The formal reply to General Sickles's demand for reparation was received November 18. The Spanish government declared that it would make no reparation until satisfied that an offense had been committed against the flag of the United States, and that when so convinced through her own sources of information or by the showing of the United States, due reparation would be made.

The representations made at Washington by the Spanish minister were of a much more satisfactory character than those made to General Sickles at Madrid. Mr. Fish, therefore, instructed General Sickles to remain at his post until the 26th, and if no accommodation were reached by that time he could demand his passports. By the time this dispatch reached Madrid General Sickles had already asked for his passports, but had not received the reply of the Spanish government. On the 26th he received a note from the Spanish minister asking for a postponement to December 25 and promising that if by that time Spain could not show that she had the right on her side—i.e., that the Virginius was not entitled to sail under the United States flag—she would comply with the demands of the United States. General Sickles replied that he could not accept such a proposal, but that he would inform his government of it and take the responsibility of deferring his departure.

Meanwhile the Spanish minister at Washington had proposed arbitration, but Mr. Fish declined to submit to arbitration the question of an indignity to the United States flag. The minister then asked for a delay, but Mr. Fish told him that delay was impossible in view of the approaching meeting of Congress. Unless settled beforehand the question would have to be referred to Congress. This firm stand brought the Spanish minister to time and on November 27 a proposition was submitted and accepted by Mr. Fish, by the terms of which Spain stipulated to restore the vessel forthwith, to surrender the survivors of her passengers and crew, and on the 25th of December to salute the flag of the United States. If, however, before that date Spain should prove to the satisfaction of the United States that the Virginius was not entitled to carry the flag of the United States, the salute should be dispensed with, but in such case the United States would expect a disclaimer of intent of indignity to its flag.

The Spanish envoy submitted to the state department a large number of documents and depositions to show that the Virginius had no right to sail under the United States flag. These were referred to the attorney-general, and on December 17 he gave his opinion that the evidence was conclusive that the Virginius, although registered in New York on September 26, 1870, in the name of one Patterson, who made oath as required by law that he was the owner, was in fact the property of certain Cubans and was controlled by them. In conclusion the attorney-general said:

Spain, no doubt, has a right to capture a vessel, with an American register, and carrying the American flag, found in her own waters assisting, or endeavoring to assist, the insurrection in Cuba, but she has no right to capture such a vessel on the high seas upon an apprehension that, in violation of the neutrality or navigation laws of the United States, she was on her way to assist said rebellion. Spain may defend her territory and people from the hostile attacks of what is, or appears to be, an American vessel; but she has no jurisdiction whatever over the question as to whether or not such vessel is on the high seas in violation of any law of the United States. Spain cannot rightfully raise that question as to the Virginius, but the United States may, and, as I understand the protocol, they have agreed to do it, and, governed by that agreement and without admitting that Spain would otherwise have any interest in the question, I decide that the Virginius, at the time of her capture, was without right, and improperly carrying the American flag.[117]

This decision was communicated to the Spanish authorities and, according to the agreement, the salute to the United States flag was dispensed with, and on January 3, 1874, the Spanish minister, on behalf of his government, expressed a disclaimer of an intent of indignity to the flag of the United States. Spain later paid indemnities to Great Britain and the United States for the families of those who had been executed.

Meanwhile General Sickles offered his resignation by cable in consequence of certain reports that his conduct had been disapproved. Mr. Fish replied that such reports were unauthorized, that no dissatisfaction had been expressed or intimated and that it was deemed important that he remain at his post. Ten days later, General Sickles requested that the telegram tendering his resignation and the reply be published. Mr. Fish declined to do so, as the resignation was hypothetical. On December 20, General Sickles again tendered his resignation and it was accepted.

After the settlement of the Virginius affair the government of the United States addressed itself once more to the task of forcing a settlement of the Cuban question in general. In his instructions to Mr. Cushing, who succeeded General Sickles, Secretary Fish expressed the policy of the administration at considerable length. After reviewing the main facts of the insurrection which had then lasted more than five years, with little or no change in the military situation, and after referring to the rejection by Spain of the offers of mediation made by the United States at an early day of the trouble, he said:

In these circumstances, the question what decision the United States shall take is a serious and difficult one, not to be determined without careful consideration of its complex elements of domestic and foreign policy, but the determination of which may at any moment be forced upon us by occurrences either in Spain or in Cuba.

Withal the President cannot but regard independence, and emancipation, of course, as the only certain, and even the necessary, solution of the question of Cuba. And, in his mind, all incidental questions are quite subordinate to those, the larger objects of the United States in this respect.