Mr. Choate to Mr. Hay.
London, January 12, 1900.
Sir: I have the honor to report that since my dispatch No. 227 of January 5 the following events have occurred relating to the seizure of American goods on British ships Mashona and Beatrice and the Dutch ship Maria, described in your instruction No. 262 of December 21, and in Messrs. Hopkins’s letter of December 12 inclosed therein, as British, and assumed by both Lord Salisbury and myself as being so in our interview of the 3d instant.
I was well aware of the urgency of the matter, but as he had promised a written statement of the grounds of seizure as early as practicable—perhaps Friday the 5th—not receiving them that day I concluded that the matter must necessarily be in the hands of the law officers of the crown. On Saturday, the 6th, and again on Monday, the 8th, the papers reported him as being in continued conference with them, so I refrained from disturbing him.
On Sunday, the 7th, your first cipher cable relating to the Pennsylvania Milling Company’s shipments (translation annexed) was received. I had already prepared a note to Lord Salisbury bringing their case to his attention in the sense therein indicated, when on the 9th I received your second cable, regarding the marks on that company’s shipment (copy annexed), which necessitated an alteration of the note to that extent; but I was hourly expecting to receive his answer and the grounds of the seizures, and thinking their contents might render some part or the whole of my note about the Pennsylvania Company’s shipments inexpedient, I withheld it until I should receive them. There were two things in the affidavit of the president of the milling [Page 553] company, as cabled, that were obscure—first, it stated that his company “had been for years engaged in the sale of flour to * * * South African Republic;”and then, second, immediately proceeded to say that it “had never sold flour with direct or ulterior destination to South African Republic by resale or otherwise” These two statements I could hardly reconcile. I inquired at cable office whether “direct” was not meant for “indirect,” and received your cable of the 9th in reply (copy annexed). I had been reading the cases of the Bermuda and the Peterhoff, where “direct” and “ulterior” seemed to me always to be used as terms of antithesis and not of paraphrase. I concluded that the meaning was that although they had made frequent sales to merchants in the South African Republic they never undertook to sell them to the Republic itself.
The affidavit, as cabled, also showed that several lots of the company’s flour were branded “Johannesburgh” and “Goldfields,” which might have a bearing on the question of “destination,” as well as property, and had better not be communicated until I got their views about contraband. Further, the affidavit, as cabled, stated the sales by the company in such a way and at such dates as to show, or at least raise the inference, that there was no ownership left in the milling company; and so, on the 9th, I cabled you the inquiry (translation annexed) to which, on the 10th, I received your reply giving further statement from company (translation annexed).
On Wednesday, the 10th, I waited upon Lord Salisbury and found him ready to state the legal views of the British Government, but with almost no information as to the details of fact in regard to the seizures. Of the interview I have little to add to what I communicated to you by cipher cable (translation annexed). His two notes, which he handed to me at the interview, contained about all that he has to say. In fact, he expressed his desire to give it to me in writing, so that there might be no misunderstanding. I annex copies of them both. He answered my inquiries as stated in the cable. He stated repeatedly that they did not claim the American goods on the Mashona and Maria to be contraband.
I called his attention to the fact that such goods as flour were very perishable in the climate of South Africa, and that we should be entitled, not only to costs and damages for detention, but for deterioration, if it took place; but he thought that an incidental matter which could be discussed later. When he made his suggestion that the best way, perhaps, would be for the American owners to offer to sell to his Government, my impression was confirmed that he was contemplating the probability of having to indemnify owners of cargo fully, and that their best way would be to buy at an agreed price. When I told him that I was already authorized to sell for one party, he misunderstood me to say at the present price in Delagoa, and replied: “Why, the prices there have been doubled and more by these seizures;” and when I explained that the authority was to offer to sell the goods at the price at the port of destination at the time when the vessels respectively should have arrived there in due course of voyage, if not interrupted, he said that was not unreasonable, and that if we would make such an offer his commissary department would consider it. We discussed considerably what owners would have to prove in the prize court to get their goods; whether he had any idea of requiring us to prove anything more than their ownership at the [Page 554] time of seizure, and he said that was all; whether he understood there was to be a trial in the prize court as to destination, and he said, “No; but proof of ownership was essential, either then or on a sale to the admiralty, as his Government could not pay one man and then be accountable to another, who might afterwards appear and prove to be the real owner.”
I said in my cable of the 10th that, not having got answer to my telegram of the 9th, I should not present the milling company’s case in the form directed unless you still desire; better to rest on regular shipping papers, which I think will suffice.
I am strongly inclined to believe that a sale to the British Government of all the goods, if they will take them at the price suggested, is best, because it is so much simpler. The customs officers, who have the Maria’s goods, will have to be satisfied as to the ownership of the claimants, and that may make trouble, although regular shipping documents, by which the goods got into the ship, ought to suffice for that in that case. And if we can get the Mashona’s goods taken by purchase, without having to go through an inquiry, it will be much better in that case. Probably the whole cargo is included in the libel for “Trading with the enemy.” Of course, the cargo of innocent American shippers can not be held for that. As Lord Salisbury said, they couldn’t get the ship into port after seizure without bringing the cargo too; and I understand that it is the usual practice in such cases to include everything in the libel. But a legal investigation of the ownership of each lot of cargo shipped on the Mashona will necessarily involve an inquiry into all that has occurred between the consignor and the-consignee, and many difficult and delicate questions might arise.
If on such an inquiry it should turn out that an agent had bought for the Transvaal Government, and on credit, so that the title passed when the goods went on board, would you consider the British Government estopped to claim that they were contraband on discovering such a fact? Such a purchaser would of course not be under American protection in any way; but an American shipper might appear to be privy to the real character of the purchases, and we should hardly like to champion the cause of a party who had shipped contraband. Of course this case is hardly supposable. I assume, as you do, and as Lord Salisbury and his law officers assume, that our American shippers are wholly innocent; but you never know when you go into a prize court what may turn up. It is full of pitfalls, and I am sorry that our cargo is there. I see that some take it for granted that if the shipper has not been paid for his goods the property is still in him, so as to constitute him the owner in a prize court, or for purposes of a sale; but there can be no such universal rule. By the terms of sale and shipment he may not have retained a lien. So there are various questions as between liens and general ownership. (See postscript.)
In view of all this, I strongly hope before this dispatch reaches you that I shall have received instructions from you to propose to sell all that we wish to protect as American property in the Mashona and Maria to the British Government on the terms which Lord Salisbury and I talked about.
After my cable of the 10th had gone, it occured to me that you had not received a copy of my note to Lord Salisbury of the 4th, to which [Page 555] it purported to be a reply, and so I sent you a further cable on the 11th instant. Copy annexed.
To-day I cabled a suggestion, and later, thinking that the foreign office must have more details about the goods and the seizures than they had communicated to me, pressed them very closely, but could get nothing more than you already have, and so I sent you a further cable.
I suppose that you, of course, have some competent man at the prize court to look after proceedings there, in case we do not close the whole matter up by a sale.
I have, etc.,
P. S.:—The title of the absolute owner prevails in a prize court over the interests of a lien holder, whatever the equities between those parties maybe. (The Winifred, Blatchf. Pr. Cases 2, cited;2 Halleck Internl. Law, 392 Engl. Ed., 1893.)