Alabama Claims The " Alabama " Claims were a series of claims for damages by the U . S . government against the government of the United Kingdom for the assistance given to the Confederate cause during the American Civil War . After international arbitration endorsed the American position in 1872 , Britain settled the matter by paying the United States $ 15 . 5 million for damages done by several warships built in Britain and sold to the Confederacy , thus ending the dispute and ensuring friendly relations . The CSS " Alabama " . During the American Civil War , several warships that became Confederate commerce raiders ( the most famous being the ) were built in the United Kingdom and did significant damage to the American merchant marine . British political involvement . The British Prime Minister Lord Palmerston and Foreign Secretary Lord John Russell had allowed the " Alabama " to put to sea from the shipyards of John Laird Sons and Company in Birkenhead , despite the explicit objections of the American Legation in London and charges from the American Minister to Britain Charles Francis Adams that the ship was bound for the Confederacy . Though both the Prime Minister and Foreign Secretary were thought to favor the Confederacy at the time of " Alabama " construction , this position was against British public opinion and MPs such as Richard Cobden campaigned against it . The subsequent release of the " Alabama " proved to be publicly embarrassing , and Palmerston and Russell were later forced to admit that the ship should not have been allowed to depart , despite the opinion of the Lord Chief Justice of England and Wales that her release did not violate neutrality . Even so , the next year two ironclad warships under construction in Birkenhead and destined for the Confederacy were detained after their completion but before their launch . As a direct consequence of the flap over the " Alabama " , rather than turn the ships over to Monsieur Bravay of Paris ( who had ordered their construction as intermediary for Confederate principals ) , Palmerston instructed the British Admiralty to tender an offer for the purchase of the ships . The claims . The United States claimed direct and collateral damage against Britain , the so - called " Alabama " Claims . In the particular case of the " Alabama " the United States claimed that Britain had violated neutrality by allowing the " Alabama " to be constructed , knowing that it would enter into service with the Confederacy . There were other particulars as well . In the summer of 1862 , the British - built warship " Oreto " , later renamed the " CSS Florida " , was delivered to Nassau in the Bahamas with the intention of its being transferred to the Confederate Navy . British Admiral George Willes Watson ( 1827 - 1897 ) aided the transfer , and Watson ' s actions were considered by the tribunal . Payment . Senator Charles Sumner , the chairman of the Senate Foreign Relations Committee , originally wanted to ask for $ 2 billion , or alternatively the ceding of Canada to the United States . When American Secretary of State William H . Seward negotiated the Alaska Purchase in 1867 , he intended it as the first step in a comprehensive plan to gain control of the entire northwest Pacific Coast . Seward was a firm believer in Manifest Destiny , primarily for its commercial advantages to the United States . Seward expected British Columbia to seek annexation to the United States and thought Britain might accept this in exchange for the " Alabama " claims . Soon other elements endorsed annexation , their goal was to annex British Columbia , Red River Colony ( Manitoba ) , and Nova Scotia , in exchange for the dropping the damage claims . The idea reached a peak in the spring and summer of 1870 , with American expansionists , Canadian separatists , and British anti - imperialists seemingly combining forces . The plan was dropped for multiple reasons . London continued to stall , American commercial and financial groups pressed Washington for a quick settlement of the dispute on a cash basis , growing Canadian nationalist sentiment in British Columbia called for staying inside the British Empire , Congress became preoccupied with Reconstruction , and most Americans showed little interest in territorial expansion . Treaty of Washington . In 1871 , President Grant ' s appointed Secretary of State Hamilton Fish , worked out an agreement with British representative Sir John Rose in Washington to create a commission consisting of six members from the British Empire and six members from the United States to resolve the " Alabama " claims , refinancing , and other international disputes between Canada and the United States by treaty . On March 8 , 1871 the Treaty of Washington was signed at the State Department and the U . S . Senate ratified the treaty on May 24 , 1871 . According to the treaty , an international arbitration tribunal met in Geneva . The treaty included the settlement process for the " Alabama " Claims , settled disputed Atlantic fisheries and the San Juan Boundary ( concerning the Oregon boundary line ) . Britain and the United States became perpetual allies after the treaty , with Britain having expressed regret over the " Alabama " damages . The tribunal . The tribunal was composed of representatives : Negotiations had taken place in Suitland , businessman Samuel Taylor Suit ' s estate , and the tribunal session took place in a reception room of the Town Hall in Geneva . This is now named . The final award of $ 15 , 500 , 000 formed part of the Treaty of Washington and was paid out in 1872 . Legacy . This established the principle of international arbitration , and launched a movement to codify public international law with hopes for finding peaceful solutions to international disputes . The arbitration of the " Alabama " claims was thus a precursor to the Hague Convention , the League of Nations , the World Court , and the United Nations .