Office of the Historian

Record of the proceedings of the tribunal of arbitration at the twenty-ninth conference held at Geneva, in Switzerland, on the 2d of September, 1872.

[Geneva, Switzerland, September 2, 1872.]

The conference was held with closed doors, pursuant to adjournment All the arbitrators were present.

Mr. Staempfli’s statement and Sir A. Cockburn’s memorandum regarding a sum in gross. The protocol of the last conference was read and approved, and was signed by the president and secretary of the tribunal. Count Sclopis, as president of the tribunal, acknowledged the receipt, by the arbitrators, of the note presented by the agent of Her Britannic Majesty on the question of interest, and of the reply to the same, presented by the agent of the United States.

The tribunal then proceeded to consider that question, and a majority of four to one decided that interest should be admitted as an element in the calculation for the award of a sum in gross.

Mr. Stæmpfli, as one of the arbitrators, presented to the tribunal copies of the synoptical table which he had prepared as a proposition for the determination of a sum in gross:

Estimate of Mr. Staempfli for the determination of a sum in gross.

After the last American table. British allowance. Mean.
Amount of claims $14,437,000 $7,074,000 $10,905,00
Expenditure in pursuit 6,735,000 940,000 Struck out.
Prospective profits and interruption of voyage 4,009,100 { Struck out as such, but for wages 588,000
25 per cent. on the values of vessels 400,000
11,893,000.
Round sum $12,000,000

Interest from the 1st January, 1864, to the 15th September, 1872.

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1. At 5 per cent. during eight years and eight and one-half months 8 x $600,000= $4,800,000
8½ x 50,000= 425,000
$5,225,000
17,225,000
Eventually one year’s interest more 17,825,000
2. At, 6 per cent. during eight years and eight and one-half months 8 x $720,000= $5,760,000
8½ x 60,000= 510,000
6,270,000 $18,270,000
Eventually one year’s interest more 18,990,000
3. At 7 per cent. during eight vears and eight and one-half months 8 x $840,000= $6,720,000
8½ x 70,000= 595,000
7,315,000 $19,315,000
Eventually one year’s interest more 840,000
20,155,000
Round sum 20,000,000

Sir Alexander Cockburn, as one of the arbitrators, then presented the following memorandum on Mr. Stsempfli’s estimate:

Memorandum on Mr. Stmæpfli’s estimate.

The figures in Mr. Stæmpfli’s paper require some material corrections, as to “which, as soon as they are pointed out, there can be no doubt.

The total claim by the United States of $14,437,000 will be found, on an inspection of the United States tables, to include the following amounts:

a.
All the double claims, without exception, notwithstanding the clear expression of opinion on the part of the tribunal that they were to be struck out These double claims amount to $1,682,243.
b.
The gross freights of the merchant-vessels, amounting to $1,007,153, as to which the tribunal has decided that at the utmost only half, that is to say $503,576, should be allowed.
c.
The new claim of $1,450,000, advanced for the first time on the 19th of August last, as to which claim Mr. Stæmpfli declared he would exclude it from consideration. It is important to observe that this new claim comprises over and above the entirelyunsupported claims for shares of vessels, and for additional personal effects, the claims for wages extending over very long and varying periods. The tribunal has decided that one year’s wages in respect of the whalers are to be allowed in lieu of prospective catch. For this one year’s wages, Mr. Stæmpfli has made a separate allowance of $588,000 (an allowance which can be shown to be excessive by at least $88,000,) and he has therefore included in his calculation the claim for wages twice over.

It is therefore clear that Mr. Stæmpfli, while he excludes some of the items of claim which the tribunal has disallowed, has omitted to strike out the other items, against which the tribunal has pronounced its opinion; but it is equally clear that all the disallowed items must be excluded before a comparison can be fairly or usefully made between the United States claim and the British estimate.

It is necessary, therefore, in the first place, to deduct from the United States claim the three amounts specified in paragraphs a, b, and c, respectively, which will leave, as is shown by the annexed table, a properly reduced claim of $10,801,324, as against the British estimate of $7,465,764, if the difference between paper and gold currency be for the present purpose disregarded.

It must, however, be carefully borne in mind that the claim of $10,801,324 includes the following items:

1.
A claim of $659,021 for secured earnings, which ought beyond a doubt to be reduced by an amount equivalent to the wear and tear of the whalers and their outfits, and the consumption of stores, which must have taken place before these earnings could be secured, and for which a deduction should be made, inasmuch as the full original values of the vessels audtheir outfits have been allowed.
2.
The claims in respect of the merchant vessels.—These are valued in the United States tables at more than $60 per ton on the average, although, according to the well-known official report presented to Congress in 1870, the cost of a first-class perfectly new American vessel, made ready for sea, did not average that amount per ton, and although, according to the same report, the average value of American vessels engaged in the foreign trade was, in 1861, only $41, and has been since only $45per ton.
3.
The claims in respect of cargoes, the insurances, commissions, and profits of the same, which profits are sometimes claimed at the rate of twenty, fifty, and even one hundred per cent. The various important considerations mentioned at page 13 of the British report, and the fact that numerous claims for cargoes, presented for the first time in April last, are unsupported by any vouchers, bills of lading, or like documents, undoubtedly require that a very considerable reduction should be made under this head.
4.
Several large claims not supported by any affidavit or declaration on oath.
5.
Numerous clearly extravagant claims specified in the British reports, such as the claim of $7,000 by a harpooner for personal injuries, the claim, by a passenger, of $10,000 for loss of office as consul, all the numerous claims by the masters of whalers for wages, sometimes at the rate of $15,000 or $20,000 a year, and which are, of course, superseded by Mr. Stæmpfli’s allowance of $588,000, and many other equally exorbitant claims, more particularly specified in the British reports.

From these considerations it is manifest that more than ample justice will be done to the United States by taking a mean between the claim of $10,301,324, and the British estimate of $7,464,764, and by adding thereto the allowance of $588,000 in lieu of prospective catch.

Mr. Stæmpfli has also added, for some unknown reason, 25 per cent. on the values of the whalers, an addition which can be easily shown to be equivalent to altogether allowing over and above the original values of the whalers and their outfits a percentage exceeding 90 per cent., and this although the question of interest is still left open to the decision of tbe tribunal.

Admitting, however, this extraordinary addition of 25 per cent., and the excessive estimate of the wages, it is shown by the annexed table that if Mr. Stæmpfli’s figures be properly corrected, the estimate would scarcely exceed $10,000,000, even without any allowance being made for the great difference between the values of the paper and the gold currency.

Mr. Stæmpfli’s calculations of interest (supposing interest to be allowed) are made at the alternative rates of 5, 6, and 7 per cent., for the period of eight and one-half years, from the first of January, 1864, to the 15th of September, 1872.

But to this he proposes to add another year’s interest for the period of delay in payment after the date of the award which is allowed by the treaty.

The tribunal has no power, under the treaty, to award payment of a gross sum with interest. The amount awarded is to be paid without interest, and if the tribunal were to add a year’s interest to the gross sum which they would otherwise award, in respect of the year allowed for payment by the treaty, they would be doing indirectly what they have no authority to do directly, and would (it is submitted) be contravening the true intent of the treaty, and chargiug interest where it was the intention of the treaty that interest should not be paid.

This is the more objectionable because it is proposed to charge a whole year’s interest at either 5, 6, or 7 per cent., whereas the British government has the option, under the treaty, to pay the sum awarded at any time within the year allowed for that purpose, and might certainly raise the money, (if that operation were necessary,) at a considerable lower rate of interest than 5 per cent.

Table in reference to the estimate of Mr. Stœmpfli.

Total United States claim in the last revised tables $14,437,143
Necessary reductions to be made from the above sunnposed total:
Double claims $1,682,243
New claims 1,450,000
One-half gross freight 503,576
3,635,819
Making the total reduced claim 10,801,324
As against the British estimate of 7,464,764
The mean of these two sums is 9,133,044
Add to this Mr. Stæmpfli’s allowances in lieu of prospective catch:
One year’s wages $588,000
400,000
988,000
10,121,044

The tribunal also considered the question of the award of a sum in gross.

After a detailed deliberation, a majority of the tribunal of four to one decided, under the Vllth article of the treaty of Washington, to award in gross the sum of $15,500,000, to be paid in gold by Great Britain to the United States, in the time and manner provided by the said article of the treaty of Washington.

The conference then adjourned until Friday, the 6th instant, at half past 12 o’clock, to be held with closed doors.

  • FREDERICK SCLOPIS.
  • ALEXANDER FAVROT, Secretary.