The mode, moreover, in which this claim for prospective earnings has been preferred leaves one without the slightest data for estimating in any one individual case the compensation which could, with any propriety, be claimed for these contingent profits. The total claim in respect of the whaling and fishing vessels amounts to about $8,500,000, about half of which is demanded for the loss of prospective earnings, without any deduction whatever. The claim is, therefore, from the very nature of the case, for reasons already stated, perfectly illusory, and we are scarcely surprised to find that this enormous claim for prospective earnings, which is really double the value ascribed by the claimants themselves to the ships and outfits, can be proved, as will be shown hereafter, to be equivalent to claiming, over and above the whole capital invested in those speculative adventures, a profit on such capital at a rate exceeding 300 per cent. per annum.1

On the fourth head it is observed:

The American insurance companies, who have paid the owners as for a total loss, are, in our opinion, entitled to be subrogated to the rights of the latter, according to the well-known principle that an underwriter who has paid as for a total loss acquires the rights of the assured in respect of the subject-matter of insurance. This principle was explained and acted on in the well-known English cases of Randall vs. Cochran, 1 Ves. Sen., 98, and the Quebec Fire Insurance Company vs. St. Louis, 7 Moore, P. C., 286, and is well recognized by the courts of America. On the other hand, it is equally clear that the underwriters cannot be entitled to anything more than the assured themselves; for the claim of the former is founded on nothing else than their title to be subrogated to the rights which the latter possessed, and which, therefore, cannot possibly be more extensive than the claim which the latter would be entitled to maintain. From these considerations two consequences follow: In the first place, where the claimant is the insurance company and not the owner, compensation cannot be due for any sum exceeding the amount of the actual loss sustained by the owner, however much that sum may fall short of the amount paid by the company by reason of the property having been over-insured. In the second place, wherever the owner puts forward a claim for his loss at the same time that the insurance company also claims the money paid by them in respect of the same loss, such a double claim must at once be absolutely rejected, since to allow it would be in effect to sanction the payment of the loss twice over.2

This double claim is, however, made in a great number of cases. Thus, as to the whaling and fishing vessels, it is remarked:

[136]

*The sums claimed by insurance companies in respect of the vessels we are now dealing with, as well as in respect of their secured and prospective earnings, amount to the sum of $902,832. On examining the list of claims it will be seen that there are five cases, namely, those of the Alert, page 3 of the printed list; the Covington, page 184; the Catherine, page 181; the General William, page 192; and the Gipsey, page 192, in which the owners give credit for moneys they have received from their underwriters; but we believe it will also be found that these are the only cases in which that course has been adopted. In all the other cases the owners claim from Great Britain the total value of the ships and outfits, as well as their secured and prospective earnings, without deducting any sums received by them from the insurance companies; while at the same time the insurance companies also put forward their claim to those very same sums.

It may be somewhat interesting to note the mode in which this double claim arises. The enumeration of the different items constituting a claim in respect of any one captured vessel is preceded by the statement of the total sum claimed; then in most instances the different items are set out, consisting simply of the alleged values of the property or earnings lost, and these are followed by the claims made on behalf of in surance companies for the amounts paid by them to the owners in respect of the same property and earnings. With the exception of the five memorable cases just mentioned, the total claim is always formed by adding the first class of items to the second class, without making any deduction. In many cases this is done without any comment or notice whatsoever; in others, and especially in those relating to the Shenandoah, the owners frankly state that "they claim the full value of their property, irrespective of the partial insurance received;" or boldly "protest against any diminution of their claim by reason of insurance." It follows, therefore, for reasons which have been already explained, that the sum of $774,183 obtained by deducting from the total amount of insurances the sum of $128,649, being the amount of the insurances in the five exceptional cases, represents losses which are, in effect, claimed twice over;

and this simple consideration enables us, without hesitation or difficulty, to strike off uno ictu this sum of $774,183, or all but 10 per cent. of the total claim.'

As to claims for masters' wages, the report observes:

A claim for loss of wages by the master has, we believe, never been allowed in the English or American courts in cases of collision or capture, or other similar cases. In the second place, if such a claim were not inadmissible, it would be necessary to take into account the fact that the master probably obtained other employment, and thereby earned other wages after the capture of his vessel, as well as the fact that when he contracted with his owners the risk of the vessel being captured was probably taken into account in fixing the wages. Finally, it must be observed that the claim of the master for loss of wages when advanced at the same time, as it invariably is in the present case, with a claim by the ship-owner for full freight is not less unjust than the claim by the owner for the amount of his loss when followed immediately by the claim of the insurance company for the very same amount; for it is out of the gross freight that the wages would have been paid, and without such payment the gross freight could not have been earned.*

It must be added that the claims for personal effects appear in many instances to be plainly exorbitant, and that claims are also made for personal losses of a remote and indirect kind, such as would never be allowed in the courts of any country. Thus, heavy damages are claimed by one man for the loss of a valuable situation, and by another for the loss of an appointment as consul, which he alleges himself to have sustained by detention on board the captured vessel.

The general result of this examination as to the private losses is to reduce the estimated amount of the claims on account of the Alabama from $6,537,611 to $3,288,851; of the Florida, from $3,693,302 to $2,635,568; of the Shenandoah, from $6,366,894 to $1,377,316; and the total amount claimed from $17,763,910 to $8,039,685; and this is believed to be a liberal, as it is certainly a careful, estimate. Whether any part of this latter sum-and, if any, how much-might with justice be charged against Great Britain is, as the arbitrators have been reminded, an entirely distinct question, depending on the decision of the arbitrators as to the existence and the extent of any liability on the part of Great Britain in respect of the several vessels to whose acts respectively the different constituent parts of this aggregate loss are to be ascribed.

Her Majesty's government supposes that the Goverment of the United States has deemed it proper to accept and present to the arbitrators the amounts at which the several private claimants have stated their own losses as sufficient for the immediate purpose of the present proceeding. But the arbitrators must be well aware that claims of this nature, put forward by private persons, cannot safely be accepted, even as furnishing materials for prima facie estimate, without strict scrutiny, and it is clear that this remark applies very forcibly to the claims now under consideration.

[137] *CLAIMS FOR NATIONAL LOSSES BY THE DESTRUCTION OF PUBLIC PROPERTY OF THE UNITED STATES.

Claims for national

The claims for public property of the United States destroyed by confederate cruisers relate to the war-steamer Hatteras, losses by the de- sunk in action by the Alabama; to the barks Greenland the and Whistling Wind, said to have been laden with coal, and destroyed respectively by the Florida and a confederate vessel called the Coquette; and to the steam revenue-cutter Caleb

struction of public property of United States.

1 Appendix to British Case, vol. vii, p. 16.

2 Ibid., p. 13.

3 Ibid., p. 36.

Cushing, cut out and destroyed by the Archer, which is alleged to have been acting as a tender to the Florida.

The Hatteras was detached from Commodore Bell's squadron, then blockading Galveston, to chase the Alabama, which had appeared in the offing. The destruction of this ship appears to have been clearly due to the failure of the squadron to support her; and Her Majesty's government conceives that the claim on account of her is, on this ground, inadmissible, supposing that it could be supported on other grounds.

The case of the Caleb Cushing betrays such remissness on the part of those intrusted with the charge and defense of the great fortified har bor of Portland (where this revenue-cutter lay) in allowing her to be cut out under the very guns of the fort by the boats of an armed vessel which had been a small fishing-schooner, that, even should the tribunal hold that Great Britain has incurred any liability to the United States for captures made by tenders of the Florida, this claim ought not to be entertained.

As to the Whistling Wind, it must be observed that the Coquette, by which she is said to have been captured, is not mentioned in the case of the United States as a tender to the Florida, and there is no evidence, so far as Her Majesty's government is aware, that she was such.

CLAIMS FOR EXPENDITURE ALLEGED TO HAVE BEEN INCURRED IN THE PURSUIT OF CONFEDERATE CRUISERS.

Claims for expen

diture alleged to have pursuit of confeder

been incurred in the

ate cruisers.

In the second of the two reports above referred to (that from the committee appointed by the board of admiralty) the arbitrators will find an examination of the claims presented on this account. It is obviously impossible, without any materials whatever for verification or comparison, to ascertain whether the several items for coal, outfit, expenses of navigation and the like, do or do not correctly represent the actual expenditure under these various heads. Her Majesty's government deems it necessary to point out that these accounts contain many obvious errors, many discrepancies, which there are no means of reconciling, and a great number of charges which, in the absence of explanation, cannot but be deemed excessive.2

It must be further observed, however, that these claims for expenditure include not only vessels stated to have been employed in seeking Jor the several cruisers specified in the United States case, including the Sumter and the Tallahassee, (which were fitted out in confederate ports,) but also others dispatched after the Rappahannock, (which is not among the specified vessels, and on account of which the case makes no claim,) and the Chesapeake, (which is not even mentioned in the case,) and others again, which were employed in the general duties

1 For example, the whole amount of the Sheppard Knapp's outfit is charged, although in the official account of her loss in the report of the Secretary of the United States Navy to Congress of the 7th December 1863, p. 556, it is stated that "her battery (11 guns) and appointments, ordnance, yeoman's and master's stores, instruments and charts, provisions and clothing, spars, sails, running and standing rigging, anchors and chains, everything portable and of value to the Government, has been saved. The only loss is the hull and the use of the ship."-(Appendix to British Case, vol. vii, p. 90.) For example, the charges under the head of medicine and surgery amount to $28,664.24. The medical director-general of Her Majesty's navy states that £2,500 would probably cover the charge for medicines and medical stores for 7,600 men for 303 days in her Majesty's navy. And this appears to have been the total of the complements of the United States cruisers.-(Ibid., p. 93.)

H. Ex. 324- -13

incidental to a state of war, such as convoy, the protection of fisheries, intercepting blockade-runners and ships laden with contraband of war, and cruising in search of enemy's privateers generally. Sailing orders, in which this general description is employed, cannot be treated as having reference to any of the specified vessels; and in several instances the dates conclusively prove that there could have been no such reference. Again, the claim for expenditure in respect of a United States cruiser dispatched in pursuit of a particular confederate ship is sometimes prolonged considerably beyond the date when the capture or destruction of that ship must have become known to the commander of the cruiser, and during a time, therefore, when he must have been employed on other service. There are cases again (such as that of the De

Soto1) in which it is clear that a cruiser alleged to have been in [138] quest of a confederate ship must have much more than paid her expenses by the prizes made by her while nominally employed

on that errand.

The result of a careful and, as Her Majesty's government believe, a fair and just examination of these claims, upon the data presented by the United States themselves, is that, even were it possible to hold Great Britain liable for all expenditure incurred in the "pursuit" of all the confederate vessels specified in the United States case, the amount could not exceed $1,854,715.99; were the expenditure limited to the Florida, Alabama, Georgia, and Shenandoah, it could not exceed $1,509,300.74; were it limited to the Alabama, it could not exceed $1,427,685.03; and these figures would require considerable abatement. The amount claimed by the United States on this score is $7,080,478.70.2 It is needless to remind the arbitrators that claims of this nature are subject to the same observation as has been made with respect to the claims for private losses. It would be plainly unreasonable to contend that, if any failure of duty could be established against Great Britain in respect of a given vessel, all that may have been expended by the United States in trying to capture her must be assumed to be chargeable against this country. But the British government takes exception to this class of claims altogether. It cannot be admitted that they are properly to be taken into account by the arbitrators, or that Great Britain can fairly be charged, at once with the losses which a belligerent cruiser has inflicted during her whole career, and with what the United States may think fit to allege that they spent in vainly endeaving to capture that cruiser. Such demands are unheard of, and were never before suggested, even in those cases in which the attempt has been made to obtain compensation for actual losses. By what test, it may reasonably be asked, would it be possible to try the propriety of such an alleged expenditure? How are the arbitrators to judge whether the ships said to have been employed were properly selected for the purpose, sent to the proper places, and furnished with proper instructions, and whether those instructions were executed with activity and judgment? On these things, however, among others, the propriety of the expenditure depends. In truth, there is but one test possible; it is that of success within a reasonable time. Tried by this test, the claim must fail, even if it were open to no other objections.

Her Majesty's government is naturally reluctant to criticise the management of the United States Navy, and desires to say as little as possible on this point. But a few brief remarks on it are made necessary by the claims of the United States, and it is difficult to resist the con

1 Appendix to British Case, vol. vii, p. 74.

2 Ibid, vol. vii, pp. 63, 111.

viction that, if well-appointed vessels of competent speed and strength had been dispatched in the directions which knowledge and experience would indicate, and if favorable opportunities had not been lost or thrown away, the list of captures by confederate cruisers would have been comparatively small.

Let us take, as the earliest example, the escape of the Sumter from the Mississippi. This is described by the Secretary of the Navy in his report to Congress, dated the 1st December, 1861, p. 8:

Such of these (the confederate) cruisers as eluded the blockade and capture were soon wrecked, beached, or sunk, with the exception of one, the steamer Sumter, which, by some fatality, was permitted to pass the Brooklyn, then blockading one of the passes of the Mississippi, and, after a brief and feeble chase by the latter, was allowed to proceed on her piratical voyage. An investigation of this whole occurrence was ordered by the Department.

With regard to the Alabama, it has been seen that the Tuscarora, being in the United Kingdom at the time the former surreptitiously left Liverpool, failed to follow and intercept her. This appeared to the United States minister in London to show a want of that promptitude and judgment which ought to have been evinced under the circumstances and he evidently believed it probable that the Tuscarora would have succeeded in intercepting her, had the needful activity and dispatch been used.

Again, she was blockaded in the harbor of Port Royal, Martinique, on the 19th November, 1862, and although private signals from a ship in the harbor were made to the United States steamer San Jacinto, then off the entrance, the Alabama on the same evening escaped the vigilance of the San Jacinto.

Again, she was off Galveston on the 11th January, 1863, and was seen by the ships of Commodore Bell's squadron; and the flashes of the guns, while the engagement between her and the United States ship of war Hatteras was taking place, were plainly visible, and the sound of the guns heard. At 7.30 p. m. the Brooklyn, the commodore's flag-ship, went in pursuit, steering S. 4 E. in the direction of the flashes. [139] The Sciota was sent out S. S. E., and the Cayuga S. S. W., but these vessels failed even to see the Alabama. The commodore, in his official dispatch of the 12th January, 1863, (p. 319 of the United States Secretary of the Navy's report to Congress,) states that "three or four vessels like the Oneida thrown into the Yucatan Channel immediately, would probably intercept him. The gun-boats are not a match for him in force or speed." Had, therefore, the Brooklyn and her consorts followed up the pursuit until the following morning, it is probable the Alabama would have been in sight, and, if so, she might have been captured. Captain Semmes, in his account of his voyage, makes the following observation: "By their account of the course steered, they could not have failed to have seen us."

Again, the Secretary of the Navy, in his report to Congress, dated 7th December, 1863, p. 23, pronounces the following censure on the improper employment of the Vanderbilt:

In derogation of these special and explicit orders, Acting Rear-Admiral Wilkes, on falling in with the Vanderbilt, transferred his flag to that vessel, and, attaching her to his squadron, detained her in his possession so long as to defeat the object and purpose of the Department. He did not release her until the 13th June, when Commander Baldwin proceeded to carry out his instructions, but he was too late. He arrived at Fernando Noronha on the 4th of July, at Pernambuco on the 6th, at Rio de Janeiro on the 14th; thence he proceeded on the 2d August to St. Helena, instead of going direct to the Cape of Good Hope. The unfortunate detention of the Vanderbilt wholly defeated the plans of the Department for the capture of the Alabama, Florida, and Georgia. They, as the Department anticipated, arrived in those latitudes and visited those ports