Title: The Defence No. X, [26 August 1795]
From: “Camillus”,Hamilton, Alexander
To:

[New York, August 26, 1795]

The object of the third article is connected with that of the second. The surrender of the posts naturally drew with it an arrangement with regard to inland Trade and navigation. Such an arrangement convenient in several respects appears to be in some respects necessary. To restrain the Indians on either side of the line from trading with the one party or the other at discretion, besides the questionableness of the right, could not be attempted without rendering them disgusted and hostile. The truth of this seems to have influenced the conduct of Great Britain and France while the latter was in possession of Canada. The 15th article of the Treaty of Peace of Utrecht in the year 1713 allows free liberty to the Indians on each side to resort for Trade to the British and French Colonies. It is to be observed too that the Indians not only insist on a right of going to Trade with whom they please but of permitting whom they please to come to Trade with them and also to reside among them for that purpose. Thus the Southern and South Western Indians within our limits maintain a constant intercourse with Spain established on the basis of Treaty —nor has their right to do it been hitherto contested by the U States. Indeed on what clear principle of justice, could this natural right to Trade of a people not subject to our ordinary jurisdiction be disputed? This claim on their part gives a corresponding claim to neighbouring nations to Trade with them. Spain would think the pretension to exclude her inadmissible. And Great Britain would have thought the same, if she had found it her interest to assert the right of intercourse; views which would always be seconded by the Indians from regard to their own interest and independence. It was a point therefore, which it much concerned the preservation of good understanding between the parties and with the Indians, to regulate on some equitable plan, and the more liberal the plan, the more agreeable to a natural course of things, and to the free participation of mutual advantages, the more likely was it to promote and prolong that important benefit.
In the second place, the expediency of some arrangement was indicated by the circumstance of the boundary line between the parties running for an extent of sixteen hundred Miles through the middle of the same Rivers lakes and Waters. It may be deemed impossible from the varying course of winds and currents for the ships of one party to keep themselves constantly within their own limits without passing or trangressing those of the other. How indeed was the precise middle line of those great lakes to be always known?
It appears evident, that to render the navigation of these waters useful to and safe for both parties, it was requisite that they should be common. Without this frequent forfeitures to enforce interdictions of intercourse might be incurred, and there would be constant danger of interference and controversy. It is probable too that when those waters are better explored in their whole extent it will be found that the best navigation of the Lakes is sometimes on one side sometimes on the other, and that common convenience will in this respect also be promoted by community of right.
Again. It is almost always mutually beneficial for bordering territories to have free and friendly intercourse with each other. This relates not only to the advantages of an interchange of commodities, for the supply of mutual wants and to those of the reciprocal reaction of industry connected with that interest but also to those of avoiding jealousy collision and contest of preserving friendship and harmony. Proximity of territory invites to Trade—the bordering inhabitants in spite of every prohibition, will endeavour to carry it on—if not allowed, illicit adventures take place of the regular operations of legalised commerce—individual interest leads to collusions to evade restraining regulations—habits of infracting the laws are produced—morals are perverted. Severities necessarily great in proportion as they counteract the natural course of things lay the foundation of discontents and quarrels. Perhaps it may be safely affirmed that freedom of intercourse or violent hatred and enmity are the alternative in every case of contiguity of territory.
The maxims of the U States have hitherto favoured a free intercourse with all the world. They have conceived that they had nothing to fear from the unrestrained competition of commercial enterprise, and have only desired to be admitted to it upon equal terms. Hence not only the communication by sea has been open with the adjacent territories on our Continent as well as with more distant quarters of the globe, but two ports have been erected on Lake Champlain for the convenience of an interior commerce with Canada; and there is no restriction upon any nation to come by the Mississippi to the only port which has been established for that side of the Union. These arrangements have excited neither c[r]iticism nor censure.

Our Envoy therefore in agreeing to a liberal plan of intercourse with the British Territories in our neighbourhood has conformed to the general spirit of our Country and to the general policy of our laws. Great Britain in acceding to such a plan departed from her system of Colonial monopoly and exclusion—a departure which ought to be one recommendation of the plan to us; for every relaxation of that system paves the way for other and further relaxations. It might have been expected also that a spirit of jealousy might have proved an obstacle on the part of Great Britain; since especially if we consider the composition of those who inhabit and are likely to inhabit Canada, it is morally certain that there must be as the result of a free intercourse a far greater momentum of influence of the U States upon Canada than of Canada upon the U States. It would not have been surprising, if this jealousy had sought to keep us at a distance, and had counteracted the wiser policy of limiting our desires by giving us possession of what is alone to us truly desireable, the advantages of commerce—rather than of suffering our wishes to be stimulated and extended by privation and restraint.
New ideas seem of late to have made their way among us. The extremes of commercial jealousy are inculcated. Regulation, restriction exclusion are now with many the favourite topics. Instead of feeling pleasure, that new avenues of Trade are opened a thousand dangers and mischiefs are pourtrayed when the occasion occurs. Free Trade with all the world seems to have dwindled into Trade with France and her Dominions. That Country, in the eyes of a certain party, appears to be an epitome of the Universe.
These new doctrines of commercial jealousy have been remarkably exemplified with respect to the article immediately under consideration. Truly estimated it is a valuable ingredient in the Treaty; and yet there is perhaps no part of it which has been more severely reprobated. It will be easy to shew that it has been extremely misrepresented—and that what have been deemed very exceptionable features do not exist at all.
We will first examine what the article really does contain and afterwards what are the comparitive advantages likely to result to the two countries.
The main stipulation is that “it shall at all times be free to his Majesty’s subjects and to the Citizens of the United States and also to the Indians dwelling on either side of the boundary line freely to pass and repass, by land and inland navigation, into the respective territories and countries of the two parties on the Continent of America (the country within the limits of the Hudson’s Bay company only excepted) and to navigate all the Lakes Rivers and Waters thereof and freely to carry on Trade and commerce with each other.”
The subject matter of this stipulation is plainly inland trade and commerce to be carried on by land passage and inland navigation between the subjects and citizens of the U States and the Indians dwelling on each side of the boundary line. This appears first from the terms of the article. The subjects and citizens of the two parties and also the Indians dwelling on each side of the boundary line are freely to pass and repass—what? The boundary line in what manner? by land and inland navigation—to what places? into the respective territories and countries of the two parties on the Continent of America (the Country of the Hudsons bay company only excepted). They are also to navigate all the Lakes Rivers and Waters thereof and freely to carry on trade and commerce with each other. This right to navigate lakes Rivers and Waters must be understood with reference to inland navigation, because this gives it a sense conformable with the antecedent clause with which it is immediately connected as part of a sentence; the right to pass and repass being expressly restricted to land and inland navigation it would not be natural to extend it by implication, on the strength of an ambiguous term, to passage by sea or by any thing more than inland navigation; because the words Lakes and Rivers have direct reference to inland navigation shewing that to be the object in view and the word “waters” from the order in which it stands will most consistently with propriety of composition be understood as something less than lakes and rivers, as ponds canals and those amphibious waters to which it is scarcely possible to give a name—and because the waters mentioned are “waters thereof” that is waters of the territories and countries of the two parties on the Continent of America—a decription which can not aptly be applied to the sea or be supposed to include navigation by sea to the U States or from them to the British territories.
This conclusion is confirmed by the general complexion of the Treaty. It is the manifest province of the Eighteen articles which succeed the first ten to regulate external commerce and navigation. The regulations they contain are introduced thus by the 11th article “It is agreed between his Majesty and the U States of America that there shall be a reciprocal and intirely perfect liberty of Navigation and Commerce between their respective people in the manner under the limitations and on the conditions specified in the following articles” Then follow articles which provide fully and distinctly for Trade and Navigation between the U States and the British West Indies, between the Asiatic Dominions of GB and the U States, and lastly between the European dominions of G Britain and the U States. These Eighteen articles properly constitute the Treaty of commerce and navigation between the two Countries. Their general scope and some special provisions which they contain prove that the object of the third article is local and partial, that it contemplates exclusively an interior commerce by land and inland navigation (except as to the Mississippi) and particularly that it does not reach at all our Atlantic sea ports. An instance of one of the special provisions alluded to will be cited in the further examination of this article.
In opposition to this construction, much stress is laid upon the provisions which immediately succeed the clauses that have been quoted. They are in these words “But it is understood that this article does not extend to the admission of Vessels of the U States into the sea ports harbours bays or Creeks of his Majestys said territories, nor into such parts of the rivers in his said Territories as are between the mouth thereof and the highest port of entry from the sea except in small vessels trading bona fide between Montreal and Quebec; nor to the admission of British Vessels from the sea into the Rivers of the U States beyond the highest ports of entry for foreign vessels from the sea.” The last it is said contains an implication that under this article British vessels have a right to come to our highest ports of entry for foreign vessels from the sea, while we are excluded from the sea ports of the British territories on this Continent.
But this is altogether an erroneous inference. The clauses last cited are inserted for greater caution, to guard expressly against any construction of the article, by implications more or less remote, contrary to the actual regulations of the parties with regard to external commerce and navigation. Great Britain does not now permit a Trade by sea to Nova Scotia and Canada. She therefore declares that the article shall not be deemed to contravene this regulation. The U States now permit foreign Vessels to come to certain ports of Entry from the sea but exclude them from other more interior ports of entry to which our own vessels may come.

   An example of this is found in the State of New York. Foreign vessels can only enter & unlade at the City of New York. Vessels of the U States may enter at the City of Hudson & unlade there & at NYork

 It is therefore declared on their part that the article shall not be construed to contravene this regulation. This was the more proper as the right of inland navigation might have given some colour to the claim of going from an outer to an inner port of entry.
But this negative of an implication, which might have found some colour in the principal provision, can never be construed into an affirmative grant of a very important privilege, foreign to that principal provision. The main object of the article it has been seen, is Trade by land and inland navigation. Trade and navigation by sea with our sea ports is an intirely different thing. To infer a positive grant of this privilege from a clause which says that the right of inland navigation shall not be construed to permit vessels coming from the sea to go from the ports of entry to which our laws now restrict them to more interior ports would be contrary to reason and to every rule of sound construction. Such a privilege could never be permitted to be founded upon any thing less than a positive and explicit grant of it. It could never be supported by an implication drawn from an article relative to a local and partial object—much less by an implication drawn from the negative of another implication. The pretension, that all our ports were laid open to Great Britain by a covert and side-wind provision and this without reciprocity would be too monstrous to be tolerated for an instant. It would be the more inadmissible, because the object is embraced and regulated by other parts of the Treaty on terms of reciprocity.
The different mode of expression, in the clauses last cited, when speaking of the British territories and when speaking of the UStates, has furnished an argument for the inference which has been stated. But this difference is accounted for by the difference in the actual regulations of the parties as described above. The object was on each side to oust an implication interfering with these regulations. The expressions to effect it were commensurate with the state of the fact on each side; and consequently do not warrant any collateral or special inference.
The only positive effect of these clauses is to confine the right of inland navigation from Montreal to Quebec to what are called “small vessels trading bona fide between Montreal and Quebec.” Those who are not familiar with laws and Treaties may feel some difficulty about the position that particular clauses are introduced only for greater caution without producing any new effect, but those who are familiar with such subjects know that there is scarcely a law or a Treaty which does not offer examples of the use of similar clauses, and it not unfrequently happens that a clear meaning of the principal provision is rendered obscure by the excess of explanatory precaution.
The next clause of this article is an exception to the general design of it confirming the construction I have given to it: “The River Mississippi shall however, according to the Treaty of Peace be entirely open to both parties; and it is further agreed that all the ports and places on its Eastern side to which soever of the parties belonging may freely be resorted to and used by both parties in as ample a manner as any of the Atlantic Ports or places of the U States or any of the ports or places of his Majesty in Great Britain.”
If the general provision gives access to all our ports, which must be the doctrine if it gives access to our Atlantic ports, then it would equally have this effect with regard to the Mississippi. But this clause clearly implies the contrary not only by introducing a special provision for the ports of the Mississippi but by introducing it expressly as a further or additional agreement—the words are “it is further agreed &c” and these ports are to be enjoyed by each party in as ample a manner as any of the Atlantic ports or places of the U States, or any of the ports or places of his Majesty in Great Britain. This reference to our Atlantic Ports coupling them with the ports of Great Britain shews that the Mississi [ppi] Ports are to be regulated by a rule or standard different from the ports for that inland navigation which is the general object of the article; else why that special reference? why not have stopped at the words “used by both parties”? If it be said, that the reference to our Atlantic Ports implies that they are within the purview of the article, let it be observed that the same argument would prove that the ports of Great Briain are also within its purview, which is plainly erroneous, for the main provisions are expressly confined to the territories of the parties on this continent. The conclusion is that the reference is to a standard out of the article and depending on other parts of the Treaty.
It may be useful to observe here, that the Mississippi Ports being to be used only in as ample, and not in a more ample, manner than our Atlantic Ports and the ports of Great Britain will be liable at all times to all the regulations privileges & restrictions of the ports with which they are assorted.
The next clause is a still further refutation of the construction which I oppose—“All goods and merchandize, whose importation into his Majestys said territories in America shall not be intirely prohibited, may freely for the purposes of commerce be carried into the same in the manner aforesaid by the Citizens of the U States, and such goods and merchandize shall be subject to no higher or other duties than would be payable by his Majestys subjects on the importation of the same from Europe into the said territories: And in like manner all goods and merchandize whose importation into the U States shall not be wholly prohibitted, may freely for the purposes of commerce be carried into the same in the manner aforesaid subject to no higher or other duties than would be payable by the Citizens of the U States on the importation of the same in American Vessels into the Atlantic Ports of the said States: and all goods not prohibitted to be exported from the said territories respectively may in like manner be carried out of the same by the two parties respectively paying duty as aforesaid”.
The words “in the manner aforesaid” occur twice in these clauses and their equivalent “in like manner” once? What is the meaning of this so often repeated phrase? It cannot be presumed that it would have been inserted so frequently without having to perform some office of consequence. I answer that it is evidently the substitute for these other words of the main provision, “by land and inland navigation.” This is “the manner aforesaid.” This is the channel through which goods and merchandizes passing would be subject to no other or higher duties than would be payable in the British territories by British subjects, if imported from Europe—in the territories of the U States, by citizens of the U States, if brought by American Vessels into our Atlantic ports. No other reasonable use can be found for the terms. If they are denied this sense, they had much better been omitted, as being not only useless but as giving cause to suppose a restriction of what it is pretended was designed to be general—a right of importing in every way and into all parts of the U States goods and merchandize, if not intirely prohibited, on the same duties as are payable by our own citizens when brought in our own vessels.

These words “whose importation into the UStates shall not be intirely prohibitted” is a further key to the true sense of the article. They are equivalent to these other words—“whose importation into all parts of the U States shall not be prohibitted.” The design of this clause is to prevent importation through the particular channels contemplated by the article being obstructed by a partial, or by any other than a general prohibition. As long as certain goods may be introduced into the U States through the Atlantic ports they may also be brought into them through the channels designated by this article, that is by land and inland navigation. The making a prohibition in the given case to depend on a general prohibition is conclusive to prove, that the article contemplates only particular channels. On any other supposition the clause is nonsense. The true reading then of this part of the article must be as follows—“Goods and merchandize whose importation into all parts of the U States shall not be prohibitted may freely for the purposes of commerce be carried into the same in manner aforesaid, that is by land and inland navigation, from the territories of His Majesty on the Continent of America.”
There are still other expressions in the article which are likewise an index to its meaning. They are these “would be payable by the Citizens of the UStates on the importation of the same in American vessels into the Atlantic Ports of the said States.” This reference to a rate of duties which would be payable on importation into the Atlantic ports, as a rule or guide for the rate of duties which is to prevail in the case meant to be comprehended in the article is full evidence that importation in the Atlantic ports is not included in that case. The mention of importation in American vessels confirms this conclusion as it shews that the article itself contemplates that the discrimination made by our existing laws may continue.
But the matter is put out of all doubt by those parts of the fifteenth article which reserve to the British Government “the right of imposing such duty as may be adequate to countervail the difference of duty now payable on the importation of European and Asiatic goods when imported into the UStates in British and in American Vessels”—and which stipulate that “the United States will not increase the now subsisting difference between the duties payable on the importation of any articles in British or in American Vessels.”
This is demonstration, that the Treaty contemplates, as consistent with it, a continuance of the present difference of duties on importations in American and British Vessels, and consequently that the third article, which stipulates equal duties, as to the cases within it, does not extend to importations into our Atlantic ports, but is confined to importations by land and inland navigation.
If it were necessary to multiply illustration of this position, it might be asked whether tis probable G B could have meant by this article to give us free admission to any ports she may ever have on the Pacific Ocean within the American Continent? The jealousy with which she guards her ports in Canada & Nova Scotia is a negative answer to this question. And yet on the doctrine, opposite to mine, as there is no special exception but of the last mentioned ports, the right of access to Ports on the Pacific would be granted. It is also known that Great Britain has extensive views in that quarter, as appeared in the question of Nootka sound. There is a large district of Country denominated New Albion.
These different views of the Article establish beyond the possibility of Doubt that except with regard to the Mississippi, inland trade and navigation are its sole objects—that it grants no right or privilege whatever in our Atlantic ports—and that with regard to the ports of the Mississippi it only establishes this principle that Great Britain shall always enjoy there the same privileges which by Treaty or Law she is allowed to have in our Atlantic Ports.
I remark incidentally, for a purpose which will appear hereafter, that as far as this article is concerned we are free to prohibit the importation into the U States at large of any British article whatever, though we cannot prohibit its importation partially, that is merely from her territories in our neighbourhood by land or inland navigation, but we may prohibit the importation by sea from those territories; nor is there any other part of the Treaty by which this is prevented.
The remaining clauses of this article establish the following points “that no duty of entry shall be levied by either party on pelt[r]ies brought by land or inland navigation into the respective territories” that Indians passing and repassing with their own goods shall pay no impost or duty upon them but goods in bales or other large packages unusual among Indians shall not be considered as their goods, that tolls and rates of ferriage shall be the same on both sides as are paid by natives, that no duties shall be paid by either party on the mere transit of goods across portages and carrying places from one part to another of the territory of the same party, that the respective Governments will promote friendship good neighbourhood and amicable intercourse by causing speedy and impartial justice to be done and necessary protection to be extended to all who may be concerned therein.
I shall conclude this paper with an observation or two on the meaning of the terms inland navigation. These terms have no technical meaning defined in the laws of either country, nor have they any precise meaning assigned by the laws of Nations. They however ex vi termini exclude navigation from the sea. And as a general rule I should say that inland navigation begins there, where sea navigation ends. Where is this? I answer at the ports of entry from the sea. By the laws of Great Britain and of the U States all Rivers are arms of the sea as far as the ordinary tides flow. It would be a consequence of this principle that sea navigation would reach to the head of tide water. But as some more obvious and notorious rule ought to govern the interpretation of national compacts the ports of entry from the sea are conceived to be the proper rule.
In the case under consideration the general spirit of the article will require that all the waters which divide the territories of the parties should be in their whole extent common to both. As to other communicating waters accessible under the article the reciprocal limit of the right will be the ports of entry from the sea. This is with the exception of the Mississippi to the ports of which access from the sea is granted under the qualification which has been pointed out.
Camillus


Title: From Alexander Hamilton to Philip Schuyler, 27 August 1795
From: Hamilton, Alexander
To: Schuyler, Philip

[New York, August 27, 1795. On August 31, 1795, Schuyler wrote to Hamilton: “I thank for you[r] favor of the 27th Instant.” Letter not found.]


Title: The Defence No. XI, [28 August 1795]
From: “Camillus”,Hamilton, Alexander
To:

[New York, August 28, 1795]

The foregoing analysis of the third article, by fixing its true meaning, enables us to detect some gross errors which have been principal sources of prejudice against it.

One of these is that the article gives to the other party a right of access to all our ports, while it excludes us from the ports of Nova Scotia and Canada. It has been clearly shewn that it gives no right of access to any one of our Atlantic Ports, and that it gives only a qualified and conditional access to the ports which we may have on the Mississippi to be regulated by the privileges at any time allowed by law or compact in our Atlantic Ports and liable to cease with the interruption of access to the last mentioned ports. The charge therefore of want of reciprocity in this particular vanishes, and with it all the exceptionable consequences which have been the fruit of the error. Such is the assertion of Decius, that a British Trader may set out from Canada traverse our lakes rivers and waters to New York and thence to Philadelphia, while we are precluded from the navigation of St Laurance and other British Rivers lower than the highest ports of Entry from the sea. It would be an indulgent construction of the article not to stop the British Trader at Hudson, as the highest port of entry from the sea and the boundary of inland navigation; but he could certainly have no claim of right under it to go from New York to Philadelphia, because he must necessarily go by sea to arrive at the last place and no such permission is stipulated by the article. Such also is the assertion of Cato that G Britain is admitted to all the advantages of which our Atlantic Rivers are susceptible. The Rivers upon which no part of their territory borders and which their vessels can only approach by sea are certainly excepted.
Another of the errors referred to is this—That goods and merchandize may under this article be imported into any part of the U States upon the same duties as are now payable when imported by citizens of the UStates in vessels of the U States. It has been clearly proved that there is no pretence for this position, and that equality of duties only applies to importations from the British territories in our neighbourhood by land and inland navigation.
Cato Decius and other writers against the Treaty have fallen into this strange error and have founded upon it much angry declamation. The first, however, embarrassed in his construction by the provision which reserves to Great Britain the right of laying countervailing duties, endeavours to escape from it by distinguishing between goods imported for Indian Trade and those imported for other uses. Whatever may be the case with regard to the latter, the former, he is convinced, are certainly intitled to admission into our Atlantic Ports on the privileged rates of duty; though he is very naturally perplexed to see how the discrimination could be maintained in practice. But Where does he find room for this distinction? Not in the provision respecting countervailing duties, for that is general—not in the clause of the third article to which he gives the interpretation for that is directly against his disti[n]ction. The goods and merchandize for the privileged importation of which it provides are restricted to no particular object have no special reference to Indian more than to other Trade. On the contrary they are expressly to be imported for “the purposes of Commerce” at large; so that in the cases in which they are privileged they are equally so whether it be for a Trade with our Citizens or with Indians. The distinction therefore only proves the embarrassment of its inventor without solving the difficulty. A curious assertion has been made on this article of duties. It has been said that while we are obliged to admit British goods on the same duties with those paid by our own Citizens on importation in our own vessels—Great Britain under the right to lay countervailing duties may encumber us with an additional ten per Cent. Can any thing be more absurd than the position that the right to lay countervailing duties exists in a case where there is no difference of duty to countervail? The term is manifestly a relative one & can only operate where there is something on our side to be countervailed or counterballanced and in an exact ratio to it. If it be true that a very high law chara[c]ter is the Writer of Cato we cannot but be surprised at such extreme inaccuracy.
Other errors no less considerable will appear in the progress of the examination; but it will facilitate the detection of these and tend to a more thorough understanding of the article to state in this place some general facts which are material in a comparison of the advantages and disadvantages of the article to the respective parties.
1   The furr trade within our limits is to the furr Trade within the British limits as one to seven nearly, that is, the Trade with the Indian[s] on the British side of the Boundary line is about seven times greater than the same Trade on our side of that line. This fact is stated as the result of repeated inquiry from well informed persons for several years past. It will not appear extraordinary to those who recollect how much the Indians on our side are circumscribed in their hunting grounds and to what a degree they are reduced in numbers by the frequent wars in which they have been engaged with us—while the tribes on the British side of the line, are not only far more numerous, but have an immense undisturbed range of wilderness. The more rapid progress of settlement on our side than on the other will fast increase the existing disparity.
2   Our communication with the sea is more easy safe and expeditious than that of Canada by the St. Laurance. Accordingly while our vessels ordinarily make two voyages in a year to and from Europe the British Vessels in the Canada Trade are from the course of the seasons and the nature of the Navigation confined to one voyage a year. Though hitherto from temporary circumstances this difference has not made any sensible difference in the price of transportation—yet in its permanent operation it is hardly possible that it should not give us a material advantage in the competition for the supply of European goods to a large part of Canada especially that which is denominated upper Canada. The city of Hudson [124] Miles from the City of New York is as near to the junction of the River [Cataraquy] and Lake Ontario as Montreal which last is near four hundred miles distant from the mouth of the St. Laurance. When the Canals now in rapid execution are completed there will be water communication the whole way from the City of Hudson to Ontario.
3   The supply of East India Goods to Canada must always be easier and cheaper, through us, than in any other way. According to the present British system Canada is supplied through Great Britain. It is obvious how much the charges of this double voyage must enhance the prices of the articles when delivered in Canada. But if a direct Trade between the East Indies and Canada should hereafter be opened, a thing which supposes a change in the British system to which there are many obstacles, still from the nature of the voyage and other circumstances, the supply through us must continue most easy and cheap. It is a fact which serves to illustrate our advantages that East India articles are commonly upon an average  per Cent cheaper in the U States than in England.
These facts demonstrate that a Trade between us and the British territories in our neighbourhood upon equal terms as to privilege must afford a ballance of advantages on our side. As to the furr Trade, for a participation in one eighth of the whole which we concede we gain a participation in seven Eig[h]ths which is conceded to us. As to the European and East India Trade we acquire the right of competition on equal terms of privilege with real and considerable advantages of situation. In regard to the East India Trade it is presumed that they are such as to be decisive.
The stipulation with regard to equal duties was essential to the preservation of our superiority of advantages in this Trade—while it could not interfere with the general policy of our regulation concerning the difference of duties on goods imported in our own and in foreign bottoms; because the supplies which can come to us through Canada for the reasons already given must be inconsiderable—because also distance would soon countervail in expences of transportation the effect of the difference of duties in our market and because in the last place this difference is not very sensible, owing to the large proportion of goods which are imported in the names of our own citizens. I say nothing here of the practicability on general grounds of long maintaining with effect this regulation.
Is it not wonderful considering the real state of the Trade as depending on locality that the Treaty should be charged with sacrificing the furr Trade to the British? If there be any sacrifice, is it not on their side—when the fact is that the quantity of Trade in which they admit us to equal privileges is seven times greater than that in which we admit them to equal privileges?
The arguments against the Treaty on this point are not only full of fallacy but they are in contradiction with each other.
On the one hand, it is argued that our communication from the sea with the Indian Country being much easier than by the St Laurance we could furnish English goods cheaper and of course could have continued the Indian Trade in its usual channel, even from the British side of the Lakes nor could they have prevented it without giving such disgust to the Indians as would have made them dangerous neighbours—on the other hand it is argued that from superiority of Capital, better knowlege of the Trade, a better established connection of customers—The British will be able to supplant us even in our own territories and so acquire a monopoly of the whole furr Trade.

   Decius No.Cato No.

Propositions so opposite cannot all be true. Either the supposed faculty of supplying English goods cheaper, which it is said would give us a command of the Indian Trade even on the British side of the Lakes, not in the power of the British to prevent, overballances the advantages which are specified on the other side or it does not. If it does not, then is it not true that it could draw to us the Trade from the British side of the Lakes. If it does, then is it not true that the British can supplant us in the Trade on either side the lakes; much less that they can obtain a monopoly of it on both sides.
Besides, if it be true that the British could not prevent our trading with the Indians on their side without giving them such disgust as to make them dangerous neighbours—why is it not equally true that we could not prevent their trading with the Indians on our side without producing a similar effect? And if they have really a superiority of advantages, why would they not, on the principle of this argument, attract and divert the Trade from us, though a mutual right to trade with the Indians in each others territories had not been stipulated.
The difficulty of restraining the Indians from trading at pleasure is an idea well founded—as has been admitted in another place. But there results from it strong arguments in favour of a reciprocation of privileges in the Indian Trade by Treaty. One of them, its tendency to preserve peace and good understanding, has been already noticed —another arises from the consideration that it will probably be the policy of the British to maintain larger military establishments on their frontier than we shall think eligible on ours, which will render it proportionably more easy to them to restrain their Indians than it will be to us to restrain ours. This greater difficulty of executing restraints on our side is a powerful reason for us to agree mutually to throw open the door. It will not be surprising if upon some other occasion, the adversaries of the Treaty should abandon their own ground & instead of saying the Treaty is faulty for what it stipulates on this point should affirm merely that it has no merit on this account, since it only does what the disposition of the Indians would have brought about without it. But, it is always a merit to divest an advantageous thing of cause of dispute, and to fix by amicable agreement a benefit which otherwise would be liable to litigation opposition and interruption.
As to relative advantages for carrying on the Trade the comparison ought to be made with caution. That which has been stated on our side, namely greater facility in conveying the materials of the Trade from Europe to the scene where it is to be carried on is a real one, and in process of time may be expected to make itself to be felt; yet hitherto as before observed it has had no sensible effect.
Of the advantages, which have been stated as belonging to the other side there is but one which has substance, and this is previous possession of the ground. But even this from the very nature of it is temporary. With our usual enterprise and industry it will be astonishing if we do not speedily share the ground to the full extent of our relative advantages.
As to superiority of Capital it amounts to nothing. It has been seen that the Capital requisite for the whole Trade is small. From a hundred to a hundred and fifty thousand pounds Sterling would be a high statement. The whole of this, if we were able to monopolise the intire trade, could not create a moments embarrassment to find it, in the opinion of any man who attends to the great pecuniary operations which are dayly going on in our Country. But that very Capital which is represented as our rival could be brought into action for our benefit in this very Trade. The solution is simple. Our Credit would command it in obtaining the goods necessary for the Trade upon as good terms as the British Merchants who now carry it on. The same objection of superiority of Capital may with as much reason be applied to any other branch of Trade between us and G Britain. Why does it not give her a monopoly of the direct Trade between her European Dominions and the U States? The argument if valid would prove that we ought to have no commerce, not only with G Britain, but with any Nation which has more commercial Capital than ourselves.
As to superior knowlege of the particular branch of business there is still less force in that argument. Tis not a case of abstruse science or complicated combination—And we are in no want of persons among us who are experimentally acquainted with the subject.
As to customers for the proceeds of the Trade we should stand upon as good a footing as the British Merchants. What we did not want for our own consumption might be sent upon equal terms to the very markets to which they send theirs—and to others which might be found preferable because less well supplied with the kind of articles.
As to whatever may depend on enterprise we need not fear to be out done by any people on Earth. It may almost be said that enterprise is our element.

It has been alleged that our Trade with the Indians would be interrupted by bad seasons and occasional wars while that of G Britain would be steady and uniform. As to the casualties of seasons ’tis evident they must fall upon Great Britain as much as upon us unless we suppose the elements in conspiracy against us—and as to wars the possession of the posts would essentially change our situation & render it peculiarly advantageous for preventing or repressing hostilities so that with equally good management our territories would not be more exposed than the British.
But the intrigues of the British Traders residing among our Indians would excite them to hostility against us. It could not be in the private interest of the Traders to do this, because, besides being amenable to punishment if discovered, besides that both the traders and the Indians within our limits, by the possession of the posts would be under our controul—wars interrupt of course the hunting of the Indians and so destroy their means of trading.
As to Great Britain she never could have had but one interest to prompt Indian hostilities, that was to induce the U States to relinquish a part of their present boundary. The restitution of the posts will put an end to this object. In regard to Trade, she and her Traders will have a common interest with us and our Traders to keep all the Indians at peace for the reason assigned above. This interest will be the stronger, because the best communication even with her own Indians will be partly through our territory, and it would be impossible that it should not be impeded and interrupted by the operations of War between us and the Indians. In fact under the circumstances of common privileges, there is every possible link of common interest between us and G Britain in the preservation of peace with the Indians.
In this question of danger to our peace, by the British participation in the Trade with our Indians—the difficulty of restraining the Indians from trading with whom they please, (which is admitted by the argument of both sides) is a very material consideration. Would there not be greater hazard to our peace, from the attempts of the British to participate in a Trade from which we endeavoured to exclude them seconded by the discontents of the Indians, than from any dispositions to supplant us when allowed a free competition—when no cause of dissatisfaction was given to the Indians and when it was certain that war must interfere with their means of carrying on the Trade? The security for our peace appears to be much greater in the latter than in the former state of things.
A suspicion is also suggested that Great Britain without exciting war will indirectly trammel and obstruct our Trade. To objections which suppose a want of fair-dealing in the other party it is very difficult to answer. All that a Treaty can do is to establish principles which are likely to operate well if well executed. It is no objection to its merits that the benefits aimed at may be frustrated by ill faith. The utility of any compact between nations must presume a sincere execution. The reverse may disappoint the best conceived plan. And the security against it must be the mutual interest to perform and the power of retaliation. If Great Britain acts with infidelity or chicanery towards us we must retract the privileges granted on our side.
Another objection which is made is that while the British would have a right to reside among us to hire houses and warehouses and to enjoy every convenience for prosecuting the Trade systematically we should not be intitled to similar privileges with them having only a right to pass “like Pedlars with our shops upon our backs.” These are the expressions of Cato.
The position is founded on that clause of the British Act of Navigation which forbids any but a natural born or naturalized subject to exercise the occupation of a merchant or factor in any of the British Dominions in Asia Africa and America.
In the first place it is to be observed that as far as the article under discussion is concerned there is no pretence to say that one party has greater rights as to residence than the other. If therefore Great Britain can prevent our citizens residing in their territories in our neighbourhood we are free by this article to apply to them a similar exclusion. And any right of residence which may be claimed under any other part of the Treaty will be temporary.
In the second place, the prohibition of residence in the Act of navigation proceeds on the ground of excluding foreigners from carrying on Trade in the territories to which it extends. But the third article expressly gives us a right freely to carry on trade and commerce with the British territories on this continent—a right which, necessarily includes the privilege of residing as Merchants and factors. For wherever an end is granted the usual and proper means of enjoying it are implied in the grant. Residence is a usual and necessary mean of freely carrying on trade without it the right to trade becomes essentially nugatory. This reasoning has peculiar force in relation to inland Trade. And it agrees with decisions at common Law and with the opinion of Lord Coke—who tells us that “of an house for habitation an alien Merchant may take a lease for years, as incident to Commerce, for without habitation he cannot merchandize or trade.” This, among other things, he informs us was resolved by all the Judges assembled for that purpose in a case of Sir James Croft in the Reign of Queen Elizabeth; and we learn from it that the right to hire houses and warehouses is derived from the right to Trade as its incident. The same principle in toto has been recognised in other cases.
The whole of the article is an innovation upon the British Act of Navigation. Being abrogated as to the principal thing, there is no difficulty in supposing it so as to incidents—on the other hand to pretend to exclude us from the right of residence could not be deemed a fair execution of the article. Hence we find that the charge of want of reciprocity in this particular also fails and with it the supposed disadvantage on our side, in the competition for the Trade.


Title: From Alexander Hamilton to Phineas Bond, 1 September 1795
From: Hamilton, Alexander
To: Bond, Phineas

New York Sep. 1. 1795
Dr. Sir

Inclosed is a letter to Judge Morris which speaks for itself. I shall be glad to hear from you on the subject of it & that at any rate if you do not come, you will authorise some discreet person to cooperate with me on your behalf. If you should turn your attention to a law character, it may be well you should know that Messrs. R: Harrison & R Troupe are concerned for the trustees.
With esteem I am Sir Yr. Obed ser
A Hamilton
P. Bond Esq


Title: From Alexander Hamilton to Robert Morris, 1 September 1795
From: Hamilton, Alexander
To: Morris, Robert

New York. Septr. 1. 1795
Dear Sir

General Schuyler and other persons concerned with him have empowered me to act for them in the case of certain lands in Cosby’s Manor which you and others as Trustees of the Ringwood Iron Company have advertised for sale on the fifth instant. Though from what I learn of the matter, I am led to conclude that my friends have a valid legal title to the premises yet there are considerations which incline me on their behalf to make some moderate concession to the claimants under the original title. I understand that the regularity of the proceedings which have constituted you a Trustee is questionable and that an opposite claim is interposed by Mr. Bond of Philadelphia. In this case could not the Trustees and Mr. Bond agree to make a joint sale or release for a consideration to be settled—leaving the right to this, as between themselves, to be settled by a judicial determination? This seems to be clearly their mutual interest since it would certainly turn the land to better account.
I shall make this suggestion to Mr. Bond also. But it were well that both you and he were either present in this City before the appointed day of sale or were represented by discreet Persons with competent authority to make a united arrangment.
With esteem I am Dr sr.   Your Obedt. sr.
A Hamilton


Title: To Alexander Hamilton from Phineas Bond, 2 September 1795
From: Bond, Phineas
To: Hamilton, Alexander

[Philadelphia, September 2, 1795. A letter which Hamilton wrote to Bond on September 1, 1795, is endorsed: “answered 2d. Sept.” Letter not found.]


Title: From Alexander Hamilton to Nicholas Olive, 4 September 1795
From: Hamilton, Alexander
To: Olive, Nicholas

New York, September 4, 1795. Acknowledges receipt of Olive’s “letter of yesterday.” States that Olive’s dispute with his “late partners” has been referred to arbitrators, who will either transfer “the management … of your late partnership” or “constitute an indifferent person as Receiver and Agent for it.”


Title: From Alexander Hamilton to George Washington, 4 September 1795
From: Hamilton, Alexander
To: Washington, George

New York Sepr. 4. 1795
Sir

I had the pleasure of receiving two days since your letter of the 31 Ulto. A great press of business and an indifferent state of health have put it out of my power sooner to attend to it.
The incidents which have lately occurred have been every way vexatious and untoward. They render indispensable a very serious though calm and measured remonstrance from this Government, carrying among others this idea that it is not sufficient that the British Government entertain towards our nation no hostile dispositions—tis essential that they take adequate measures to prevent those oppressions of our Citizens and of our Commerce by their Officers & Courts of which there are two frequent examples and by which we are exposed to suffer inconveniences too nearly approaching to those of a state of war. A strong expectation should be signified of the punishment of Capt Holmes for the attemp⟨t⟩ to violate an ambassador passing through our territory and for the hostile and offensive menaces which he has thrown out. The dignity of our country and the preservation of the confidence of the people in the Government require both solemnity and seriousness in these representations.
As to the negotiation for alterations in and additions to the Treaty I think it ought to embrace the following objects.
A new modification of the 12th article so as to extend the Tonnage and restrain the prohibition to export from this country to articles of the growth or production of the British Islands. The more the tonnage is extended the better; but I think ninety tons would work advantageously if nothing better can be done. I had even rather have the article with seventy as it stood than not at all, if the restriction on exportation is placed on the proper footing. Some of our merchants however think its value would be questionable at so low a tonnage as seventy. It would be also desireable that the article should enumerate the commodities which may be carried to and brought from the British Islands. This would render it more precise and more intellig[ib]le to all.
Great Britain may have substantial security for the execution of the restriction if it be stipulated on our side “That a law shall be passed and continued in force during the continuance of the article, prohibitting the exportation in vessels of the U States of any of the articles in question if brought from British Islands, on pain of forfieture of the Vessel for wilful breach of the law—and that the same law shall provide that the regulations contained in our laws respecting drawbacks shall be applied to all exportations in our vessels of the articles in question, to ascertain that they were imported into the UStates from other than British Islands, & this whether a drawback of the duty is required or not by the exporter—and shall also provide that all such articles exported in our vessels from the UStates shall be expressed in the clearance with a certificate of the Collector indorsed specifying that he has carefully examined according to the Treaty & to the law the identity of the articles exported and that it did bona fide appear to him that they had not been imported from any British Island or Islands.” This security is the greatest difficulty in the case and would in my opinion be given by a provision similar to the foregoing.
It would be a very valuable alteration in the XIII article if a right could be stipulated for the U States to go with articles taken in the British territories in India to other parts of Asia. The object of the present restriction upon us to bring them to America was I believe to prevent our interference with the British East India Company in the European Trade in India Goods. If so, there could be no objection to our having a right to carry commodities from the British territories to other parts of Asia. But if all this latitude cannot be obtained, it would be a great point gained to have a right to carry them thence to China. It is a usual & beneficial course of the Trade to go from the U States to Bombay & take in there a freight for Canton, purchasing at the last place a cargo of Teas &c.
It would be well if that part of the XV article which speaks of countervailing duties could be so explained as to fix its sense. I am of opinion that its only practicable construction is and ought to be that they may lay on the exportation from their European dominions, in Vessels of the U States, the same additional duties on articles which we lay on the importation of the same articles into the U States in British Vessels. But the terms of the clause are vague & general and may give occasion to set up constructions injurious and contentious.
As to the more exact equalization of duties of which this article speaks it is a ticklish subject and had better I think be left alone. It would be right that it should be expressly agreed that wherever our vessels pay in the ports of GBritain higher charges than their own vessels a proportional deduction shall be made out of any duty of Tonnage which may be laid on our vessels to countervail the difference of Tonnage on theirs in our ports.
The XVIII article is really an unpleasant one and though there is I fear little chance of altering it for the better, it may be necessary for the justification of the President to attempt it. The standard to be approached by us as nearly as possible is that in our Treaty with France. As to the point of free Ships making free goods though it be desireable to us to establish it if practicable—and ought to be aimed at—Yet I neither expect that it will be done at present nor that the great maritime powers will be permanently disposed to suffer it to become an established rule & I verily believe that it will be very liable though stipulated to be disregarded as it has been by France through the greatest part of the present war. But naval stores and provisions ought if possible to be expressly excluded from the list of contraband—except when going to a blockaded or beseiged port town or fortress or to a fleet or army engaged in a military operation—for I can imagine no other cases in which there is a just pretence to make provisions contraband.
Some provision for the protection of our seamen is infinitely desireable. At least G Britain ought to agree that no seamen shall be impressed out of any of our vessels at sea, and that none shall be taken out of such vessel in any of her colonies, which were in the vessel at the time of her arrival at such colony. This provision ought to be pressed with energy as one unexceptionably just & at the same time safe for G Britain.
The affair of the negroes to give satisfaction may be retouched but with caution & delicacy. The resolution proposed in the Senate will afford a good standard for this.
As to the croud of loose suggestions respecting the Treaty which have no reasonable foundation, it would not consist with the reputation of the Government to move concerning them. Only reasonable things merit or can with propriety have attention.
I beg Sir that you will at no time have any scruple about commanding me. I shall always with pleasure comply with your commands. I wish my health or the time for it would permit me now to be more correct. The other part of your letter shall be carefully attended to in time.
With the truest respect & the most affectionate attachment   I have the honor to be Sir   Your obedient & humble servant
A Hamilton
The President of the U States


Title: The Defence No. XIII, [5 September 1795]
From: “Camillus”,Hamilton, Alexander
To:

[New York, September 5, 1795]

The 4th and 5th articles of the Treaty from similarity of object will naturally be considered together. The fourth, reciting a doubt “whether the River Mississippi extends so far Northward as to be intersected by a line to be drawn due West from the Lake of the Woods in the manner mentioned in the Treaty of Peace” agrees, that measures shall be taken in concert between the two Governments to make a joint survey of that River from one degree of latitude below the falls of St Anthony to the principal source or sources thereof and of the parts adjacent thereto, and that if in the result it should appear that the said River would not be intersected by such a a line as above mentioned, the two parties will proceed by amicable negotiation to regulate the boundary line in that quarter as well as all other points to be adjusted between them according to justice and mutual convenience and the intent of the Treaty of Peace. The fifth, reciting that doubts have arisen what River was truly intended under the name of the River St Croix mentioned in the Treaty of Peace, and forming a part of the boundary therein described, provides that the ascertainment of the point shall be referred to three Commissioners, to be appointed thus—one to be named by his Britannic Majesty, another by the President of the USstates with the advice & consent of the Senate, the third by these two, if they can agree in the choice; but if they cannot agree, then each of them to name a person and out of the two persons named one drawn by lot in their presence to be the third Commissioner. These Commissioners are to meet at Halifax with power to adjourn to any place or places they may think proper—are to be sworn to examine and decide the question according to the evidence which shall be laid before them by both parties and are to pronounce their decision, which is to be conclusive, by a written declaration under their hands and seals containing a description of the River and particularising the latitude and longitude of its mouth and of its source.
These articles, though they have been adjusted with critical propriety, have not escaped censure. They have even in one instance been severely reprobated as bringing into question things about which there was no room for any and which a bare inspection of the map was sufficient to settle.
With regard to the Mississippi there is no satisfactory evidence that it ever has been explored to its source. It is even asserted, that it has never been ascended beyond the 45 degree of North latitude, about a degree above the falls of St. Anthony. Faden’s Map of 1793 will serve as a specimen of the great uncertainty which attends the matter. It notes, that the River had not been ascended beyond the degree of latitude just mentioned, and exhibits three streams, one connected with the Marshy Lake in that latitude, another with the White bear Lake near the 46th degree, and a third with the Red Lake in the 47th degree —denominating each of the two first “The Mississippi by conjecture” and the last “Red Lake River or Lahontans Mississippi” —all of them falling considerably short in their Northern extent of the Lake of the Woods, which is placed as high as the [fiftieth] degree of North Latitude. Thus stands this very clear and certain point, which we are told it was disgraceful on the part of our Envoy to have suffered to be brought into question.
There is however a specific topic of blame of the article which has greater plausibility. It is this, that it does not finally settle the question, but refers the adjustment of the closing line to future negotiation, in case it should turn out that the River does not stretch far enough North to be intersected by an East & West line from the Lake of the Woods.
I answer, that the arrangement is precisely such as it ought to have been. It would have been premature to provide a substitute ‘till it was ascertained that one was necessary. This could only be done by an actual survey. A survey is therefore provided for and will be made at the joint expence of the two Countries.
That survey will not only determine whether a substitute be requisite or not; but it will furnish data for judging what substitute is proper and is most conformable with the true intent of the Treaty. Without the data which it will afford any thing that could have been done would have been too much a leap in the dark. National acts, especially on the important subject of boundary ought to be bottomed on a competent knowlege of circumstances. It ought to be clearly understood how much is retained—how much relinquished. Had our envoy proceeded on a different principle, if what he had agreed to had turned out well, it would have been regarded as the lucky result of an act of supererogation. If it had proved disadvantageous, it would have been stigmatised as an act of improvidence and imprudence.
The strong argument for having settled an alternative is the avoiding of future dispute. But what alternative could have been agreed upon, which might not have bred controversy? The closing line must go directly or indirectly to the Missi [ssi] ppi. Which of the streams reputed or conjectured to be such above the falls of St Anthony is best entitled to be so considered. To what known point was the line to be directed? How was that point to be indentified with adequate certainty? The difficulty of answering these questions will evince that the danger of controversy might have been increased by an impatience to avoid it and by anticipating without the necessary lights an adjustment which they ought to direct.
The facts with regard to the River St Croix are these. The question is which of two Rivers is the true St Croix. The dispute concerning it is as old as the French possession of Nova Scotia. France set up one River Great Britain another. The point was undecided, when the surrender of Nova Scotia by the former to the latter put an end to the question as between those parties. It was afterwards renewed between the Colonies of Nova Scotia & Massachusettes Bay, which last in the year 1762 appointed Commissioners to ascertain, in conjunction with Commissioners which might be appointed by the province of Nova Scotia, the true River; but no final settlement of the matter ensued.
The Treaty of Peace gives us for one boundary the River St Croix but without defining it. Hence it has happened, that not long after the peace was concluded, the question which had before been agitated between France and Great Britain and between the provinces of Massachusettes & Nova Scotia was revived between the State of Massachusettes & that province and it has ever since continued a subject of debate.
A mode of settling the dispute was under the consideration of Congress in the year 178[5] and powers were given to our then Minister at the Court of London to adjust the affair, but nothing was concluded. And We learn from a letter of Mr. Jefferson to Mr. Hammond dated the 15 of December 1791 that it then engaged the attention of our Government, that the ascertaining of the point in dispute was deemed a matter of “present urgency” and that it had been before the subject of application from the U States to the Government of Great Britain.
It is natural to suppose that a dispute of such antiquity between such different parties is not without colourable foundation on either side: at any rate it was essential to the preservation of peace that it should be adjusted.
If one party could not convince the other by argument of the superior solidity of its pretensions, I know of no alternative, but arbitration or war. Will any one pretend that honor required us in such a case to go to war, or that the object was of a nature to make it our interest to refer it to that solemn calamitous and precarious issue?
No rational man will answer this question in the affirmative. It follows, that an arbitration was the proper course—and that our Envoy acted rightly in acceding to this expedient. It is one too not without precedents among nations, though it were to be wished for the credit of human moderation that they were more frequent.
Is there any good objection to the mode of the arbitration? It seems impossible that any one more fair or convenient could have been devised, and it is recommended by its analogy to what is common among individuals.

What the mode is has been already detailed and need not be repeated here. It is objected, that two much has been left to chance; but no substitute has been offered which would have been attended with less casualty. The fact is that none such can be offered. Conscious of this, those who make the objection have not thought fit to give an opportunity of comparison by proposing a substitute.
What is left to chance? Not that there shall be a final decision, for this is most effectually provided for. It is not only positively stipulated that commissioners with full and definitive power shall be appointed, but an ultimate choice is secured by referring in the last resort to a decision by lot what it might not be found practicable to decide by agreement. This is the ne plus ultra of precaution. Is it that this reference to lot leaves it too uncertain of what character or disposition the third Commissioner may be? If this be not rather a recommendation of the fairness of the plan, how was it to be remedied? Could it have been expected of either of the parties to leave the nomination to the other? Certainly not. Would it have been adviseable to have referred the ultimate choice to some other state or Government? Where would one have been found in the opinion of both parties sufficiently impartial? On which side would there have been the greatest danger of successful employment of undue influence? Is it not evident that this expedient would have added to equal uncertainty as to character and disposition, other casualties and more delay? Should it have been left to the two Commissioners appointed by the parties to agree at all events? It might have been impossible for them ever to come to an agreement and then the whole plan of settlement might have been frustrated.
Would the sword have been a more certain Arbiter? Of all uncertain things the issues of War are the most uncertain. What do objections of this kind prove but that there are persons resolved to object at all events?
The submission of this question to arbitration has been represented as an eventual dismemberment of empire, which it has been said cannot rightfully be agreed to but in a case of extreme necessity. This rule of extreme necessity is manifestly only applicable to a cession or relinquishment of a part of a Country held by a clear and acknowledged title—not to a case of disputed boundary. It would be a horrid and destructive principle that nations could not terminate a dispute about the title to a particular parcel of territory, by amicable agreement or by a submission to arbitration as its substitute; but would be under an indispensable obligation to prosecute the dispute by arms till real danger to the existence of one of the parties should justify by the plea of extreme necessity surrender of its pretensions.
Besides, the terms in which writers lay down the rule and the reason of it will instruct us that where it does apply, it relates not to territory as such but to those who inhabit it, on the principle, that the social compact intitles all the members of the society to be protected and maintained by the common strength in their rights and relations as members. It is understood that the territory between the two Rivers in dispute is either uninhabited or inhabited only by settlers under the British. If this be so, it obviates all shadow of difficulty on our side—but be it as it may, it would be an abuse of the rule to oppose it to the amicable adjustment of an ancient controversy about the title to a particular tract of country depending on the question of fact whether this or that river be the one truly intended by former treaties between the parties. The question is not in this case, shall we cede a tract of our country to another power? It is this—to whom does this tract of country truly belong? Should the weight of evidence be on the British side, our faith pledged by Treaty demands an acquiescence in their claim. If the parties are not able to agree in opinion concerning the point it is most equitable & most consident with good faith to submit it to the decision of impartial judges.
It has been asked among other things whether the U States were competent to the adjustment of the matter, without the special consent of the State of Massachusettes. Reserving a more particular solution of this question to a separate discussion of the constitutionality of the Treaty —I shall content myself with remarking here that our Treaty of peace with Great Britain by settling the boundaries of the U States without the special consent or authority of any state, assumes the principle that the Government of the U States was of itself competent to the regulation of boundaries with foreign powers, that the actual Government of the Union has even more plenary authority with regard to Treaties than was possessed, under the confederation, and that acts both of the former and of the present Government presuppose the competency of the National Authority to decide the question in the very instance under consideration. I am informed also that the State of Massachusettes has by repeated acts manifested a corresponding sense on the subject.
A reflection not unimportant occurs here. It was perhaps, in another sense than has been hitherto noticed, a point of prudence in both Governments to refer the matter in dispute to arbitration. If one has yielded to the pretensions of the other it could hardly have failed to draw upon itself complaints and censures more or less extensive, from quarters immediately interested or affected.
Camillus


Title: The Defence No. XIV, [9 September 1795]
From: “Camillus”,Hamilton, Alexander
To:

[New York, September 9, 1795]

The sixth article stipulates compensation to British Creditors for losses and damages which may have been sustained by them, in consequence of certain legal impediments, which since the Treaty of Peace with Great Britain, are alleged to have obstructed the recovery of debts bona fide contracted with them before the peace.
To a man who has a due sense of the sacred obligation of a just debt, a proper conception of the pernicious influence of laws, which infringe the rights of creditors, upon morals upon the general security of property, upon public as well as private credit, upon the spirit and principles of good government—who has an adequate idea of the sanctity of the national faith explicitly pledged, of the ignominy attendant upon a violation of it in so delicate a particular as that of private pecuniary contracts—of the evil tendency of a precedent of this kind to the political and commercial interests of the Nation generally—every law which has existed in this Country interfering with the recovery of the debts in question must have afforded matter of serious regret and real affliction. To such a man, it must be among the most welcome features of the present Treaty, that it stipulates reparation for the injuries which laws of that description may have occasionned to individuals, and that as far as is now practicable, it wipes away from the national Reputation the stain which they have cast upon it. He will regard it as a precious tribute to Justice, and as a valuable pledge for the more strict future observance of our public engagements: and he would deplore as an ill omened symptom of the depravation of public opinion the success of the attempts which are making to render the article unacceptable to the People of the U States. But of this there can be no danger. The spontaneous sentiments of Equity of a moral and intelligent people, will not fail to sanction with their approbation a measure which could not have been resisted without inflicting a new wound upon the honor and character of the Country.
Let those men who have manifested by their actions a willing disregard of their own obligations as Debtors—those who secretly hoard or openly and unblushingly riot on the spoils of plundered creditors—let such men enjoy the exclusive and undivided satisfaction of arraigning and condemning an act of National Justice, in which they may read the severest reproach of their iniquitous principles and guilty acquisitions. But let not the People of America tarnish their honor by participating in that condennation or by shielding with their favourable opinion the meretricious apologies which are offered for the measures that produced the necessity of reparation.
The recapitulation of some facts will contribute to a right judgment of this part of the Treaty.
It is an established principle of the laws of nations that on the return of peace between Nations which have been at War, a free and undisturbed course shall be given to the recovery of private debts on both sides. In conformity with this principle, the 4th article of the Treaty of Peace between the US and G Britain expressly stipulates “that Creditors on either side shall meet with no lawful impediment to the recovery of the full value in Sterling money of all bonafide Debts theretofore contracted.”
Two instances of the violation of this article have been already noticed with a view to another point one relating to certain laws of the State of Virginia passed prior to the peace which for several years after it appear to have operated to prevent the legal pursuit of their claims by British Creditors—another relating to a law of the state of South Carolina which suspended the recovery of their debts for Nine months, and after that period permitted the recovery only in four yearly installments.
But these were not all the instances. There were other laws of South Carolina prolonging the installments and obliging the Creditors to receive in payment the property of debtors at appraised values; and there were laws of Rhode Island, New Jersey, North Carolina and Georgia making paper money a legal tender for the debts of those Creditors; which it is known sustained a very great depreciation in every one of those States. These very serious and compulsory interferences with the rights of the Creditors have received from Decius the soft appellation of a modification of the recovery of British Debts. Does he expect to make us believe by this smooth phraze that the right to recover the full value of a debt in sterling money, is satisfied by the obligation to take, as a substitute, one half one third or one fourth of the real value in paper?
It must necessarily have happened that British Creditors have sustained from the operation of the different acts alluded to, losses more or less extensive, which the mere removal of the legal impediments that occasionned them could not repair. In many instances, the losses must have actually accrued and taken their full effect. In others, where no proceedings may have been had, the lapse of so many years must have created inabities to pay in debtors, who were originally competent and who might have been compelled to pay, had there been a free course to justice.

The removal of the impediments therefore, by opening of the Courts of Justice, was not an adequate satisfaction. It could not supersede the obligation of compensating for losses which had irretrievably accrued by the operation of the legal impediments, while they continued in force. The claim for this was still open on the part of Great Britain, and still to be adjusted between the two Nations.
The excuse that these laws were retaliations for prior infractions of Treaty by Great Britain was in no view an answer to the claim.

   Note   *It may not be improper to observe that this excuse implies a palpable violation of the then constitution of the UStates. The Confederation vested the powers of War and of Treaty in the Union. It therefore lay exclusively with Congress to pronounce whether the Treaty was or was not violated by Great Britain & what should be the satisfaction. No state individually had the least right to meddle with the question and the having done it was a usurpation on the constitutional authority of the U States. It might be shewn on a similar principle, that all confiscations or sequestrations of British Debts by particular States during the War were also unconstitutional.

In the first place, as has already been proved, the fact of such prior infractions was too doubtful to be finally insisted upon, and was, after a fruitless effort to obtain the acquiescence of the other party, properly and necessarily waved, so that it not serve as a plea against reparation.
In the second place, if that fact had been indubitable, the species of retaliation was unwarrantable. It will be shewn when we come to discuss the tenth article that the debts of private individuals are in no case a proper object of reprisals, that independent of Treaty the meddling with them was a violation of the public faith and integrity, and that consequently it was due as much to our own public faith and integrity as to the individuals who had suffered to make reparation. It was an act demanded by the justice probity and magnanimity of the Nation.
In the third place, it was essential to reciprocity in the adjustment of the disputes which had existed concerning the Treaty of Peace. When we claimed the reinstatement and execution of the article with regard to the Posts, it was just that we should consent to the reinstatement and execution of the article with regard to Debts. If the obstruction of the Recovery of Debts was the equivalent by way of retaliation for the detention of the posts, we could not expect to have restitution of the thing withheld and to retain the equivalent for it likewise. The dilemma was to be content with the equivalent and abandon the thing, or to recover the thing and abandon the equivalent. To have both was more than we could rightly pretend. The reinstatement of the article with regard to the debts necessarily included two things, the removal of legal impediments as to future recovery, compensation for past losses by reason of those impediments. The first had been effected by the new constitution of the U States, the last is promised by the Treaty.
Did our Envoy reply that the reinstatement of the article with regard to the posts included likewise compensation for their detention? Was it an answer to this destitute of reason, that our loss by the detention of the posts which resolved itself essentially into the uncertain profits of a Trade that might have been carried on admitted of no satisfactory rule of computation, while the principal and interest of private debts afforded a standard for the computation of losses upon them, that nevertheless while this was the usual and must be the admitted standard it is an inadequate one in cases where payment is protracted beyond the allowed term of credit; since the mere interest of money does not countervail among merchants the profits of its employment in Trade and still less the derangements of credit and fortune which frequently result to Creditors from procrastinations of payment: and that the final damage to Great Britain in these two particulars, for which no provision could be made, might well exceed any losses to us by the detention of the posts?
In the last place, the compensation stipulated was a sine qua non with Great Britain of the surrender of the posts and the adjustment of the controversy which had subsisted between the two Countries. The making it such may be conceived to have been dictated more by the importance of the precedent than by the quantum of the sum in question. We shall easily understand this, if we consider how much the Commercial Capital of Great Britain is spread over the world. The vast credits she is in the habit of extending to foreign Countries render it to her an essential point to protect those Credits by all the sanctions in her power. She cannot forbear to contend at every hazard against precedents of the invasion of the rights of her Merchants, and for retribution where any happen. Hence, it is always to be expected that she will be peculiarly inflexible on this point, and that nothing short of extreme necessity can bring her to relax in an article of policy which perhaps not less than any other is a necessary prop of the whole system of her political Oeconomy.
It was therefore to have been foreseen that whenever our controversy with Great Britain was adjusted compensation for obstructions to the Recovery of Debts would make a part of the adjustment. The option lay between compensation, relinquishment of the Posts or war. Our Envoy is intitled to the applause of all good men for preferring the first. The extent of the compensation can on no possible scale, compare with the immense permanent value of the posts, or with the expences of War. The sphere of the interferences has been too partial to make the sum of the compensation in any event a very serious object; and as to War a conscientious or virtuous mind could never endure the thought of seeing the country involved in its calamities to get rid of an Act of Justice to individuals, whose rights in contempt of public faith, had been violated.
Having reviewed the general considerations which justify the stipulation of compensation, it will be proper to examine if the plan upon which it is to be made is unexceptionable.
This plan contains the following features. 1   The cases provided for are those “where losses and damages occasionned by the operation of lawful impediments (which since the peace have delayed the full recovery of British Debts bona fide contracted before the peace and still owing to the Creditors and have impaired and lessenned the value and security thereof) cannot now for whatever reason be actually obtained in the ordinary course of Justice.” 2   There is an express exception out of this provision of all the cases in which losses and damages have been occasionned by such insolvency of the Debtors, or other causes, as would equally have operated to produce them, if no legal impediments had existed, or by the manifest delay or negligence or wilful omission of the claimants. 3   The amount of the losses and damages for which compensation is to be made is to be ascertained by five Commissioners to be appointed as follows—two by his Britannic Majesty two by the President with the advice & consent of the Senate—the fifth by the unanimous voice of these four, if they can agree—if they cannot agree, then to be taken by lot out of two persons one of whom to be named by the two British Commissioners, the other by the two American Commissioners. 4   The five Commissioners thus appointed are before they proceed to the execution of their trust to take an oath for its faithful discharge. Three of them to constitute a Board but there must be present one of the two Commissioners named on each side and the fifth Commissioner. Decisions to be made by majority of voices of those present. They are first to meet at Philadelphia but may adjourn from place to place as they see cause. 5   Eighteen months after the Commissioners make a Board are assigned for receiving applications, but the Commissioners in particular cases may extend the term for any further term not exceeding six months. 6   The Commissioners are empowered to take into consideration all claims, whether of principal or interest or ballances of principal and interest, and to determine them according to the merits and circumstances thereof and as justice and Equity shall appear to them to require; to examine persons on oath or affirmation and to receive in evidence depositions books papers or copies or extracts thereof either according to the legal forms existing in the two countries, or according to a mode to be devised by them. 7   Their award is to be conclusive and the U States are to cause the sum awarded in each case to be paid in specie to the Creditor without deduction and at such time and place as shall have been awarded; but no payment to be required sooner than twelve months from the day of the exchange of the Ratifications of the Treaty.
This provision for ascertaining the compensation to be made, while it is ample, is also well guarded.
It is confined to debts contracted before the peace, and still owing to the creditors. It embraces only the cases of loss or damage in consequence of legal impediments to the recovery of those debts which will exclude all cases of voluntary compromise, and can include none where the laws have allowed a free course to justice. It can operate in no instance where, at present, the ordinary course of justice is competent to full relief, and the debtor is solvent, nor in any, where insolvency or other cause would have operated to produce the loss or damage, if no legal impediment had existed, or where it has been occasioned by the wilfull delay, negligence or omission of the creditor.
If it be said that the Commissioners have nevertheless much latitude of discretion, and that in the exercise of it they may transgress the limits intended, the answer is, that the United States, though bound to perform what they have stipulated with good faith, would not be bound to submit to a manifest abuse of authority by the Commissioners. Should they palpably exceed their commission, or abuse their trust, the United States may justifiably, though at their peril, refuse compliance. For example, if they should undertake to award upon a debt contracted since the peace, there could be no doubt that their award would be a nullity. So likewise there may be other plain cases of misconduct, which in honor and conscience would exonerate the United States from performance. It is only incumbent upon them to act bona fide, and as they act at their peril to examine well the soundness of the ground on which they proceed.
With regard to the reference to Commissioners to settle the quantum of the compensation to be made, this course was dictated by the nature of the case. The tribunals of neither country were competent to a retrospective adjustment of losses and damages, in many cases which might require it. It is for this very reason of the incompetency of the ordinary tribunals to do complete justice, that a special stipulation of compensation, and a special mode of obtaining it became necessary. In constituting a tribunal to liquidate the quantum of reparation in the case of a breach of treaty, it was natural and just to devise one likely to be more certainly impartial than the established Courts of either party. Without impeaching the integrity of those Courts, it was morally impossible that they should not feel a byas towards the nation to which they belonged, and for that very reason they were unfit arbitrations. In the case of the spoliations of our property, we should undoubtedly have been unwilling to leave the adjustment in the last resort to the British Courts; and by parity of reason, they could not be expected to refer the liquidation of compensation in the case of the debts to our Courts. To have pressed this would have been to weaken our argument for a different course in regard to the spoliations. We should have been puzzled to find a substantial principle of discrimination.
If a special and extraordinary tribunal was to be constituted, it was impracticable to contrive a more fair and equitable plan for it, than that which has been adopted. The remarks on the mode of determining the question respecting the river St. Croix, apply in full force here, and would render a particular comment superfluous.
To the objection of the Charleston committee, that the article erects a tribunal unknown to our constitution, and transfers to commissioners the cognizance of matters appertaining to American courts and juries, the answer is simple and conclusive. The tribunals established by the constitution do not contemplate a case between nation and nation arising upon a breach of treaty, and are inadequate to the cognizance of it. Could either of them hold plea of a suit of Great Britain plaintiff against the United States defendant? The case therefore required the erection or constitution of a new tribunal, and it was most likely to promote equity to pass by the Courts of both the parties.
The same principle contradicts the position that there has been any transfer of jurisdiction from American courts and juries to commissioners. It is a question not between individual and individual, or between our government and individuals, but between our government and the British government. Of course, one in which our courts and juries have no jurisdiction. There was a necessity for an extraordinary tribunal to supply the defect of ordinary jurisdiction,
and so far is the article from making the transfer imputed to it, that it expressly excepts the cases in which effectual relief can be obtained in the ordinary course of justice.
Nations acknowledging no common judge on earth, when they are willing to submit the questions between them to a judicial decision, must of necessity constitute a special tribunal for the purpose. The mode by Commissioners, as being the most unexceptionable, has been repeatedly adopted.
I proceed to reply to some other objections which have been made against the provision contained in this article.
It is charged with fixing a stigma on the national character, by providing reparation for an infraction, which, if it ever did exist, has been done away, there being now a free course to the recovery of British debts in the courts of the United States.
An answer to this objection has been anticipated by some observations heretofore made. The giving a free course to justice in favour of British creditors, which has been effected by the new constitution of the United States, though it obviates the future operation of legal impediments does not retrospectively repair the losses and damages which may have resulted from their past operation. In this respect the effects continued and reparation was due. To promise it, could fix no stigma on our national character. That was done by the acts which created the cause to reparation. To make it, was as far as possible to remove the stigma.
It has been said, that the promise of compensation produces injustice to those states which interposed no legal impediments to the recovery of debts, by saddling them with a part of the burden arising from the delinquencies of the transgressing States. But the burden was before assumed by the treaty of peace. The article of that treaty which engaged that there should be no lawful impediments to the recovery of debts, was a guarantee by the United States of justice to the British creditors. It charged them with the duty of taking care that there was no legal obstacle to the recovery of the debts of those creditors, and consequently with a responsibility for any such obstacle which should happen, and with the obligation of making reparation for it. We must therefore refer to the treaty of peace, not to the last treaty, the common charge which has been incurred by interference in the recovery of British debts. The latter only carries into execution the promise made by the former. It may be added that it is a condition of the social compact that the nation at large shall make retribution to foreign nations for injuries done to them by its members.
It has been observed, that Mr. Jefferson has clearly shewn, that interest in cases like that of the British debts, is liable, during the period of the war, to equitable abatements and deductions; and that, therefore, the discretion given to the commissioners on this head, ought not to have been as large as it appears in the article.
Mr. Jefferson has, no doubt, offered arguments of real weight to establish the position that judges and juries have, and exercise a degree of discretion in an article of interest, and that the circumstances of our war with Britain, afford strong reasons for abatements of interest. But it was foreign to his purpose, and accordingly he has not attempted to particularise the rules which ought to govern in the application of this principle to the variety of cases in which the question may arise—and he has himself, noted that the practice in different states and in different courts, has been attended with great diversity. Indeed, admitting the right to abate interest under special circumstances, in cases in which it is the general rule to allow it, the circumstances of each case, are, perhaps, the only true criterion of the propriety of an exception. The particular nature of the contract, the circumstances under which it was entered into, the relative situation of parties, the possibility or not of mutual access; these and other things would guide and vary the exercise of the discretion to abate. It was, therefore, right to leave the commissioners, as they are left, in the same situation with judges and juries; to act according to the true equity of the several cases, or of the several classes of cases.
Let it be remembered, that the government of Great Britain has to consult the interests and opinions of its citizens, as well as the government of the United States those of their citizens. The only satisfactory course which the former could pursue, in reference to its merchants, was to turn over the whole question of interest as well as principal, to the commissioners. And as this was truly equitable, the government of the United States could make no well founded opposition to it.

Camillus