By that time warfare had become highly mechanised and a costly venture. War also brought about untold misery not only for the belligerent States, but for the neutral countries as well. It meant dislocation of their economy, for the countries of the world had become, after the industrial revolution, interdependent financially and commercially.
A strong premium, accordingly, was put on any method of settling quarrels without actual war. International arbitration began to be resorted to even when questions of great magnitude were involved. Between the United States and Great Britain arbitration was repeatedly employed especially for the rectification of boundary lines as in 1827 and 1846.
The most important arbitration was with respect to the Alabama case which ended in the award of a compensation of $15,500,000 to the United States. It is estimated that in the nineteenth century over a hundred important cases were decided through the medium of arbitration.
A further development in international relations can be seen in the attempt to constitute a permanent tribunal for the settlement of disputes and conclusion of treaties between various States, binding them to refer their disputes to this tribunal.
A conference was convened at The Hague in 1899 and it was agreed to establish a permanent court of arbitration.
Although it was not obligatory upon the signatory powers to refer their disputes to the Court of Arbitration, nevertheless the Court “offered standing facilities for peaceful settlement very difficult to bring into being during the strained relations occasioned by the acute international controversy.”
Between 1899 and 1912 eleven States referred their disputes to the Court of Arbitration and its decisions were accepted by the parties concerned.
The Second Hague Conference met in 1907, and as many as 44 States participated in it. This conference considered the desirability of revising the system of arbitration adopted in 1899. But it primarily concerned itself with the consideration of the rules of war.
The conference, led by Great Britain, attempted to create an International Prize Court of Appeal. A special conference consisting of the chief European powers and the United States and Japan met in London in 1909, and drew up the Declaration of London which contained provisions concerning blockade, contraband of war, the position of neutrals and compensation. The Declaration of London was withdrawn during World War 1 by the British Government.
The First Hague Conference was hailed as “the parliament of mankind” and was popularly designated as the Peace Conference. According to the International Peace Bureau of Berne, 133 treaties were concluded during the ten years following the first Peace Conference, the contracting parties having pledged to adopt settlement by arbitration whenever possible.
These treaties, however, created delusive hopes about the prospect of permanent peace. The hope cherished during the opening years of the twentieth century, that war had become obsolete, was falsified by the events culminating in the Great War of 1914.
But with the War also came the realization that some comprehensive organisation of States was needed if wars were to be prevented in the future. One of the most important tasks of the Peace Conference which followed the Great War was the creation of the League of Nations.