File No. 763.72112/1696

The British Ambassador ( Spring Rice ) to the Secretary of State

No. 363]

Sir: I have the honour to inform you that I have received from my Government a copy of the communication made to them by the [Page 565] American representative in England of the meat packers dated July 9, giving his version of the negotiations between His Majesty’s Government and the packers with a view to a compromise on the question at issue between them.

On receiving Mr. Urion’s communication, Sir Edward Grey caused a statement to be prepared giving an account of these negotiations based on the information in the possession of His Majesty’s Government.

The packers have appealed against the decision of the prize court, and the cases of the other ships dealt with in the negotiations have not so far come before the prize court at all. The case is therefore still sub judice, and in ordinary circumstances it would be impossible for His Majesty’s Government to issue any statement as to the unsuccessful negotiations which took place in the hope of settling it. As, however, the statement of the representative of the packers has apparently been communicated to your Department, it would seem to be advisable for His Majesty’s Government to put you in possession of their own view of the negotiations. I have therefore the honour to communicate to you herewith copy of the statement in question.1

As you will observe, Mr. Urion states that the packers maintained that they had the right to undertake the transactions in question as being “exports of foodstuffs to neutral countries”: and that, having regard to the large sum Involved and to the state of feeling in the United States, he regarded the decision of the prize court as of comparatively minor importance. Acting from this point of view he made certain demands which he describes in detail.

The British Government, on the other hand, had reason to believe that, as a matter of fact, the real destination of the consignments was an enemy government for the use of enemy forces, and that according to principles of law laid down by the United States courts these consignments were liable to confiscation. With a view, how-over, to an agreement designed to secure to the United States and other neutral countries the continuance of normal trade, while preventing the enemy forces from receiving war supplies, the British Government made certain proposals for a compromise. They contended that, even if, the case were decided in favour of the packers, the evidence adduced was such that, according to the prize court rules which do not materially differ from those of the United States, the cargoes would merely be released as they stood, and that the sum obtained by the sale would amount to £1,300,000. But the basis proposed by them for the compromise was the payment of a round: sum of £2,250,000 (including £682,000 to compensate the Danish buyers), against £2,073,284 (not including this item) demanded by the packers. This latter sum was calculated on the high prices ruling on the Continent in consequence of the German demand, which, as the British Government contends, could only have been obtained if the goods were forwarded to Germany.

The British statement contends that the demands of the packers could not be granted, as they were equivalent to a complete admission by the British Government that the seizure had been made without [Page 566] any reasonable ground for suspicion. The evidence in the possession of His Majesty’s Government did not justify such an admission, and under these circumstances the negotiations came to an end and the case was proceeded with.

I have [etc.]

Cecil Spring Rice
  1. Not printed.