justice, if Great Britain is held responsible for those claims, she would herself have a claim for indemnity against those eleven States; which, in their external relations toward herself and other countries, are represented by the Federal Government. If everything has been condoned to them by the Federal Government, and if their relations to that Government preclude Great Britain from having recourse to them for the indemnity which would otherwise be justly due to her, it is surely impossible to conceive a case in which there would be less justification for a discretionary and penal augmentation of damages, such as an allowance in respect of interest, in a proceeding for unliquidated damages, always is. Another argument, arising from the peculiar circumstances of the present case, and which has also a strong bearing in favor of a reasonable modification of the liability of Great Britain, and, at all events, against any aggravation of that liability by the addition of interest as an element of damages, is thus stated in the British Counter Case, (p. 132:) When any vessels, whether procured from Great Britain, or otherwise obtained, had become Confederate ships of war, the duty of repelling their hostile proceedings by all proper and efficient means (like the rest of the operations necessary for the conduct of the war) devolved exclusively upon the United States, and not upon the British Government. Over the measures taken by the United States for that purpose, Great Britain could exercise no influence or control; nor can she be held responsible in any degree for their delay, their neglect, or their insufficiency. Any want of skill or success, even in the operations by land, would have the effect of prolonging the period during which cruises of this nature could be continued. All losses, which might have been prevented by the use of more skillful or more energetic means, ought justly to be ascribed to a want of due diligence on the part of the Government of the United States, and not to any error, at any earlier stage, of the British Government. Causa proxima, non remota spectatur. In support of this reasoning, various facts are referred to, at pages 138-140 of the same Counter Case, which show that numerous opportunities of arresting the progress of the Confederate cruisers were actually. lost, through the remissness or fault (according to the judgment of their own official superiors) of the officers who ought to have performed that duty; and that the means employed by the Government of the United States for that object were on the whole inadequate for its energetic accomplishment. It would surely be of very dangerous example to hold that a belligerent power is at liberty (upon such an occurrence, e. g., as the enlistment of forty men of the Shenandoah on the night of her leaving Melbourne) to leave a vessel which has abused the hospitality of a neutral State, to harass the commerce of its citizens without the use of efficient means of prevention; relying upon an eventual pecuniary claim against the neutral State for the value of all the subsequent captures of that vessel, with interest to the day of payment. 12. Even if it were possible that interest could be held due, on ac-, count of delay of payment, in a case of unliquidated and unascertained claims of this nature, between nation and nation, it is obvious that the United States, and not Great Britain, are exclusively responsible for so much, at least, of the delay, as has been due to the rejection by the Senate of the United States of the Convention signed by Mr. Reverdy Johnson and the Earl of Clarendon, on the 14th January, 1869. (British Appendix, vol. iv, part 9, pp. 36-38.) That Convention provided for a reference to arbitration of all the claims of American citizens, arising out of the acts of the several vessels to which the present controversy relates. It was the result of a careful negotiation, expressly authorized from the beginning to the end by the Government of the United States. Its form was, several times altered to meet suggestions proceeding from that Government; and no such suggestion was made, before the final signature, which was not met by a practical concession on the part of Great Britain. If that Convention had been ratified in 1869, a settlement of all these claims would have taken place either three or, at least, two years since. It was, however, rejected by the Senate of the United States without so much as the communication, at the time, of any reason or explanation whatever to the British Government. (British Appendix, vol. iv, part 9, page 10, ad finem.) No reason or explanation has ever been offered which can alter the significance of this fact, or make it reconcilable with any conceivable view of justice, that, as against a Government which has never derived any profit or benefit, either directly or through its citizens, from any of the captures in question, the United States should claim interest for a delay due only to themselves. Great Britain, from the commencement of the negotiations between Lord Stanley and Mr. Reverdy Johnson in 1866, was always willing that these claims should be settled by arbitration; the difficulty (which appears to have originated in the suggestion by Mr. Sumner of those indirect claims, which are now excluded from the consideration of the Tribunal) was on the part of the United States alone. Can it be said that, if the delay, so caused, had lasted for twenty or for ten years, a claim by the United States for interest during that period could still have been maintained? If not, it cannot be maintained now; whether the delay is twenty years or two years, can make no difference in principle. 13. All the foregoing reasons belong to the general equity of the case, and are independent of all the objections to the allowance of interest as an element of damages or compensation, which arise out of the particulars of the claims, and the impossibility of ascertaining or defining them before this Tribunal. 14. The substantial claims (setting aside that of the United States for the alleged expenses of pursuit and capture) are those of the owners of ships and other property destroyed, and those of the insurance.companies with whom the property lost was insured. The amount of both these classes of claims is stated in dollars of the currency of the United States at the respective times when the losses were sustained and the insurances paid. The value of the dollar currency was, during that whole period, enormously depreciated by reason of the war and of the suspension of specie payments in the United States. Its exchangeable value, as compared with the exchangeable value of the dollar in gold, during the period of specie payments before the war and also at the present time, was as 5,614 to 7,744, or, in round numbers, as 8 to 11.! All values of property computed in dollars of the forced paper currency, during that period, stood at proportionally higher figures than they would have done during the time of specie payments. The payment of all these claims," so stated at their values in a forced paper currency, is now sought to be recovered against Great Britain at the nominal value of the same number of dollars converted into gold at the present rate of exchange; thus giving to every claimant a direct gain of above 27 per cent., by the difference only between the value of the dollar in which the losses were estimated, and the value of the dollar in which the payment is asked to be made. This gain is alone equivalent to the actual addition of interest, at the rate of 6 per cent. per annum, for four years and a half upon every claim. 15. With respect to the insurance companies, it must be remembered 1 British Summary, p.68. 2 The exceptions are few, and of no importance to the argument. that, as against the losses which they paid, they received the benefit of the enormous war-premiums which ruled at that time; and that these were the risks against which they indemnified themselves (and, it cannot be doubted, so as make their business profitable upon the whole) by those extraordinary premiums. Would it be equitable now to reimburse them, not only the amount of all these losses, but interest thereon, without taking into account any part of the profits which they so received? 16. These remarks would hold good if an exact valuation of the claims were possible; but, before this Tribunal, neither an exact valuation of any part of these claims, nor any approximation to such a valuation, is possible. This consideration alone ought to be decisive against the demand of interest, as an element of damages, in any gross sum to be awarded by the Tribunal. When this is held to be admissible in private jurisprudence, the estimate or computation of the amount to be added for interest is always founded upon some appropriate evidence, by which the Jury or the Court is enabled to fix a definite sum as the value of the principal subject for which compensation is due. Before interest can be computed, whether as a legal incident of a liquidated debt, or as an element in damages previously unliquidated, the principal sum must be known; and this, not by conjecture, not by accepting, without proof in detail, the amount at which the interested party may choose to state his own claim, (almost always excessive and exorbitant, and, as a general rule, purposely so overstated, in order to leave a very wide margin fór a profit after all probable deductions,) nor by any merely arbitrary modification of that amount, but by such vouchers and proofs as, after the opposite party has had the opportunity of seeing and checking them, are deemed satisfactory. Where such vouchers and proofs are absent, or cannot be satisfactorily tested, all foundation for an allowance of interest, as an element of damages, necessarily fails. 17. In the present case, not only is it altogether impossible to ascertain, either accurately or proximately, any sum which can be taken by the Tribunal as representing the principal amount of the losses, for which Great Britain ought to be held responsible; but the figures which have been laid before the Tribunal on both sides show in a very significant manner what great injustice might be inadvertently done, and how largely any just measure of compensation or indemnity might be exceeded, if the Tribunal were either to assume some amount, arbitrarily fixed, as representing the principal of those losses, and then to add interest on that amount; or were, without any such attempt at exactness, to swell, by some undefined and arbitrary addition under the notion of providing for interest, an award for a gross sum, founded on no distinct elements admitting of any computation. It does not require much attention to the particulars of the claims to see that they have been intentionally so stated, as to leave not only a wide margin for all those deductions, which the criticism of Great Britain might prove to be necessary, but ample room, after every such deduction has been made, for a large and full compensation and indemnity, without any further addition whatever. The British criticisms cannot and do not attempt more than to cut off manifest exaggerations of those claims, either by demonstrating the inadmissibility in principle of some of them, (e. g., the double claims, and the prospective earnings,) or by showing that others (e. g., the claim for gross freights) must, on principle, be reduced by manifestly necessary deductions, or by appealing to the known and ascertained values of shipping, &c., of the same classes before the war, as a standard of comparison to which estimates of losses, manifestly excessive, may be referred. But when the fullest effect has been given to all these criticisms, the remaining claims continue unvouched and untested, under circumstances in which every really doubtful and uncertain question of actual value is practically taken for granted, even by the reduced British estimate, in the claimant's favor. 18. In illustration and proof of the preceding observations, the following important extract from the Report of Messrs. Cohen and Young, appended to the British Argument or Summary, (pp. 46-47,) containing matters, not of opinion, but of fact, which the Arbitrators may verify for themselves merely by referring to the several documents in which the claims of the United States have been at different times stated, is here subjoined: "It will be useful," they say, "to make some observations which present themselves on comparing, with the 'Revised Statement,' the original list of claims which was sent by Mr. Seward to Mr. Adams in August, 1866, and also the extension of this, as presented by the President to the House of Representatives in April, 1869, and which are to be found in the fourth volume of The Correspondence concerning Claims against Great Britain transmitted to the Senate of the United States.' "These lists of claims not only strongly confirm the opinion we expressed in our First Report, that the estimate we there made of the value of the vessels was probably a very liberal one, but also show in a remarkable manner how, since the year 1866, the claimants have in most cases enormously increased their estimate of the losses al-leged to have been sustained by them. "We will cite some of the more striking instances-calling the list of claims sent to Mr. Adams the Original List,' the List presented to the House of Representatives the United States Amended List,' the Statement, on which we have already reported, the 'Former Statement,' and the Revised List of Claims2 on which we are now reporting the 'Revised Statement.' "The Alert.-The claim as stated in the 'Original List' amounted to $57,859; in the 'Revised Statement' (p. 1) it amounts to $202,726. In the Original List' there was a claim of $30,000 for interruption of voyage;' but now, in addition to that amount, there is claimed a sum of $144,869 for prospective earnings.' "The Anna Schmidt.-This vessel was in the 'Original List' valued at $30,000, which is somewhat less than the average valuation we have allowed in proportion to her tonnage, but in the 'Revised Statement' (p. 13) the sum claimed in respect of the vessel is double that amount. "The Golden Eagle.-In the 'Original List' the owners claimed for the vessel $36,000, and for freight $26,000. Our average estimate in proportion to her tonnage was about $45,000. In the 'Revised Statement' (p. 40) the owners claim $86,000 for vessel and freight, thus increasing their claim by nearly 50 per cent. "The Highlander.-She was a vessel of 1,049 tons, and was in ballast. In the 'Original. List' two insurance companies advanced claims for insurances to the extent of $30,000, which was probably about the value of the vessel; but in the 'Revised Statement' (p. 46) the owners put forward an additional claim for the ship to the extent of $84,000 This claim is, however, far less extravagant than the claim for freight, which in the 'Original List' amounted to $6,000; whereas in the 'Revised Statement' it exceeds $68,000, and is advanced without any deduction whatever, although the ship was in ballast at the time of her capture. It will be found that. at pages 6 and 27 of our First Report we have specially commented on the character and extent of the extraordinary demands put forward in respect of this vessel. "The Ocean Rover.-In the Original List' the owners claimed $10,400 for value of ship, loss of oil on board, and damages for breaking up of voyage. The claims now advanced in the 'Revised Statement' (p. 68) in respect of the same losses exceed $193,000, the difference between the original claim and the more recent one being made up entirely of double claims for single losses.' "The Kate Cory.—In the 'Original List' the owners claimed $27,800 for the value of the brig, outfit, and oil on board, and there was also a claim of $1,820 for the value of reasonable prospective catch of oil.' In the 'Revised Statement' (p. 51) the amounts insured have, as usual, been added to the claims by the owners, and there has been inserted a claim of $19,293 for loss of prospective catch, so that the original claim for $29,620 has grown to $56,474. "The Lafayette No. 2.—In the 'Original List' the owners valued the ship and outfit I Presented with the American Case, on December 15, 1871. at $24,000, which is less than our average valuation according to her tonnage; and the secured earnings at $10,475; but in the Revised Statement' (p. 55) the claim put forward in respect of ship and outfit and secured earnings is more than $89,000; and the prospective earnings, which were in the Original List' valued at $33,446, are now estimated at a sum exceeding $50,000. The original claim for $69,471 has grown to $141,858. "The Rockingham.-The claim in the 'Original List' amounted to $105,000, whereas the claim in the Revised Statement' (p. 74) exceeds $225,000. This is also one of the vessels which we selected in our First Report (page 23) as a striking example of the exorbitant nature of some of the claims. There can be no doubt that the original claim was very extravagant, but in the Revised Statement' it has been doubled by improperly adding the insurances to the alleged values. The Union Jack.-In the " Original List" it is stated that G. Potter, after deducting the amount received from the Atlantic Insurance Company, claims the sum of $7,584; but in the "Revised Statement" (p. 111) he claims the sum of $34,526, without making any deduction for insurances, although the insurance companies at the same time claim $32,014 in respect of the amount insured by them; and it therefore clearly follows that a sum, at any rate exceeding $26,000, is claimed twice over. The Catherine. In the "Original List" the owners claimed about $45,000 for vessels and secured earnings, but made no claim in respect of prospective earnings. Now, in the "Revised Statement," (p. 229,) there is a claim put forward of $35,329 for loss of vessel and cargo, over and above $31,676, the alleged amount of insurances by the owners, which is also at the same time claimed by the insurance company. In addition to this there is a claim for prospective earnings exceeding $19,600, so that the original claim of $45,805 has now grown to the enormous sum of $272,108. The Favourite.-She was a bark of 393 tons. In the "Original List" the Atlantic Insurance Company, as insurers and assignees of the owners, claimed for loss on vessel and outfit $40,000, which there can be little doubt was the full value. In the "Revised Statement" (p. 240) the claims in respect of the vessel and outfit amount altogether to $110,000. The master, in the "Original List,” claimed $1,498 for the loss of his effects; but now he claims for the loss of his personal property, $2,239, and for loss of interest in oil and bone, $2,709. The Isaac Howland.-In the "Original List" the claim for prospective earnings was $53,075, but in the "Revised Statement" (p. 247) it has grown to nearly four times that sum, namely, to $196,158. Moreover, in the "Original List," the owners claimed $65,000 for ship and outfit, subject to abatement for insurance; whereas, in the "Revised Statement," they claim the same sum, but protest against any diminution of claim by reason of insurance obtained by them, although the insurance companies claim at the same time the whole amount insured by them. The General Williams.-In the "Original List" the owners claimed $40,503 as damages by the destruction of the vessel, over and above $44,673, the amount of insurances received by them. In the "Revised Statement" (p. 241) there is added to the amount of insurances a sum of $85,177, the claim being in this manner all but doubled. There are also added the following claims: A claim by the owners for prospective earnings amounting to $196,807; a claim by the master for loss of prospective catch, time, and occupation, amounting to $20,000; a similar claim by the mate, amounting to $10,000; another claim of $30,000 for insurances on vessel and outfit; and finally, the sum of $16,000 for insurances by the owners on the vessel's prospective earnings. In this manner the original claim, which was less than $66,000, has grown to the sum of $406,934, and has therefore been increased more than sixfold. 19. One more subject remains to be dealt with. The United States, in their Argument, (page 220,) have appealed to certain historical precedents. After stating, in a passage already referred to, (and to which, it is hoped, a full and sufficient reply has been made,) that they conceive this demand of interest, as an element of damage, to be "conformable to public law, and to be required by paramount considerations of equity and justice," they add: Numerous examples of this occur in matters of international valuation and indemnity. Thus, on a recent occasion, in the disposition of Sir Edward Thornton, British Minister at Washington, as Umpire of a claim on the part of the United States against Brazil, the Umpire decided that the claimants were entitled to interest by the same right which entitled them to reparation. And the interest allowed in this case was (45,077 dollars) nearly half of the entire award, (100,740 dollars.) So, in the case of an award of damages by the Emperor of Russia in a claim of the United States against Great Britain under the Treaty of Ghent, additional damages were awarded in the nature of damages from the time when the indemnity was due. |