choose an arbitrator or arbitrators, to whose final decision was to be referred any question upon which, in the course of their examination of the said claims, the commissioners should not be able to come to an agreement. The scheme also provided that neither Government should make out a case in support of its position, and that no person should be heard for or against any such claim, the official correspondence alone being laid before the commissioners. A convention, of which these were the leading features, was drawn up and signed by Lord Stanley and Mr. Reverdy Johnson on the 10th November, 1868. So confident was the American Minister that his Government and the Senate of the United States would approve and ratify this convention, that at the Lord Mayor's banquet on the 9th November, the day before it was formally concluded, he spoke in the following terms: "How that end [the termination of the differences between England and America] has been brought about I forbear to say, except that it has been brought about without touching in the slightest degree the rights or the honour of either nation. From 1846 to the present time, from one cause or other, there were clouds which alarmed the people of both countries. We have removed those clouds, and leave both nations in an undimmed sunshine of peace." 66 sympathy with the cause of slavery. Under the influence of this extravagant notion, he indulged in the following piece of declamation. "The truth must be told," he said, "not in anger, but in sadness; England has done to the United States an injury most difficult to measure. ... At a great epoch of history [most true that was, it was a great epoch], not less momentous than that of the French Revolution, or that of the Reformation,—when civilisation was fighting a last battle with slavery,England gave her name, her influence, her material resources to the wicked cause, and flung a sword into the scale with slavery." What more could Mr. Sumner have said if we had recognised the independence of the Southern States, and entered into an alliance with them against the North? Mr. Sumner maintained further, that "the escape and career of the Alabama, and the manner in which her depredations were viewed by the British Government, constituted an offence against the national dignity, for which England ought to offer an apology, or make some similar moral atonement.” Mr. Gladstone appears to have become a convert to Mr. Sumner's views in this respect, as we shall see in due time. He also urged that, in estimating the material damages inflicted by cruisers of the Alabama class, the total loss to American commerce, caused by the fear of cruisers, consisting in the abandonment of the carrying trade by American shipowners, and the sale of their ships to foreigners, must be taken into account; and he hinted that the cost of carrying on the war, for at least a portion of the time, as a probable consequence of English sympathy, ought to be taken into account also. Here we have the first foreshadowing of those claims for "indirect losses," the production of which at a later period went near to rendering the Treaty of Washington abortive. These anticipations, as it turned out, were too sanguine. Although Mr. Seward had telegraphed to Mr. Reverdy Johnson that the convention was entirely acceptable, except that the place of meeting should be altered to Washington (a modification to which Lord Stanley acceded), when the text was received in America, objections were raised by the Government. In a letter intended for Lord Stanley, but which, as it arrived after the resignation of the Conservative Ministry, was received and acted upon by Lord Clarendon, the British Government was informed that Mr. Reverdy Johnson had misunderstood his instructions, that the President thought several of the articles of the convention inadmissible, and that the Cabinet were agreed that the convention could not, in the form which it then wore, be ratified by the Senate. Certain modifications were proposed, which, when examined by Lord Clarendon, appeared to him to be variations in form rather than of substance; he did not therefore refuse to entertain them, and a new convention was signed between him and Mr. Johnson on the 14th January, 1869. Everything seemed at last in train for settlement; the convention was laid before the Senate of the United States, and referred by it to the Committee on Foreign Relations, which was expected to report in favour of its adoption. But a speech made by Senator Sumner on the 13th April, vehemently denouncing the conduct and attitude of England towards the United States, in relation to that whole class of acts and omissions out of which the Alabama Claims arose, had so great an effect upon the Assembly, that the convention was rejected by an overwhelming majority-successors could not be consulted on the question. The fifty-four to one. That eminent man, in whom warmth of feeling and rectitude of purpose were not adequately seconded by intellectual gifts, had in some manner persuaded himself that the conduct of England during the civil war betokened a real, though suppressed, By the rejection of the convention, the question returned into its original state. In the summer of 1869, after Mr. Motley had succeeded Mr. Reverdy Johnson as the representative of the United States, various important interviews and much interesting correspondence took place, of which we shall give a very brief outline. Early in June, in an interview held by appointment with Lord Clarendon at the Foreign Office, after a discussion of various pending negotiations between the two countries, Mr. Motley offered an explanation tending to throw light on the motives which had influenced the Senate in the rejection of the Reverdy Johnson convention. Owing to some accident, which he could not explain, the text of the convention had been published prematurely in America, long before it was brought under the cognisance of the Senate, and had become the mark for much unfavourable comment. The time at which it was signed was thought inopportune, because the late President and his Cabinet were then virtually out of office, and their convention was further objected to because it dealt only with the claims of individuals, and had no reference to those of the two Governments on each other; and, lastly, because it did not settle one of the moot points of international law which had been debated between the A.D. 1871.] THE HISTORY OF THE ALABAMA CLAIMS. Governments, and laid down no principles for future guidance. Mr. Motley proceeded to say that President Grant had decided that it would be better to let the question stand over for a time, until angry feelings had subsided. When it was again approached, his Cabinet was of opinion that it would be desirable to lay down, with greater precision than heretofore, certain principles of international law with reference to the rights and duties of neutrals. In the following September, Mr. Motley read to Lord Clarendon a long despatch from Mr. Fish, the American Secretary of State, narrating and characterising the circumstances which had given rise to the Alabama Claims, from the American point of view. As this despatch travels over topics which have been frequently handled in these pages, it is not necessary to analyse its contents. Its fairness may be judged of from the terms in which it describes the secession of the Southern States, as a mere domestic act of insurrection." It labours to prove that the recognition by Great Britain of the belligerent rights of the South was a premature and essentially unfriendly act, and that it had much to do with hardening and prolonging Southern resistance. Mr. Fish actually connects the proclamation of neutrality with the subsequent escape of the cruisers from our ports, so as to make the former "a virtual act of war"! At the same time the American Government did not in this despatch, he said, propose or desire to set any time for the settlement of their claims. Their present object was merely to make the British Government fully acquainted with the manner in which the subject was regarded in the United States; they were, however, prepared to negotiate whenever a proposition should be made from this side, and to enter upon the examination of that proposition with a sincere desire to promote the interests of peace and permanent friendship between the two countries. Lord Clarendon, in replying to this despatch (November, 1869), thus noticed the hint that America was prepared to consider any fresh overtures. "It is obvious," he said "and Mr. Fish will probably on reflection admit -that Her Majesty's Government cannot make any new proposition or run the risk of another unsuccessful negotiation until they have information more clear than that which is contained in Mr. Fish's despatch respecting the basis upon which the Government of the United States would be disposed to negotiate." He transmitted at the same time to Mr. Thornton (who had succeeded Sir Frederick Bruce as British Minister at Washington) a paper of observations which he was to lay before Mr. Fish, informally replying to the principal allegations, and combating some of the exaggerated statements, which the despatch of the latter had contained. CHAPTER XLVI. THE HISTORY OF THE ALABAMA CLAIMS-continued. The Alabama Claims.-III.-Recall of Mr. Motley.-Joint High Com mission-Alabama Claims referred to it-Meets in February, 1871Progress of the Negotiation-British Commissioners propose Arbi 521 tration-Expression of Regret-Settlement of the Fisheries Question-Agreement to refer the San Juan Boundary Question to the Arbitration of the Emperor of Germany: History of that Question -Articles of Treaty for settling the Alabama Claims-Board of Arbitrators-The Three Rules-Proviso or Rider appended to them on the part of Great Britain-The Fenian Claims omitted from the Treaty-Treaty ratified by the Senate-Debate on it in the House of Lords-Lord Granville's Explanations: His Assertion of the Abandonment of the Indirect Claims-Perspicacity of Lord Cairns-Speech of Lord Derby.-Nomination of Arbitrators: They meet at Geneva-The Cases of the two Governments submitted-Order of Procedure-The American Caso includes Claims for Indirect Losses-Sketch of the Contents of the British CaseExcitement in England on the Subject of the Indirect ClaimsNegotiations for a Supplementary Treaty-The American Government in the Right-Counter Cases filed-Proceedings on 15th June -The Tribunal rules out the Indirect Claims-Both Governments accept the Decision-Opening of the Arbitration-Views of M. Stampfli-Unsuccessful Endeavour of the British Agent to obtain Time for Sir R. Palmer to prepare a fresh Argument-The Cases of the different Cruisers separately examined-The Tribunal requests the Opinion of Counsel-Deliberates with Closed DoorsDelivers its Decision-Termination of the Arbitration-Sir A. Cockburn's "Reasons for Dissenting."-Analysis of the AwardObservations upon it. III. THUS matters stood till the beginning of 1871, except that Mr. Motley was suddenly recalled towards the end of 1870. The impression was general, both in England and America, that the President had thought him too prone to a policy of compromise, and that he was to be replaced by a more unbending negotiator; and when, after much difficulty, the post was filled up by the appointment of a soldier-General Schenck-that impression naturally gathered strength. But, as it happened, the truth lay in the opposite direction. Mr. Motley was recalled because he had identified himself to such an extent with the extreme views and perfervid temper of Mr. Sumner, that he did not conform faithfully to his instructions, but indulged in phrases about "burning questions of grievance," and "the gravity of the occasion,” which displeased the cool-headed and sagacious President. Grant had begun to perceive that it would not do to continue to place the conduct of England in conceding belligerent rights in the fore-front of the American case; since not only international law, but the similar behaviour of other neutral nations on the same occasion, made our conduct in that particular substantially unassailable. The damage caused-directly or indirectly-by the cruisers issuing from our ports was, he correctly perceived, the true ground of claim; and the alleged premature recognition was only to be used as evidence of an unfriendly animus, which would give an air of antecedent probability to the positive breaches of neutrality with which we were to be charged. Towards the end of 1870, Mr. Gladstone's Government proposed the appointment of a Joint High Commission, to be held at Washington, for the settlement of the Fisheries question. In assenting to the commission, President Grant proposed that all other matters of dispute between the two Governments, including the longstanding question of the Alabama Claims, should be referred to the same tribunal. To this, Lord Granville (who had succeeded the Earl of Clarendon at the Foreign Office) consented. It was agreed that five commissioners should be appointed on each side. For England the leading commissioner was Earl de Grey, to whom were joined Sir Stafford Northcote, Sir Edward Thornton, our Minister at Washington, Sir John Macdonald, a prominent member of the Canadian Government, and Professor Mountague Bernard, the author of the learned and dispassionate essay on British neutrality to which in the foregoing narrative we have had to make frequent reference. It was considered a politic stroke on the part of Mr. Gladstone, that by requesting one of the leaders of the Conservative party (Sir Stafford Northcote) to join the commission, he in some measure anticipated and negotiate and conclude a treaty, was very full and large in its expressions; it stated that they were appointed "for the purpose of discussing in a friendly spirit with commissioners to be appointed on the part of our good friends the United States the various questions on which differences have arisen between us and our good friends, and of treating for an agreement as to the mode of their amicable settlement." The Joint High Commission met and constituted itself at Washington, on the 27th February, 1871; the first full meeting was held on the 4th March. The disarmed the hostility which the Opposition might otherwise be tempted to raise in Parliament, and partially committed the other side of the House to acquiescence in any treaty that might be concluded. The American commissioners were Mr. Hamilton Fish, the Secretary of State, General Schenck (whose sailing was purposely postponed that he might serve on the commission), Mr. Ebenezer Hoar, Mr. George H. Williams, and Mr. Justice Nelson. A paragraph in the Queen's Speech stated that the arrangement made with America for the holding of the High Commission included all claims for compensation which had been, or might be, made by each Government, or by its citizens, upon each other. The commission, dated February 16th, 1871, giving power to Earl de Grey and the other commissioners to Alabama Claims came up for discussion on the 8th March. The American commissioners then stated the case of their Government, explaining the grounds on which the people of the United States conceived that they had just cause to complain of the conduct of Great Britain during the war, putting in a rough estimate of the direct losses which American commerce had sustained through the depredations of cruisers which had been fitted out, or armed, or equipped, or which had received augmentation of force, in the ports of Great Britain or her colonies; and adding that, "in the hope of an amicable settlement, no estimate was made of the indirect losses "-those alleged to have arisen through the enhanced rate of insurance, the transfer of American ships to foreign flags, and the prolongation of the war, all which grievous effects were ascribed to the cruisers; "without prejudice, however, to the right of indemnification on their account in the event of no such settlement being made." Finally, they expressed the hope that the British commissioners would be able to place upon record an expression of regret by Her Majesty's Government for the depredations committed by the vessels, the acts of which were under discussion. The British commissioners replied, in accordance with their instructions, that they could not admit that Great Britain had failed in any of the duties imposed upon her by international law, nor that she was justly liable to make good to the United States the losses occasioned by the acts of the cruisers referred to. They reminded the American commissioners of various acts of the British Government, while the war was in progress, which argued, not merely an impartial, but a friendly animus towards the United States; such as the seizure of the Alexandra, and the iron-clads, and the acquisition, at a great cost, of control over the Anglo-Chinese flotilla, which it was apprehended might be employed against the United States. They added, however, that although Great Britain had consistently disavowed her liability, she had already shown her willingness to adopt the principle of arbitration, provided that a fitting arbitrator could be found, and an agreement arrived at as to the points which should be submitted to his decision. They, therefore, would abstain from replying in detail to the arguments urged on the other side, in the hope that a common understanding might be arrived at for the reference of the matters in dispute to an impartial umpire-a course which would tend to the maintenance of amity better than their continued discussion by the parties themselves. There is something strange and unsatisfactory in this announcement, considered as the indication of a nation's policy. Let us consider in what cases arbitration is naturally and wisely resorted to in differences between individuals. Evidently it is in those cases where the law or the equity of the matter, or both, are doubtful; so that two honest and well-intentioned men, approaching the question from different sides, might easily differ in their appreciation of it. As then some bias towards a solution favourable to self-interest is to be apprehended in the great majority of men, the reference to a third party, who is wholly impartial, commends itself to reason as a good way of putting an end to the difficulty. But this is only where the question is really doubtful, and is felt by both parties to be so. If either party is persuaded that in equity the difference ought to be decided wholly in his favour, he will not consent to its being referred to arbitration unless either he cannot lose, but may gain, from the result of the arbitration, or an adverse decision be immaterial to him, as affecting not at all, or only in an insignificant degree, his honour and his interest. Except in these two cases, he will maintain his position, and leave his adversary, if he thinks himself aggrieved, to his legal remedy. The rights of the matter, if we substitute nations for individuals, appear to be much the same. The Americans might reasonably consent to refer the Alabama Claims to arbitrators, because, although they entertained a strong opinion that the equity of the case was all on their side, they, as the claimants of compensation, could not lose, but might gain largely, whatever were the decision of the arbitrators. England, on the contrary, if convinced that equity was on her side, and that the claims made on her were unfounded, had no reason to consent to arbitration. Whichever way the arbitration went, she might lose, but could not possibly gain. Nor, again, was an adverse decision immaterial to her; for, firstly, it would involve a heavy pecuniary mulct; and, secondly, it could not be to her honour to be found guilty of wrong-doing by an independent tribunal, after having roundly maintained the blamelessness of her conduct. Had the question been doubtful and difficult, whether viewed in its legal or in its equitable aspect, England might, on that ground, have reasonably consented to arbitration. But our commissioners took no such ground; they professed to believe the conduct of England above reproach; like lawyers pleading for a client, they made no concessions, not one damaging admission. But in this case, whatever the real state of international law might have been at the time of the occurrences complained of, the equity of the matter, after the full investigation which it had received, was no longer doubtful. It surely did not become Great Britain to dispute that much laxity had characterised her administration with regard to the equipment and career of several of these vessels; or that, in consequence of this laxity, the Americans had suffered harm and loss. If this was clear, then it was also clear that England owed America reparation; and to dispute her liability to make it was neither just nor dignified. At any rate, if England denied that reparation was due, she should have held to that view at all hazards. But to say, "England owes you no reparation, but we don't mind referring the matter to arbitration," was simply, as the event proved, and as any clear-sighted man could have foreseen, to court humiliation. tribunal decided that England did owe reparation, and that, not on mere technical grounds, but on grounds of equity and reason. The inference was unavoidable, for all those who accepted the verdict as just, that but for some dimness of moral vision in England's representstives at Washington, they would have seen matters in the same light as the foreigners who sat at Geneva. The But to return to the negotiation. To the proposal of the British commissioners to refer the question to arbitration, the American commissioners replied that they would only consent to this, provided the principles by which the arbitrators should be guided could first be made matter of agreement. They gradually developed their meaning, and it appeared that they desired the definition of new rules or principles of international law, laying down more strictly than before the duties of neutral Powers in time of war. Long discussions arose on this point. The British commissioners were willing to discuss and agree upon rules the observance of which should be held binding for the future; but they thought that the best mode of conducting an arbitration was, to |