Mr. Hay to Mr. Choate.
Washington, March 9, 1900.
Sir: I have to acknowledge the receipt of your dispatch No. 265 of the 27th ultimo in which you report the substance of a conversation with Lord Salisbury as to the American flour seized by the British naval authorities in South African waters, and state that you have sent to the foreign office the invoices and bills of lading of the Pennsylvania Milling Company.
The Department has advised the American shippers, from time to time, of the suggestions made by you with a view to facilitating the sale or release of the goods seized by the British naval authorities, and that the United States consul at Cape Town has been instructed to cooperate with them in effecting a satisfactory adjustment with the British High Commissioner in South Africa. The shippers are acting in harmony with your views and those of the Department by forwarding to the consul-general proofs of ownership, etc. The Department has advised them of the importance of presenting clear evidence of ownership or of procuring the relinquishment by the consignees of their apparent title and their assent to the sale by the consignors to Her Majesty’s Government. The spirit of cooperation shown by them, and the willingness of Her Majesty’s Government to purchase the goods at the price they would have brought at the port of destination at the time they would have arrived there in course of uninterrupted voyage, induce the hope that the whole matter may be adjusted to their reasonable satisfaction. They have been advised that if their goods are bought by the Government on these terms it would be with the understanding that no damages should be claimed for the seizure and detention of the goods thus purchased.
The Department appreciates and has not failed to advise the Pennsylvania Milling Company of the difficulties of apparent ownership in their case. Their contention is that, through their failure to insure against war risks and on account of the seizure and detention of the goods, the ownership will revert to them. The Department has not yet found it necessary to express any opinion upon the question whether such would be the legal effect of their contract with the consignees, nor on the other question suggested by you, whether there would be a liability on the part of the British Government for indirect [Page 607] loss to the consignors in case the consignees should accept the goods subject to recoupment of damages by deterioration. It is thought advisable to avoid raising issues, so far as practicable, in the hope that through a mutually reasonable and concilatory spirit the whole matter may be adjusted without substantial loss to the shippers by the sale of their goods, on the terms and in the form suggested, to the British Government.
The Department approves your action reported in this end in previous dispatches.
I am, etc.,