The United States and Great Britain for the first time agreed to use arbitration in their relations with each other when they concluded their first commercial treaty, usually called Jay's Treaty, in 1794. That treaty provided for three joint commissions to deal with disputes over boundaries, compensation due British creditors for obligations incurred by Americans before the Revolution, and questions arising from Britain's treatment of American shipping in the war with revolutionary France then in progress. The commission for maritime matters decided several questions, and the boundary commission also attained some success. It identified the Schoodiac River as the St. Croix, the river which was supposed to be part of the boundary between Maine and British territory according to the treaty of independence. But the debt commission broke up in an angry exchange, and it was necessary for the two governments to resume negotiations. According to a treaty concluded in 1802, the United States paid Britain a lump sum and the controversy came to an end.
The Treaty of Ghent, signed 24 December 1814, like Jay's Treaty, provided for three joint commissions. Only one commission completed its assignment—determination of the ownership of islands in the Passamaquoddy Bay. One commission tried to determine boundaries between British territory and the United States from the St. Lawrence River to the Lake of the Woods; it agreed upon a boundary through the Great Lakes but failed to determine the line from Lake Superior to the Lake of the Woods. The third commission was supposed to decide the boundary from the St. Croix to the St. Lawrence, but it failed to reach accord. The two governments thereupon referred the dispute to William I of the Netherlands. That monarch failed to find a clear basis for a decision but in 1831 made an award anyway, giving the United States and Britain what he believed to be equitable shares of a wilderness. The United States refused to accept this award, protesting that the king had not acted in accord with the agreement referring the controversy to him. While arbitration had failed in this instance, the case was of considerable importance, for it clearly established the principle that arbitrators should abide by the terms of a compromis or other preliminary agreements. (The U.S. government probably erred in refusing to accept the award, for the Webster-Ashburton Treaty in 1842 gave the United States less territory than it would have received according to the king's decision.)
The United States and Britain meanwhile had one other arbitration in connection with the Treaty of Ghent. The two powers were supposed to restore all property, both public and private, that they had seized from each other during the War of 1812. The treaty specifically mentioned slaves, but the British failed to return all American slaves under their jurisdiction at the close of hostilities. After many protests from Washington, British leaders agreed that an arbitrator should deal with the matter, and the two governments referred their dispute to Alexander I of Russia. The czar decided that Britain had failed to meet its obligations and should pay an indemnity. Upon his recommendation the United States and Britain concluded a convention setting up a commission to decide the amount due the United States. After elaborate proceedings, the commissioners decided that the indemnity should be $1,204,960, and, in a convention concluded 13 November 1826, the British government accepted this decision.