Papers Relating to the Foreign Relations of the United States, Transmitted to Congress, With the Annual Message of the President, December 8, 1885
Mr. Foster to Mr. Bayard.
Madrid, July 8, 1885. (Received July 20.)
Sir: With my No. 333, of the 29th ultimo, I transmitted a copy of the decision of Baron Blanc, the Italian minister, in the case of the Masonic. In addition thereto the baron has given me a copy of his memoir concerning the reasons for the decision rendered by the arbiter as to the indemnity to be paid to the owner of the Masonic, which he has sent to his own Government to support his action in case it should be called in question by either of the parties interested. I have his permission to forward to you, which I do herewith in translation.
* * * * * * *
I am, &c.,
Memoir concerning the reasons for the decision rendered by the arbiter as to the indemnity to be paid by Spain to the owner of the Masonic.
i.—Value of the Vessel.
In the account presented in 1883 by the claimant, without proofs and by way of amicable compromise, $14,500 are claimed as the value of the Masonic when seized.
In the offers made by way of equity by his excellency the minister of state (note memorandum of May 30), the value of the Masonic is fixed at $6,000.
In the account presented at the arbitration on the same date, of 30th May ultimo, by his excellency the minister of the United States, by way of strict right and the proofs. $22,000 are claimed as the value of the Masonic when seized.
Among the documents in due form, according to the laws of the United States, presented to arbitration, those of disinterested origin in the claim prove that the building of the Masonic, done in 1864, cost, rigging and accessories not included, $41,000; that the ship, on her departure from New York, was worth from $23,000 to 125,000. and, according to the most precise estimate, $45 per register ton 539.80, viz, $24,291, the rigging and effects being by themselves worth $6,838.45, and the copper sheets covering the bottom, $2,000; that her conditions of solidity have been certified as being in good order on the 16th of May, 1878, on her departure from New York, by the Bureau Veritas, which classed her Al. l, the register of the American Shipmasters’ Association classing her on its own part Al. l½.
But after her forced detention at Manila (January, 1879) the Masonic had experienced damages which diminished her value. The cost of repairs of those damages has been estimated by Captain Nichols (Blanchard?) and by the Mate Genn, in their affidavits, and without other proof, at $3,000, having reference to the current prices in the Hong-Kong docks; and by official information not produced at the arbitration, but stated by his excellency the minister of state to have been given by the comandancia de ingenieros of marine at Manila, where, according to the documents produced by the claimant, the repairs are more difficult and expensive, at $20,000.
It appears that the vice-consul of the United States at Manila proposed to sell the ship; but that this proposition was expressly occasioned, not by the gravity of the damages, but by the wish to avoid her confiscation with the total loss of the value, on account of the refusal of the customs authorities to admit any protest or appeal before the fine should be paid, and on account of the impossibility on the part of the captain to pay the fine for want of money; besides, that proposition was not accepted by the captain, who affirmed, and the mate also, that there was no authority to sell.
For the appraisement of damages it does not seem conclusive that after the seizure and order for the sale issued by the administration of the Philippines, and against which the consulate of the United States, supported by his Government, openly” presented a protest of nullity, the ship did not find a bidder at any price in the public auction [Page 730] which took place, in regard to which, besides, no document was presented to the arbitration, nor have any documents likewise been exhibited relative to the final sale by the Spanish administration of the ship as wreck for $1,141,90.
An official report, not produced at the arbitration, but declared by his excellency the minister of state as having been given by the comandancia de ingenieros of marine at Manila, appraises the ship at $6,000, that is to say, less than the third of the sum appraised by the same comandancia for the repairs; however, this appraisement is expressly based upon the affirmation that the damages were not caused by bad weather, but by a condition of fundamental and real decay of the vessel.
It is unavoidable for the undersigned, in view of the above, to consider the offer of $6,000 as being one of those which the Spanish Government makes upon its general declarations and before the production of contrary proofs presented, in fact, subsequently at the arbitration.
On the other hand, with respect to the claim of $22,000, based on the appraisement of the damages at $3,000, the opinion of the undersigned is that the proofs furnished by the claimant, not being unimpeachable as to the latter figure, and the claimant being liable to be considered as bound by the claim of $14,500 made by him in 1883, the only one, according to the declaration of his excellency the minister of state of which the Spanish Government is officially aware, the appraisement of $14,500 made upon the invention at the time the seizure took place, presented by the claimant in 1883 to the Spanish Government, and produced at the arbitration by his excellency the minister of state, remains a document for the benefit of Spain against the appraisement exceeding that amount.
In view, therefore, of the principles of equity and of the sense of conciliation which ought to prevail in an arbitral decision, the undersigned reduces the indemnity for the value of the ship to $14,500. He does not adjudge any interest on that amount, for reasons to be set forth below.
ii.—Value of the Earnings of the Masonic.
The claimant appraises them at $5,000 annually net. Whilst refusing that indemnity, in consequence of the reports which represented the ship as not being worth being repaired and unable to render profitable service, yet the Spanish Government admits in principle the verification of ordinary and reasonable earnings of a vessel in good condition and ready to go to sea.
The proofs produced in the arbitration having established that the Masonic was in a normal state, in good condition of service, and ready to go to sea after repairs which it has not been shown would have exceeded an ordinary character, the undersigned considers himself bound to determine the probable value of the earnings lost by the claimant on account of the seizure. It is certified by witnesses not interested in the claim that from 1874 to 1877 the net profits of the Masonic had not been less than $5,000 a year.
The same valuation presented by the claimant has been incidentally charged by the Spanish Government as being exaggerated, noting that the price of the freights at the time of the seizure were lower than ever, a remark which would give to the earnings of the Masonic in 1879 a decisive importance for the valuation of the probable profits of the subsequent years.
The charter party, produced in authentic form by the claimant, proves that for the transportation by the Masonic from New York to Nagasaki, where it was bound, of 7,500 (16,500?) cases of petroleum, there was paid 47½ cents per case, say $7,837.50. It is alleged, but not proved, that the claimant would ha.ve received besides a supplementary fee of 5 per cent., the customary commission, say $391.87.
It is proved that Bursley, a New York merchant, on declaring that he considered the Masonic as a ship of good service, was negotiating to charter the Masonic back from the Philippines to New York, offering $8 per ton of freight (50 per cent, greater than the register tonnage), say about $6,500; it is alleged, but not proved, that the claimant would be entitled to the same 5 per cent, customary commission.
The voyage of the Masonic from New York to Nagasaki and back, feasible in one year, would therefore have paid, if the seizure had not intervened, from $14,000 to $15,000.
The valuation of the expenses, for a sailing vessel of 540 tons register, it does not seem ought to exceed the two-thirds of that amount.
The documents produced do not furnish the undersigned with data to modify, by reason of the oscillations of the prices of freights after the year the seizure took place, the valuation which would result from the above for the probable earnings of the following years.
In general, it does not appear unreasonable to admit that a well-classed vessel, and which has not reached the termination of her normal duration, produces annually 12 per cent, of her cost of construction.
[Page 731]The undersigned must therefore admit the annual payment of $5,000 as net earnings lost from the 7th of May, 1879, that is to say, two months after the seizure, which took place on the 7th of March, a time deemed necessary for the repairs to be made at Hong-Kong, up to the date of the arbitral decision.
With regard to the interest on the annual earnings asked by the claimant from the date of the expiration of each year, it is stated, in opposition to this demand among others, in the note memorandum of the Spanish Government of 30th May ultimo, that the delays which have occurred in the settlement of this matter are chargeable to the claimant, who, bound to submit himself in his petitions to the administrative jurisdiction to the Spanish laws, refused at first to give the legal bond required for the proceeding instituted by Kerr & Co., at Manila, in the name of the captain of the vessel, before the council of administration of the Philippines.
On the other hand, it is established by the documents Nos. 1 and 2, produced by his excellency the minister of state—
That the decision of the council of state of October 16, 1884, confirms entirely the decision given on the 9th of June, 1882, by the sections of contentions of the council of administration of the Philippines, which had decided that, although the fact upon which the fine and seizure had been based, that is to say, the missing on board of 22 cases of petroleum mentioned in the manifest, should have been ascertained to be correct, which was not so (the cargo having been afterwards proved to be complete), the fine imposed and the seizure effected were in every case illegal, and that the owner of the Masonic was entitled to an indemnity for the damages and losses which he should duly establish to have been suffered by him.
That the grounds upon which the two decisions above mentioned are based imply the entire confirmation of the proofs of the facts and reasons of right furnished through a diplomatic channel since 1879 by the Government of the United States against the fine and the seizure.
That in 1882 the governor-general of the Philippines had officially acknowledged the reasons for the seizure to be unfounded; that excessive severity had been exercised towards a ship of a friendly nation bound to a port of a third power, and arrived by stress of weather without any intention of or attempt at a commercial operation at Manila.
That an indemnity was unavoidable, which could but increase with the delays; that an immediate solution was desirable, which was within the power of the Government; finally, that the refusal of the claimant to give a bond in the pending administrative procedure was admissible.
That, in fact, by royal order of 19 July, 1882, the claimant was excused from furnishing the bond.
That by the resolution of the council of ministers of the same epoch, the minister of ultramar was authorized to finally settle the question as he might deem it most opportune.
In consequence, the undersigned—
Considering the just regards due to the position of the claimant, represented by the Government of the United States as being a respectable citizen, almost ruined by the loss of his means of livelihood, and who, however, does not ask for compensation for losses which are not accurately appraisable during the past six years.
In conformity with the spirit of impartiality which has characterized the opinions of the Government of the Philippines and of the two administrative councils which have given their decision in the matter in a contentious way;
In conformity with the sense of high equity of the declarations of his excellency the minister of state, inasmuch as he admits in principle the 6 per cent, interest from the 7th March, 1879, for the cash capital which in equity and justice may bear interest, and inasmuch as in the offer of total indemnity made by the note of 30th May he includes the interest of the total capital which he found then proved;
Adjudges the interest asked for the net earnings capitalized at the end of each year from the 7th May, and therefore does not adjudge the supplementary interest for the value of the ship.
iii.—Expenses of Telegrams.
The sum of $250, admitted by the Spanish Government, is adjudged, besides the interest for six years at 6 per cent.
iv.—Payments made to Captain Nichols.
The claimant asks $3,443.41.
The accounts signed by Nichols prove payments made for $1,967.20, of which $484 are for expenses of return from Manila to New York, which the undersigned acknowledges ought to be admitted, and $69 for wages, which must be excluded, as already embraced in the calculation of the net annual earnings. Neither does the undersigned [Page 732] deem recoverable an account signed Nichols, amounting to $1,258.20, for Nichols’s journey from New York to Manila, made previous to the seizure, when Nichols was sent to take the place of the deceased captain.
Finally, the balance of the amount claimed on this item is rejected, as it is not established by proofs, the claimant declaring he has lost the vouchers.
On the other hand, the Spanish Government offers $500; but the undersigned, inasmuch as the Spanish Government embraces in that amount salary which becomes inadmissible after the adjudication by the arbiter of the net earnings, does not think he ought to allow the claimant the benefit of said offer, and reduces the indemnity for this item to $484, in addition to interest for six years at 6 per cent.
v.—Expenses paid to Captain Genn.
The claimant asks $294 for wages and expenses incurred as a consequence of the seizure.
The wages cannot be admitted as recoverable; but the seizure having prevented Genn from returning to New York on board the Masonic, the sum of $250, admitted by the Spanish Government for the journey back of Nichols, is adjudged by the undersigned for the return expenses of Genn; in addition 6 per cent, interest during six years.
vi.—Consular Fees paid.
The claimant asks $83, an amount estimated by the minister of the United States not to be excessive, the consuls of the United States being authorized in such cases to charge for their services as notaries. However, as there is no proof that the whole amount of that was paid for the two consular documents produced before the arbitration, the indemnity is reduced by the undersigned to the $25 offered by the Spanish Government, in addition to 6 per cent, interest during six years.
vii.—Fees to the Lawyers of New York.
The proof not being produced, the indemnity asked of $1,500 is reduced to the $500 offered by the Spanish Government. No interest has been asked.
viii.—Traveling Expenses Between New York and Washington.
In spite of the likelihood and moderation of the amount of $360 asked, the difficulty of the proofs for such expenses, and the assurance given by the Government of the United States as to the honesty of the claimant, the undersigned does not think that he can deviate from the principle not to admit what is not proved by formal documents. For this item, as it is not admitted by the Spanish Government, the undersigned does not adjudge any reimbursement.
ix.—Expenses of Stamped Paper at Manila.
The demand of $25, admitted by the Spanish Government, is adjudged. No interest has been claimed.