File No. 462.11Se8/48
The Ambassador in Germany (Gerard) to the Secretary of State
[Received September 22, 8.20 a. m.]
2911. Following note received from the Foreign Office to-day:
Berlin , September 19, 1915.
The undersigned has the honor to make the following reply to the note of his excellency, Mr. James W. Gerard, Ambassador of the United States of America, dated 13th [10th] ultimo1 on the subject of the claim for reparation for the sinking of the American merchantman William P. Frye .
With regard first to the ascertainment of the damage by experts the German Government believes that it should dispense with the nomination of an umpire. In the cases of the ascertainment of damages hitherto arranged between the German Government and a neutral government from similar causes the experts named by the two parties have always reached an agreement as to the amount of the damage without difficulty; should it not be possible, however, to reach an agreement on some point, it could probably be settled by diplomatic negotiation. Assuming that the American Government agrees to this, the German Government names as its expert Doctor Kepny, of Bremen director of the North German Lloyd’s; it begs to await the designation of the American expert.
The German Government declares that it agrees to the proposal of the American Government to separate the question of indemnity from the question of the interpretation of the Prussian-American treaties of 1785, 1799, and 1828. It therefore again expressly states that in making payment it does not acknowledge the violation of the treaty as contended by the American side, but it will admit that the settlement of the question of indemnity does not prejudice the arrangement of the difference of opinion concerning the interpretation of the treaty rights, and that this dispute is left to be decided by the Hague tribunal of arbitration.
The negotiations relative to the signing of the compromis provided by Article 52 of the Hague arbitration convention would best be conducted between the Foreign Office and the American Embassy in Berlin in view of the difficulties in the way of instructing the Imperial Ambassador at Washington. In case the American Government agrees, the Foreign Office is prepared to submit to the Embassy a draft of such a compromis.
The American Government’s inquiry whether the German Government will govern its naval operations in accordance with the German or the American interpretation of the treaty stipulations in question pending the arbitral proceedings has been carefully considered by German Government. From the [Page 552] standpoint of law and equity it is not prevented in its opinion from proceeding against American ships carrying contraband according to its interpretation until the question is settled by arbitration. For the German Government does not need to depart from the application of generally recognized rules of the law of maritime war, as the Declaration of London, unless and in so far as an exception based on a treaty, is established beyond all doubt; in the case of the present difference of opinion between the German and the American Governments such an exception could not be taken to be established except on the ground of the arbitral award. Moreover, the disadvantages to Germany which would ensue from the American interpretation of the treaty stipulations would be so much greater as to be out of proportion to those which the German interpretation would entail for the United States. For whereas the American interpretation would materially impede Germany in her conduct of warfare, hardly any particular disadvantage to American citizens would result from the German interpretation, since they receive full reparation for any property damage sustained.
Nevertheless the German Government, in order to furnish to the American Government evidence of its conciliatory attitude, has issued orders to the German naval forces not to destroy American merchantmen which have loaded conditional contraband, even when the conditions of international law are present, but to permit them to continue their voyage unhindered if it is not possible to take them into port. On the other hand, it must reserve to itself the right to destroy vessels carrying absolute contraband wherever such destruction is permissible according to the provisions of the Declaration of London.
The undersigned begs to suggest that the Ambassador bring the above to the knowledge of his Government, and avails himself [etc.]
Von Jagow