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In 1871 the United States and Britain had both accepted the premise hat they needed to examine various issues, including the Northwestern Boundary dispute and reparations concerning the Confederate ship the Alabama, and formulate a method for resolving them. Sir John Rose or Britain arrived in Washington to determine whether a deal could be struck and by January 26th both countries had agreed to the appointment of a High Commission which would address the issues.

The commission was to be composed of Earl Grey, Sir Stafford Northcote, Sir Edward Thornton, Mountague Bernard and Canadian Prime Minister Sir John A Macdonald. The inclusion of Macdonald on the commission was an important step forward for Canada but, as Macdoanld was soon to learn, he may have been window dressing for the public with British interests willing to sacrifice Canadian issues in order to get a deal.

The commission began almost immediately and concluded a treaty on May 8th. The main issues which were reviewed were compensation for the damage that the British built ship the Alabama had done against the United States during the American Civil War, the San Juan Boundary dispute on the west coast, and the Canadian inshore fisheries question.

Reciprocity had between Canada and the United States had ended in 1866 and the economic impact on Canada had been negative. The negotiation of new American access to Canadian fisheries was viewed s a bargaining chip that might be used to re-establish reciprocity and open up US markets to Canada product once again. Reverting back to the 1818 convention US fishermen were still allowed to fish in Canadian waters but were subject to payment of a fee. The US was in an anti-reciprocity mood and refused to trade that right for fishing rights. The Canadian authorities had begun to seize American ships who had not paid the fishing fee and the situation had become one of imminent concern. Macdoanld realized that support from the British for his position was luke warm and that they were more interested in settling the issues specifically related to their issues. The deal that was finally reached allowed the US rights t fish in the Canadian waters for 10 years in exchange for unfettered access to the American market of Canadian fish products. An amount was also to be paid and that was to be set by a special commission which eventually set the payment at $5,500,000 which was generous in Canada's favour at the time.

Macdonald also broached the subject of the damages done by Fenian raids from the US but the US refused to discuss the issue claiming that it was not on the agenda. The British defused the situation by offering to pay compensation herself to Canada for the raids.

The next issue was the actual boarder of Canada and the United States between Vancouver Island and the US mainland. San Juan Island lie roughly at the mid point of the waterway and both countries claimed the productive sheep farming settlement. It was decide that the issue would be referred to the Kaiser in Germany for arbitration and he awarded it to the United States.

In connection to that issue, another result was the agreement between Canada and the US of free navigation of the waterways of concern to both parties including the St Lawrence River, Lake Michigan and the rivers of Alaska.

The last main issue was that of the Alabama which was not really of concern to Canada and after some intense negotiations it was also referred to an arbitration commission, this one in Geneva, who awarded $15,500,000 to the United States in 1872.

When Macdoanld returned to Canada he faced criticism from both the opposition and the press fro giving in to British interests and selling out Canada. In his defence, he was not in a position to override the British majority on the commission and the result was that Canadians, Macdonald included, began to work towards gaining control of their own foreign affairs. The other positive result was that the potential conflict and hard feelings that had been festering between Canada and the United States were soothed and  the development for stronger and much friendlier relations between the two countries had been established.