(2) When two Nations have agreed by Treaty to submit to arbitration Arbitration takes a question of national wrong between them, such agreement the place of war. takes the place of war. If therefore it could by ingenious reasoning be made to appear (which we deny) that the British construction of this Treaty might possibly be maintained as plausible, yet we conceive that this Tribunal will, in the general interest of peace, feel itself not only authorized, but required, to so construe the Treaty as to take to itself the decision of every question pertinent to the issues, which, left unsettled, could lead to war. (a a) Pradier Fodéré, in one of his notes to Vattel, makes the following observations:

The Tribunal the judge of its own powers.

Pradier Fodere.

L'arbitrage, très-usité dans le moyen-âge, été presque entierement négligé dans les temps modernes les exemples d'arbitrages offerts et acceptés sont devenus de plus en plus rares, par l'experience des inconvenients qui semblent être presque inseperables de ce moyen, ordinairement insuffisant par le défaut d'un pourvoir sanctionateur. Los que les grandes puissances constituent un tribunal arbitral, ce n'est ordinairement que pour des objets d'intérêt secondaire.1

Yet all men are of accord to look to international Arbitration as one of the means of diminishing wars, and much had been expected as an example from the present Arbitration.

The principle of international arbitration is well defined by Calvo, as follows:

Calvo.

L'arbitrage international dérive de la même cause et repose sur les mêmes principes que l'arbitrage privé en matière civile ou commerciale. Il en diffère en ce que celui-ci est susceptible d'homologation par un tribunal ordinaire, qu'il est absolument obligatoire et que l'exécution en peut être toujours suivie par les voies de droit commun. Entres les états, le principe de souveraineté et d'indépendance réciproque n'admet en cette matière qu'une obligation morale de s'incliner devant les résultats de l'arbitrage sollicité; aussi, avant de recourir à ce mode de solution et pour mieux assurer le but définitif que l'on poursuit, est-il d'usage que les parties en présence siguent ce qu'en langage de droit où appelle un compromis, c'est-àdire, une convention spéciale qui précise nettement la question à débattre, expose l'ensemble des points de fait ou de droit qui s'y rattachent, trace les limites du rôle dévolu à l'arbitre et, sauf les cas d'erreur matérielle ou d'injustice flagrante, implique l'engagement de se soumettre de bonne foi à la décision qui pourra intervenir.

Neither party loses anything by such good faith. The nature of the contract of international arbitration affords perfect remedy to either party, in the contingencies in which either is wronged, namely:

1o. Si la sentence a été prononcée sans que les arbitres'y aient été suffisamment autorisés, ou lorsqu'elle a statué en dehors ou au-delà des termes du compromis;

2o. Lorsque ceux qui ont rendu la sentence se trouvaient dans une situation d'incapacité légale ou morale, absolue ou relative, par exemple, s'ils étaient liés par des engagements antérieurs ou avaient dans les conclusions formulées un intérêt direct ignoré des parties qui les avaient choises;

3o. Lorsque les arbitres ou l'une des parties adverses n'ont pas agi de bonne foi; 4o. Lorsque l'un ou l'autre de états intéressés dans la question n'a pas été entendu ou mis à même de justifier de ses droits;

5o. Lorsque la sentence porte sur des questions non pertinentes;

6o. Lorsque sa teneur est absolument contraire aux règles de la justice et ne peut, dès lors, faire l'objet d'une transaction. 3

Conspicuous among causes of exception, is the case of "a sentence which bears on questions not pertinent." But neither party can anticipate that the arbiters will undertake to decide any question beyond their competency.*

1

1 Vattel, Droit des gens, éd. P. Fodéré, tom. ii, chap. xviii, sec. 329, note.

2 Calvo, Droit international, éd. fr., 1870, tom. i, p. 791.

3 Calvo, ibid., p. 766. Compare Heffter, Droit international, liv. ii, s. 1095; Bluntschli, Code de Droit international, liv. i, s. 667.

4

+ Pradier Fodéré, La Question de l'Alabama et le Droit des gens; Pierantoni, Gli arbitrati internazionali e il trattato Washington.

(bb) Great Britain entered into an engagement to submit all the points in question to the Tribunal. We only ask the Tribunal to exercise the measure of jurisdiction which has been conferred upon them.

We assume that the Arbitrators have the power in the first instance to judge of their own competency, both in point of the scope of the Treaty and of the possible action of either Government.

1

The effect of the Treaty is to create a tribunal with complete jurisdiction of the subject-matter. It differs from a tribunal established by municipal law in two respects: first, that as Arbiters they do not possess the power of causing the execution of their sentence; and, secondly, that constituting an international tribunal, no such authority exists to enforce their sentence as in the case of arbitration under municipal law. In fact, the sanction of the acts of the Tribunal is the faith of the Treaty.

(cc) That the Tribunal possesses power to pass on the question of its competency is a conclusion of general law; otherwise it would be a council of mediation, not a tribunal of arbitration. It is a conclusion also from the tenor of the particular Treaty, which commits to the Tribunal, not only "all differences" and "all claims," but "all questions" submitted by either Government.

This conclusion is in perfect consonance with pure reason. We shall not assume that either Government maintains that, where one of the parties to a contract suggests doubt as to the meaning of some clause, such expression of doubt dissolves the contract. That is contrary to law and to reason. If it were admitted between individuals, no man could ever be compelled to execute a contract. If it were admitted between nations, it would be idle to enter into treaties; for then, if, after treaty concluded, one power regrets its engagement, it needs only to proclaim a difference of intention, and thus to frustrate the rights of the other Power.

Mr. Mount a gue

(dd) Indeed, if we may regard the pertinent explanations of Mr. Bernard, there is general reason for submitting the construction of treaties to the judgment of arbiters, and special Bernard. reason in regard to the present Treaty. He says of treaties generally: I may be permitted to observe, in passing, before taking leave of this part of the subject, that a treaty is an instrument which you cannot send to be settled in a conveyancer's chambers, nor commit to a knot of wrangling attorneys; no, not even to the family solicitor. It is an instrument in the framing of which the sensitive and punctilious self-respect of governments and nations has to be consulted, and discussion must never be suffered to degenerate into altercation; in which it is often necessary, for the sake of agreement, to accept a less finished or more accurate one; and which must be construed liberally and reasonably, according to what appears to be the true intention of contracting parties. In all this, there is no excuse for equivocal expression, and no defense of such ambiguities can be founded on it; but of apparent faults of expression it has often been, and often will be, the unavoidable cause.2

These expressions seem to be introduced as an apology for some intentional obscurity of language in the present Treaty. We do not so regard the matter. The history of the negotiations in this case abundantly shows that every word of the Treaty was well weighed by the British Ministers before it was signed by their Commissioners.

However this may be, if, as Mr. Bernard says, in order to conform to the delicacies of diplomatic intercourse and of international negotiation, it was necessary to employ in the Treaty unfinished language, inaccurate language, "faults of expression," to say nothing of equivocal language, then there is all the more reason why the United States should

'Mellii, Institutiones juris civilis Lusitani, lib. i, tit. 4, sec. 21.

Lecture on the Treaty of Washington, May 28, 1872, London Times, May 29, 1872.

ask the Tribunal to dispel the doubts which were created by the British Commission, for the benefit of the British Government.

If, contrary to our belief, the language of the Treaty be vague or equivocal, or if it rests on understandings unwritten, the question should be judged by the Tribunal, in whose judgment both parties ought to have implicit confidence. Should the judgment involve any act ultra vires, then will be the time for the injured party to refuse to accept such judgment, if the injury is great enough to justify so extreme a remedy. (e e) The United States therefore adhere to the Treaty as of their own right; they adhere to it as the greatest, perhaps, of all modern efforts, to establish the principle of international arbitration; and they adhere to it in the sentiment of profound consideration for this august Tribunal, and for the sovereign States which have been pleased to accept their delicate duties in this behalf at the common solicitation of Great Britain and the United States.

And here we dismiss all considerations of this order, and, maintaining the competency of the Tribunal, we proceed to the question of the amount of damages claimed by the United States.

Rules for measur

III. MEASURE OF DAMAGES.

The responsibility of the British Government having, as we think, been established as law and as fact, we shall assume also, ing damages. in what follows, that that responsibility has been proved to be co-extensive with the wrong; that is, it is a responsibility for the acts of the Confederate cruisers in question to the extent of the provisions of the Treaty.

1. The next inquiry is of the application of this responsibility to the facts, and the induction of the amount of damages for each specific head of injury.

We submit the following rules of judgment in this respect:

(a) When the demand of damage is founded on a tort, as distinguished from a contract, severity is to be shown toward the doer in claims found: Wrong-doer, and the losses which the injured party has suffered are to be appreciated with liberality for the purpose of indemnification.

Severity to be -shown to the wrong. ed on torts.

Infractions of contract are to be anticipated, in view of the too prevalent carelessness of men in this respect, the possibility of which will, therefore, have been foreseen and taken into consideration by the other party.

But when there is violent wrong, it is a fact beyond prevision, which of course occasions more perturbation and derangement of the affairs of the injured party, and which has a character of perversity more grave than that involved in the mere non-execution of a contract. Of course, reparation should be exacted with more rigor.

The animus of the

(b) When the damage claimed is founded on a tort, the culpable animus of the wrong-doer constitutes an element of the question of wrong-doer an ele damage. In such cases the injured party is entitled to damment of damage. ages beyond the amount of actual loss, in the nature of exemplary or punitive damages.

The doctrine in this respect, as understood in Great Britain and the United States, is stated by an American author as follows:

"In these actions all circumstances of aggravation go to the jury.

"The necessary result of this rule is that all the attendant circumstances of aggrava

tion which go to characterize the wrong complained of may be given in evidence; and so it has been held, both in England and in this country. Indeed, it may be said that in cases of tort, where no fixed and uniform rule of damages can be declared, the functions of the court at the trial of the cause are mainly to the reception and exclusion of evidence when offered either by way of aggravation or mitigation, and to a definition of the line between direct and consequential damage." 1

On this point there is unanimity of opinion among jurists, both of the common law, as in Great Britain and the United States, and of the civil law, as in the countries of the Roman law in Europe and America.2

The illustration of this rule, as among private persons, also applies to governments.

"In fact," says Mayne, "if any other rule existed, a man of large fortune might, by a certain outlay, purchase the right of being a public tormentor. He might copy the example of the young Roman noble mentioned by Gibbon, who used to run along the Forum, striking every one he met upon the cheek, while a slave followed with a purse, making a legal tender of the statutory shilling."3

The relation be

(c) Distinctions arise in regard to the relation of the loss or damage and the act of injury, by reason of which reparation is demanded, which require attention, especially in view of the tween the injury question of whether direct or indirect damages, which figures in the present case.

and its cause.

This distinction is raised in various forms of expression, the party of whom damages are demanded seeking to diminish the amount by alleging that they are consequential or remote, or indirect or not immediate. All damages are claimed as a consequence of the act of wrong, and in that sense consequential, and therefore discussion necessarily ensues as to the more or of less remoteness, or indirectness, or immediateness of the consequence.

(d) But each of these conditions is, of itself, uncertain, vague, and sometimes incapable of precision, which has led to the Whether the natendeavor to state the doctrine with more exactness, as ural result of the calling for the inquiry whether the damage complained of wrong-doer's act. is the natural and reasonable result of the wrong-doer's act; and it is settled that it may be deemed of that character if it can be shown to be such a consequence as, in the ordinary course of things, would follow from those acts.*

In truth, every cause has a series of effects; or, to speak more accurately, each effect becomes itself a cause; and so on, from cause to effect, in a longer or shorter series of alternations between cause and effect, according to the particular circumstances.

(e) If law-givers and jurists had been able to say that all damages for wrong should stop at the first effect of the cause, the definition of the rule would be less vague than it is in the common expression; but even then it would be necessary to reflect that the cause does not necessarily operate in a single line only, but frequently in several lines: it may operate in diverse directions, and produce many immediate and direct effects, as by radiation from the common centre of the causa causans, like a stone cast into water.

Of course, the solution of the problem becomes more and more difficult in proportion to the multiplicity of these different lines of action in which the primitive causes operate to produce effets, which are them

Sedgwick on the Measure of Damages, p. 528.

Sourdat, Traité de la Responsabilité, tom. i, p. 97; Sedgwick on Damages, ch. xviii. 3 Mayne on Damages, p. 14. + Ibid., p 15.

selves new causes, and all of them the natural, not to say necessary, consequences of the one definite act of wrong.

(f) As a given event may be, and often is, produced by a plurality of causes working together, so may a wrong be the effect of the action of two or more persons. In such case, the injured party has right of redress against all and each of the wrong-doers, although neither of them may be morally accountable for all the injury, and some one of them may have contributed to the injury in a comparatively small degree. But it is no defense for any of the wrong-doers to say, "I did but co-operate with others, and that in a comparatively small degree, to inflict the injuries."

Whether the effect complained of be or not directly connected with the cause, whether it be proximate or remote, whether the reputed injury be or not the natural and logical consequence of the alleged act of wrong, all these are in part questions of fact, which cannot be reduced to absolute precision, but of which the competent tribunal must judge. Thus, in the example so much discussed by writers on the civil law, suppose that the buildings, cattle, and horses of a cultivator are destroyed by the malicious or culpable negligence of another, so as to establish the right of indemnity against the author of the conflagration, how far shall the demand of damages extend?

Reparation must at least comprehend all which it costs to rebuild the farm-buildings and to procure the same number and quality of cattle and horses, and the personal inconvenience and derangement caused by the conflagration.

But the destruction of the buildings and cattle has interrupted cultivation and deprived the proprietor of his expected crop. Shall this, too, be included in the indemnity?

And the interruption of culture and the losses incidental thereto embarrass the proprietor, so that, in the course of the expenditure to which he is subjected in the purchase of materials of construction and cattle and horses, he becomes indebted; the failure of his crop deprives him of the expected means of payment; his creditors come upon him and seize and sell whatever he has, and thus he becomes ruined and reduced to absolute destitution.

All these disasters are the manifest consequence and effect of the acts of the incendiary. Is the incendiary responsible for them all? Or is he only responsible for the value of the things consumed? Are the subsequent losses, which are confessedly the natural consequences of the act of wrong, so remote or indirect as to relieve the incendiary of responsility therefor?

The law does not require that the damage recoverable shall be the necessary effect of the cause,-that is, an effect impossible to prevent; it does not require that the damage recoverable shall be the first effect of the cause, but only that the damage shall have efficient cause in the act of wrong.

And the party injured is not to be deprived of redress, if he failed to employ extraordinary means to arrest the progress of his losses and diminish their amount, provided he took the ordinary steps of prudence to that end.1

All these, we repeat, are considerations of fact, which the competent tribunal judges according to the circumstances and which do not admit of absolute legal conclusions of law.

(h) Damages, reparation, indemnity, all these are terms to describe

1 Sourdat, De la Responsabilité, tom. i, p. 96.