Sir Julian Pauncefote to Mr. Wharton.
Newport, R. I., August 26, 1891.
Dear Mr. Wharton: In my reply to your official note of the 22d instant I stated that I hoped to be able to send an answer to your note of the 23d ultimo in a few days.
Before doing so, however, I am anxious to explain to you privately and unofficially by letter, as I would do verbally were I in Washington, the objection which my Government entertain to the latest form of clause relating to compensation which has been proposed by the President for adoption as article 7 in the Behring Sea arbitration agreement. Such a private and unofficial exchange of views at this point of the negotiations may abridge the official correspondence and facilitate a solution of the present difficulty, on the basis of a suggestion which you made when we discussed the questions informally at Washington.
My Government are unable to accept the form of clause proposed by the President because it appears to them, taken in connection with your note of the 23d ultimo, to imply an admission on their part of a doctrine respecting the liability of governments for the acts of their nationals or other persons sailing under their flag on the high seas which is not warranted by international law and to which they can not subscribe.
I need hardly say that the discussion of such a point (which, after all, may never arise) must prolong the negotiation indefinitely. Moreover, it seems premature to enter into such a discussion before the other questions to be submitted to the arbitrators have been determined and all the facts on which any liability can arise have been ascertained.
Your suggestion, to which I have referred, was to leave out altogether the question of damages from the arbitration agreement, and you may remember that at the time I did not encourage the idea, not apprehending that the clause would give rise to such protracted discussion, and being, moreover, anxious that the settlement to be arrived at should embrace and finally dispose of every point in controversy.
There is a middle course, however, which appears to me to commend itself, from every point of view, as a practical and logical solution of the present difficulty. It is to omit the seventh clause, as to compensation, and to insert in its place a clause referring to the arbitrators any question of fact which either Government may put to them with reference to the claims for compensation it believes itself to possess. The application of the facts to international law might be a matter for negotiation after they are determined, and, if the two Governments agree, might be referred, in whole or in part, to the arbitrators. The clause might be worded as follows:
Clause 7. Either of the two Governments may submit to the arbitrators any question [Page 590] of fact which it may wish to put before them in reference to the claims for compensation which it believes itself or its nationals to possess against the other.
The question whether or not, and to what extent, those facts, as determined by the arbitrators and taken in connection with their decision upon the other questions submitted to them, render such claims valid according to the principles of-international law shall be a matter of subsequent negotiations, and may, if the two powers agree, be referred, in whole or in part, to the arbitrators.
I do not, of course, propose the above wording as definite. It should be open to amendment on either side. But if, after submitting it to the President, you should be able to inform me privately that such a clause, under the circumstances, would be acceptable to your Government, I would then address you officially in reply to your note of the 23d ultimo and formally make the above proposal, stating the grounds on which it is based. Hoping that this mode of settlement of the last point in dispute will meet with your approval, and that this effort on my part to bring the negotiation at once to a satisfactory termination may be successful,
I remain, etc.,