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observe that her Majesty's government understand that Mr. Seward's objection to the convention signed by my predecessor and Mr. Johnson turns chiefly on the distinction made in that convention between general claims and the so-called "Alabama claims."

Mr. Seward desires to expunge from the convention the passages that relate to those claims, and to leave them to be dealt with on the same footing as other claims. The passages thus proposed to be expunged are the last paragraph of article II and articles IV, V, and VI of the convention.

Mr. Seward, anticipating a difficulty that might be raised by her Majesty's government to submitting to the arbitration of any private individual who might be selected as arbitrator or umpire by the commissioners questions of principle such as would arise in the consideration of the Alabama claims, now proposes to insert in article I of the convention passages which should admit generally of reference to a foreign sovereign or state of any such questions arising out of any claims whatever. By such a process provision would be made, though in a more comprehensive form, for the reference of the Alabama claims, in case of need, to the arbitration of a foreign sovereign or state, which was contemplated in articles IV and VI of the signed convention.

Mr. Seward further desires that the convention should be made to resemble as closely as possible the convention of 1853, as being more likely in that shape to be acceptable to the Senate of the United States.

Her Majesty's government, after full consideration of the matter, and being no less desirous than their predecessors and Mr. Seward himself to come to a settlement on the difficult and complicated question of mutual claims, are prepared to meet the wishes of the government of the United States in the manner which I will now explain to you.

They agree with Mr. Seward that it is desirable to adopt as closely as possible the terms of the convention of 1853.

They also agree to expunge the last paragraph of article II, and also articles IV and VI of the signed convention, which relate specifically to the "Alabama claims;" but they think that with a slight alteration, to be presently explained, it would be desirable to retain the terms of article V, though not embodied in a distinct article.

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They further agree in the principle involved in Mr. Seward's proposed insertion in article I, under which reference to the decision of a friendly sovereign or state would be admissible in certain cases.

It appears, however, to her Majesty's government that, besides involv ing a very wide departure from the terms of the same article in the convention of 1853, the proposed insertion would render the article obscure and complicated, difficult of construction, and still more difficult in operation, and would tend to protract almost indefinitely the labors of the commission.

Her Majesty's government fully concur in the necessity of providing in the convention for a more solemn arbitration, where questions of principle in which the commissioners cannot agree are involved, than could be expected from any private individuals selected by the commissioners. Such questions may arise not only in regard to the "Alabama claims," but in regard to many other classes of claims which may be brought before the commissioners, and it seems to her Majesty's government highly important that such questions should be decided by the arbitration of a foreign sovereign or state, inasmuch as they will turn on points of international law, comity, or equity, in the consideration of which a foreign sovereign or head of a state may call to his assistance the learning and intelligence of any of their subjects who have made such matters their especial study.

But it seems to her Majesty's government that it would scarcely be courteous to any sovereign or head of a friendly foreign state, in default of the two governments agreeing within six months as to whom reference should be made, to leave to the commissioners to select him. Such selection could only rightly be made by the two governments themselves, as being co-ordinate in rank and dignity, and therefore fitting applicants for the good offices of one of their compeers; while, on the other hand, for the reasons that I have stated, the question on which the commissioners may be at issue can only be satisfactorily determined by a friendly foreign sovereign or state.

Her Majesty's government do not anticipate that any difficulty need arise between the two governments in selecting an arbiter of that class. No such difficulty was felt, in the corresponding case of the convention of 1827 respecting the northwest boundary, when the King of the Netherlands was agreed upon by the British secretary of state and the United States minister in London.

Her Majesty's 'government observe, moreover, that in Mr. Seward's proposed insertion no allusion is made to the production before the commissioners or arbitrator of the official correspondence which may have taken place between the two governments respecting any claims. This they conclude to be an oversight; but if not, her Majesty's government would not be disposed to insist upon it.

They observe, further, that no provision is made for accepting the deci sion of the arbitrator, whether chosen by the commissioners or chosen by the governments, as ruling not only the specific claim submitted to him, but all other claims of the same class. Her Majesty's government think it very essential that some such provision should be made, as otherwise the same principle may be submitted to arbitration over and over again, and so the sittings of the commissioners might be indefinitely prolonged. Bearing all these considerations in mind, her Majesty's government have framed a fresh draft of convention, which I now inclose, and which I have to instruct you to submit to Mr. Seward, together with a copy of this dispatch.

This draught has been framed on the principle of adhering as closely as possible to the terms of the convention of 1853.

Thus the first article, with the exception of the introduction of the words "by and with the advice and consent of the Senate," and the substitution of "Washington" for "London," nearly textually reproduces the same article of the treaty of 1853.

The second article has necessarily been altered to meet the special requirements of the present case. The proposed alterations up to the end of the third paragraph are printed in italics, so that they may be more easily distinguished. The reasons for proposing them are already explained.

After the third paragraph a paragraph has been introduced varying but slightly from the fifth article of the signed convention. It seems necessary to adopt this provision to meet the case of the principle of a claim being decided by an arbitrator, leaving to the commissioners and the general arbiter named by them to determine, if the case arises, the amount of compensation payable to the claimant.

After the before mentioned paragraph is inserted the penultimate paragraph of the signed convention, as well as articles VII and VIII of the same.

Drawn in this shape article II will, except as regards the passages inserted in italics and the fourth paragraph, nearly textually reproduce the corresponding article of the convention of 1853.

The remaining slight alterations in articles IX and XI of the signed convention are adopted.

It remains for me to say that her Majesty's government prefer the form of convention to that of protocol, as calculated to lead to an earlier settlement of the preliminary discussion between the two governments. If a protocol were adopted in the first instance, its provisions would be operative until it were embodied in a convention; and the arrangement would require, as her Majesty's government understand the matter, to be twice submitted to the Senate for assent, whereby much time would be lost, with all the inconvenience of keeping open a question which necessarily attracts much attention, and of deferring the adjudication on claims, in the early settlement of which so many subjects and citizens of the two countries are deeply interested.

I have only to add that if the inclosed draft is accepted by Mr. Seward, Mr. Johnson might be authorized by telegraph to sign it, in which case it might be returned to Washington so as to admit of its being laid before the Senate by the middle of January, and pronounced upon by that body before the rising of the Congress on the 4th of March.

Her Majesty's government will greatly rejoice if their first interchange of communications with the government of the United States should be attended with a settlement of the complicated matters which form the subject of my present dispatch.

I am, &c.,

EDWARD THORNTON, Esq., C. B., &c., &c., &c.

CLARENDON.

Memorandum.

The amendments made by the Secretary of State to this draft of convention are indicated as follows:

The parts expunged are placed between parentheses. The parts added are placed between brackets. Mr. Johnson was instructed accordingly by telegram January 11, and by dispatch No. 59 of the 12th of January, 1869.

Draft of convention between Great Britain and the United States of America for the settle ment of all outstanding claims.

DECEMBER 22, 1868.

Whereas claims have, at various times since the exchange of the ratifications of the convention between Great Britain and the United States of America, signed at London on the 8th day of February, 1853, been made upon the government of her Britannic Majesty on the part of the citizens of the United States, and upon the government of the United States on the part of subjects of her Britannic Majesty; and whereas some of such claims are still pending and remain unsettled, her Majesty the Queen of the United Kingdom of Great Britain and Ireland, and the President of the United States of America, being of opinion that a speedy and equitable settlement of all such claims will contribute much to the maintenance of the friendly feelings which subsist between the two countries, have resolved to make arrangements for that purpose by means of a convention, and have named as their plenipotentiaries to confer and agree thereupon, that is to say:

Her Majesty the Queen of the United Kingdom of Great Britain and Ireland, the right honorable Edward Henry Stanley, commonly called Lord Stanley, a member of her Britannic Majesty's most honorable privy council, a member of Parliament, her principal secretary of state for foreign affairs; and the President of the United States of America, Reverdy Johnson, esquire, envoy extraordinary and minister plenipotentiary from the United States to her Britannic Majesty; who, after having communicated to each other their respective full powers, found in good and due form, have agreed as follows:

ARTICLE I.

The high contracting parties agree that all claims on the part of subjects of her Britannic Majesty upon the government of the United States, and all claims on the part of citizens of the United States upon the government of her Britannic Majesty, (including the so-called Alabama claims,] which may have been presented to either government for its interposition with the other since the 26th of July, 1853, the day of the exchange of the ratifications of the convention concluded between Great Britain and the United States of America, at London, on the 8th day of February, 1853, and which yet remain unsettled, as well as any other such claims which may be presented within the time specified in article III of this convention, whether or not arising out of the late civil war in the United States, shall be referred to four commissioners, to be appointed in the following manner, that is to say: Two commissioners shall be named by her Britannic Majesty, and two by the President of the United States, by and with the advice and consent of the Senate. In case of the death, absence, or incapacity of any commissioner, or in the event of any commissioner omitting or ceasing to act as such, her Britannic Majesty, or the President of the United States, as the case may be, shall forthwith name another person to act as commissioner in the place or stead of the commissioner originally named.

The commissioners so named shall meet at Washington at the earliest convenient period after they shall have been respectively named, and shall, before proceeding to any business, make and subscribe a solemn declaration that they will impartially and carefully examine and decide, to the best of their judgment and according to justice and equity, without fear, favor, or affection to their own country, upon all such claims as shall be laid before them on the part of the governments of her Britannic Majesty and of the United States respectively; and such declaration shall be entered on the record of their proceedings.

The commissioners shall then, and before proceeding to any other business, name some person to act as an arbitrator or umpire, to whose final decision shall be referred any claim upon which they may not be able to come to a decision. If they should not be able to agree upon an arbitrator or umpire, the commissioners on either side shall name a person as arbitrator or umpire; and in each and every case in which the commissioners may not be able to come to a decision, the commissioners shall determine by lot which of the two persons so named shall be the arbitrator or umpire in that particular case. The person or persons so to be chosen as arbitrator or umpire shall, before proceeding to act as such in any case, make and subscribe a solemn declaration, in a form similar to that made and subscribed by the commissioners, which shall be entered on the record of their proceedings. In the event of the death, absence, or incapacity of such person or persons, or of his or their omitting or declining or ceasing to act as such arbitrator or umpire, another person shall be named, in the same manner as the person originally named, to act as arbitrator or umpire in his place and stead, and shall make and subscribe such declaration as aforesaid.

ARTICLE II.

The commissioners shall then forthwith proceed to the investigation of the claims which shall be presented to their notice. They shall investigate and decide upon such claims in such order and in such manner as they may think proper, but upon such evidence or information only as shall be furnished by or on behalf of their respective governments. The official correspondence which has taken place between the two governments respecting any claims shall be laid before the commissioners, and they shall, moreover, be bound to receive and peruse all other written documents or statements which may be presented to them by or on behalf of the respective governments, in support of or in answer to any claim, and to hear, if required, one person on each side on behalf of each government, as counsel or agent for such government, on each and every separate claim. Should they fail to decide by a majority upon any individual claim, they shall call to their assistance the arbitrator or umpire whom they may have agreed upon, or who may be determined by lot, as the case may be; and such arbitrator or umpire, after having examined the official correspondence which has taken place between the two governments, and the evidence adduced for and against the claim, and after having heard, if required, one person on each side as aforesaid, and consulted with the commissioners, shall decide thereupon finally and without appeal.

(If, however, it shall appear to the commissioners, or any two of them, that, from the nature of any particular claim in regard to which they may have been unable to come to a decision, it is desirable that a special arbitrator or umpire shall be named, to whose decision such claim shall be referred,) [Nevertheless, if the commissioners, or any two of them, shall think it desirable that a sovereign or head of a friendly state should be arbitrator or umpire in case of any claim,] the commissioners shall report to that effect to their respective governments, who shall thereupon, within six months, agree upon some sovereign or head of a friendly

state, who shall be invited to decide upon such claim, and before whom shall be laid the official correspondence which has taken place between the two governments, and the other written documents or statements which may have been presented to the commissioners in respect of such claims.

The decision of the commissioners, and of the arbitrator or umpire, shall be given upon each claim in writing, and shall be signed by them respectively, and dated. (The decision of the arbitrator or umpire on any particular claim so referred to him shall rule any other claims of the same class.)

In the event of a decision involving a question of compensation to be paid being arrived at by a special arbitrator or umpire, the amount of such compensation shall be referred back to the commissioners for adjudication; and in the event of their not being able to come to a decision, it shall then be decided by the arbiter or umpire appointed by them, or who shall have been determined by lot.

It shall be competent for each government to name one person to attend the commissioners as agent on its behalf, to present and support claims on its behalf, and to answer claims made upon it, and to represent it generally in all matters connected with the investigation and decision thereof.

Her Majesty the Queen of the United Kingdom of Great Britain and Ireland and the President of the United States of America hereby solemnly and sincerely engage to consider the decision of the commissioners, or of the arbitrator or umpire, as the case may be, as absolutely final and conclusive upon each of such claims decided upon by him or them respectively, and to give full effect to such decision without any objection or delay whatsoever.

It is agreed that no claim arising out of any transaction of a date prior to the 26th of July, 1853, the day of the exchange of the ratifications of the convention of the 8th of February, 1853, shall be admissible under this convention.

ARTICLE III.

Every claim shall be presented to the commissioners within six months from the day of their first meeting, unless in any case where reasons for delay shall be established to the satisfaction of the commissioners, or of the arbitrator or umpire in the event of the commissioners differing in opinion thereupon; and then, and in any such case, the period for presenting the claim may be extended to any time not exceeding three months longer.

The commissioners shall be bound to examine and decide upon every claim within two years from the day of their first meeting. It shall be competent for the commissioners, or for the arbitrator or umpire, if they differ, to decide in each case whether any claim has or has not been duly made, preferred, or laid before them, either wholly, or to any and what extent, according to the true intent and meaning of this convention.

ARTICLE IV.

All sums of money which may be awarded by the commissioners, or by the arbitrator or umpire, on account of any claim, shall be paid in coin, or its equivalent, by the one government to the other, as the case may be, within eighteen months after the date of the decision, without interest.

ARTICLE V.

The high contracting parties engage to consider the result of the proceedings of this commission as a full and final settlement of every claim upon either government arising out of any transaction of a date prior to the exchange of the ratifications of the present convention; and further engage that every such claim, whether or not the same may have been presented to the notice of, made, preferred, or laid before the said commission, shall, from and after the conclusion of the proceedings of the said commission, be considered and treated as finally settled and barred, and henceforth inadmissible.

ARTICLE VI.

The commissioners and the arbitrator or umpire appointed by them shall keep an accurate record and correct minutes or notes of all their proceedings, with the dates thereof; and shall appoint and employ clerks, or other persons, to assist them in the transaction of the business which may come before them.

The secretary shall be appointed by her Britannic Majesty's representative at Washington, and by the Secretary of State of the United States, jointly.

Each government shall pay the salaries of its own commissioners. All other expenses, and the contingent expenses of the commission, including the salary of the secretary, shall be defrayed in moieties by the two parties.

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