GENEVA AWARD: What shall Congress Do with the Balance ? REA.SONS WHY It shall be distributed to the Owners of the so-called “Outside,” or “Exculpated” Cruisers, their Officers and Crews; and to the Payers of “In¬ creased” Marine Insurance, or so-called “War Premiums,” and NOT to Marine; or Fire and Marine Insurance Companies. ARGUMENT THEREFOR TO THE JUDICIARY COMMITTEE OF THE SENATE OF THE UNITED STATES. WASHINGTON, D. C. By J. F. MANNING, Esq., Of Worcester, Mass., Counsel for certain Claimants under the Award. MARCH, 187(5. Printed and Bound at THE NATIONAL REPUBLICAN PRINTING HOUSE , WASHINGTON, D. C. 1 1 3 . %% CO 4 Mr. Chairman and Gentlemen of the Committee ^ . Two years ago last September Great Britain paid to the Government of the United States the amount awarded to it by the “ Geneva Tribunal,” sitting in pursuance of the inter¬ national agreement, known as the Treaty of Washington, bearing date the 8th of May, 1871. The amount of the pay¬ ment was fifteen and one-half millions of dollars in current gold coin. The Government soon borrowed it upon its bonds as security, stipulating to pay five per cent, interest semi-an¬ nually, and consequently the interest to be re-invested every six months. By Act of Congress of June 28, 1874, the Court of Com¬ missioners of Alabama Claims, composed of five judges' was created to proceed with the distribution of the award under the terms imposed by the Act, and to decree interest on its judgments at the rate of four per cent, per annum since the losses occurred, up to the time of the payment of the judg- t ments. The Court has proceeded with marked, even pre-emi- i ment ability and promptness, in the performance of its un- 1 c precedented and arduous duties, and has nearly completed its J J labors under the act, and made awards as empowered for losses by the insurgent cruisers Alabama, Florida and their “ tenders,” and the Shenandoah after she sailed from Mel- M bourne, Australia, February 18, 1865. The Court has adju¬ dicated upon all the cases before it, amounting to thirteen <4 hundred and eighty-five, except one hundred and seven now r undecided, and has ordered the entry of judgments amount¬ ing to a trifle over eight millions of dollars, including prin- ^ cipal-and the four per cent, interest. The Act of June 23, "" 1874, prescribed that the Court should decree payment in f 452-18 4 “ tlie currency of the United States.” This, under the “ Le¬ gal Tender Act ” of 1862, is construed to mean the paper money of the United States, and not its gold coin. Conse¬ quently gold being at a premium over the paper currency an amount has been added (as it were) to the award, equivalent to the gold premium at date of the payment of the judg¬ ments when the investment bonds are converted into cur¬ rency. The present gold premium adds about fifteen per cent, to the Geneva Award fund. This necessarily inures to the benefit of the claimants - who may hereafter be en¬ titled by Congress to share in its distribution. The present sum total of the fund in paper money is about twenty mil¬ lions of dollars, including the current premium and accumu¬ lated interest. Deducting therefrom the aggregate sums awarded by the Court—eight millions in “ round numbers ”— and the unappropriated balance approximates twelve mil¬ lions of dollars.. Following this recital of the present condi¬ tion of the fund, we subjoin “REASONS” Why this unappropriated balance should be paid to the own¬ ers of about sixty vessels (mostly small ones) their cargoes and freight-money, wages of officers and crews, and the pay¬ ers of the so-called war premiums. The first class of losses in order of merit which should be provided for, is that known as the “ exculpated ” or outside “cruisers; “outside” because excluded from the right of proofs in the present Court. They differ in no aspect from those now in process of payment by the Treasury Depart¬ ment under the seal of the Court. They were losses by in¬ surgent, or Confederate cruisers on the high seas during the rebellion, of hulls and cargoes and freight-money earned by actual transportation of merchandise, or legally due when captured and destroyed by the law of admiralty, because “ under charter ” or contract to pay when cargo was delivered. Being prevented from delivery by Confederate interception 5 and destruction, the present Court awards them the money agreed for by the stipulations of the charter treaty. If distinctions are drawn, and meritorious classification of claims in order of hearing, and payment established, it certainly seems proper and entirely just that those persons should he first paid who risked their property, perchance u their all,” in commerce carried on in American bottoms, under the ex¬ pected and promised protection of the American flag, and burned or sunk because found floating under the Stars and Stripes. If the cross of St. George or the tri-color of France, or the insignia of any other nationality had held over it its aegis of protection, then the enemies of the Union, in the guise of pirates, would have passed them by with a salute of recog¬ nition instead of applying the torch of destruction. In¬ tensely and unswervingly patriotic as these claimants were they preferred a sacrifice of their commercial interest (and in many cases*as the sequel shows, bankruptcy) rather than to them ignoble and unpatriotic device of protection—“ white¬ washing— hoisting to the masthead the colors of a country not their own, to which they owed no allegiance; instead of the flag of their native land, to which they did owe allegi¬ ance, and from which in return they expected and were guaranteed protection and immunity from losses. But for this courageous and self-sacrificing patriotism, this absolute fidelity of citizenship they might have sailed the seas in peace, prosperity and profit. How gratifying to-day the retrospect to them and their descendants; how creditable to the American name that they proferred perils and endured severe losses, as compared with the avarice, cowardice, the civil and commercial treachery of their competitors who transferred their vessels and cargoes to a flag that these same Confederate cruisers floated as a de¬ coy to capture and the torch! 1 Such, in brief, is their record ; on a history like that do the persons we are honored to represent, base their appeal for compensation ; for the simplest, most obvious justice. 6 For twelve, thirteen, fourteen years, (long and trying), have they waited at the bar of nations and the tribunals of the country they honored and helped to save, for that partial indemnity which money alone can give; and every impartial and unbiassed observer says is rightfully theirs. A careful computation of the entire losses of this class shows the aggregate to he about one million dollars, (paper,) and at the present four per cent, interest makes the total about one million five hundred thousand dollars. This is probably less than one-half the amount added to the fund from gold premium and accumulated income. We cannot for a moment believe that their appeal will meet any other than a prompt, and generous response. The Govern¬ ment of Great Britain has publicly and formally expressed its sincere regrets and apologies that any of its subjects should have so far violated the sacred obligations of neu¬ trality as to participate in the depredations and piratical gains, and has nobly and ungrudginly paid the amount that the chosen tribunal said was due. This indemnity has been in the United States Treasury for nearly three years. Many of the men whose patriotism was the immediate occasion of their losses have gone to that u bourne whence no traveller re¬ turns/’ Their descendants and those who are still spared to recite their sufferings, are mindful that “ delay is often the worst injustice,” and are anxious that the history of the English spoliation claims be not that of the French spolia¬ tion claims. They do not ask that the American Govern¬ ment pay them from its own funds, but from those that it holds as trustee for their specific and intended use, equally with all others in the same situation. The Government is trustee “ without bonds,” excepting the international obligation of honor and fidelity to its own citizens from whom it exacts allegiance and taxes, and in re¬ turn promises protection in all cases, and insures it where it can. From stress of circumstances it was unable to render it on the seas during the rebellion, and in due time in repa¬ ration for the losses consequent upon the inability to protect. demanded, secured and received redress from the neutral Power responsible for the depredations. Honorably allowed and punctually paid by the defendant nation, it is the obvi¬ ous and bounden duty of the recipient to as honorably and punctually award and distribute in detail the munificent sum it received and holds “ in gross.” Only one limitation is im¬ posed by the trust, and that is that the distribution be made to those who sustained marine losses at the hands of the officers and crews of the Confederate cruisers. Common parlance, and even some arguments, have used the descrip¬ tive terms of “ direct ” and “ indirect ” losses. Ho such lan¬ guage is found in the Treaty, or in the Award. It was a misnomer introduced by the English counsel at Geneva, evi¬ dently intended as a part of the u special pleading ” or soph¬ istry that sought to evade responsibility of the client nation they so ably represented. Only two classes of losses were pre¬ sented to the Tribunal, to wit: National and private. The one covering those of the United States in their political capacity; the other those of individuals no matter what the form of that loss might have been, whether that of a hull or a cargo, or the payment of a war premium to underwriters as a guarantee against capture and destruction. A loss is a loss; no more no less. Distinctions here are distinctions without a difference. Nothing can be plainer. He who paid twenty thousand dollars for a hull or cargo burned or sunk lost just the same as he who paid the same sum to an insur¬ ance company to protect him against piratical depredations, or war perils. Admiralty law, the law of insurance whether fire or marine, recognizes but one distinction here, and that is a “ partial ” or a “ total ” loss. In the former it discounts the salvage; in the latter as nothing is saved, it discounts no salvage, but pays in full. This is the controlling element determining the amount due in all cases. But this distinc¬ tion has no place here, except it be in those instances where the underwriter paid the assured a scrip or other dividend, which the records of the companies and the receipts of the payees can easily establish under the modes of proof and 8 rules of evidence whicli the Court may lay down ; and the common law has for so long made explicit and positive. It is a subject easily presented and as readily adjusted—a ques¬ tion of figures devoid of complications and free from errors. Ho mystery, no duplicity; hut the absolute unerring certainty of mathematics. Some pretence has been made of the doc¬ trine of subrogation as a technicality, or a principle that should enter into the consideration and have weight in the settlement. But how can it? We have yet to see a satis¬ factory answer. On the contrary, it is apparent how it cannot ! Then, the ordinary marine rate of insurance against sea perils ranged from one-half of one per cent, to two per cent., depending on the kind of cargo and the intended or current voyage. The war rate against war perils was from (usually) four to fifteen per cent. In a few cases it was from two to thirty per cent., according to the competition of the companies; and whether the assured property was in the track of the cruisers or not. The war premium was always in addition to the marine premium, and commonly entirely separate from it, sometimes a separate policy. In every case the Court, by the aid of parties and counsel, can easily ascertain the amounts paid for each kind of insur¬ ance. Subrogation is simply the sucession of the insurer to the rights of the assured to any property that may he saved from the wreck, and the rate is always governed and deter¬ mined in ordinary marine insurance against sea perils with reference to salvage. In a large majority of disasters some¬ thing is saved which always goes to the underwriter, increases his income and resources, and enables him to insure at lower rates. But in war insurance a rate was made without refer¬ ence to salvage; because as a matter of fact, in no instance was anything saved beyond apparel upon the person of the officers and crew. Usually the captured property was burned; in a/ceases, saved. The companies, officers, and agents knew this, and charged and received a premium in 'proportion. They never expected 9 to get any return compensation, and we fail to see why injus¬ tice or equity , they ever should!! The Government has always refused (and justly) to pay these claims, which have frequently been presented and re¬ jected, because they were into the business as a business) (not obliged to,) and were paid for the risk. In support of this is the well-considered judgment of Con¬ gress, as proved by the following letter: “ Commonwealth of Massachusetts, “ Executive Department, “ Boston, Jan. 24, 1873. “Dear Sir: While I was on the Committee of Claims for six years, several cases of insurance companies were pre¬ sented where property had been lost or destroyed, on which they had paid the insurance. The Committee always dis¬ missed the claim, on the ground that they were paid for the risk, and could not ask the Government to hold them harm¬ less. “ Yours truly, “ W. B. WASHBURY. “ To Geo. 0. Shattuck, Esq.” Having been paid for it once , why should Congress tax the people, or impose custom duties to pay them again ? One compensation for the same thing, or the same service is all that is usually paid. Why make wealthy corporations an exception ? Is the Government under any obligation ? Have they given, or promised to give, any “ quid pro quo f ” What Board of Underwriters, what company’s officers thirteen or fourteen years ago ever looked forward, and, in prophetic vis- ian, saw British gold in the vaults of the Treasury of the United States to pay them twice over? Something has been said about the insurance companies having influenced the Geneva decision. Are they willing to say that they employed assistant or special counsel to press their claims before the Tribunal? Did not the able trio of counsellors act for the 10 Government ? Were they not paid by the Government that sent them on their high, honorable and successful mission ? Will anyone presume even to suggest that there was a “ third house ” there ; that “ lobbying ” surrounded that—the most a ugust and impartial of Courts ? It has passed into history as one of the most successful pro¬ fessional achievements, and that no persons endowed with judicial powers ever held the scales of justice more evenly! If a judgment ever personified the mythical or pictorial goddess that presides over judicial forums, it was the Geneva Award. The award makes no mention of any specific sum allotted to insurance companies, nor to any special class of claims there considered. It is awarded in satisfaction of all the claims presented or referred to the consideration of the Tri¬ bunal. The agent of the Government could not withdraw from the consideration of the Arbitrators the claims for war premiums if he would. Those were private claims—the property of indivinuals—and not the property of the Gov¬ ernment. If the agent had formally withdrawn them it could not annihilate the title ef the payers of those premiums, or extinguish their property therein. The owner's never sur¬ rendered ownership in them, nor conld they be divested of their titles. Governments do not thus confiscate the prop¬ erty of law-abiding, loyal, tax-paying citizens. Handing the amounts to the Government agent to present to the board never carried a delegated or implied power to surrender without adequate compensation. The Government did what it saw fit with its own claims. With these we have nothing to do. But we submit that the Government received far greater compensation than any individual now asks, in this, viz : that it gained for the future the establishment of certain principles and rules of international law that are henceforth to govern the relations and conduct of neutrals towards bel¬ ligerents in times of war. Such indemnity is vastly superior to money. The Government was more than satisfied with the recog- 11 nition of those rules for which it had been so long contend¬ ing, and the people have cordially approved the triumph ; and the consequent advance of public law. It might have been the misfortune that the private elaims were more or less intermingled with the national claims; but that does not lessen the rights which their owners possess, and of which no Government or Tribunal can, or desires to deprive them. Governments exist to protect, not to deprive citizens of the rights of property. Government filed claims for the cost of pursuit of Confederate cruisers, and the Tribunal disallowed them because they are “ not distinguishable from, the general ex¬ penses of wary (See Cushing’s Treaty of Washington, p. 153, et seq.) The Government in its instructions to the agent at Ge¬ neva said: “ You will be careful not to commit the Govern¬ ment as to the disposition of what may be awarded,” and again: “ If the value of the property captured or destroyed be recovered in the name of the Government, the distribu¬ tion of the amount recovered will be made by this Govern¬ ment without committal, as to the mode of distribution.” The language of the award is: “ The Tribunal awards to the United States the sum of fifteen millions five hundred thou¬ sand dollars in gold ” “ for the satisfaction of all the claims referred to the consideration of the Tribunal.” We quote verbatim. Clearly this is an award to the G-overnment , and as clear that it includes in “ all claims referred to the considera¬ tion of the Tribunal,” those of “ outside ” cruisers and war premiums because they were there filed and considered.” The amount of war premiums there filed and considered was a trifle over six millions of dollars. This included the gross sums paid, and generally did not allow for subsequent “ scrip f or other dividends which as hereinbefore explained, the Court would deduct by giving it power to allow and award only net loss as in the'cases already in process of pay¬ ment by the Treasury officers. These payers of war pre¬ miums did not do so from choice , as in the case of the com¬ panies who received, them. But they were paid by necessity — 12 the most despotic mercantile compulsion. Either pay them, or they could not buy goods in foreign markets on credit, nor export in American bottoms in which freights were lowest. The owners of vessels were compelled to pay them on ac¬ count of the ruinous competition that ensued from the fre¬ quent unpatriotic and dishonorable transfers to foreign flags. It was a mercantile competition between the friends and sup¬ porters of the Government in its years of severest trial, and the grasping avarice of disloyalty, or sympathy with treason. At this time it cannot be possible that the lapse of years and the unyielding avarice of corporations, will so blunt or be¬ cloud the sense of justice and duty as to exclude these suf¬ ferers from sharing in the trust-fund held under the most sacred obligations for an even-handed distribution. We gladly quote from a recent opinion of Mr. Justice Ray¬ nor, of the Court of Commissioners of Alabama Claims. In Ilubbell vs. the United States, he says, referring to the pro¬ ceedings of the Geneva Tribunal: “ Nothing can there be found to limit or control good faith on the part of our Gov¬ ernment in making such allowance to claimants before us as in their judgment and discretion Congress might think proper.” In fact, the honorable committee to whom the British Board of Trade referred the investigation of the points at issue say in their report: “ The proper compensation for the losses occasioned by the cruisers in question, we have to examine, but with the mode of distributing that among the various claimants, the Ameri¬ can Government is alone concerned.” Here is abundant proof that Congress is supreme and ex¬ clusive in its jurisdiction, limited only by that “good faith” on which we confidently rely. As Burke once said: “ Gov¬ ernments cannot afford , (if they would), in the long run, to do injustice.” The law of compensation is as sure and fatal on the elevated plateaus of international relations as in the obscure and lowly dealings of human life. Every lawyer knows that in making a law brief, he cites 13 only the opinion of the court, not the arguments of counsel, except for reference to throw light on the court’s reasoning, where that may not he quite clear. So in dealing with these questions. We are to listen and rely on the Award , not the arguments, except where there is obscurity. Fortunately it is all clear, exact, unambiguous. The arbitration there express a conclusion , not its reasons. What those were they give no sign. On pages 7 and 8, vol. 4, Treaty Papers, the Government agent says that the pro¬ ceedings were held “with closed doors,” and not even he knew how the result was arrived at. Indeed, one of the Arbitrators expressly declared that in arriving at a conclusion, the arbitrators were not to be re¬ garded as making an assesment, or confining themselves to the schedules, estimates, or tables of the two governments. Cushing’s Treaty of Washingtan, page 1(17. The Forty- third Congress announced this doctrine in the act of June 23, 1874. Rights have become vested under that doctrine and act . How can this, or any future Congress consistently, justly, or constitutionally change it ? The immediate distribution of this fund is called for by every consideration associated with the history of these dep¬ redations, the negotiations preceding the payment, the prompt and generous response of England, the situation and needs of the claimants, the record and the honor of our own Govern¬ ment. Ho interest suffered so severely during the war as that of shipping; none is, to-day, so far from recovery; none was in the main more patriotic or deserving ; and in propor¬ tion to its means, none will so rapidly or surely contribute to the restoration of commercial prosperity as this. It is the very marrow of the backbone of successful and prosperous trade. Hearly every dollar of this fund, now lying commer¬ cially idle in the vaults of the Treasury, will find its way back into the depleted and needy channels of our mercantile marine. Delay is continued depression and continued disas¬ ter. Justice is often synonymous with and equivalent to punctuality. Delay breeds distrust, if it does not pave the 14 way for downfall. So, we respectfully ask for that immediate legislation that will provide for the earliest payment for losses of hulls and cargoes, and war premiums. If there is any balance then left, it should, in our judgment, go to those who lost money by the insurgent cruisers, if such remain, before those who made money, who (at best have but a quasi , or secondary claim) are paid. The present Court is allowed to decree judgments in favor of insurance companies where they can show their payments for war losses exceeded their income from war premiums. Ti;ey get, therefore, their net loss. This is all any other claimant asks or gets, and no unjust discriminations should now he made. The Court’s docket shows only a Few thou¬ sand dollars loss to all underwriters. Comment is needless. On this latter proposition, for the present, we express no preference, except an unqualified dissent from the proposition to “ cover it into the Treasury.” There are some claims (not yet provided for) easily defined and judicially adjudicated for excessive personal suffering of prisoners on hoard the cruisers, and (after landing them in the Confederacy) in Southern prison stockades. The most obvious considerations of humanity entitle these to some provision. Respectfully submitted, J. F. MAMLN T (i, Counsel for certain Claimants under the Geneva Award. EXTRACT FROM THE LAWS OF THE STATE OF XEW YORK. Chapter 614. An Act to authorize Marine Insurance Companies to de¬ clare extra dividends in certain cases, Passed, May 24th, 1878. The ■people of the State of New York , represented in Senate and Assembly , do enact as follows: Section 1. If any Marine Insurance Company, organized under the laws of this State, having paid a loss, shall receive a sum derived from the Geneva Award, by way of reimburse¬ ment of that loss, it shall be lawful for such company to divide the net amount so received, after deducting the ex¬ penses and liabilities relating hereto, among the persons or parties who paid premiums and suffered by the payment of the original loss, or were prevented from receiving so much as they otherwise would have received by occasion of the loss, instead of dividing the same among the more recent •script-holders or dealers with such company; such division to be in the form of an extra dividend, or extra dividends upon the plan contemplated by the charter of such company, subject to all just claims for debts and liabilities and pay¬ able to the same persons or their representatives, and in like manner as the money from which the loss was originally paid, would have been payable if the loss had not been borne by the company and the action of the board of directors or 16 trustees, in ascertaining the amount and making sucli extra dividend or dividends, shall have like force and effect as their action in making and declaring dividends under the charter. Section 2. This act shall take effect immediately. The following are the objections to any distribution of the balance of the Geneva Award, under this act, viz : 1st. It includes all marine companies organized under the laws of Yew York, whose claims in the aggregate cover more than one-half of the entire amount asked for by all the companies. 2d. The act .provides for the payment of the u net amount ” “ after deducting the expenses and liabilities.” The companies themselves are made the jurors.to deter¬ mine these amounts, and the time when they will be paid—• without any appeal or power to revise, audit or change their allowances to policy holders. 3d. The only limitation positively imposed by this act, is that the amount is to be paid to the persons who were mem¬ bers of the companies when the losses occurred—and these persons include' marine payers as well as “ war” payers. In fine, there is no certainty of time of payment, or amount; and by the only affirmative portion of the law, a part or all the disbursements under it are to go to those who sustained no “ war ” losses, to wit: marine payers. So far as the act recognizes the payment to “ war ” payers, it admits their right to recover. Why not let them share without the tor¬ tuous, tedious and diminishing (if by “ expenses and liabili¬ ties” and payments to marine payers it does not extinguish), processes established by this law, viz: through the Treasuries of forty-three companies? Only a few members then , are voters now. Consequently mem¬ bers not entitled to the money would vote it away as they saw fit. / ■ *