No. 254.]

EXPATRIATION.

Mr. Olney to Mr. Uhl.

DEPARTMENT OF STATE, Washington, December 21, 1896. SIR: I have to inform you that your dispatch No. 196, of the 1st instant, stating that Mr. Ernst Friedrich Blumenthal, who became naturalized as an American citizen in the United States court for the western district of Pennsylvania on the 5th of January, 1893, recently called on Mr. Johnson, the United States consul at Stuttgart, exhibited his naturalization certificate and surrendered his passports, and then told the consul that he intended remaining permanently in Germany and renouncing his American citizenship, has been received.

In view of the statement made by Mr. Blumenthal, and of the fact that he voluntarily gave up his passports, the Department approves of Mr. Johnson's course in receiving them, and they have accordingly been placed on file here with your dispatch.

It may be observed, however, that Mr. Blumenthal's statement and the surrender of his passports do not necessarily reinvest him with German nationality, but merely evidences his renunciation of his naturalization in the United States, according to Article IV of the convention of 1868 with North Germany. Whether Germany will readmit him to citizenship is another thing.

In a general way, if it should appear that a naturalized American citizen, by any voluntary act recognized or prescribed by German law, has resumed his German allegiance or been readmitted to German nationality, the surrender of the passport of such a person may properly be demanded.

I am, etc.,

RICHARD OLNEY.

AFFAIRS IN SAMOA.

(See Samoa.)

GREAT BRITAIN.

ADJUSTMENT OF DISPUTES BETWEEN THE UNITED STATES AND GREAT BRITAIN BY ARBITRATION.

No. 65.]

Lord Salisbury to Sir Julian Pauncefote.

FOREIGN OFFICE, March 5, 1896.

SIR: In the spring of last year communications were exchanged between your excellency and the late Mr. Gresham upon the establishment of a system of international arbitration for the adjustment of disputes between the two Governments. Circumstances, to which it is unnecessary to refer, prevented the further consideration of the question at that time.

But it has again been brought into prominence by the controversy which has arisen upon the Venezuelan boundary. Without touching upon the matters raised by that dispute, it appears to me that the occasion is favorable for renewing the general discussion upon a subject in which both nations feel a strong interest, without having been able up to this time to arrive at a common ground of agreement. The obstacle which has separated them has been the difficulty of deciding how far the undertaking to refer all matters in dispute is to be carried. On both sides it is admitted that some exceptions must be made. Neither Government is willing to accept arbitration upon issues in which the national honor or integrity is involved. But in the wide region that lies within this boundary the United States desire to go further than Great Britain.

For the view entertained by Her Majesty's Government there is this consideration to be pleaded, that a system of arbitration is an entirely novel arrangement, and, therefore, the conditions under which it should be adopted are not likely to be ascertained antecedently. The limits ultimately adopted must be determined by experiment. In the interests of the idea, and of the pacific results which are expected from it, it would be wise to commence with a modest beginning, and not to hazard the success of the principle by adventuring it upon doubtful ground. The suggestion in the heads of treaty which I have inclosed to your excellency will give an opportunity for observing more closely the working of the machinery, leaving it entirely open to the contracting parties, upon favorable experience, to extend its application further, and to bring under its action controversies to which for the present it can only be applied in a tentative manner and to a limited extent.

Cases that arise between States belong to one of two classes. They may be private disputes in respect to which the State is representing its own subjects as individuals, or they may be issues which concern the State itself considered as a whole. A claim for an indemnity or for damages belongs generally to the first class; a claim to territory or sovereign rights belongs to the second. For the first class of differences the suitability of international arbitration may be admitted without reserve. It is exactly analogous to private arbitration, and there is no objection to the one that would not apply equally to the other. There is nothing in cases of this class which would make it difficult to find

capable and impartial arbitrators. But the other class of disputes stands on a different footing. They concern the State in its collective capacity, and all the members of each State and all other States who wish it well are interested in the issue of the litigation. If the matter in controversy is important, so that defeat is a serious blow to the credit or the power of the litigant who is worsted, that interest becomes a more or less keen partisanship. According to their sympathies, men wish for the victory of one side or another.

Such conflicting sympathies interfere most formidably with the choice of an impartial arbitrator. It would be too invidious to specify the various forms of bias by which, in any important controversy between two great powers, the other members of the commonwealth of nations are visibly affected. In the existing condition of international sentiment each great power could point to nations whose admission to any jury by whom its interests were to be tried it would be bound to challenge; and in a litigation between two great powers the rival challenges would pretty well exhaust the catalogue of the nations from whom competent and suitable arbiters could be drawn. It would be easy, but scarcely decorous, to illustrate this statement by examples. They will occur to anyone's mind who attempts to construct a panel of nations capable of providing competent arbitrators, and will consider how many of them would command equal confidence from any two litigating powers.

This is the difficulty which stands in the way of unrestricted arbitration. By whatever plan the tribunal is selected, the end of it must be that issues in which the litigant States are most deeply interested will be decided by the vote of one man, and that man a foreigner. He has no jury to find his facts; he has no court of appeal to correct his law; and he is sure to be credited, justly or not, with a leaning to one litigant or the other. Nations can not afford to run such a risk in deciding controversies by which their national position may be affected or a number of their fellow-subjects transferred to a foreign rule.

The plan which is suggested in the appended draft treaty would give a court of appeal from the single voice of the foreign judge. It would not be competent for it to alter or reverse the umpire's decision, but, if his judgment were not confirmed by the stipulated majority, it would not stand. The court would possess the highest guaranty for impartiality which a court belonging to the two litigating nations could possess. Its operation in arresting a faulty or doubtful judgment would make it possible to refer great issues to arbitration without the risk of a disastrous miscarriage of justice.

I am aware that to the warmer advocates of arbitration this plan will seem unsatisfying and imperfect. But I believe that it offers an opportunity of making a substantial advance, which a more ambitious arrangement would be unable to secure; and if, under its operation, experience should teach us that our apprehensions as to the danger of reposing an unlimited confidence in this kind of tribunal are unfounded, it will be easy, by dropping precautions that will have become unnec essary, to accept and establish the idea of arbitration in its most developed form.

I beg that you will read this dispatch and the appended draft treaty to the Secretary of State and leave him a copy if he desires it.

[Inclosure.]

Heads of a treaty for arbitration in certain cases.

1. Her Britannic Majesty and the President of the United States shall each appoint two or more permanent judicial officers for the purposes of this treaty; and on the

appearance of any difference between the two powers, which, in the judgment of either of them, can not be settled by negotiation, each of them shall designate one of the said officers as arbitrator; and the two arbitrators shall hear and determine any matter referred to them in accordance with this treaty.

2. Before entering on such arbitration the arbitrators shall select an umpire, by whom any question upon which they disagree, whether interlocutory or final, shall be decided. The decision of such umpire upon any interlocutory question shall be binding upon the arbitrators. The determination of the arbitrators, or, if they disagree, the decision of the umpire, shall be the award upon the matters referred.

3. Complaints made by the nationals of one power against the officers of the other; all pecuniary claims or groups of claims, amounting to not more than £100,000, made on either power by the nationals of the other, whether based on an alleged right by treaty or agreement or otherwise; all claims for damages or indemnity under the said amount; all questions affecting diplomatic or consular privileges; all alleged rights of fishery, access, navigation, or commercial privilege, and all questions referred by special agreement between the two parties shall be referred to arbitration in accordance with this treaty, and the award thereon shall be final.

4. Any difference in respect to a question of fact, or of international law, involving the territory, territorial rights, sovereignty, or jurisdiction of either power, or any pecuniary claim or group of claims of any kind, involving a sum larger than £100,000, shall be referred to arbitration under this treaty. But if in any such case, within three months after the award has been reported, either power protests that such award is erroneous in respect to some issue of fact, or some issue of international law, the award shall be reviewed by a court composed of three of the judges of the Supreme Court of Great Britain and three of the judges of the Supreme Court of the United States; and if the said court shall determine, after bearing the case, by a majority of not less than five to one, that the said issue has been rightly determined, the award shall stand and be final; but in default of such determination it shall not be valid. If no protest is entered by either power against the award within the time limited, it shall be final.

5. Any difference which, in the judgment of either power, materially affects its honor or the integrity of its territory, shall not be referred to arbitration under this treaty except by special agreement.

6. Any difference whatever, by agreement between the two powers, may be referred for decision by arbitration, as herein provided, with the stipulation that, unless accepted by both powers, the decision shall not be valid.

The time and place of their meeting, and all arrangements for the hearing, and all questions of procedure, shall be decided by the arbitrators or by the umpire, if need be.

No. 365.]

Mr. Olney to Sir Julian Pauncefote.

DEPARTMENT OF STATE, Washington, April 11, 1896. EXCELLENCY: I have the honor to acknowledge the receipt at your hands of the copy of Lord Salisbury's dispatch of March 5, 1896. His lordship, after recurring to the negotiations of last year between himself and the late Secretary Gresham for the establishment of a general system of arbitration of disputes between the two Governments, and after in terms excluding from consideration the Venezuelan boundary dispute, expresses the opinion that the time is favorable for renewing discussion upon the subject. He thereupon proceeds to make a most interesting contribution to such discussion, which he concludes by submitting the draft of a proposed treaty, a copy of which, for convenience of reference, is annexed to this communication.

It is proper to state at the outset that these proposals of Her Majesty's prime minister are welcomed by the President with the keenest appreciation of their value and of the enlightened and progressive spirit which animates them. So far as they manifest a desire that the two great English-speaking peoples of the world shall remain in perpetual peace, he fully reciprocates that desire on behalf of the Government and people of the United States. To himself personally nothing could bring greater satisfaction than to be instrumental in the accomplishment of au end so beneficent,

If Lord Salisbury's draft had stopped with article 3 no criticism could have been made either of the arbitral machinery provided or of the arbitral subjects enumerated, except that the latter seem to be so cautiously restricted as hardly to cover other than controversies which, as between civilized States, could almost never endanger their peaceful relations. But article 3, as well as article 4, is apparently qualified by the provisions of article 5, since the national honor may sometimes be involved even in a claim for indemnity to an individual. Further, the arbitral machinery provided by article 4 is open to serious objection as not securing an end of the controversy unless an award is concurred in by at least five out of the six appellate arbiters. In calling attention to these features of the scheme as largely restricting its value, I am directed by the President to propose as a substitute for articles 4 and 5 the following:

IV. Abitration under this treaty shall also be obligatory in respect of all questions now pending or hereafter arising involving territorial rights, boundaries, sovereignty, or jurisdiction, or any pecuniary claim or group of claims aggregating a sum larger than £100,000, and in respect of all controversies not in this treaty specially described: Provided, however, That either the Congress of the United States, on the one hand, or the Parliament of Great Britain, on the other, at any time before the arbitral tribunal shall have convened for the consideration of any particular subject-matter, may by act or resolution declaring such particular subject-matter to involve the national honor or integrity, withdraw the same from the operation of this treaty: And provided further, That if a controversy shail arise when either the Congress of the United States or the Parliament of Great Britain shall not be in session, and such controversy shall be deemed by Her Britannic Majesty's Government or by that of the United States, acting through the President, to be of such nature that the international honor or integrity may be involved, such difference or controversy shall not be submitted to arbitration under this treaty until the Congress and the Parliament shall have had opportunity to take action thereon.

In the case of controversies provided for by this article, the award shall be final if concurred in by all the arbitrators. If assented to by a majority only, the award shall be final unless one of the parties, within three months from its promulgation, shall protest in writing to the other that the award is erroneous in respect of some issue of fact or of law. In every such case, the award shall be reviewed by a court composed of three of the judges of the Supreme Court of Great Britain and three of the judges of the Supreme Court of the United States, who, before entering upon their duties, shall agree upon three learned and impartial jurists to be added to said court in case they shall be equally divided upon the award to be made. To said court there shall be submitted a record in full of all the proceedings of the original arbitral tribunal, which record, as part thereof, shall include the evidence adduced to such tribunal. Thereupon the said court shall proceed to consider said award upon said record, and may either affirm the same or make such other award as tho principles of law applicable to the facts appearing by said record shall warrant and require; and the award so affirmed or so rendered by said court, whether unanimously or by a majority vote, shall be final. If, however, the court shall be equally divided upon the subject of the award to be made, the three jurists agreed upon as herein before provided shall be added to the said court; and the award of the court so constituted, whether rendered unanimously or by a majority vote, shall be final. The considerations which, in the opinion of the President, render the foregoing amendments of Lord Salisbury's scheme most desirable and perhaps indispensable may be briefly stated:

1. The scheme, as thus amended, makes all disputes prima facie arbitrable.

Each, as it may arise, will go before the arbitral tribunal unless affirmative action by the Congress or by the Parliament displaces the jurisdiction.

2. The scheme, as amended, puts where they belong the right and power to decide whether an international claim is of such nature and importance as not to be arbitrable, and as to demand assertion, if need be, by force of arms.

FR 96-15