ALABAMA CLAIMS. 159 



ing out of a state of war being thus disposed of, we 

 arrive at the great class of private losses, w hich chief 

 ly occupied the time of the Tribunal. 



DECISION AS TO PRIVATE LOSSES. 



The Arbitrators, assuming that, pursuant to the 

 command of the Treaty, they are to be governed by 

 the three Rules, and the principles of international 

 law not incompatible therewith, proceed to lay down 

 the following prefatory positions, namely : 



1. &quot;The due diligence referred to in the first and third of 

 the said Rules, ought to be exercised by neutral Governments 

 in exact proportion to the risks to which either of the Belliger 

 ents may be exposed from a failure to fulfill the obligations of 

 neutrality on their part. 



2. &quot; The circumstances, out of which the facts constituting the 

 subject-matter of the present controversy arose, were of a na 

 ture to call for the exercise on the part of Her Britannic Maj 

 esty s Government of all possible solicitude for the observance 

 of the rights and the duties involved in the proclamation of 

 neutrality issued by Her Majesty on the 13th day of May, 1861. 



3. &quot; The effects of a violation of neutrality committed by 

 means of the construction, equipment, and armament of a ves 

 sel are not done away with by any commission which the Gov 

 ernment of the belligerent Power benefited by the violation of 

 neutrality may afterward have granted to that vessel; and the 

 ultimate step, by which the offense is completed, can not be 



admissible as a ground for the absolution of the offender; nor 

 can the consummation of his fraud become the means of estab 

 lishing his innocence. 



4. &quot;The privilege of ex-territoriality accorded to vessels of 

 war has been admitted into the laws of nations, not as an ab 

 solute right, but solely as a proceeding founded on the princi 

 ple of courtesy and mutual deference between different na 

 tions, and therefore can never be appealed to for the protec 

 tion of acts done in violation of neutrality. 



