No. 32.
Earl Granville to Sir E. Thornton.

[From British Blue Book “North America” No. 9, (1872.) p. 7.]

Sir: With reference to my other dispatch of this day’s date, I transmit to you herewith, for your information, a copy of a revised draught which I gave confidentially to General Schenck, after consultation with the Cabinet.

I pointed out to him that we had left out the sentence objected to by him, “without prejudice,” &c, on condition that no converse proposition should appear in the answer from Mr. Fish.

That we had omitted the whole of the sentence objected to by Mr. Fish, “Her Majesty’s Government adheres,” &c

That we had left out the words, “in similar cases and in similar circumstances,” and have further modified the sentence as to the principle which will bind both nations for the future.

That we had adopted General Schenck’s last paragraph.

General Schenck said he would telegraph the revised draught this evening, but would give no opinion on it.

I am, &c.,

GRANVILLE.

Inclosure in No. 32.

Draught of letter from Earl Granville to General Schenck, as given to General Schenck by Earl Granville, May 6, 1872.

Sir: I have laid before my colleagues the dispatch addressed to you by Mr. Fish on the 16th ultimo, of which you furnished me with a copy on the 1st instant.

I informed you in my letter of the 20th of March last that Her Majesty’s Government, in communicating to you the grounds on which they hold that the claims for indirect losses are excluded from the scope and intention of the reference to the Tribunal of Arbitration at Geneva, did not wish to commence a diplomatic controversy, but merely to comply with the desire substantially expressed by the Government of the United States to be advised of the reasons which had prompted the declaration made by me on behalf of Her Majesty’s Government on the 3d of February.

Her Majesty’s Government are still of the same mind, and although they cannot admit the force of the partial rejoinder which Mr. Fish has made to that statement of their reasons, they agree with Mr. Fish in seeing no advantage in the continuance of an argumentative discussion on the subject.

It will, however, be understood that if I do not review the matter of Mr. Fish’s dispatch it is not from an assent to his positions, but from the hope that a way may be found to avoid further controversy.

In the full expectation, therefore, that an arrangement satisfactory to both countries will be accepted by the Government of the United States, I proceed to state the views of Her Majesty’s Government.

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, viz, 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 record.