COMPENSATION, OR THE MEASURE OF DAMAGES.

Under this head it is proposed first to consider the question of

Prospective catch and loss of catch.*

The theory of all law on the subject of the loss of personal property, is, that the party deprived of it or abandoning it to the converter may immediately supply its place in the market with its money value if he sees fit; and therefore his measure of recovery is limited to the value of the property lost.

The following propositions are maintained under the present convention:

(One.)

The claim for prospective catch is settled adversely to Great Britain by what has been seen is conventional or positive international law, fixed and binding on both nations, viz., a decision of the precise question on analogous facts by the adjudication of the Tribunal of Arbitration at Geneva.

(Two.)

The claim for prospective catch, prospective profits, and the like, in cases of marine torts or captures on the high seas, however tortious, has never been allowed by any tribunal or court administering international law, or by any authoritative judicial judgment of either country, whether administering international or the municipal common law.

And of these in their order.

* See the contingencies and uncertainties of pelagic sealing, p. 177, infra.

(ONE.)

The judgment at Geneva.

By the treaty of Washington, Article VI, it was provided as follows:

In deciding the matters submitted to the arbitrators, they shall be governed by the following three rules, which are agreed upon by the high contracting parties as rules to be taken as applicable to the case, and by such principles of international law not inconsistent therewith as the arbitrators shall determine to have been applicable to the case.

Then follow the three rules as to duties of neutrals in time of war; and the article closes with this provision:

And the high contracting parties agree to observe these rules as between themselves in future, and to bring them to the knowledge of other maritime powers and to invite them to accede to them.

It is apparent that, as to the rule of damages, the arbitrators were bound by the principles of international law, and that their decision upon that question must be held to be the international law as between these nations, according to the authorities cited in this argument at page 20, supra et seq.

That rule is binding under this Convention unless-(a) the position taken in the British argument (p. 25, fol. 20) be correct, that the Tribunal did not really decide against the principle of prospective profits; or (b) there is something in the facts here that distinguishes the principle to be applied; or (c) a distinction is to be made, as claimed in the British argument, on the ground that the torts in that case were not directly committed by Great Britain with her own cruisers.

(a)

A somewhat remarkable statement is found in the British argument (p. 25, fol. 20), as follows:

A reference to the proceedings before the Geneva Arbitration will show that as a matter of fact, although this general

proposition was laid down in the award, a sum in lieu of prospective profits was allowed to the Government.

By reference to protocol No. 29 it will appear that the award was finally made upon the basis of allowing a sum equal to 25 per cent of the value of the vessel and outfit in lien of prospective catch, this sum amounting in that case to $988,000.

This is a striking error.

After a very full and most exhaustive discussion of the question of prospective catch, and after both sides had rested the entire argument, on August 19, 1872but ten days before the first formal ruling against prospective profits--the arbitrators requested the counsel for the United States to present tables of the claims of the United States, and then in those tables, as stated, "In accordance with the suggestions of some of the arbitrators (the counsel say), we have eliminated from the tables the claims submitted in favor of whaling vessels for the prospective catch, the amount of which would be $4,009,302.50;" and it appears that those claims were so eliminated for the purposes of the tables for the use of the arbitrators, although not wholly withdrawn.

(See Papers, Treaty of Washington, Vol. III, pp. 579-580, and attached tables under head Shenandoah, pp. 602-609.)

In Protocol XXVII (Id., Vol. IV, p. 43) the arbitrators made their first ruling against prospective profits August 29, 1872.

Now, in Protocol XXIX, by which the British argument, here, states, as above quoted, "it will appear that the award was finally made up on the basis of allowing a sum equal to 25 per cent, etc., in lieu of prospective catch," it appears as a matter of fact, and as stated in the protocol itself, that the only figures presented was not an award or a finding at all, "but that M. Staempfli, as one of the arbitrators, presented to the Tribunal copies of the synoptical table which he had prepared as a proposition for the determination of a sum in gross.”

We will see directly how that arbitrator came to put in the item "prospective profits and interruption of voyage" in this his own mere personal suggestion to the Tribunal.

But as appears by the same protocol (XXIX) the arbitrator for Great Britain, Sir Alexander Cockburn, promptly attacked the item in question, saying:

M. Staempfli has also added, for some unknown reason, 25 per cent on the values of the whalers, an addition which can be easily shown to be equivalent to altogether allowing. over and above the original value of the whalers and their outfits, a percentage exceeding 90 per cent, and this although the question of interest is left open to the decision of the Tribunal.

This all occurred on September 2, 1872-seven days before the award of the arbitrators. (Vol. IV, id., pp. 44 to 47.)

The award was finally agreed to and adopted, as appears by Protocol XXXI, on September 9, 1872, and in it is the final decision on the question of prospective profits in these words (see id., p. 53):

And whereas prospective earnings can not properly be made the subject of compensation, inasmuch as they depend in their nature upon future and uncertain contingencies, the tribunal is unanimously of opinion that there is no ground for awarding to the United States any sum by way of indemnity under this head.

That is the final judgment, adopted seven days after protocol 29 (referred to in the opposing argument as above quoted) was made and signed by the arbitrators on September 2, 1872, and after M. Staempfli had then made the suggestion (called the award by the opposing argument) so vigorously and successfully contested by the arbitrator for Great Britain.

The error of M. Staempfli in protocol 29, is thus shown to have been fully discussed and ruled to be an error, and expressly ruled as not having the approval of the Tribunal.

It is a matter of no importance here, but it is apparent that in making his suggestion M. Staempfli was misled in assuming that Great Britain had made an admission in their case to the effect set out in his memorandum suggestion. Thus:

At page 1009 of the British counter case and evidence, fifth paragraph, it was suggested as to the whaling vessels (in regard to which only any claim for prospective catch was made by the United States) that interest at the rate of "25 per cent per annum on the value of each ship and outfit, and in addition 5 cents per ton per day to meet expenses on account of expenditures and other disbursements, both amounts being included between the day of leaving port and the date of capture, would provide for the loss actually sustained in respect of the forty-one whalers."

M. Staempfli evidently understood from this admission that 25 per cent of value was admitted by Great Britain as a proper measure of damages in the case of the whalers, when the fact was, as above quoted, it was 25 per cent per annum interest for the limited time, which had been suggested in behalf of Great Britain.

It is apparent that the arbitrators allowed no interest in their award except on account of the whalers, and for the limited period suggested in the British argu

ment as above.

It is submitted that it has been demonstrated that the Geneva Arbitration did decide that prospective profits should not be allowed. Indeed, it is apparent that, after a very exhaustive examination of the decisions, made by both sides in the argument, the United States substantially abandoned the claim.

(b.)

Claim for prospective catch or prospective profits was made only for the forty-one whalers destroyed or captured, for the most part, by the Shenandoah.