No. 70.

Mr. Fish to General Schenck.

[Telegram.-Extract.]

WASHINGTON, May 29, 1872.

Your telegram of last night received this morning. We cannot understand the objections which Lord Granville raises. He raises new issues, but suggests nothing in the direction of an agreement. Criticism and objection without suggestions lead to no results, and do not give assurance of a desire to harmonize differing views.

You have informally suggested various modes of agreement, but Great Britain has met all with the demand to withdraw claims which we feel we were justified under the Treaty in presenting, while the obligations which Great Britain has in various forms proffered on her part have all been substantially the same, and have been vague, uncertain, ideal, and not likely ever to become available.

The Article proposed by the Senate is fair, candid, and reciprocal. This Government has endeavored to express its views, objects, and meaning with respect to the principle embodied therein in the correspondence which has taken place, and in the communications which you have had with Her Majesty's Minister of Foreign Affairs.

As the proposed Article, if it is to become a Treaty, must be signed and be submitted to the Senate for approval, but two days remain within which that approval can be had, and the Treaty forwarded to London to enable the ratifications to be exchanged in time to be presented to the Arbitrators at their meeting in June.

Further explanations of the views of the Government seem, therefore, impossible to be interchanged between here and London; but you may be able to explain these views as they have been communicated to you from this Department.

The President is extremely anxious to preserve a Treaty embodying and giving practical application to the doctrine of arbitration as a mode of settling international differences, and for that end has been willing to make large concessions.

You will call the attention of Her Majesty's Minister to the fact that unless the Treaty be signed and approved by the Senate, so that the President's ratification can leave here the day after to-morrow and go by Saturday's steamer, it cannot reach London in time to be there exchanged, and be presented to the Arbitrators at their meeting on 15th June.

The suggestion of another treaty to adjourn the meeting at Geneva seems impracticable. The Senate is in the last days of its session, with much important legislation pending, and every hour of its time preoccupied. In the absence of any indication of a disposition on the part of the British Government to suggest anything to which this Government could assent, it would be impossible to secure enough of the time of the Senate to agree to a treaty which promises only further delay and procrastination.

I regret not to see an indication of a desire or disposition on the part of the British Government to come to an agreement which will be honorable to this Government.

If the British Government has any proposals to make they will be fairly considered, with the most sincere desire of a frank, friendly, and honorable agreement. We neither ask nor will consent to anything else.

The tone of Lord Granville's notes seems to assume that the Senate and this Government are to accept what Great Britain may have suggested. Our view is very different.

FISH.

[From British Blue Book "North America," No. 9, (1872,) p. 32.]

No. 71.

Earl Granville to Sir E. Thornton.

FOREIGN OFFICE, May 29, 1872.

SIR: General Schenck called upon me early this morning, and informed me that he had received a telegram from Mr. Fish stating that the Government of the United States declined to agree to the alterations which Her Majesty's Government had proposed, as set forth in my letter to him of the 27th instant, in the Article of the supplementary Treaty. Mr. Fish says that, holding to the opinion that the claims for indirect losses are admissible before the Arbitrators, the establishment of the principle embodied in the Article, or assented to by the Senate, has been its object in adhering to that Article; and that the recognition of that principle by such supplementary Treaty will be the inducement for withdrawing the claims.

General Schenck further said that he last telegraphed to Washington last night the whole of the communication, containing the additional obeservation which I made to him in my letter of yesterday, but that he did not expect to receive any further telegram from his Government before early to-morrow morning. He understood that Congress had agreed not to adjourn till next Monday, the 3d of June. Before that day, and probably to-morrow, he expects to receive a reply to the proposal to extend the time for arbitration beyond the 15th of June, and he therefore thought he should not have to trouble me before noon to-morrow. I am, &c.,

GRANVILLE.

[From British Blue Book "North America,” No. 9, (1872,) p. 32.]

No. 72.

Memorandum communicated by General Schenck, May 30, 1872.

I assume that your object, like ours, is to affirm the principle that neutrals are not to be held liable for indirect and remote damages which may be the result of a failure to observe neutral obligations, and to establish that principle, as a rule, to be observed between our two nations. Your proposed form of Article, as it was amended by the Senate, we think does that. You think it is too vague. We think your proposal, either as originally made, or as modified by your proposed amendment of the language of the Senate, would be altogether uncertain as a rule in practice, confines itself to hypothetical cases which may never occur; and, instead of recognizing and applying the general principle, limits the rule to some three classes, only indirect claims, being those which are put forth by the United States in their Case at Geneva.

No. 73.

General Schenck to Mr. Fish.

[Telegram.]

LONDON, May 30, 1872. (Received 9 p. m.)

Your telegram of yesterday received and communicated to Lord Granville. He said he would confine himself to one remark, namely, that your statement at the beginning from the words "he raises," down to the word "views," was inexplicable to him. What had been the course they had pursued? They had at the request of the Government of the United States draughted an Article founded on an idea of that Government. The Government of the United States had amended that Article, and in answer they had not merely stated an objection to the amendment, but had draughted a re-amended Article for their consideration. He said he would not make any further argument until he had submitted to his colleagues the communication which had just been made to him. I stated that I did not wish to go into any argument, but would just state again what was my view of the present situation and difference between us, though it was but repeating former statements. I said to him, "I assume that your object, like ours, is to affirm the principle that neutrals are not to be held liable for indirect and remote damages, which may be the result of a failure to observe neutral obligations, and to establish that principle as a rule to be observed between our two nations. Your proposed form of Article, as it was amended by the Senate, we think does that. You think it is too vague. We think your proposal, either as originally made or as modified by your proposed amendment of the language of the Senate, would be altogether uncertain, as a rule in practice confines itself to hypothetical cases which may never occur, and, instead of recognizing and applying the general principle, limits the rule to some three classes only of indirect claims, being those which are put forward by the United States in their Case at Geneva." The Cabinet is now in session.

SCHENCK.

No. 243.]

No. 74.

General Schenck to Mr. Fish.

LEGATION OF THE UNITED STATES,

London, May 30, 1872. (Received June 11.) SIR: Inclosed with this I send copies of all written correspondence which has passed between Lord Granville and me since my No. 239. These notes taken in connection with the several telegrams which have passed between you and me, of which copies are also forwarded to you with another dispatch to-day, will bring up the history of what has taken place here for the last five days in relation to the proposal for a supplementary Treaty. Your telegram of the 28th, declining, on the part of the United States, to agree to the proposed altering of the supplementary Treaty, was received in the night and communicated to Lord Granville very early yesterday morning. I would give you, with these documents, some narrative and comments, and it was my intention to

do so, but your long telegram in answer to the observations of Lord Granville, contained in his note which I telegraphed to you in full at midnight of the 28th, has this moment arrived and requires to be deciphered and to have my immediate attention, so that it will not be possible to give any other communication by the mail which is made upfor Queenstown to-day.

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

ROBERT C. SCHENCK.

[Inclosure 1 in No. 74.]

Earl Granville to General Schenck.

FOREIGN OFFICE, May 27, 1872.

SIR: I instructed Sir E. Thornton to communicate to Mr. Fish the accompanying form of preamble to which Her Majesty's Government were prepared to agree in case a convention should be concluded embodying the draught Article. I have learned from Sir E. Thornton that Mr. Fish would prefer the omission of the words "in order that the same may be communicated to the Tribunal of Arbitration, appointed under the first article of the Treaty signed at Washington on the 8th of May, 1871, for the guid-ance of the proceedings of that Tribunal," and I have this day informed Sir E. Thornton that he may tell Mr. Fish that Her Majesty's Government will not insist on the words which he desires to omit in the preamble, if he will give Sir E. Thornton an assurance in writing that the Government of the United States will agree to the form of note which I proposed, and of which I sent you a copy on the 20th instant, com-municating the Convention on the part of the two Governments to the Tribunal of Arbitration at Geneva. I have to add that Sir E. Thornton has a general full power enabling him to sign a Convention, and instructions to do so if the proposals contained in this, and in my other letters of this day's date, are agreed to.

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

GRANVILLE.

[Inclosure 2 in No. 74.]

Proposed preamble to supplemental Treaty.

Her Majesty the Queeen of the United Kingdom of Great Britain and Ireland, and the United States of America, having resolved to conclude a Convention in the terms of the Articles hereinafter set forth, in order that the same may be communicated to the Tribunal of Arbitration appointed under the first Article of the Treaty signed at Washington, on the 8th of May, 1871, for the guidance of the proceedings of that Tribunal, have named as their Plenipotentiaries, that is to say—

[Inclosure 3 in No. 74.]

Earl Granville to General Schenck..

FOREIGN OFFICE, LONDON, May 27, 1872. SIR: I have lost no time in laying before the Cabinet the telegraphic dispatch from Mr. Fish, which you communicated to me this afternoon, informing you of the result of the deliberations of the Senate on the draught Article submitted for their adviceby the President of the United States. It appeared from this dispatch that the Senate had agreed to advise and consent to the adoption of the proposed article, with the substitution for the third and fourth paragraphs, of two paragraphs, as follows:

"And whereas the Government of the United States has contended that the said claims were included in the Treaty; and whereas both Governments adopt for the future the principle that claims for remote or indirect losses should not be admitted as:

the result of the failure to observe neutral obligations, so far as to declare that it will hereafter guide the conduct of both Governments in their relations with each other, now, therefore," &c.

In communicating this dispatch to me, you inquired whether any possible interpretation could be given to the proposed Article in the form in which the Senate have modified it, taking all its parts together, which would prevent taking before the Arbitrators, to be considered by them in making their award, that part of the claim called "direct claims" in the Case, which relates to the cost of pursuit and capture of cruisers. I have now the honor to state that I must, on behalf of Her Majesty's Government, decline to answer the question which you have put to me as to the effect of the article as altered by the Senate, or to state what possible construction it may bear.

Her Majesty's Government are of opinion that the definition as therein expressed, of the principle which both Governments are prepared to adopt for the future, is so vague that it is impossible to state to what it is or is not applicable, and they believe that it would only lead to future misunderstandings. That Her Majesty's Government prefer the Article as they had draughted it, but have no objection to accept the Article in the form proposed by the Senate, with the substitution of the words "of a like nature" for the words "for remote and indirect losses," and the substitution of the words "such want of due diligence on the part of a neutral" for the words "the failure to observe neutral obligations." The article would then run thus: "And whereas both Governments adopt for the future the principle that claims of a like nature should not be admitted as the result of such a want of due diligence on the part of a neutral, so far as to declare that it will hereafter guide the conduct of both Governments in their relations with each other."

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

GRANVILLE.

[Inclosure 4 in No. 74.]

General Schenck to Earl Granville.

LEGATION OF THE UNITED STATES,

London, May 28, 1872.

MY LORD: I received late last evening your note of yesterday's date, informing me,in relation to the form of preamble which you had instructed Sir Edward Thornton to communicate to Mr. Fish, as that to which Her Majesty's Government were prepared to agree in case a convention should be concluded embodying the draught Article, that you had since learned from Sir Edward that Mr. Fish would prefer the omission of the words "in order that the same may be communicated to the Tribunal of Arbitration appointed under the first Article of the Treaty signed at Washington, on the 8th of May, 1871, for the guidance of the proceedings of that Tribunal," and that you had informed Sir Edward Thornton that he might tell Mr. Fish that Her Majesty's Government will not insist on the words which he desires to omit in the preamble, if he will give Sir Edward Thornton assurance, in writing, that the Government of the United States will agree to the form of note which you proposed, and of which you sent me a copy on the 20th instant, communicating the Convention on the part of the two Governments to the Tribunal of Arbitration at Geneva.

In the same note you add that Sir Edward Thornton has a general full power, enabling him to sign a convention, and instructions to do so if the proposals contained in that note and in your other letter of the same date are agreed to.

Immediately after the receipt of your note last night I communicated to Mr. Fish, by telegraph, information of that instruction you had given to Sir Edward Thornton in regard to omitting the words in question from the preamble. I had previously, and early in the day yesterday, telegraphed to Mr. Fish the information you had already given me verbally, that Sir Edward Thornton had a full power to sign a convention. But I remark now, that the instructions to Her Majesty's Minister at Washington appear by your note to have been given to be exercised on a condition. I beg to know from your Lordship if I am to understand that Sir Edward Thornton's authority to sign is limited by his instructions, and only to be used in the case that the proposals contained in your notes addressed to me yesterday are agreed to by the United States. I have the honor to be, with the highest consideration, my Lord, your Lordship's most obedient servant, ROBT. C. SCHENCK..