That, should the tribunal award a sum in gross, this sum ought to be measured solely by the extent of liability which the tribunal may find to have been incurred by Great Britain on account of any failure or failures of duty proved against her.1

118. These propositions appear to Great Britain too clear to need the support of argument. It is evident that should the arbitrators be satisfied that, as to any ship and in any particular, there has been a clearly ascertained default on the part of Great Britain, it would then become their duty to examine wherein the default consisted, and whether it was a just ground for pecuniary reparation; and, if so, to determine the gen eral limits of the liability incurred, having regard both to the nature and gravity of the default itself and the proportion of loss justly and reasonably assignable to it. The liability thus determined, or the ag gregate of such liabilities, as the case may be, constitutes, it is evident, the only just measure of the compensation, if any, to be awarded to the United States. The basis of the award must be the fact, established to the satisfaction of the arbitrators, that certain losses have been sustained on the one side, which are justly attributable to certain specific failures of duty on the other, in respect of a certain ship or ships; and the basis of the award must also be the basis for computing the sum to be awarded. The power of awarding a gross sum does not authorize the arbitrators to depart, in substance, from this basis, although it may relieve them from the necessity of a minute inquiry into the particulars of alleged losses and from intricate and perhaps inconclusive calculations.

The only question which can arise, should the tribunal be satisfied that Great Britain has failed in the discharge of any international obligation toward the United States, is, what, if any, compensa tion in money would afford a just reparation for the loss caused by that default? International law, while it recognizes the obligation, as between sovereign States, to redress a wrong committed, knows nothing of penalties. Two alternative modes of ascertaining the amount have been provided by the treaty. But, which mode soever it may be found convenient to pursue, the question continues to be in substance the same; for the foundation of the award must remain the same, (some specific failure or failures of duty, alleged and proved to the satisfaction of the Tribunal,) and the principle of calculation, there fore, is, of necessity, the same. What is due from Great Britain? would be the question for the arbitrators; what is due from Great Britain! would, in like manner, be the question for the board of assessors, and justice would as clearly forbid that more than what is due should be awarded by the former as that less should be awarded by the latter.

119. Lastly, it has been shown by a fair and careful examination of the various classes of claims presented by the United States, so far as such an examination was possible in the absence of the necessary materials, (which the United States have not furnished,) that the esti mates of losses, private and public, which have been laid before the Tribunal, are so loose and unsatisfactory, and so plainly excessive in amount, that they cannot be accepted as supplying even a prima-facie basis of calculation. It has been likewise shown that the estimates of expenditure were the claims on that head to be considered admissible. are also too unsatisfactory to serve a similar purpose.2

Some new matter being contained in the revised list of claims ap

1 British Counter Case, p. 132.

* British Counter Case, Part X, pp. 134-141; Appendix to British Case, vol. vii.

pended to the Counter Case of the United States with reference to these points, Her Majesty's Government has thought it most convenient to embody their further views and arguments on this part of the subject in a further report from the committee appointed by the Board of Trade, which constitutes the Annex (C) to this argument. A further note on the claims presented by the Government of the United States for expenditure alleged to have been incurred in the pursuit and capture of the confederate cruisers is also appended as Annex (D.)

120. With reference to the question of compensation, it has been observed that it would be unjust to hold a neutral nation liable for losses inflicted in war, which reasonable energy and activity were not used to prevent, on the plea that the vessels, which were instrumental in the infliction of the loss, were procured from the neutral country, even though it may be alleged that there was some want of reasonable care on the part of the neutral government. The utmost period over which a liability once established on the ground of default could be extended on any rational principle would be that which must elapse before the aggrieved belligerent would, by the use of due diligence and proper means on his own part, have the opportunity of counteracting the mischief. The United States seem to take exception to this position. To Great Britain it appears to be just and reasonable in itself, to be supported by sound legal principles and analogies, and to be a necessary limitation of claims of this nature, should they be considered admissible in principle.

Conclusion.

121. The British government has been compelled, therefore, to take notice of the inefficiency of the measures which were adopted by the Government of the United States during the war to protect their commerce at sea and prevent the losses of which they now complain-losses sustained from ordinary operations of war, the whole burden of which the belligerent seeks, now that the contest is at an end, to transfer to a neutral nation. It can hardly be doubtful that these would have been in great measure averted, if the naval resources of the United States had, at the time, been employed with reasonable activity for the purpose.2 122. It is not, then, without reason that the British government has, in the concluding paragraphs of its Counter Case, described the claims which the tribunal is asked to sanction by its award as of grave and serious consequence to all neutral nations. In truth, it is not too much to say that, were they to be affirmed as the United States have presented them, and were the principles on which they have been framed and argued to obtain general acceptance, the situation of neutral powers would be entirely altered, and neutrality would become an onerous and, to the less powerful states, (such, especially, as cherish the freedom of commerce and have free institutions,) an almost impossible condition. It is the interest of all nations that the recognized duties of neutrality should be discharged with good faith and reasonable care; and Great Britain requires of others in this respect nothing which she is not ready to acknowledge herself equally bound to perform. But it is likewise the interest of all nations, and in a still higher degree, that these duties should be as little burdensome as possible.

123. The question submitted to the tribunal is not whether the subordinate officials of the British government, or even the government itself, might or might not, on some occasions during the war, have acted with greater dispatch or with better judgment. Nor has it to

1 British Counter Case, p. 140.

2 Ibid., part X, pp. 138-140.

determine whether it would be for the advantage of the world that rules of action which have not been recognized in past time should be established for the future. These are matters of opinion which Great Britain would not have consented to refer to arbitrators. The question for decision is a question of positive duty and liability, to be determined solely by the application of accepted rules and settled principles to ascertained facts. And no award can with justice be made against Great Britain to which the United States, or Italy, or Switzerland, or Brazil, or any other power, under similar circumstances, would be justly unwilling to submit.

ANNEX (A.)-COMMUNICATIONS BETWEEN THE BRITISH AND AMERICAN GOVERNMENTS, DURING THE CIVIL WAR, WITH REFERENCE TO THE STATE OF THE NEUTRALITY LAWS OF GREAT BRITAIN.

In addition to the Annex (B) to the British Counter Case, it is thought desirable here to exhibit, in one view, the effect of every material communication which passed during the war between the British and American governments with reference to the state of the neutrality laws of Great Britain. It will be seen (1) that the equal efficacy of the provisions of the British foreign-enlistment act with those of the American act of the 20th April, 1818, was never during that period seriously called in question, and (2) that the only additional legislation then solicited. from Great Britain by the United States was of a different kind, with a view either to the prevention of the trade in articles contraband of war between Great Britain or her colonies and the Confederate States, or to the more effectual repression of acts inconsistent with neutrality in the British North American possessions, conterminous with the United States.

On the 28th June, 1861, Mr. Seward wrote thus to Mr. Adams:

As it is understood that there is an act of the British Parliament similar to our act of neutrality of the 20th April, 1818, I have to request that, if any infringement of the British act adverse to the rights of this Government should come to your knowledge, you will cause complaint thereof to be made, in order that the parties implicated may be prosecuted according to law. 1

On the 7th September, 1861, Mr. Seward instructed Mr. Adams to remind Lord Russell of an act of Congress passed in 1838, during an insurrection. against the British authority in Canada, adding:

The British government will judge for itself whether it is suggestive of any measures on the part of Great Britain that might tend to preserve the peace of the two countries, and, through that way, the peace of all nations.2

On the 10th of the same month he forwarded to Mr. Adams an intercepted letter relative to the shipment of arms and powder from Nausau for the use of the confederates, and said:

The existing British statute for the prevention of the armed expeditions against countries at peace with Great Britain is understood to be similar to our act of Congress of the 5th of April, 1818. Proceedings like that referred to in the letter of Baldwin, however, afford us special reason to expect legislation on the part of the British Government, of the character of our act of 1838. It may be, however, that the British Government now has the power to prevent the exportation of contraband of war from British colonies near the United States, for the use of the insurgents in the South. 3

On the 11th and the 14th of September, 1861, Mr. Seward expressed his regret that the British laws were not effectual to repress this description of trade. At a much later date, (24th October, 1864,) recurring to the same suggestion, he wrote:

The insufficiency of the British neutrality act and of the warnings of the Queen's proclamation, to arrest the causes of complaint referred to, were anticipated early in the existing struggle; and that Government was asked to apply a remedy by passing

1 Appendix to Case of the United States, vol. i, p. 517.

2 Ibid., p. 660.

3

Ibid., p. 518. See also Mr. Adams's letter of May 12, 1862; ibid., pp. 663, 664.

an act more stringent in its character, such as ours of the 10th March, 1838, which was occasioned by a similar condition of affairs. This request has not been complied with, though its reasonableness and necessity have been shown by subsequent events.

The act of Congress of 1838, thus referred to, was a temporary statute. (of two years' duration,) by which power was given to the officers of the United States Government "to seize or detain any vessel, or any arms or munitions of war, which might be provided or prepared for any military expedition or enterprise against the territory or domin ions of any foreign prince or state, &c., conterminous with the United States, and with whom they were at peace, contrary to the sixth section of the act of the 20th April, 1818," and "to seize any vessel or vehicle, and all arms or munitions of war, about to pass the frontier of the United States for any place within any foreign state, &c., conterminous with the United States, where the character of the vessel or vehicle, and the quantity of arms and munitions, or other circumstances, should furnish probable cause or believe that the vessel or vehicle, arms or munitions of war, were intended to be employed by the owner or owners thereof, or any other person with his or their privity, in carrying on any military expedition or operations within the territory or dominions of any foreign prince, &c., conter minous with the United States," suitable provisions being made for the trial, in due course of law, of the legality of all such seizures. These powers (limited, as they were, to operations illegal under the act of 20th April, 1818, of which the destination should be some territory conterminous with the United States) were still further guarded and limited by the following proviso:

Provided, That nothing in this act contained shall be construed to extend to, or interfere with, any trade in arms or munitions of war, conducted in vessels by sea, with any foreign port or place whatever, or with any other trade which might have been lawfully carried on before the passage of this act, under the law of nations, and the provisions of the act hereby amended.

If a law substantially similar to this had been enacted in Great Britain, it would have been wholly inapplicable to the trade by sea in articles contraband of war, for the repression of which its enactment was suggested by Mr. Seward. Its efficacy would have been confined to such acts, hostile to the United States, as might be attempted in the British possessions conterminous with those States. Such a law was. in point of fact, enacted by the Canadian Legislature as soon as acts of that nature were attempted by the Confederates in the British North American provinces; and Her Majesty's Government has no reason to suppose that the measures then taken to preserve from violation the neutrality of Her Majesty's North American possessions were deemed unsatisfactory, or insufficient to meet that emergency, by the Govern ment of the United States.

Of the correspondence which took place between December, 1862, and March, 1863, when Her Majesty's Government invited, from Mr. Adams, suggestions with a view to concurrent amendments in the Foreign-Enlistment Acts of both countries, (which suggestions were met by an invitation from the United States to Her Majesty's Government to make proposi tions for that purpose, it being at the same time expressly stated that the Government of the United States considered their own law "as of very sufficient vigor," or, as Earl Russell understood Mr. Adams to say, that "they did not see how their own law on this subject could be im proved,") and the opinion then formed and announced to Mr. Adams by

Appendix to Case of the United States, vol. i, p. 677.

- Appendix to the Case of the United States, vol. i, pp. 668, 669; also, pp. 585 and 602.