File No. 763.72112/662

The Consul General at London (Skinner) to the Secretary of State

No. 249]

Sir: Referring to my despatch No. 215, dated January 1,2 enclosing a note from the British Foreign Office dated December 23 stating that after consideration of my representations, payment of freight and charges incurred in connection with the release of American [Page 315] cargoes shipped before the war would be remitted, I have the honor to report that as the note from the Foreign Office was somewhat obscure, I immediately brought its terms to the attention of the procurator general. I requested the procurator general to give me his opinion as to the application of the Foreign Office note to cargoes shipped in British vessels, which, as it seemed to me, should be dealt with in the same manner as cargoes shipped in enemy vessels. I continued:

I take it that a good many releases have been effected in which freight and charges have been collected and which would have been released free of charges under the terms of the enclosed note. May I inquire how it is proposed to deal with these matters, as I assume that freight collected under these circumstances will be reimbursed?

Finally would you be kind enough to explain to me what are meant by cases “in which the cargo released would have been condemned either to confiscation or to detention if it had been taken into the prize court”? It does not seem to me possible to assume that in given cases the prize court would have condemned any cargo confiscated without actually taking the case to trial.

Perhaps you would be so good as to illustrate this class of cases by reference to one or two with which I am familiar.

I have received a reply from the procurator general, a copy of which is enclosed herewith.

The reply deals not only with my inquiries of January 1 based upon the Foreign Office note, but also with letter of December 31, 1914, reiterating the contention that under Article 43 of the Declaration of London cargoes shipped before the war were not liable to condemnation and that proceedings in the prize court in respect of such cargo were entirely inappropriate. The Department will not fail to note that upon this point the procurator general joins issue with me.

While the correspondence with the British authorities in respect of payments of freight and charges which they have been collecting on released cargo is not wholly satisfactory, at least some substantial progress has been made. The procurator general states that he is now prepared to consider applications for the reimbursement of freight collected under these circumstances.

I have no means of knowing what particular claimants have paid freight which should be reimbursed, except as to perhaps three hundred cases which have been brought to my personal attention. Perhaps the Department may have some suggestions to make upon this point.

I have [etc.]

Robert P. Skinner

The British Procurator General to the American Consul General

Sir: I regret that owing to pressure of other business I have been unable hitherto to reply to your letters of the 31st ultimo and the 1st instant.

Taking first your letter of the 31st instant [sic], I understand that the cargoes there referred to in the S. S. Belgia are being treated as being subject to prize proceedings on the ground that they are enemy property.

I understand that you desire to raise the contention that notwithstanding that they are enemy property they are exempt from condemnation under Article 43 of the Declaration of London. Probably I have not fully understood the scope of your contention, but my difficulty is that the articles, of which Article 43 forms one, are not dealing with enemy property at all. They are dealing [Page 316] with contraband which, ex hypothesi, is neutral property. If it were enemy property, there would be no need to consider whether the property was contraband or not and Article 43, as I understand, is introduced for the purpose of protecting neutral contraband in certain circumstances; and it is provided that when those circumstances are present, the contraband is not liable to condemnation nor is the ship or the remainder of the cargo liable to condemnation under Articles 41 and 42 as they might otherwise be if the contraband were liable to condemnation. At present, therefore, I am afraid I do not quite follow the contention that Article 43 would apply to the case of enemy goods, but I feel that I may have misunderstood the point which you wish to put forward and I shall be glad to reconsider the matter if you will return to it in further correspondence.

With regard to your letter of the 1st January, the note to which you refer is not applicable to cargoes shipped in British vessels. I think that in an interview which, I had with you at a very early stage I pointed out that the British Government could not interfere between the owners of British ships and the owners of American cargoes, and that, in such cases, the freight must be paid where by law it was payable and, of course, would not be payable where by law it was not payable; and I think that if you will refer to the correspondence which has passed between us you will find that the reference throughout is only to cargoes on enemy vessels and certainly that is so in the note addressed to the Ambassador to which you refer.

As regards the question of past release where the cargoes would have been released free of freight under the terms of the enclosed note, I shall be prepared to consider applications for the return of the freight.

I am afraid that pressure of work may cause some delay in these matters as the claims of persons seeking to have their cargoes must necessarily have priority, but the matter will be dealt with as speedily as is found possible.

Finally with regard to the question asked in the third paragraph of your letter, the question whether the cargo released would have been condemned if it had been taken into the prize court must, of course, under the circumstances prevailing, be decided by the procurator general or the committee dealing with the matter, to the best of his or their judgment upon the facts appearing in the case.

It would be impossible within the confines of a letter to give a full account of all the cases in which property would or would not be condemned which would amount almost to writing a treatise on prize law, but fortunately there is, as far as I know, no difference as regards the law on these subjects between the American and the English prize law. In fact some of the authorities to which we chiefly refer are those of great American lawyers.

There are, however, two guiding principles which I think may be of assistance to you: The first is that, as was decided in the Miramichi case, the question depends on whether the property has or has not, at the time of seizure, passed to the enemy in accordance with the ordinary rules of English law, that is, in cases of shipments before war with which alone we are now dealing. The second principle is that where the goods are on enemy ships there is a presumption in favour of their being enemy goods which it lies upon the owner of the goods to rebut.

As regards illustrations I might perhaps refer to the cases where property is under a f. o. b. contract and has been shipped to the order of the enemy purchaser. There have been many such cases in which the property has undoubtedly passed to the enemy but in which the procurator general or the committee have, in the exercise of their discretion, returned it to the American owners who have not received payment. Another class of case is where the documents have gone forward to the enemy consignee and passed into his possession or where no evidence is forthcoming as to whether they have passed into his possession or not. In all these cases I think that no doubt can be felt that the prize court, on the matter being put before them on that state of facts, would have condemned the cargo.

There is a case which has recently been considered, which though perhaps not typical of a large class of cases is also a case where the property would have been condemned, and that is the case which you have put forward of the National Cash Register Company. There the goods were sold to German companies having an independent corporate existence in Germany and the property had undoubtedly passed to the German companies, and on that account the goods would have been condemned by the prize court. It was, however, considered [Page 317] under the circumstances of the case that the goods might fairly be released, but in that case the committee have decided that freight should be charged in accordance with the terms of the note.

I am [etc.]

A. H. Dennis
  1. Ante, p. 304.