To the Senate of the United States:
I herewith submit to the Senate, for their advice, the proceedings and award of the commissioners under the convention between the United States of America and the Republic of Paraguay, proclaimed by the President on the 12th of March, 1860. It is decided by the award of these commissioners that "the United States and Paraguay Navigation Company have not proved or established any right to damages upon their said claim against the Government of the Republic of Paraguay, and that upon the proofs aforesaid the said Government is not responsible to the said company in any damages or pecuniary compensation whatever in all the premises.
The question arises, Had the commissioners authority under the convention to make such an award, or were they not confined to the assessment of damages which the company had sustained from the Government of Paraguay?
Our relations with that Republic had for years been of a most unsatisfactory character. They had been investigated by the preceding and by the present Administration. The latter came to the conclusion that both the interest and honor of the country required that our rights against that Government for their attack on the Water Witch and for the injuries they had inflicted on this company should, if necessary, be enforced. Accordingly, the President in his annual message of December, 1857, called the attention of Congress to the subject in the following language:
A demand for these purposes will be made in a firm but conciliatory spirit. This will the more probably be granted if the Executive shall have authority to use other means in the event of a refusal. This is accordingly recommended.
After due deliberation, Congress, on the 2d of June, 1858, authorized the President "to adopt such measures and use such force as in his judgment may be necessary and advisable" in the premises. A commissioner was accordingly appointed and a force fitted out and dispatched to Paraguay for the purpose, if necessary, of enforcing atonement for these wrongs.
The expedition appeared in the waters of the La Plata and our commissioner succeeded in concluding a treaty and convention embracing both branches of our demand. The convention of indemnity was signed on the 4th of February, 1859. The preamble of this convention refers to the interruption for a time of the good understanding and harmony between the two nations which has rendered that distant armament necessary. By the first article the Government of Paraguay "binds itself for the responsibility in favor of the United States and Paraguay Navigation Company which may result from the decree of commissioners" to be appointed in the manner provided by article 2. This was in accordance with the instructions to our commissioner, who was told that an indispensable preliminary to the negotiation would, "of course, be an acknowledgment on the part of the Paraguayan Government of its liability to the company." The first paragraph of this second article clearly specifies the object of the convention. This was not to ascertain whether the claim was just, to enforce which we had sent a fleet to Paraguay, but to constitute a commission to "determine," not the existence, but "the amount, of said reclamations." The final paragraph provides that "the two commissioners named in the said manner shall meet in the city of Washington to investigate, adjust, and determine the amount of the claims of the above-mentioned company upon sufficient proofs of the charges and defenses of the contending parties." By the fifth article the Government of Paraguay" binds itself to pay to the Government of the United States of America, in the city of Assumption, Paraguay, thirty days after presentation to the Government of the Republic, the draft which that of the United States of America shall issue for the amount for which the two commissioners concurring, or by the umpire, shall declare it responsible to the said company."
The act of Congress of May 16, 1860, employs the same language that is used in the convention, "to investigate, adjust, and determine the amount" of the claims against Paraguay. Congress, not doubting that an award would be made in favor of the company for some certain amount of damages, in the sixth section of the act referred to provides that the money paid out of the Treasury for the expenses of the commission "shall be retained by the United States out of the money" (not any money) "that may, pursuant to the terms of said convention, be received from Paraguay."
After all this had been done, after we had fitted out a warlike expedition in part to obtain satisfaction for this very claim, after these solemn acts had been performed by the two Republics, the commissioners have felt themselves competent to decide that they could go behind the action of the legislative and executive branches of this Government and determine that there was no justice in the original claim. A commissioner of Paraguay might have been a proper person to act merely in assessing the amount of damages when an arbiter had been provided to decide between him and the commissioner on the part of the United States, but to have authorized him to decide upon the original justice of the claim against his own Government would have been a novelty. The American commissioner is as pure and honest a man as I have ever known, but I think he took a wrong view of his powers under the convention.
The principle of the liability of Paraguay having been established by the highest political acts of the United States and that Republic in their sovereign capacity, the commissioners, who would seem to have misapprehended their powers, have investigated and undertaken to decide whether the Government of the United States was right or wrong in the authority which they gave to make war if necessary to secure the indemnity. Governments may be, and doubtless often have been, wrong in going to war to enforce claims; but after this has been done, and the inquiry which led to the reclamations has been acknowledged by the Government that inflicted it, it does not appear to me to be competent for commissioners authorized to ascertain the indemnity for the injury to go behind their authority and decide upon the original merits of the claim for which the war was made. If a commissioner were appointed under a convention to ascertain the damage sustained by an American citizen in consequence of the capture of a vessel admitted by the foreign government to be illegal, and he should go behind the convention and decide that the original capture was a lawful prize, it would certainly be regarded as an extraordinary assumption of authority.
The present appears to me to be a case of this character, and for these reasons I have deemed it advisable to submit the whole subject for the consideration of the Senate.
James Buchanan, Special Message Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/202120