No. 519.

Mr. Frelinghuysen to Mr. Reed .

No. 302.]

Sir: Referring to your No. 270 of the 3d ultimo, relating to the case of the Masonic, I have to state that the action of the legation as set forth in your dispatch and its inclosures, is approved. You are therefore authorized to accept the proposition of the minister of state to refer to Baron Blanc, the minister of Italy at Madrid, the adjudication of the injuries and losses suffered by the owner of the Masonic as the result of the seizure and sale of his vessel and the expenses occasioned by the prosecution of his claim. It must be understood, however, that Spain recognizes its responsibility for these injuries, losses, and expenses, and that the only subject which is to be submitted to Baron Blanc is the ascertainment and fixing of the amount thereof upon the evidence presented by the claimant and by the Spanish Government, the functions of Baron Blanc to be those only of a referee as to the amount of damages and not of an arbitrator of any question of responsibility, the latter question having been diplomatically settled against Spain.

It must be further understood that Baron Blanc will render his decision within six months from the date of your note accepting the proposition of reference, fixing the amount in American gold, and that the Spanish Government will pay to the Department of State in Washington, within six months from the date of the decision, the sum with 6 per awarded by the referee, cent, interest from the date of such decision.

I am. &c.,

FRED’K T. FRELINGHUYSEN.