claims of the Puget's Sound Agricultural Company the sum of Two Hundred Thousand Dollars; and that, at or before the time fixed for the first payment to be made in pursuance of the Treaty, and of this award, each of the said Companies do exe cute and deliver to the United States of America, a sufficient deed of transfer and release to the United States of America, substantially in the form hereunto annexed.

"In Testimony Whereof, We, the said Commissioners, have set our hands to this award in duplicate, on the day and year, and at the place aforesaid.

"Know All Men by these Presents; That the Puget's Sound Agricultural Company, in pursuance of the Award of the Commissioners, under the Treaty between Her Britannic Majesty and the United States of America, of the first day of July, 1863, which award bears date, September 10th, 1869, doth, by these presents, transfer to the United States of America, all the possessory rights and claims of the said Company mentioned and specified in the first article of the said Treaty, and in the third and fourth articles of the Oregon Treaty therein referred to; and also doth, by these presents, release unto and in favor of the United States of America, all claims and demands founded upon, or growing out of the aforesaid provisions of the said Treaties, or the possessory rights and claims of the said Company herein before referred to.

"In Testimony whereof, the Puget's Sound Agricultural Company have, in due form of law, executed this deed, at London, this day of -, eighteen hundred and

The same form of deed, mutatis mutandis, is to be executed by the Hudson's Bay Company."

Performance of
Award.

In accordance with the award transfers were executed to the United States by the two com panies, and the money was duly paid by the United States in two installments of $325,000 each.1 In the payment of the second installment a complication arose in consequence of a claim by Pierce County, Washington Territory, against the Puget's Sound Agricultural Company, amounting to $61,305.22, for taxes. In appropriating the money for the payment of the second installment under the award, Congress provided that, before payment should be made of the portion awarded to the Puget's Sound Agricultural

116 Stats. at L. 386, 419. The receipts in the Treasury are respectively dated September 26, 1870, and September 15, 1871.

1

Company, "all taxes legally assessed upon any of the property of said company covered by said award, before the same was made, and still unpaid, shall be extinguished by said Puget Sound Agricultural Company; or the amount of such taxes shall be withheld by the Government of the United States from the sum hereby appropriated." The question thus raised was submitted to the Attorney-General of the United States. On the 7th of August 1871 he rendered an opinion to the effect that the award should be paid. The treaty of 1863 stipulated, he said, that the sums awarded under it should be paid in two fixed installments "without any deduction whatever" (Article IV.). If the proviso inserted by Congress in the appropriation should cause the payment of a less sum than the amount awarded, it would produce a breach of the treaty. The statute should therefore be construed strictly, and be held to mean no more than its language necessarily imported. Under this rule the term "taxes," standing in an act of Congress, with nothing in the context to enlarge its signification, was construed to mean United States as distinguished from State or Territorial taxes. On the strength of this opinion, as the United States had no claim against the company for taxes, the money was paid over "without any deduction whatever.":

2

116 Stats. at L. 419; H. Misc. Doc. 222, 42 Cong. 2 sess.

2 For. Rel. 1871, pp. 532–540.

CHAPTER IX.

IMPEDIMENTS TO THE RECOVERY OF DEBTS: COMMISSION UNDER ARTICLE VI. OF THE JAY TREATY.

ish Subjects.

In the negotiation of the provisional articles Debts Due to Brit- of peace between Great Britian and the United States in 1782 it was found necessary to adjust two questions which involved to a large extent the pecuniary interests of British subjects. These were the question of either restoring the estates of the loyalists or affording indemnity for their confiscation and the question of securing the payment of debts due to British subjects before the war. While the conclusion of peace would once more open the courts of the country to British subjects, there existed on the statute books of various States acts which were passed during the war, and which, remaining in force after its termination, would continue to bar the recovery of debts. Chief among these were the confiscation and sequestration acts, which authorized the payment of debts due to British subjects into the State treasuries and made such payment a full discharge of the obligation of the debtor.'

ion.

When in the earlier stages of the negotiaJohn Adams's Opin- tions at Paris the British commissioners demanded some provision to secure the payment of debts as well as compensation for the loyalists, Franklin and Jay answered that the matter was one that belonged exclusively to the several States. When John Adams arrived in Paris he announced a different opinion. "In my first conversation with Mr. Franklin on Tuesday last," says Adams, in his Journal of the Peace Negotiations, under date of Sunday, November 3, 1782,2 "he told me of Oswald's demand of the payment of debts and compensation to the Tories. He said their answer had been that we had not power nor had

Congress. I told him I had no notion of cheating anybody. The questions of paying debts and compensating Tories were two. I had made the same observation that forenoon to Mr. Oswald and Mr. Strachey, in company with Mr. Jay, at his house. I saw it struck Mr. Strachey with peculiar pleasure; I saw it instantly smiling in every line of his face. Mr. Oswald was apparently pleased with it, too. In a subsequent conver sation with my colleagues, I proposed to them that we should agree that Congress should recommend it to the States to open their courts of justice for the recovery of all just debts. They gradually fell into this opinion, and we all expressed these sentiments to the English gentlemen, who were much pleased with it, and with reason, because it silences the clamors of all the British creditors against the peace, and prevents them from making common cause with the refugees."

Provisions of Treaty of Peace.

When the treaty was concluded it went still further. It did more than recommend; it took bold national ground. By its fourth article it positively stipulated "that creditors on either side shall meet with no lawful impediment to the recovery of the full value in sterling money of all bona fide debts heretofore contracted." "We have been informed," said the American commissioners in communicating the treaty to their government, "that some of the States had confiscated British debts; but, although each State has a right to bind its own citizens, yet in our opinion it appertains solely to Congress, in whom exclusively are vested the rights of making war and peace, to pass acts against the subjects of a power with which the confederacy may be at war. It therefore only remained for us to consider whether this article is founded in justice and good policy. In our opinion no acts of government could dissolve the obligations of good faith resulting from lawful contracts between individuals of the two countries prior to the war. We knew that some of the British creditors were making common cause with the refugees and other adversaries of our independence; besides, sacrificing private justice to reasons of state and political convenience is always an odious measure; and the purity of our reputation in this respect in all foreign commercial countries is of infinitely more importance to us than all the sums in question. It may also be remarked that American and British creditors are placed on an equal footing."

Wharton's Dip. Cor. Am. Rev. VI. 132.

Inexecution of the
Treaty.

But, though the treaty thus provided for the recovery of debts, the Government of the United States was unable to execute it. The States refused to repeal their impeditive enactments, and the State courts continued to enforce them. The government of the confederation was practically powerless, and unable to afford a remedy.

On the other hand, there were certain provisions of the treaty which the British Government refused to execute. By the seventh article it was provided that His Britannic Majesty should, "with all convenient speed, and without causing any destruction, or carrying away any negroes or other property of the American inhabitants, withdraw all his armies, garrisons and fleets from the said United States, and from every post, place and harbour within the same." The British forces, before and at the time of their withdrawal from certain places, sent or carried away a large number of negroes, in violation, as the United States maintained, of the treaty of peace.' But from certain other places they refused to withdraw. The posts at Detroit, Mackinaw, Fort Erie (Buffalo), Niagara, Oswego, Oswegatchie, Point au Fer, and Dutchmans Point were retained by them.2

Adoption of the
Constitution.

When the Constitution of the United States was ratified and the government under it established, Washington took measures to secure the execution of the treaty by Great Britain. Since the conclusion of the peace the relations between the two countries had been in a most unsatisfactory condition, which the outbreak of the revolution in France had lately contributed to aggravate. The British Government, alleging the failure of the United States to fulfill its obligations, had declined to reciprocate the act of the latter government when it sent John Adams as minister to London; and diplomatic intercourse between the two countries had long since ceased. It was hoped, however, in the United States, that the adoption of the Constitution would remove all obstacles that existed in America to the restoration of good relations. By Article VI., clause 2, of that instrument, it was provided that "all Treaties made, or which shall be made, under the Authority of the United States, shall be the supreme Law of the Land, and the Judges in

5627-18

Am. State Papers, For. Rel. I. 206. 2 Am. State Papers, For. Rel. I. 190.