September 14, 1872
A joint arbitration commission ordered Great Britain to pay the US $15.5 million as compensation for damages during the Civil War. The peaceful resolution of these claims seven years after the war ended set an important precedent for solving serious international disputes through arbitration. The controversy began when Confederate agents contracted for warships from British boatyards. Disguised as merchant vessels during their construction in order to circumvent British neutrality laws, the craft were actually intended as commerce raiders which eventually sank more than 150 Northern ships and impelled much of the U.S. Merchant Marine to adopt foreign registry. Charles Sumner, Chairman of the Senate Foreign Relations Committee, argued that British aid to the Confederacy had prolonged the Civil War by 2 years, and indirectly cost the United States hundreds of millions, or even billions of dollars (the figure Sumner suggested was $2.125 billion). Some Americans adopted this argument and suggested that Britain should offer Canada to the United States in compensation.
