240 



THE INDIA RUBBER WORLD 



[February 1, 1913. 



In the Chamber of Commerce each party to the dispute is 

 obliged to deposit $60 with the clerk of the committee, and this 

 $120 cominonly covers all expenses of the litigation. It is pos- 

 sible that for less than $100 a dispnte involving tens of thousands 

 of dollars may be settled in a week's time and without ill feeling 

 — a dispute that if carried into the courts would cost thousands 

 of dollars, a year or more of litigation and, it may be, a life- 

 time of hatred. 



3. Efficiency. Commercial disputes necessarily involve ques- 

 tions of commercial usage, the quality of goods contracted for, 

 the interpretation of trade agreements, etc. Equitable settle- 

 ments of these disputes call for a knowledge of trade terms and 

 customs. Imagine what a reputable merchant risks when he sub- 

 mits an issue of this kind to a jury made up of men who it may 

 be do not know the difference between a bill of lading and a 

 billet doux. 



Under the Chamber of Commerce plan one can choose an ar- 

 bitrator, or arbitrators, from a Hst of 200 to 300 of the best- 

 known business men of the city — men who have achieved success 

 in their lines of trade, and who know the rules, the customs and 

 thj; language which prevail in the markets of the world. This 

 makes for high class efficiency. 



4. Privacy. Publicity is absolutely necessary to the adminis- 

 tration of justice in a court of law. There can be no star cham- 

 ber proceedings in the operation of justice in these modern days. 



But, publicity, which is a necessary safeguard in the courts, is 

 not necessary in the conduct of a case voluntarily submitted by 

 disputants to arbitration. In an arbitration committee, a busi- 

 ness man may secure the guarantee of justice, with the additional 

 and great advantage of privacy. 



Every business man, and certainly every credit man, under- 

 stands what losses may be sustained through the publicity given 

 to litigations. This is one of the reasons why the National As- 

 sociation of Credit Men are establishing arbitration tribunals in 

 their organization. So greatly does litigation often impair credit 

 that the time may come when one of the questions which the 

 commercial borrower may have to answer before obtaining loans 

 will be: "Do you make a practice of submitting your differences 

 to arbitration?" 



A striking illustration of the value of privacy is afforded by a 

 recent case tried in the Chamber of Commerce between a busi- 

 ness man who disputed the charge made by his attorney for pro- 

 fessional services. The lawyer desired the privacy of arbitra- 

 tion because his professional ability was attacked. The merchant 

 desired the privacy of arbitration because the credit of his con- 

 cern was involved in the proceedings. 



5. Simplicity. No elaborate machinery is necessary for the 

 conduct of arbitration, and this is one of its great merits, for it 

 would inevitably break down if arbitration simply substituted a 

 private court for a public court ; and undoubtedly this was one of 

 the reasons why the former Court of .Arbitration failed of entire 

 success. That court was established because the earlier arbitra- 

 tion method of the Chamber had in the course of time become 

 inadequate to the changing requirements of business, and yet that 

 early method which was established by the Chamber at its first 

 meeting in 1768, and which lasted for nearly a century, was in- 

 finitely better than the Court of Arbitration which followed it, 

 because it worked on a simple rough-and-ready plan, and hun- 

 dreds and probably thousands of cases were decided by it. I re- 

 cently discovered in the New York Public Library the minutes 

 of the .Arbitration Committees of the Chamber from 1779 to 

 1792, and they make a large manuscript volume. 



6. Adaptability. The present method of arbitration of the 

 New York Chamber has the merit of adaptability to varying con- 

 ditions and classes of cases. For instance, it makes it possible 

 for the two parties to have one arbitrator, or three arbitrators. 

 or, in certain important disputes, to have the entire Committee 

 on Arbitration sit as arbitrators. 



The system is adapted not only to disputes between members 

 of the Chamber, but also to persons not members ; and it can 

 settle controversies between citizens of different countries. It 

 will interest you to know that the lirst case tried under the pres- 

 ent rules was between a manufacturer in England and a con- 

 tractor in New York; and the impartiality of the proceedings is 

 demonstrated by the fact that the American arbitrator decided 

 in favor of the English manufacturer. Moreover, as the system 

 works, it serves not only to decide definitely submitted disputes, 

 but it also serves to bring about settlements by conciliation with- 

 out any trial whatever. This is even better than arbitration. 

 Scores of disputes have already been brought to an amicable 

 settlement through the conciliatory offices of the Chamber's Com- 

 mittee on Arbitration which, without that method of mediation, 

 would inevitably have gone to litigation. In one case between 

 two of the most noted merchants in the city, the dispute involved 

 the sale of a large amount of merchandise. At first they de- 

 termined to submit this case to litigation in court. Then they 

 agreed to submit it to the Arbitration Committee of the Chamber, 

 and an arbitrator was appointed. A day was set for the trial, 

 when, by the good offices of the committee, the two merchants 

 were brought together and they settled their dispute privately 

 and without arbitration. 



7. Good Will. The conduct of a trial in a court of justice 

 necessarily involves much irritation and bad feeling. It can 

 hardly fail to do this. Even innocent parties to the dispute, as 

 for instance, witnesses who have no interest whatsoever in the 

 controversy, may be irritated by the trial and leave with a feel- - 

 ing of dislike for the administration of justice. Any one who 

 has undergone the ordeal of cross-examination will understand 

 something of what I mean. 



Now, in an arbitration proceeding, while bad feeling may not 

 be entirely eliminated, there is nothing in the conduct of the 

 case which involves any breach of courtesy, any violent attack , 

 upon the opposing party, any irritating cross-examination of wit- i 

 nesses, any exhibitions of bad temper. This is a very great ad- 

 vantage of arbitration proceedings. In one case at the Chamber 

 of Commerce, the two parties to the dispute, after the decision 

 had been rendered, left the building practically arm in arm. both 

 entirely satisfied that they had obtained justice. 



In conclusion let us not claim too much for arbitration, whether 

 applied to international disputes, labor disputes or commercial 

 disputes. Arbitration will not always settle. But because arbi- 

 tration is not applicable in every case, that is no reason for not 

 establishing arbitration tribunals. There is an international 

 court at The Hague, yet there have been two big wars in Europe 

 during the past year. But shall we therefore abolish interna- 

 tional arbitration, when we know that there has been an average 

 of one important dispute between nations settled by arbitration 

 every year in the last half century? Shall we abandon arbitra- 

 tion in labor disputes because in some cases the contending 

 parties prefer the arbitrament of industrial war? 



Commercial arbitration is not always the wisest course of ac- 

 tion in business disputes ; but in ordinary questions of fact aris- 

 ing out of mercantile transactions it is the best, speediest, most 

 economical and simple method of effecting settlements. 



The man who consciously or unconsciously feels that he is in 

 tlie wrong will go to litigation every time, preferring to take his 

 chances before a jury. Arbitration establishes the honest intent 

 of both parties to a dispute ; and I believe the time will come 

 when business public opinion will put upon the merchant who 

 refuses to arbitrate his dispute the burden of giving a clear and 

 convincing reason to justify his action. 



As many members of the Rubber Club have taken a deep 

 interest in the system of arbitration established by the Chamber 

 of Commerce, Mr. Pratt's clear and concise statement of the 

 scope and advantages of that system was listened to with close 

 attention. .\t its conclusion President Hood arose and stated 



