Decr. 11. 1799
The Secretary of the Treasury respectfully submits [to] the consideration of the President of the United States, the following observations upon the measures proper to be taken for obtaining an explanation of the 6th. article of the Treaty with Great Britain.
It is believed, that the Letter of the Attorney General to the President dated August 1st 1799 contains a just and candid Statement of objections against the opinions declared by three Comrs. and that the explanatory article as proposed, is well calculated to support the construction which has been maintained on the part of the United States.
But it may be reasonably doubted whether the British Government can be induced to concur in a Treaty which would expressly contravene the principles of distinct decisions formed by a majority of the Board; or if this objection should not be deemed of much importance, it may be presumed, that it will be exceedingly difficult to engage its assent to propositions, the effect of which upon certain classes of claims, can only be ascertained by a laborious and minute investigation.
While therefore it is admitted that a draft such as has been proposed, will be essentially necessary for the information of the American Minister, it appears proper that an attempt be made to comprize the whole subject in a few general propositions, reconcileable with the terms of express engagements in former Treaties, and applicable to the subjects of controversy, according to principles clearly indicated by candour justice and good faith.
With a view to objections which may be made against the form of the proposed article and to illucidate the principles proper to be asserted by the Government The following ideas are submitted in the form of a draft of instructions to the American Minister in London.
The proceedings contemplated by the 6th. article of the Treaty of Amity, Commerce and Navigation concluded between the United States and his Britannic Majesty, having been interrupted in consequence of an essential diversity of opinion between the Commissioners named on the part of the United States, and the other members of the Board; the President has determined to propose that the true interpretation of the said 6th Article be settled by such a mutual and friendly explanation, as will give full effect to the just engagements, which were understood to have been thereby formed on the part of the United States.
In pursuance of this determination you will receive herewith a special Commission investing you with full powers to enter upon the proposed negociation, and to conclude the same according to this Letter of Instructions.
That you may be fully informed of the points in dispute you will recieve duplicate Copies of a representation made to the President by the Attorney General dated Aug 1st. 1799. with two collections of documents comprizing the arguments of agents; the opinions of members of the Board and the decisions adopted by a majority of the Commissioners. It is believed that these papers, contain every thing essential to be known; and as the Government is determined that its proceedings shall be marked with perfect candour, the whole or any part of them, may if you [. . .]
It would be unwise and improper to revive discussions respecting differences which have been formally terminated by reciprocal stipulations; in the spirit which dictated the first article of the Treaty of Amity & as a [. . .] part of the [United States,][. . .] of various lawful impediments since the Treaty of Peace, not only the full recovery of debts bona fide contracted before the peace, and due to divers merchants & other subjects of his Britanic Majesty at the date of the Treaty of Amity had been delayed, but also that the value & security thereof had been impaired & lessened, so that by the ordinary course of judicial proceedings, the British Creditors could not at the date of the Treaty of Amity, obtain full and adequate compensation for the losses and damages, which they had sustained, & that compensations are justly due by the United States, for all losses and damages, which were occasioned by the operation of such lawful impediments, subsequent to the peace and prior to the promulgation of the Treaty of Amity.
In the interpretation of the above mentioned engagement, the following principles and to be asserted & admitted.
1st. It is to be admitted, that all legislative Acts passed during the War, which by the decisions of Courts were held to be in force after the peace: & all legislative Acts passed subsequent to the peace, which suspended or denied a right of action in law or equity, to persons who were on the side of his Britannic Majesty during the late War, within the true intent and meaning of the 4th. Article of the Treaty of peace, for the recovery of debts contracted before the peace; or which required them to recieve payment of such debts by Installments; or which debarred them of recovering, the whole principal and whole Interest, secured by the original Contracts; or which declared that judgements obtained by such persons, might or should be satisfied with less than the full value in sterling money of the sums due by such Contracts; were lawful impediments, within the meaning of the Treaty of Amity concluded in 1794.
It is also to be admitted that the decisions of the highest Courts of law or equity of any state, if any have been pronounced at any time after the peace and prior to the promulgation of the Treaty of 1794. Whether upon a writ of Error, or demurrer; or delivered as the opinion of the Court in charge to a jury; or upon a special verdict returned by a jury, whereby it has been declared to be a rule of Law, with or without reference to the Treaty of Peace, that persons on the side of his Britannic Majesty during the late war within the true intent and meaning of the [. . .] article of the Treaty of Peace, whether residing or having Agents in the United States during the War, or otherwise; were not entitled to recover the value in sterling money of the whole Principal and whole Interest secured by Contracts made prior to the peace, or whereby it has been declared that such persons ever liable to any delays, impediments or disabilities, in consequence of their national character; were lawful impediments within the meaning of the Treaty of 1794, while such decisions remained unreversed or uncontrouled by any subsequent decision or legislative Act passed within such state.
It is sincerely believed and maintained on the part of the United States, that no obstruction to the recovery of debts, other than such as have been enumerated, can be properly denominated lawful impediments; and in particular, that erroneous decisions of inferior Courts; mistakes alledged to have been comitted by Juries; popular prejudices; partial and temporary commotions; or fraudulent or litigious practices of debters are not of that description. National Compacts are to be construed in a manner susceptible of execution; it is odious to presume, that a nation has promised what it could not perform; no nation can engage that the decisions of its inferior tribunals, shall never be reversed, or in other words, that they shall be free from Error; it was not stipulated, that British subjects or Citizens of the United States should be deprived of a right of trial by Jury; that all the American debtors should be honest men, or that they should concur in opinion with the British Creditors respecting the justice & amount of their demands: and it is both odious and absurd to presume that the United States stipulated to controul the decisions of Juries, to suppress national prejudices or prevent occasional tumults: while it would be unwarrantable to affirm that British subjects, have not at some periods and in particular Districts suffered injury from these causes; it may be asserted that the Interests of American Creditors have though perhaps in a lesser degree been similarly affected; that all virtuous men have deplored these evils and have uniformly exerted their influence & authority to mitigate their effects.
It is to be asserted that the concession above made contains every thing required by candour [. . .]terality or truth; for the effects of the lawful impediments above defined, the United States will be responsible; but it can never be admitted that Justice has not been purely & correctly administered according to principles publickly proffessed by the Govt; or that compensations are due upon principles which derogate from the character of the people; if general conclusions have been drawn by individuals from particular events, contrary to what is above declared, they are to be attributed to prejudices similar to those erroneously imputed to the American Nation.
2d. It is to be asserted that the United States are in no case liable to make compensation for a debt due by any person, who was insolvent at the date of the Treaty of Peace.
The truth and equity of this proposition require no illustration: no express or even implied engagement is contained in the Treaty of peace or the Treaty of Amity, that the United States should be responsible for insolvencies which happened during the War; the general rule of the Law of Nations on this point is; that the state in which things are found at the date of a Treaty of peace is lawful, and not to be varied, unless in pursuance of some express engagement.
3d. It is to be asserted, that the United States are in no case responsible to make compensation for any debt, where the Debtor was solvent during a reasonable time after lawful impediments, as defined by the first article, ceased to operate in the State in which such Debtor resided; nor for any debt of an amount cognizable by the Courts established by authority of the United States, where the Debtor was solvent during a reasonable time after such Courts were established nor for a debt of any description, where the Debtor was solvent at the Date of the promulgation of the Treaty of Amity; nor where the Creditor may be solvent at the time of decision on the claim for compensation; except in cases where the right of Action against the Debtor shall have been barred by judicial decisions in the particular cases pursuant to some principle declared to be a lawful impediment contrary to the Treaty of Peace.
The principles assumed by this article of construction are: that the United States and his Britannic Majesty were equal parties to the Treaty of Amity; that it is a compact containing stipulations for reciprocal indemnities; that it cannot be justly construed to impose a penalty on either party; that the United States are not responsible for all losses sustained by British Creditors; that they have not assumed the trouble risque and expence of collecting debts, which the Creditors can themselves collect; that compensations are only due for losses and damages occasioned by the operation of lawful impediments, while such impediments existed.
That the Treaty of Amity is not susceptible of a penal construction, is evident from the whole tenor of the instrument; & from the clause in the 6th article containing the direct engagement of the United States, but is also particularly manifest from the restrictive declaration. That it is distinctly understood that compensations shall extend to such losses only as have been occasioned by lawful impediments and that they are not to extend to losses occasioned by such insolvencies of the debtors or other causes, as would equally have operated to produce such losses if the said impediments had not existed; nor to such losses and damages as have been occasioned by the manifest delay or negligence or wilful omission of the claimant.
It being assumed for truth that the United States are responsible only for losses occasioned by lawful impediments, and the nature of these impediments having been defined, it remains to be considered, whether the article under consideration, contains a just and reasonable provision in favour of British Creditors.
Here it is necessary to premise, that prior to the establishment of the present constitution of the United States, all legislative and judicial powers, relative to the payment or collection of debts, were exercised by the authority of the individual States; Under this political organization, which however was known and recognized by the parties to the Treaty of peace, uniformity of legislation or of judicial decision on questions in any degree doubtful, was found impracticable; & the obligations of the said Treaty were accordingly variously understood and observed. It is admitted that lawful impediments have existed, and that the United States are responsible for the losses arising therefrom wherever they have occurred; it is however certain that these impediments were various in their nature and produced different effects in different states; & that they were either mitigated or wholly removed in some states, while in others they existed in full [force].
It results from the facts above stated, that the effects of legal impediments ought to be considered with reference to the statutes and judicial decisions of each of the individual states, which prior to the establishment of the Constitution of the United States, were in fact independent and coordinate authorities.
The inconveniences arising from the collisions of state Laws and judicial decisions, upon subjects of general concern to the United States, and particularly in respect to the execution of the Treaty of Peace are well known to have operated as powerful inducements to the establishment of the existing Constitution. By this national compact it is declared that Treaties shall be the Supreme Law of the Land; and that the Judges in every state shall be bound thereby any thing in the Constitutions and Laws of any state to the contrary notwithstanding.
But although the obligation of Treaties was solemnly acknowledged by the acceptance of this Constitution, it is not desired on the part of the United States, that the British Creditors should be satisfied with less, than a practical and efficient remedy for the recovery of their debts. Some time would certainly be necessary to effect a transition from the antient to the new system. The adoption of the Constitution & the establishment of Judicial Courts by the United States, were acts of great notoriety; it is however proposed and assumed as an equitable interpretation, that the responsibity of the United States for insolvencies shall be deemed to have continued for such a reasonable time after lawful impediments ceased in the respective states, as will justify a presumption that the British Creditors, were apprized of the revival of the legal remedies to which they were entitled and also in respect to claims cognizable by the Courts of the United States, for a reasonable time after the said Courts were established; it being understood however that the responsibity of the United States, shall in no case be deemed to have continued after the promulgation of the Treaty of Amity as a Law of the Land.
The foregoing is sincerely believed to be a true & candid exposition of the meaning of the Treaty, in the point under consideration; but if the construction be admitted still a diversity of opinion may arise respecting the reasonable time, during which the responsibility of the United States for insolvencies should continue; it is for the pecuniary Interest of the United States that the period should be as limited as possible; a superior Interest, requiring that the article be executed with liberality, and without a renewal of unpleasant discussions; to render a point certain which must now depend on the judgement and discretion of the Commissioners, you will consider yourself authorized to engage, that the responsibility of the United States, for all insolvencies shall be deemed to have continued during a period not exceeding nine months after lawful impediments, shall be found to have been removed, in each of the cases before described, during which period no delay, negligence or omission, shall be imputed to the British Creditors, in derogation of their claims for compensation.
The point under consideration being one, respecting which the most essential diversity of opinion has existed; it is necessary to examine the grounds upon which an adverse construction has been maintained.
The Majority of the Board of Commissioners are understood to have expressly decided that compensations may consistently with the Treaty of Amity be awarded against the United States, not only on the ground of the insolvency of the debtors at certain periods, but also that such awards may be made where the debtors were solvent at or since the date of said Treaty, or are still solvent, in all cases where a Majority of the said Commissioners shall declare themselves satisfied from evidence, that by the existing Law, as it was then established and declared at the date of said Treaty full and adequate compensation could not them be obtained in the ordinary course of judicial proceedings.
It is moreover understood, that the words “cannot now obtain,” or rather the single word “now” in the declaratory part of the 6th article of the Treaty of Amity, is avowed to be the ground upon which the above conclusion is founded. It is declared that by force of this expression, the Commissioners are warranted in forming a system of rules delaratory of the obligations of the 4th article of the Treaty of Peace, of deciding on the nature of the lawful impediments which existed prior to and at the date of the Treaty of Amity; of ascribing to such impediments the now payment of all debts due to British Creditors, unless it be specially shewn on the part of the United States that such new payment ought to be ascribed to “other causes” within the meaning of the restrictive declaration in the said 6th. article; but also of declaring that by the Treaty of Amity certain rights were compleatly vested in the British Creditors in consequence of what the Board may determine to be the state of things at the date of sd. Treaty, comprehending as well the state of the Law as the situation of the debtors and on the ground of rights which may be so declared to be vested, of exempting all British Creditors whose cases may fall within the purview of the rules so established, from resorting to their Debtors or claiming their rights in the Courts of the United States.
It is manifest that nothing can be more dissimilar than the interpretation adopted by the Majority of the Commissioners from that herein before asserted on the part of the United States; and it is hoped that satisfactory explanations will be effected, without recurring to the proceedings of the Board; if however the construction of the three Commissioners should be urged by the Minister of his Britannic Majesty as the basis of settlement it will be your duty to represent with temper but at the same time with decision, that the engagement in the 6th. article of the Treaty of Amity is viewed only as an honourable stipulation to repair losses actually sustained by the subjects of his Britannic Majesty, during a period, when certain unexplained differences subsisted between the two nations; that the Government can never permit it to be executed in a manner calculated to reflect on the good faith of the Nation at any period, or upon principles which imply any existing defect of power, wisdom or integrity in its tribunals of Justice.
It is deemed no imputation upon the honour of the United States to admit that lawful impediments prevented the execution of the 4th article of the Treaty of Peace, nor that various opinions prevailed at different times in the same state and in different states, respecting the fitness or expediency of creating or continuing such impediments; it was impossible that a considerable number of independent legislatures however virtuous & sincere should concur in opinion respecting the nature & extent of the national rights, or in the policy of all the measures which resulted from their conflicting opinions: It is notorious that the Treaty of Peace was not fully executed on the part either of Great Britain or of the United States; and neither Nation has or can be brought to admit that they were chargeable with the first infraction; without admitting that odious inferences can be drawn from the declaration, it is however asserted, that the Treaty of Peace has invariably been considered as a Law of the Land, by the national Legislature and the Courts established under the present Constitution & that it has never been infracted by either in a single particular; the causes which led to infractions by the individual states, were happily divided by the reciprocal stipulations contained in the Treaty of Amity, the United States are in consequence bound to repair the losses directly occasioned by such infractions; and it is admitted, upon principles of a liberal construction, that this responsibity may possibly have continued in some cases exclusively cognizable by the state Tribunals, till the promulgation of the said Treaty by the President of the United States: no further concession can be made.
But notwithstanding the truth and justice of these principles is deemed entirely evident, the inadmissible doctrine has been maintained that not only losses which arise during a time when national differences existed, are to be repaired, but that the United States, have moreover assumed the payment of monies due by individuals who are still solvent & amenible to their Creditors in the tribunals of Justice.
As if it was intended to support a construction the most injurious to the United States, by arguments the most offensive and humiliating, a Majority of the Commissioners, instead of applying their own principles to the particular cases submitted to their examination, have chosen to consider themselves as a censorial inquisition: the opinions of Judges and other eminent public characters have been cited and compared, with the view on one hand to enlarge the claims of Individuals founded on the 4th. article of the Treaty of Peace and on the other to multiply and increase the effect of the lawful impediments for which the Government is held to be responsible; these opinions have not been stated as justice required, with reference to the circumstances under which they were advanced, of which no person not conversant with American transactions can be accurately acquainted; no allowance has been made for the influence of statutes or of judicial precedents, nor for the results of independent systems of legislation; it seems not to have been perceived that the decisions of upright Judges would necessarily vary with every charge in the Laws by which their conduct was to be regulated; indeed the decisions of inferior as well as of Superior Courts, decisions which on review have been reversed as well as those which have been established, have equally been deemed authorities from which impediments might be inferred or by which claims might be supported. From such materials a system of general rules has been framed, tending to fix imputations of inconsistency weakness or bad faith, upon the legislative & judicial Councils of our Country, & to aggravate the burden of compensations to be made by the Goverment in proportion to the liberality of judicial decisions in favour of British Creditors.
If a discussion of this subject should become necessary, the facts upon which the foregoing observations are founded, will be disclosed from the documents herewith transmitted. We trust a single observation will suffice as a comment; we emulate the just pride & satisfaction of the British Government when contemplating the dignity wisdom & purity of their Courts & adhering to their maxims, are determined to preserve to the American tribunals, an unsullied Honor.
The descriptions of persons who are to be considered as on the side of his Britannic Majesty, within the true intent and meaning of the 4th article of the Treaty of Peace and who are of course to be admitted as Claimants to compensations under the 6th article of the Treaty of Amity, are next to be considered.
The discussions which have taken place relative to the epoch of the independence of the United States are deemed to have been totally irrelevant to any question submitted to the Board of Commissioners, and it is much [to be] regretted that the harmoney of their proceedings [has] been disturbed by a question of this nature; as the [point] has occurred, it is satisfactory to find, that the controversy [did] not originate on the part of the Commissioners [and] Agents named by the United States & [that] the real question is susceptible of an adjustment without calling in question the public declarations derogating from the rights or honor of either of the parties.
Prior to the year 1775, the Inhabitants of the Countries which now constitute the United States, were objects of his Britannic Majesty: a war commenced that year between the said Inhabitants on one [part], & his Majesty on the other; the nature of this war was differently [defined] by the two parties; it was however terminated [in] the year 1783, as a National War, between independent Sovereignties.
By the Treaty of Peace his Majesty acknowledged the United States “to be” independent; the terms in which the acknowledgment was made, were satisfactory to both parties & it is admitted that no other declaration, can be expected or ought now to be required by the United States.
But it cannot be inferred from the refusal or omission of his Britannic Majesty, to consent to a retrospective acknowledgement of the Independence of the United States, in derogation of the acts of his government during the War, that the United States have retracted or modified their Acts and public declarations during the same period; the propriety of an opposite deduction and <
of[. . .]> the imprudence of agitating a question upon which no concert of opinion could possibly be formed are therefore too evident to require an argument.
Discarding therefore the epoch of the independence of the United States, as an unsuitable criterion by which to determine the rights of the claimants; reference will be had to the real condition of the two parties, considered in a state of absolute political equality, during the continuance of the public war, and at the date of the Treaty of Peace.
It cannot be denied that as soon as the War commenced two parties or sides were formed; the powers of Government were [exercised] and have since continued to be ever <
[. . .]> and by both of these parties; it will not be contended that the acts or declarations of either party, can be controuled or disparaged by the other & it is certain that as municipal regulations, they are to be regarded by both as of equal authority validity & effect.
By the Treaty of Peace and as a necessary consequence of the peculiar nature of the war, four descriptions of persons were recognized; 1st Citizens of the United States; 2d. Real British subjects; 3d. Persons resident in Districts in the possession of his Britannic Majesty’s arms, who had not borne arms against the United States & 4th persons of any other description.
There appears to be no difficulty in defining the four classes of persons above mentioned; in the first were included the great body of the inhabitants of the Country who were attached to the American side of the War, who submitted to the Governments then established; the second, included the subjects of his Majesty who had not resided or been domiciliated in the United States during the War; the third comprized individuals who resided within the United States, at the commencement of, or at some period during the war, and who voluntarily joined the side of his Majesty, or who happened to reside in Districts under his command without taking up Arms against the U. States; The fourth is a general description comprizing all other persons, but really intended to include such individuals only, as had resided or been domiciliated in the United States, and who during the War, joined the side of his Britannic Majesty & bore Arms against the United States.
The distinctions above mentioned and which are recognized in the Treaty of Peace, are founded in the nature of things; to comprize the three last Classes in and descriptions, would be to violate the most fixed principles of human nature: The two first, though not perfectly united in sentiment, were in the aggregate mutually considered merely as National enemies; the third was a mixed Class of Americans composed of men who voluntarily joined the side of his B. Majesty, but without bearing arms, or of men who by the fortune of war fell under his power & direction, their situation, general character, and the means which they possessed of acquiring information in the Country, could not fail to expose them to the particular suspicion of the American Government. The Individuals of the fourth description were considered not only as public enemies, dangerous from their character influence & example, but also as deserters from the cause espoused by their Country.
With respect to the description of persons denominated “real British Subjects” no objection can or ought to be made; it is admitted that they are entitled to claim compensations under the 6th. article of the Treaty of Amity and the United States will pay the sums which may be awarded in pursuance of a just interpretation of that engagement.
But it is not perceived that any principle can be adopted consistently with the honour of the United States, by which the third and fourth Classes, comprehending the individuals usually denominated Loyalists & Refugees, can be excempted from the fortune allotted to them by the Laws of their Country, during the War. In declaring this determination the Govt is influenced by no vindictive sentiments; the pecuniary Interests affected by the decision are of inferior moment; the primary consideration affects the validity of the social obligations held to have been contracted during the late War; these obligations must not now, or at any future time be drawn into question.
It being however certain that the honour of the United States requires nothing inconsistent with liberality or moderation, it may be admitted that all Subjects of his Britannic Majesty, who were not inhabitants of, or domiciliated in the territories which now constitute the United States, at the commencement of the late War; all persons resident within the said territories during the whole or any part of the said War, who at the commencement thereof held Commissions or appointments under his Britannic Majesty as Officers in the Civil Military or Naval Departments of his Government, and in addition to the above mentioned descriptions, all other persons resident within the said territories, who at any time during the War joined the side of his Britannic Majesty, with the consent of the existing Government or without having thereby violated any public Act of the State in which they resided; are to be considered as having been on the side of his Britannic Majesty within the true intent & meaning of the 4th article of the Treaty of Peace.
It is believed that the principles assumed in the foregoing definition of British Subjects as distinguished from American Citizens are justified by the law of nature and nations and the Spirit of the Treaty of Peace. Although the obligations of Allegiance & Patriotism are generally consistent, yet it is certain, that they are sometimes irreconciliable; the case of a war having for its object the division of an Empire, must necessarily render these engagements incompatible; & the diversity of opinion respecting the relative force of these duties must be admitted to be the real cause of every such War, in all discussions, where the political equality of the parties is conceeded.
From a just respect to the political equality of the two nations, it is therefore admitted, that the Individuals, who held Offices under his Britannic Majesty, at the commencement of the War, are to be presumed to have remained attached to his cause whereever they resided, and that all other persons were free to make their election, untill they were positively restrained, by some regulation of the Government to which they were actually subject. By establishing this criterion, all difficulties will be avoided: the two parties will be distinguished by the circumstances which really existed: the Acts & declarations of both instead of being disparaged, will be regarded as of equal validity within the spheres of their respective influence; odious constructions will be prevented, more especially the inadmissible doctrine will be rejected, that Acts for combining the public force & preventing defections during a state of War, are immoral & unjust, or that the declared obligations of allegiance & patriotism, can ever be absolved by desertion.
5th. It appears to be the prevalent opinion of the Judges of the United States, that the rights of British subjects to recover their Debts, were revived by the 4th article of the Treaty of Peace notwithstanding such debts were confiscated or sequesterd during the War. The Government will not contest an opinion thus sanctioned; it is proper however to mention, that the Judges have proceeded upon the general principle, that the Treaty not only contained a stipulation that there should be no future lawful impediments to the recovery of Debts due to British Subjects, but also that by a retrospective operation all mere impediments of Law, created during the War were repealed.
It will be seen from the documents herewith transmitted that under colour of the liberal contraction which has been adopted by the Judicial Dept, attempts have been made by a majority of the Board to extend the remedy provided by the Treaty of Amity to cases, which were adjusted judicially or otherwise with the consent of the Parties or their Agents, during the War: the effect of such a principle would be to give authority to the Board to revise transactions which were settled according to rules which governed in similar cases between Citizens of the United States & particularly to render the Government responsible for losses sustained by the depreciation of the public currency.
Notwithstanding the resolutions and arguments which appear in the proceedings of the Board, it remains uncertain, to what extent, the principle of revising settlements made during the war, was intended to be carried; & the event of an explicit understanding on this point, was one of the causes, which unhappily interupted the harmony of their proceedings.
On the part of the United States there will be perfect candour, and it must be admitted that the operations of the War were chiefly supported by issues of paper Currencies, which greatly depreciated in value; & that during a considerable period debts might lawfully be discharged in these Currencies and by other methods which inevitably subjected the Creditors to losses. Under these circumstances, it is too evident to require proof, that when Creditors recd. less than the real value of their Debts, they must have generally been influenced by considerations relating to the state of the Law, the situation of their Debtors & the probability of adverse future events; from the species of coercion arising from these causes neither American nor British Creditors could possibly be exempted.
But prior to the Treaty of Peace British Subjects could not maintain suits in the Courts of the United States; if therefore judicial decisions were made in cases to which they were parties their National character must have been excluded from consideration and they must have recd the same measure of Justice which was provided for Citizens of the United States; in effecting private settlements they must also have cooperated with a full expectation that these transactions would be attended with the usual consequences. It was impossible for them to have foreseen, that the recovery of their debts would have been [governed] by a special stipulation in the then future Treaty of Peace; indeed from the nature of things it must have been mutually understood by the Parties that every expectation of a future readjustment was expressly renounced.
It is sufficiently liberal on the part of the United States to admit, that Acts of confiscation passed during the war, shall be considered as having been annulled in respect to debts by the Treaty of Peace, & thence forward not liable to be considered as lawful impediments; to these Acts however the Creditors, never consented & this circumstance strongly discriminates claims arising therefrom, from these at present under consideration; the mischiefs which would result from a precedent for unsettling transactions deemed to have been adjusted & terminated during the War are incalculable; and if the principle herein controverted shall be advanced, it must be declared, that no payment settlement or act of any kind during the war, by which the claim of a Citizen of the United States, would under similar circumstances, be by the Courts of the U States determined to be barred, shall be deemed a lawful impediment contrary to the Treaty of Peace.
It has already been admitted that compensations are due in all cases where the right of action against the debtor, has been barred by judicial decisions pronounced subsequent to the Treaty of Peace pursuant to some principle admitted to be a lawful impediment contrary to the said Treaty.
It is presumed that the equity of the distinction hereby taken between decisions prior and subsequent to the Treaty of Peace is obvious—It is however certain that many, though not all, the decisions subsequent to the Treaty, ought to be deemed equally conclusive; it must have happened that numerous disputes have existed between the Creditors & Debtors respecting the merits of their mutual claims and which have been decided without reference to the National character of the Parties—indeed where the Law permitted a plea in derogation of the claim of a British Creditor as secured by the Treaty & such plea has not been advanced the omission of itself furnishes strong ground for presuming, that the decision was not influenced by any of the causes herein admitted to have been lawful impediments.
But candour requires that it be admitted, that difficulties exist in respect to private settlements made subsequent to the Peace, and during the existence of lawful impediments, for which no compleat remedy is percieved. It must be presumed that in some cases British Creditors, have consented to disadvantageous compromises with their debtors merely in consequence of such impediments, and if the cases thus circumstanced could be descriminated from others, justice would require that compensations should be awarded.
But though this concession is made on the part of the United States candour requires that it be equally admitted on behalf of the British Claimants that a general revision of the settlements made subsequent to the Peace, while lawful impediments prevailed, would not promote the cause of Justice. Some of the Acts which are admitted to have been lawful impediments, were adopted from necessity in consequence of the impoverished state of the Country after the War and they affected American equally with British Creditors. In numerous instances Creditors of both descriptions, from enlightened views of their own Interest, or influenced by considerations of justice towards their particular Debtors, have voluntarily renounced a part of their legal demands; the considerations which have induced such settlements, are too various & complex to be defined. It would be illiberal to suppose that generosity has not been frequently displayed by the Creditors & that Debtors have not been often found deserving of tokens of gratitude, but at the same time nothing is more certain, than that sentiments which powerfully influence the dealings of individuals are insufficient to prevent demands on a National Treasury.
It is moreover a notorious fact, that public securities and almost every other species of American property has greatly appreciated in value since the War; vast sums have passed into the hands of British Creditors under circumstances which have since more than indemnified their apparent losses; equity requires, that the whole subject should be considered & not those parts only, which would be brought into view, by the Claimants: it is evidently impossible to fix any safe or practicable limitation upon the principle of reviewing settlements if it should in any degree be admitted—to allow the Board to go at large into enquiries of this nature, would unavoidably expose the United States to the payment of unjust demands, collusively supported by the original Debtors and Creditors, which no vigilance could detect.
It being a fair objection to any interpretation of a Treaty that it necessarily exposes one party to great & remediless injury without producing to the other an advantage in any considerable degree equivalent, & it being assumed for granted, that the Treaty of Amity is not suceptible of a penal construction, it must be declared that no Award can be made, where the right of Action has been barred by any Release or Acquittance of the Creditor or his Agent.
The Govt being however sincerely desirous of rendering Justice and being satisfied that some losses must have been sustained, for which they would willingly make compensations, if the cases could be discriminated, by any proper rule, you will if it be positively refused by the British Govt to exclude the cases under consideration from the cognizance of the Board propose that the United shall pay not exceeding [ ] in gross, for losses occasioned by private settlements, to be distributed as the British Govt shall judge proper; but this offer is not to be made untill it shall be ascertained that all other points in controversy can be satisfactorily adjusted.
6th. It is believed that the principles before mentioned embrace every essential point of construction upon which a diversity of opinion has arisen. It now remains for the Government to explain its sentiments of the rules of procedure necessary to be observed by the Board.
In treating of this division of the subject it is proper to premise, that the honour and Interest of both nations imperiously demand, that the article be executed to the satisfaction of both parties, and under the influence of a spirit of mutual candour & conciliation. The duties enjoined upon the Board, are of great [intrinsic] difficulty; it is estimated, that nearly fifty thousand distinct accounts are to be examined, comprizing the transactions of retailers scattered over an immense Country, during several years prior to the War. The present Claimants are in many instances Heirs or assignees of the original Creditors, who of course possess little or no knowledge of the transactions of the agents or Attornies, to whom the collection of the Debts has at different periods been entrusted: The most limited experience in business will suffice to satisfy any reasonable mind, of the uncertainty of claims so circumstanced: The aggregate amount is of serious importance to both parties; whatever is justly due under the engagement of the Treaty ought to be paid. But the United States cannot be expected to assume a heavy burthen of debt, without a strict examination. Both parties ought to consider themselves bound in honour to facilitate a speedy and equitable result, nothing being more certain than regulations founded on distrust, & fastiduous attention to matters of form and pundits, instead of a partient and systematical inquiries into the merits of the particular claims cannot fail to defeat the equitable intentions of the two Governments.
It must be asserted that the claimants shall prove three points, to bring their cases within the jurisdiction of the Board. 1st. That a debt was due to a British Subject at the date of the Treaty of Peace, 2d. That the Debtor was solvent during a reasonable time after the date of said Treaty; and 3d. That some lawful impediment to the recovery of the said Debt existed in the State in which the Creditor resided.
It will not be contended on the part of the United States that British Creditors are in all cases to be required to prove their Debts according to the strict rules prescribed for judicial proceedings. Such evidence as will satisfy a reasonable mind, of the justice of a claim ought to suffice. Claims founded on written Contracts ought to be supported by the production of such Contracts. Those founded on open Accounts should be proved by exhibiting the Books of original Entries. There can rarely be any difficulty in establishing the authenticity of Books of Accounts & any reasonable proof of such authenticity ought to be recd. The internal evidence resulting from inspecting a series of Accounts, will always determine the degree of Credit to which they are entitled. Claims founded on European transactions can be proved by exhibiting attested transcripts from the original Accounts, with Copies of the Invoices, & these can be frequently supported by the original Bills of Lading. The dates & particulars of claims must always which exhibited or otherwise it cannot be determined they they were not barred of recovery before the [Treaty]. Special cases may indeed be expected to arise, for which particular rules will be necessary, but in general no difficulty can exist with respect to the proof proper to be expected, from the British Houses concerned in foreign Commerce. In all cases the claimants ought to declare on Oath that they believe their claims to be just and that all Credits within their knowledge are disclosed.
The proof of the solvency of Debtors at particular periods, must from the nature of things be discretionary & in some cases doubtful. It can only consist of declarations of the belief respectable & impartial individuals. The proof of lawful impediments will result from public Records, & is liable to no uncertainty.
The agents of the United States ought to be allowed to adduce counter evidence relative to any facts alledged by the Claimants; or when the three points above mentioned shall be admitted to be well proved, still claims ought to dimissed, if satsifactory evidence shall be exhibited that the Debtors were solvent during a reasonable time after lawful impediments as herein before defined ceased to operate within the state.
The cases however where compensations are claimed in consequence of judicial decisions, pursuant to some principle declared & admitted to be a lawful impediment, there will be no necessity to adduce proof of the original debt; as the records and other memorials of the decisions, will furnish data, for determining the amount of the Awards.
The proof of solvency, to exonerate the United States from the payment of a claim ought to be of the same nature with that allowed to bring the case under the cognizance of the Commissioners.
It is not deemed necessary if the principles herein proposed should be adopted to require the Claimants to prove that they made personal demands of their debtors, or commenced suits during the existance of lawful impediments; it ought not to be supposed that they would incur expences without a prospect of advantage, & though they may have made personal demands the proof thereof may frequently not be within their power to command; on the contrary the “manifest delay, negligence, or willful omission,” which is to exonerate the United State, ought to be inferred from proof to be exhibited on their part, that the debtors were solvent when no impediments existed, or that they remain solvent at the time when the cases are under consideration by the Board.
In fine, the real business of the Board well understood and properly conducted, will be found to consist in a candid and persevering attention to two subjects—first an examination into the origin and value of the claims, second an equiry respecting the solvency or insolvency of the Debtors. Good sense and integrity, will clearly indicate the course of duty in both particulars though considerable time & exercise of much patience will be necessary to produce equitable results.
It will be clearly perceived by the British Govt. that a happy termination of the business under consideration is not to be expected from the present Board of Commissioners. It must therefore be proposed that other appointments be made by the two Government: as the fifth Commissioner was named on the part of his B. Majesty, the United States consent that three members of the new Board proposed to be instituted, shall be British Subjects to be named by his B. Majesty. The other two members will be appointed by the President of the US with the advice & consent of the Senate. No doubt is entertained that characters can be easily selected in both Countries conspicuous for talents & Integrity, who superiour to National prejudices, will delight in an opportunity of evincing to the world the equity of the two Governments. Assurances maybe given that characters will be designated on the part of the U States, with a sincere view to give full effect to the stipulations in the Treaty of Amity & under firm expectations that his B. M will in the choice of Commissioners on his part, manifest, equal sentiments of justice.
Such is the view which the President has after mature consideration taken of the engagement contained in the 6th article of the Treaty of Amity; and as the proceedings of the Board have been interupted by the secession of the Comrs. named on the part of the United States, he has deemed it incompatible with the honour of the Government to propose a negociation which shall in the least degree diminish the effect of the existing stipulation; on the part of his B. M it will not be desired that the engagement should be extended by an undue construction if the concurrence of the British Governt cannot be obtained to the principles herein asserted, the most positive assurances may be given that any arguments which may be adduced in support of the different interpretation, will be considered with respectful attention and presmably answered under the influence of those friendly sentiments which it is the sincere desire of the American Government to cherish & perpetuate between the two nations.
It may also be declared that the American Govt is far from desiring that the Treaty of Amity should receive a partial execution and that untill the 6th article shall be in a course of adjustment, it is preferred that the proceedings under the 7th article should remain suspended on the terms announced by his B. Majesty, which are entirely satisfactory.
All which is respectfully / by
CtHi: Oliver Wolcott, Jr. Papers.