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to estimate the amount of each, and the amount to be paid to the respective claimants. The most important duty of this board will be the valuation of property and the determination of questions of ownership.
In view of the foregoing considerations, I earnestly advise you and other parties interested —
First, not to sacrifice any of your claims by sale : 'that is, not to sell under any other circumstances, or at any other rate than in the case of other assured rights of property.
All claimants in such cases stand better appearing in their own right.
Secondly, not to sacrifice your claims by transactions in the nature of contingent-agency compensation.
You will need attorneys or counsel before the board of assessors, who should be compensated with liberal and honorable fees as such; but your claims are not of that aleatory and precarious character which requires them to be placed in the category of some foreign claims, such as those before the Mexican commission, or of some domestic claims demanding long-continued and peculiar service before the executive departments or before Congress.
I remain, very truly,
At the opening of the last Congress, it seemed then that the true course to be adopted was the easiest and simplest possible, that of being guided by the precedent of 1832. But it did not so strike either branch of the national legislature.
In the Senate, Mr. Morton, of Indiana, offered such a bill as it is thought was generally expected, providing for the appointment of three commissioners, who, or a majority of whom, should adjust and determine the compensation due to- the several claimants, according to the principles settled by the Tribunal; and whose judgments should be promptly paid by the Secretary of the Treasury, except so far as related to interest. This was to be allowed on each finding at the rate of six per cent per annum from the time of loss to the date of the judgment; but it was not to be paid until all claims should have been passed upon, and was then to be paid in full, if the fund proved sufficient, otherwise pro rata.
This bill was referred to the committee on the judiciary, which reported, as an amendment to it, a bill providing for commissioners to adjust the losses and for their payment, but containing this clause: —
And no claims shall be admissible or allowed by said court, by or in behalf of any insurance company or insurer, either in its or his own right, or as assignee or otherwise, in the right of a person or party insured as aforesaid, unless such claimant shall show, to the satisfaction of said court, that during the late Rebellion the sum of its or his losses, in respect to his or its war risks, exceeded* the sum of its or his premiums, or other gains upon or in respect of such war risks, and in case of any such allowance, the same shall not be greater than such excess of loss.
And Mr. Edmunds, of Vermont, who reported the amended bill, advocated it at much length. He admitted that by the general law the underwriter who had paid a total loss had the right to be subrogated to the rights of the insured, not only in regard to physical salvage, but in regard to money paid or due to the insured by a foreign government on account of such loss. But he claimed that no person had any legal or equitable right to any part of the indemnity fund, because (1) the losses were occasioned not directly by the acts of Great Britain, but by the acts of the rebels with whom we were at war, and that consequently, as there was no spes recuperandi against the principal offenders, there could be none against their accessory, Great Britain ; and (2) that it was intended by the framers of the treaty of Washington, and it was the true construction of that treaty, that the claims, when paid, should be paid to the United States, to be disposed of at their sovereign pleasure. And he occupied much time in showing that the phraseology of the treaty was different from that of those which referred to private claims.
To the latter point Mr. Thurman, of Ohio, replied that the difference in phraseology was fully accounted for by the fact that claims of the United States on its own account were included in the treaty; and to the former, that the relations of principal and accessory were terms erroneously imported from the municipal criminal law, and could not be used to illustrate the question at issue. If, indeed, Great Britain was an accessory, then she was an ally of our enemies, and consequently was herself our enemy, in which case all the contracts made during the whole period of such enmity between subjects of Great Britain and citizens of the United States were merely void, and every citizen of the latter country who made such a contract was liable to indictment under the statute. And he pointed out the fact that our claim on Great Britain was made upon her simply and solely because she had tailed in her duties as a neutral.
He might have added that to impute to the framers of the treaty the deliberate purpose so to construct it as to deprive all individual claimants of their rights, without any notice to or hearing of the parties, was to ascribe to them a wanton disregard of duty, by which they could gain nothing whatever, and would be sure to incur not a little obloquy. To deprive large classes of living men — useful, intelligent, and jealous of their rights — of large amounts of property by a mere juggle, for the purpose of placing that property in the treasury of the United States, would be to make a thousand active enemies and not a single friend, — would be as unwise as it would be flagitious.
Indeed, the only apology for such a charge against honorable men would be, that the gentleman did not appreciate the force and meaning of his own language.
The argument derives its only importance from its source, and is given simply as a part of the history of the discussion. If the phrase " claims of the United States " had not comprehended the claims of its citizens, the award would have been in its favor only to the extent and value of the two or three insignificant vessels belonging to the government, as such, which were destroyed by the cruisers.
But if the argument proved all that it claims, that is, that the government of the United States provided in and by the treaty that the money due to its citizens should be paid, not to their use but to its own, as distinct from theirs, still it would be nugatory.
The Executive Department and the Senate certainly could not confiscate the property, of citizens without making the United States responsible to the owners. Nor could the executive and both branches of Congress. The physical power is not disputed. The question is one of right.
The rights of the private claimants were not created by the treaty, but existed independently of it.1 If, for any reason, or for no reason, they were bartered or given away by the United States,
1 "Though a member of civil society is restrained in his right to obtain reparation, this right is not destroyed. He does not entirely lose his right to obtain reparation, he only loses his right to obtain it at his own discretion and by his own force; he is not obliged to submit to damage without redress; but is obliged, if he seeks redress, to seek it by the use of the public force, which is under the direction of the common understanding. He has still the right to obtain reparation, and the society, when it interposes, either by itself or by the civil magistrate, to obtain reparation for him, interposes in his right and not in its own." Rutherforth, Inst. Nat. Law, B. 2, c. v.
Bo that they ceased to exist as claims against Great Britain, they would simply become claims, and just claims, against the United States. If the case can be simplified, — suppose that the officers of the government of Brazil had seized, and its courts had condemned, against public law, a ship belonging to one of our citizens; that our government had claimed her, and Brazil were willing to give her up, and that in the progress of the negotiation our government had requested, and Brazil had agreed, that the ship should be surrendered to the United States as its absolute property, subject to no trust whatever: will any one contend that the owner of the ship would not in such case be entitled to claim her value from our government, or, if the ship had been paid for by the insurer, that the latter would not be so entitled? If not, the protection afforded to its citizens by our government is but slight, and they might as well submit to be despoiled by a foreign government in the first instance, as invoke the interference of their own.
In the House of Representatives Mr. Poland, of Vermont, introduced a bill providing for the adjustment of all the claims, including those of underwriters, by one of the Circuit Courts of the United States, to be designated by the President, upon proceedings to be instituted, and, on the part of the United States, conducted by the Attorney-General. And Mr. Butler, of Massachusetts, offered a bill by which the adjustment should be made by the several Circuit Courts whose jurisdiction should attach to each case in a mode therein provided, and by which full indemnity, with interest at five per cent from .the date of loss, should be paid to the actual owner of the property destroyed at the time of its destruction, and to officers and seamen who had lost their wages. The bill then further provided that after the payment of silch losses the remainder of the sum paid under the award should be paid in full, or as far as it might go, to the persons who, after the sailing of either of said cruisers (for whose acts Great Britain is liable), had paid a premium of insurance for a war risk, to the amount of such premium; and to such insurers, being citizens or corporations of the United States, who had suffered by the acts of any of the rebel cruisers, as should show that their war premiums did not equal in amount the losses by such cruisers paid by them respectively.
It however excludes all claims of insurers as holding rights by subrogation, in the following proviso of the third section: —
And provided further, That no insurer shall have any claim or right in the claims of any assured herein provided for, because of any assignment, either in law or in fact, unless such assignee had actually paid adequate consideration therefor other than underwriting the policy, or settling or paying any loss claimed by the assured, or unless such assignment was made a part of the written contract of insurance before the policy was underwritten in express terms.1
The bill offered by Mr. Butler was referred to the Committee on the Judiciary, who made a report thereon recommending its passage, and stating their reasons for so doing.
Mr. Potter, of New York, in a minority report, expressed his dissent from the views of the Committee in respect to the claims of the insurers, and supported these claims very ably and clearly.
The report of the Committee is some fourteen pages in length, and quite elaborate, and may be presumed to give the argument for excluding such claims as fully as is necessary for a full understanding of it. It will therefore repay examination.
It concedes at the outset that if the claims had been referred to the Board of Assessors, a finding by such board that Great Britain was liable in a particular case would have been controlling in favor of the claimant and against the United States in the distribution of the award ; but it contends that, according to a particular mode of stating the figures, only $7,498,669.71 was the amount of individual claims which were considered by the Tribunal, and that by no possibility of calculation of claims allowed, or of interest thereon, could the sum of $15,500,000 have been reached by the Tribunal as the amount of indemnity to be paid for losses to individuals or corporations.
The method by which this conclusion is reached is by a system of guesses which very clearly would not arrive at that sum.2
1 The last Italics are ours.
2 It was stated in debate in the House by Mr. Peters, of Maine, that interest was in fact allowed by the Tribunal upon the amount of the claims at six per cent, and this was expressly admitted by Mr. Butler, who said, " The fact is apparent from papers connected with the award." Cong. Globe, Feb. 15, 1873. A simple calculation would give the principal sum substantially agreed on by the Tribunal.