No. 110.
Mr. Evarts
to Mr. Osborn.
Washington, December 26, 1879.
Sir: In my No. 67 of June 24 last, I sent to you a copy of my No. 23 to the minister of the United States at Lima, in relation to the status of foreign-built ships owned by Americans, and questions pertaining thereto. Having had occasion to address that minister farther on this subject, I deem it well to communicate to you the substance of my instruction to Mr. Christiancy, in the form of a further instruction to your legation, to the end that no occasion may exist for any failure of accordance in the premises between the diplomatic representatives of the United States at Lima and Santiago.
This department in its instructions (Nos. 65 and 67) to your legation, and in Nos. 7, 11, and 23 to the legation at Lima, has already defined the principles which should guide them in the determination of these questions, and can now do little more than reiterate and reaffirm the leading principles hitherto laid down, relying upon your judgment and discretion for their proper application in matters of detail, as it is manifestly impracticable to frame an instruction which shall meet every possible incident as it may arise.
The right of Americans to buy foreign-built vessels and to carry on commerce with them is clear and undoubted. A reference to paragraphs 220 and 221 of the consular regulations will show how perfectly this right is recognized, and how clearly the exercise of it is defined. It has existed ever since the origin of the Government. The fact that it is possible for collusion to take place between consuls and American merchants in foreign countries, in connection with these transactions, is not a sufficient reason to invalidate a right which exists independently of statute law, and which is advantageous to the interests of American commerce and enterprise. As a consequence and adjunct of this right, the flying of the American flag cannot be absolutely prohibited. As before stated in the instructions, if circumstances justify on the part of the consular officer an opinion that the sale was honest, and that the vessel has really become the property of a citizen, she may properly fly the flag of the owner’s country, as an indication of such ownership and an emblem of the owner’s nationality.
The duty of the consul in reference to these transactions is clearly enough indicated in Article XVII of the consular regulations. He is forbidden by law to grant any marine document or certificate of ownership, but he may properly make record of the bill of sale in his office, authenticate its execution, and deliver to the purchaser a certificate to that [Page 124] effect and also certify that the owner is a citizen of the United States. A considerable discretion and responsibility rest upon consuls in regard to determining the good faith of such transactions. They are not to conclude, as a matter of course, that all such transactions are genuine and honest. They are to take notice of any circumstances which would indicate that the transfer is fraudulent, and in all such cases it is their duty to refuse the certificates referred to. But, on the other hand, they are certainly not required to consider the mere fact of the transfer of a foreign-built vessel to an American citizen as an evidence of bad faith. The presumption is rather on the other side, as in all transactions in civilized countries, and in the absence of any indication of fraud a sale in a regular way, with the usual business formalities, is to be regarded by the consul as made in good faith.
When such transactions have been perfected, and when a consul, thoroughly satisfied of the good faith of the parties, has given his certificate of the transfer of a foreign-built vessel to an American citizen, and a vessel furnished with such consular certificate has been regularly cleared from the port where the consul referred to is stationed, and has come within the jurisdiction of another consular officer or diplomatic representative of the United States, it should require very strong evidence of fraud to induce the second consular officer to deny the American character of the vessel, to refuse the regular and necessary clearance to enable the vessel to pursue its voyage, and still more to insist upon such a vessel hauling down its flag. In cases where a consular officer or diplomatic representative is thoroughly convinced that a vessel has no right to an American certificate of sale, and consequently no right to the use of the American colors, he will be justified in going to the extent indicated; but this discretionary power should be used with the utmost caution and reserve.
Vessels in these circumstances, of course, cannot claim the privileges and immunities and the thorough protection which are accorded to regularly registered American vessels plying between ports of the United States and those of foreign countries. The American owners domiciled abroad, engaging in business of this sort, take upon themselves all the risks incident to such traffic. If they are seized by the war vessels of one or the other belligerent, and carried into courts of admiralty as prizes, they have no right to demand from the diplomatic officers of the United States that they shall be accorded anything more than fair treatment in such courts; that is to say, the fact that they are provided with consular certificates of American ownership secures for them only presumption that such is the fact, and they are not necessarily for that reason entitled to demand from the legations of the United States anything more than that protection afforded to every other species of property belonging to American citizens domiciled in foreign countries.
In the absence of any statutory provisions in regard to these important and delicate matters, it seems to be the duty of the Executive branch of the Government to prevent as far as possible any damage or danger to American interests, and, in addition, to guard and cherish to the extent of its power the right of neutrals to carry on honest commerce between nations engaged in hostilities, reducing to the least possible degree the hinderances to neutral trade, which inevitably arise from a state of war.
You will therefore, in all cases that may arise, keep these considerations constantly in sight, and apply them with that judgment and discretion which have hitherto won the approval of the President. The action of the legation at Lima in the matter of the “Itata” was commended, [Page 125] because there seemed sufficient reason to doubt the regularity of the transfer in virtue of which she was displaying the American flag. If, as has been intimated, that vessel and her consorts, are now about to resume our flag, and other merchant vessels are preparing to pursue the same course, it will be the duty of the consul, under the direction of the legation, in that country where these ships first display American colors, to inquire strictly into the circumstances of the alleged transfers, and refuse or grant clearances according to the merits of each particular case. This being done, it is obvious that the act of one American consul or minister should not be challenged or reversed by another, except upon the strongest proof of mistake or collusion.
I am, &c.,