No. 629.
Mr. Bayard to Mr. de
Muruaga.
Washington, June 28, 1886.
Sir: I have the honor to acknowledge your predecessor’s esteemed note of February 19 last, calling my attention to the claim of Messrs. Larrache & Co. against the United States Government for the seizure and sale in May, 1865, of some cotton belonging to them, the details of which had already been laid before this Department in notes from your legation of the 2d, 10th, and 29th of December, 1884, and of February 7, March 10, and November 15, 1885.
I beg you to believe that the delay in replying to these communications is solely due to the great importance of the questions involved, which are now for the first time brought diplomatically before this Department.
The claimants state that during the year 1864 the agent of the commercial firm of Maza & Larrache purchased about 3,000 bales of cotton from the Confederate States Government in Louisiana and Texas, of which 1,369 bales, valued at $700,000, and stored at Shreveport, La., were seized by agents of the United States Government, shipped to New Orleans, there sold by Federal officials, and the proceeds turned into the National Treasury. For this seizure the claimants now demand indemnity from the United States Government.
The case, as thus presented, appears to be a simple one of a private contract for commercial profit and mutual advantage between the claimants and the Southern Confederacy, which, at the time the bargain was made, was a recognized belligerent, and was considered by the claimants a responsible contracting party. It was also at that time perfectly well known to the claimants that the Confederate Government, with which they made this voluntary contract, was then in a state of open rebellion and war against the Government of the United States. The claimants also knew that the commodity contracted for was at that time being made [Page 1007] use of by the Confederacy in carrying out the war, both by accumulating it in large quantities for sale, when it Could be passed through the lines, and by destroying it when in danger of being seized by the United States troops; in this way aiding a cotton famine in foreign countries, so as to stimulate and secure recognition of the Confederacy as a separate member of the family of nations.
Cotton was useful as collateral security for loans negotiated abroad by the Confederate States Government, or, as in the present case, was sold by it for cash to meet current expenses, or to purchase arms and munitions of war. Its use for such purposes was publicly proclaimed by the Confederacy, and its sale interdicted except under regulations established by, or contract with, the Confederate Government. Cotton was thus officially classed among war supplies, and, as such, was liable to be destroyed when found by the Federal troops or turned to any use which the exigencies of war might dictate.
The military importance of cotton to the Confederacy is shown by the fact that as early as February, 1861, an act passed by the provisional government of the Confederate States “to raise money for the support of the government and to provide for the defense of the Confederate States of America” levied a duty on all cotton in the raw state exported from the Confederate States and in May of the same year an act was passed prohibiting the export of cotton from the Confederate States, except through the ports of said States.
In the same year (1864) in which the claimants made their contract the Confederate war department officially recognized cotton as being one of the chief munitions of war by advising that large amounts of Confederate bonds should be issued for the separate use of that department in purchasing cotton and steamers with which to obtain military supplies from abroad.
Cotton, in fact, was to the Confederacy as much munitions of war as powder and ball, for it furnished the chief means of obtaining those in dispensables of warfare. In international law there could be no question as to the right of the Federal commanders to seize it as contraband of war, whether they found it on rebel territory or intercepted it on the way to the parties who were to furnish in return material aid in the form of the sinews of war—arms or general supplies.
The facts that the claimants were aliens, living in another country, and acting only through agents in the Confederate States, does not alter the case or entitle them to damages for seizures by the United States. This argument in analogous cases has been frequently used by Spain towards American claimants, alien ownership not being in the Spanish dominions, or in any other part of the civilized world, a ground on which confiscation of contraband of war could be avoided.
The argument of the claimants that hostilities had ceased when the seizure took place is not valid, as the war between the Confederacy and the United States was flagrant at the time the contract was made by the claimants with the Confederate States. The war, under the decisions of the Supreme Court of the United States, did not terminate until the 20th of August, 1866.
This Department, in its instructions to our ministers at those courts which recognized the Southern insurgents as belligerents, has maintained that those nations, after such recognition, must be content to have their subjects who were domiciled as merchants in belligerent territory considered as belligerents, and the same argument would embrace all aliens residing in the enemy’s country for business purposes, or represented by agents there. It has likewise been held by the Supreme [Page 1008] Court of the United States in one case, where the property of a non-combatant was destroyed, that property left by its owner in the country of a belligerent is subject to the chances of war and to confiscation by the other belligerent.
A similar rule was enforced in the case of the losses of British subjects through the Dutch bombardment of Antwerp in 1830, and was assented to by Great Britain and all the other powers whose citizens suffered loss. The same was the case with the property of American citizens in Naples in 1807, and likewise in the case of losses incurred by foreigners by our bombardment of Grey town in 1853, France and Great Britain acquiescing.
If claims for losses of goods belonging to neutral owners which happen to be at the time of hostilities in the enemy’s territory can not be entertained, how much less valid are they when goods were the subject of a voluntary contract entered into by the owners with the leaders of a revolt, the two contracting parties taking the chances of loss through the failure of the Confederacy, or of the profits to result from its success, which, doubtless, would in the present case have been enormous. The contracting parties were partners in a speculation in contraband of war, which was subject to the vicissitudes of war and which failed, and the resulting loss can become no basis for a claim which, if admitted, might embarrass Spain, among other nations, as furnishing a precedent in possible future cases where the integrity of her colonial possessions should be at stake.
Trusting that, on due consideration of the views I have adduced, you will acquiesce in the validity of the objections of this Government to entertain the claim of Messrs. Larrache & Co. so courteously and ably presented by your predecessor, I avail, etc.