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copy of the draught which was withdrawn, as well as of the one which was finally submitted, simply as marking a step in the progress of the negotiation.

As these two notes, with their inclosures, were of the same date, and delivered at the same time, I acknowledged the receipt of the whole together, stating that I would immediately transmit the Article to you by telegraph, and that I did not doubt it would be considered at once by my Government, and the result of that consideration communicated to me through the same medium, and with as little delay as possible and in the same friendly spirit in which the proposal of Her Majesty's Government had been offered. A copy of my note of acknowledg ment is inclosed herewith.

This evening I have received from Lord Granville a note, for the first time formally acknowledging the receipt of your dispatch to me of the 16th of April, a copy of which I had communicated to him on the 1st instant. This note, although dated on the 6th, has obviously just been written, and is now delivered to me antedated in order to keep up the chronological sequence and logical connection of the correspondence. I transmit herewith a copy of it.

I have the honor to be, sir, your obedient servant,

ROBT. C. SCHENCK.

[Inclosure 1 in Ne. 46.]

Earl Granville to General Schenck.

FOREIGN OFFICE, May 10, 1872.

SIR: In replying to the communication which you made to me on the 8th instant, I think it well to recapitulate the recent communication which I have had with you on the subject of the arbitration on the Alabama claims.

On the 29th of April you made an informal communication to me which you subsequently rendered official, informing me that a proposal made by this country on a certain basis would be acceptable. Her Majesty's Government thereupon decided to assume the initiative, and they framed upon that basis, as they understood it, the accompanying draught with a view to an exchange of notes.

This draught, which had been subjected to various alterations to bring it more closely in conformity with the views which you had expressed, and to make it, as they believed, more acceptable to the Government of the United States, was delivered to you on the 6th instant.

On the 8th instant you communicated to me a telegraphic message, apparently in reply to this draught, from your Government, of which I made the accompanying memorandum.

Her Majesty's Government are by this telegram invited to propose an Article in addition to or in amendment of the Treaty of the 8th of May, 1871.

The Treaty is, in the judgment of Her Majesty's Government, clear and sufficient, and excludes from the arbitration the claims for indirect losses advanced by the Government of the United States. It is therefore difficult for Her Majesty's Government to take the initiative in the manner the United States have proposed.

They think that it belongs to the Government of the United States, to whose friendly suggestions the communications which have taken place since the date of Mr. Fish's reply to my letter of the 20th of March have been due, to frame the suggested Article; yet, in order to meet their wishes and to save any inconvenient delay, I will transmit to you a draught of an Article which, if the Government of the United States think fit to adopt, will be accepted by Her Majesty's Government.

I have the honor to be, with the highest consideration, sir, your most obedient, humble servant,

GRANVILLE.

[Inclosure 2 in No. 46.]

Memorandum.

The United States Government claim, and insist upon their claim, that, under the Treaty, claims for the indirect losses which have been put forward are admissible to be considered by the Arbitrators, although they do not expect, and never have expected, a pecuniary award of damages for such claims. Great Britain denies that such claims come within the scope or province of the Arbitrators to consider or decide upon. The argumentative discussion has ended, leaving each party adhering to their position.

The United States Government, in this condition of things, have been willing to accept a proposal from Great Britain that in consideration of not pressing for a pecuniary award on these indirect claims, Great Britain would on her part agree to engage not to advance in the future in any case, when she should be a belligerent and the United States a neutral, such claims for indirect damages as are put forward by the United States Government in the Case presented on their behalf to the Tribunal of Arbitration at Geneva, and to make that reciprocally the rule for the future. Great Britain is understood to object to this on the ground that an agreement not to press for compensation for these indirect claims is not sufficient, because the Arbitrators in that case might, themselves, proceed to take them into consideration and make them the subject of an award. And, therefore, Great Britain has only been willing to establish the rule in regard to indirect damages on condition that the American part of the Case at Geneva which puts forward these particular claims should be entirely withdrawn from the consideration of the Arbitrators. The President holds that he has power to give instructions in regard to the management of the Case before the Arbitrators, and therefore could direct that these claims should not be pressed for an award. But inasmuch as the Government of the United States hold that the claims are admissible to be considered by the Arbitrators under the Treaty, he cannot withdraw the claims as not being rightfully put forward without its being such an alteration of the terms and principles of the Treaty as is inconsistent with his understanding of it, and the interpretation which has been put upon it by his Government. The Treaty itself, however, may be amended in such a manner as to accomplish the object and remove all differences between the two Governments arising out of their different interpretations of its provisions.

General Schenck is therefore authorized to state that the President will be willing to consider, and, if possible, will present for the consideration of the Senate, any new article for the Treaty which may be proposed by the British Government, which, while it settles the principle involved in the presentation of what are called the indirect claims, will remove the differences which have arisen between the two Governments in the consideration of the Treaty.

The President is earnestly desirous to do everything consistent with his duty and with the great interest for the future of both countries, and to preserve principles, so important to civilization as he thinks are involved in the Treaty, of which he is anxious to prevent the failure, and to this end he is willing to exhaust all proper efforts as far as can be done without abandoning any principle and consistently with the honor and dignity of both Governments.

[Inclosure 3 in No. 46.]

Earl Granville to General Schenck.

FOREIGN OFFICE, May 10, 1872.

SIR: I have the honor to transmit to you herewith the draught1 of an Article referred to in my preceding note of this day's date.

I have the honor to be, with the highest consideration, sir, your most obedient, humble servant,

GRANVILLE.

1 For draught of the Article see p. 500.

[Inclosure 4 in No. 46.j

General Schenck to Earl Granville.

LEGATION OF THE UNITED STATES,
London, May 10, 1872.

MY LORD: I have the honor to acknowledge the receipt, at 4 o'clock p. m. to-day, of your note of this date, in which you take occasion to recapitulate some recent communications we have had with each other on the subject of the Arbitration on the Alabama claims, and to state briefly, according to your understanding and note of the transactions, what occurred subsequently in consequence of those communications. You refer to and furnish me at the same time with copies of a draught of a proposed note delivered to me on the 6th instant, and your memorandum of a conversation I had with you afterward, at an interview on the 8th instant, in which it was suggested to you to propose an Article in addition to, or in amendment of, the Treaty of the 8th of May, 1871.

This suggestion of a Treaty stipulation, you will remember, was made in consequence of the failure to obtain from you any draught of a note which, in the opinion of the Government of the United States, was in conformity with the proposal which Mr. Fish telegraphed to me on the 27th of April, as I informed you he was led to expect would be made.

Your Lordship proceeds to say that the Treaty is, in the judgment of Her Majesty's Government, clear and sufficient, and excludes from the Arbitration the claims for indirect losses advanced by the Government of the United States, and that it is therefore difficult for Her Majesty's Government to take the initiative in the manner the United States have proposed; that Her Majesty's Government think it belongs to the Government of the United States, to whose friendly suggestion the communications which have taken place since the date of Mr. Fish's reply to your letter of the 20th of March have been due, to frame the suggested article; but yet, in order to meet their wishes and to save any inconvenient delay, you will transmit to me a draught of an Article, which, if the Government of the United States think fit to adopt, will be accepted by Her Majesty's Government.

And I have also to acknowledge the receipt of another note of this date from your Lordship, which was delivered to me at the same time, inclosing the draught of an Article in the preceding one referred to.

I will hasten to communicate immediately by telegraph this draught to my Government; and I doubt not it will be considered at once, and the result of that consideration communicated to me through the same medium, and with as little delay as possible, and in the same friendly spirit in which your proposal is offered.

I have the honor to be, with the highest consideration, my Lord, your Lordship's most obedient servant,

ROBT. C. SCHENCK.

[Inclosure 5 in No. 46.]

Earl Granville to General Schenck.

FOREIGN OFFICE, May 6, 1872.

SIR: I have the honor to acknowledge the receipt of Mr. Fish's dispatch of the 16th April, which you communicated to me on the 1st instant. I abstain from addressing any observations to you on the tenor of that dispatch pending the result of the communications which are now passing between us, and which it is the earnest hope of Her Majesty's Government may lead to a satisfactory settlement of the questions under discussion between our two Governments.

I have the honor to be, with the highest consideration, sir, your most obedient, humble servant,

GRANVILLE.

No. 47.

The following dispatch was published in the supplement to the London Gazette, May 17, and communicated, in accordance with instructions from his Government, by Sir Edward Thornton, in a note dated May 31, 1872. (Received June 1.)

Earl Granville to Sir E. Thornton.1

FOREIGN OFFICE, May 13, 1872. SIR: Her Majesty's Government have refrained from continuing an argumentative discussion with the Government of the United States upon the scope and intention of the Articles in the Treaty of Washington relating to the Arbitration on the "Alabama claims."

There are, however, some passages in Mr. Fish's dispatch on this subject of the 16th ultimo, upon which it seems desirable that, for your own information, and for use in any future communications with the Government of the United States, you should be put in possession of the views of Her Majesty's Government.

In the first place, Mr. Fish takes exception to the assertion in my letter of the 20th of March, that although it is true that, in some of the earlier letters of Mr. Adams, vague suggestions were made as to possible liabilities of this country, extending beyond the direct claims of American citizens for specific losses arising from the capture of their vessels by the "Alabama," "Florida," "Shenandoah," and "Georgia," no claims were ever defined or formulated, and certainly none were ever described by the phrase "Alabama claims," except these direct claims of American citizens.

Mr. Fish states that I cannot be disposed to intend more than to say that the claims for indirect or national losses and injuries were not "formulated" by the United States Government, and the amount thereof set forth in detail and as a specific demand.

I did not, however, confine myself to saying that no claims of this nature were ever defined or formulated, but added that no such claims have ever been "described” as "Alabama claims."

Mr. Fish admits that the claims for indirect or national losses were not formulated or defined, but proceeds to cite various passages in the correspondence in which he considers that they were brought forward. He does not mention one instance in which they were described as "Alabama claims."

The fact is that, throughout the correspondence, the representations made by the United States Government respecting the actual claims for injuries sustained by American citizens from the depredations of the "Alabama" and other cruisers were interspersed with complaints of the supposed premature recognition of the belligerent rights of the Gonfederate States by the issue of Her Majesty's Proclamation of Neutrality, and of the proceedings of blockade-runners.

Nearly all the passages cited by Mr. Fish will be found, when read with their context, to have reference to these complaints, and to the indefinite suggestions of liability founded on them. On the other hand, on turning to the Memorandum, inclosed in my letter of the 20th of March, it is apparent that the phrase "Alabama claims" has uniformly been used to distinguish the actual claims on account of the acts committed by the "Alabama" and the other cruisers from these complaints of the "attitude" assumed by Great Britain.

Mr. Fish lays great stress on the statement in Mr. Adams's letter of the 20th November, 1862, that he was instructed to "solicit redress for the national and private injuries already thus sustained." The injuries thus sustained were, as appears by the inclosures in Mr. Adams's letter, the destruction of the "Ocmulgee," and other vessels by the "Alabama." As already pointed out in the Memorandum, Mr. Adams spoke merely of the "depredations committed on the high seas upon merchant-vessels " by the "Alabama," and of "the right of reclamatiom of the Government of the United States for the grievous damage done to the property of their citizens," and referred to the Claims Commission under the Treaty of 1794 as a precedent for awarding compensation. There is not a word in the letter to suggest any indirect or constructive claims.

In the dispatch of the 19th of February, 1863, Mr. Seward, in a similar manner, uses the term "its claims" with obvious reference to the claims put forward by the United States on behalf of American citizens; those, indeed, being the only claims that had been indicated in the correspondence between Mr. Adams and Lord Russell to which he was alluding.

I must remark that this dispatch of the 19th of February, 1869, was not communicated to the British Government.

Mr. Fish has omitted some important words in the next passage which he adduces from Lord Russell's dispatch to Lord Lyons on the 27th of March, 1863.

The dispatch gives an account of a conversation with Mr. Adams, at the close of which Lord Russell said that it was his belief "that if all the assistance given to the Federals by British subjects and British munitions of war were weighed against similar aid given to the Confederates, the balance would be greatly in favor of the Federals."

Mr. Adams totally denied this proposition. "But above all," he said, "there is a manifest conspiracy in this country, of which the Confederate Loan is an additional proof, to produce a state of exasperation in America, and thus bring on a war with Great

For reply of Mr. Fish to this communication, see No. 86, p. 547.

Britain, with a view to aid the Confederate cause, and secure a monopoly of the trade of the Southern States, whose independence these conspirators hope to establish by these illegal and unjust measures."

Mr. Fish omits the words "of which the Confederate Loan is an additional proof," which, taken with the context, show that Mr. Adams was then speaking, not of the case of the "Alabama," but of the assistance in money and materials which he considered was improperly rendered to the Confederate States by blockade-ruuning and the Cotton Loan.

Mr. Adams's letters of the 7th of April and 20th of May, and Lord Russell's letter of the 4th of May, 1865, are commented on in the Memorandum, Part II, and it is unnecessary for me to make any further observations on them, as Mr. Fish does not reply to those which I have already offered. Whatever may have been the purpose to require indemnification, no claim was presented or notified, and the grievances of which complaint was made were in no way identified with the "Alabama claims."

The dispatch of the 14th of February, 1866, was not communicated to Her Majesty's Government; but, on referring to the 3d volume of the Appendix to the American Case, p. 628, in which it is given, it appears to refer to the possibility of fresh negotiations in regard to a revision of the Neutrality Laws and to Lord Russell's refusal of arbitration. Both these subjects are referred to at page 625, and the dispatch accordingly concludes, after the paragraph quoted by Mr. Fish, by saying, "I think that the country would be unanimous in declining every form of negotiation that should have in view merely prospective regulations of national intercourse, so long as the justice of our existing claims for indemnity is denied by Her Majesty's Government, and those claims are refused to be made subject of friendly but impartial examination."

There can be no pretense that the claims which Lord Russell refused to submit to arbitration extended to indirect claims. The proposal arose in connection with "a claim for the destruction of the ship 'Nora' and other claims of the same kind," (see Mr. Adams's letter of the 23d of October, 1863,) and Lord Russell, in reply to it, stated that Her Majesty's Government must decline "either to make reparation and compensation for the captures made by the 'Alabama,' or to refer the question to any foreign State."

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I have already pointed out that no importance can be attached to the claims of private citizens being spoken of by Mr. Seward as "our claims." The "claims of citizens of the United States against Great Britain for damages, &c., by means of depredations upon our commercial marine committed on the high seas by the Sumter,' the 'Alabama,' the Florida,' the 'Shenandoah,'" &c., of which a summary was annexed to the dispatch from Mr. Seward to Mr. Adams, of the 27th of August, 1866, communicated to Lord Stanley, and which are undeniably private claims, are mentioned in that dispatch as the claims upon which we insist," and "our claims."

66

The next dispatch referred to, that from Mr. Seward to Mr. Adams, of the 2d of May, was likewise not communicated to Her Majesty's Government. The context clearly shows that the "injuries" from "the first unfriendly or wrongful proceeding' referred to the "concession of belligerency." Mr. Seward, in a preceding paragraph, says, "I feel quite certain that the balance of faults has been on the side of Great Britain. First, the concession of belligerency ought not to have been made; second, upon our earnest appeals it ought to have been earlier rescinded." The dispatch goes on to state the conviction of the American people that the "proceedings of the British Government in recognizing the Confederacy were not merely unfriendly and ungenerous, but entirely unjust."

In another part of Mr. Fish's dispatch complaints (not claims) are noticed as having been made by Mr. Adams on the 30th of December, 1862, 14th and 27th of March, 1863, and 28th of April.

The "acts" complained of in the first extract will be seen, on reading the entire passage, to have been that "vessels owned by British subjects have been and are yet in the constant practice of departing from British ports laden with contraband of war and many other commodities, with the intent to break the blockade and to procrastinate the war."

The dispatch of the 14th of March, 1863, refers to certain intercepted correspondence relating to the proceedings and supposed intentions of Confederate agents, blockaderunners, and to the Cotton Loan.

The complaint on the 27th of March, as I have already explained, also referred to the Cotton Loan and to these proceedings of Confederate agents.

The dispatch of the 28th of April begins, "I am instructed to inform your Lordship that the Government of the United States has heard with surprise and regret of the negotiation of a loau in this city," and proceeds to state that "this transaction must bring to an end all concessions, of whatever form, that may have been heretofore made for mitigating or alleviating the rigors of the blockade in regard to the shipment of cotton;" and concludes, "I am sure that it is with the greatest reluctance it" [the United States Government] "finds itself compelled, by the offensive acts of apparently irresponsible parties, bent upon carrying on hostilities under the shelter of neu

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