presented of such “claims shall be their principle of future action” and conduct; and 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 are neutral, Great Britain will never advance any claims inconsistent with that principle, such an engagement for the future being reciprocally given by both parties; the notes which are exchanged on this subject to be presented to the Tribunal of Arbitration and entered on its records.

In the prefatory paragraphs he strikes out. at my suggestion, the words “without prejudice to the arguments heretofore advanced by Her Majesty’s Government.”

Received at 1.20 a.m.