The Trail Smelter Dispute covered a period of thirteen years from 1928 to 1941. It arose out of the operation by the Consolidated Mining and Smelting Company of Canada, Limited, of a smelter at Trail, British Columbia, on the Columbia River about eleven miles from the international boundary. In roasting sulphur-bearing ores, sulphur dioxide gas was wasted into the air. When the air drift was down the valley, the smoke cloud containing the sulphur dioxide crossed the boundary in sufficient strength to cause damage in the State of Washington. In 1925 and 1926, the output of the smelter was increased and more sulphur dioxide was wasted into the air. By reason of the conformation of the valley and the atmospheric conditions prevalent, it was carried across the boundary into the State of Washington. It was common ground that some damage was caused in the years 1926 to 1930.

The U.S. government intervened, through diplomatic channels, in 1927. The subject matter of the dispute did not directly concern the two governments; nor did it involve claims by U.S. citizens against the Canadian government. It did not seem to come within any of the ordinary categories of arbitrable international disputes. It consisted, rather, of claims based on nuisance, alleged to have been committed by a Canadian corporation and to have caused damage to U.S. citizens and property in the State of Washington.