This treaty settled the claim of the United States against Great Britain for its help of Confederate raiders. The United States and Great Britain agreed to submit this dispute to international arbitration. The arbitration committee decided that Great Britain owed the United States $15,500,000.
The sympathy shown by many Englishmen towards the Confederacy combined with the British government's lax enforcement of neutrality created a serious rift between the United States and Great Britain. The most serious charge leveled by the U.S. was that the British allowed the Confederate cruisers "Alabama", "Shenandoah" and "Florida" to be armed in British ports.
Early attempts to resolve this dispute were unsuccessful. At one point, a claim was made that Britain was responsible for half the cost of the war, and that the US would consider Canada proper payment. This shocked the British and they realized they had better come to some agreement soon.
Thus, on May 8th, the United States and Great Britain agreed to submit all of their disputes, including boundary disputes, fishery issues, and the question of claims to binding arbitration.
The arbitration committee decided that Great Britain owed the United States $15,500,000 dollars.