File No. 195.1/303
The British Ambassador ( Spring Rice ) to the Secretary of State
Dear Mr. Secretary: You ask me what is the attitude of my Government with regard to the transfer of the flag after the outbreak of hostilities. I beg to state in reply that I have not received any detailed instructions from my Government on this question although in general they propose to follow the principles laid down in the Declaration of London.
As however they have not ratified the declaration it may be argued that in considering the question they must be guided by the principle which (in common with your Government) they have professed in times past. These principles are, as you are aware, that the absolute prohibition of sales of ships during hostilities would be too severe a measure for a commercial nation, although such sales must always be regarded with suspicion. It has, I believe, been generally held that the validity of the sale is judged by its commercial character; the purchaser must prove a bona-fide sale and in general the ship must not be used to serve enemy purposes under a neutral flag.
So far, I understand, 111 vessels, formerly foreign, have received American registry since the war began and of these 86 were British and 17 German.
My Government has hitherto let such transfers pass without protest in cases where the vessel was bona fide owned by an American company before the war, so that the transfer does not involve a sale, and where the vessel does not carry an enemy crew and is not employed in carrying supplies to an enemy or to a neutral port which is used for supplying an enemy. Cases where the vessel was originally owned by a non-American owner are regarded with suspicion because of the possibility that the transfer of the flag is resorted to for unneutral purposes. In the case of the Sacramento in San Francisco, a transferred ship was collusively seized by a German cruiser and emptied of her stores of coal for belligerent use. The Dacia has [Page 677] been sold by a German company to a German-American for one third her value and is reported to be destined to a German port. The Stoya Romana was a Roumanian ship which received American registry in the port of Bremen; has cleared from that port, nominally for America, but has not so far as I know yet arrived here. If loss or damage results to Great Britain as a consequence of the transfer of these ships it is to be presumed that a claim will be made against the United States Government.
But cases must arise in which the transfer of the flag is of a purely commercial character and the purchase effected without any but commercial objects. It has not I believe been the rule to contest the validity of the transfer if the bona fides of the sale is proved and if the ship when she changes her owner is employed with a neutral crew in neutral trade and between neutral ports.
The German Government has declared that it would withdraw its objections to the transfer of a ship from an enemy to the American flag in cases where the ship traded exclusively between America and Germany. I think it not improbable, though I do not write under instructions, that my Government would raise no further question if a transferred ship were to trade between any ports not serving as ports of supply to the enemy.
There is however the further question of the liberation of interned ships as a consequence of transfer. That is the question as to whether a neutral performs an unneutral act if in the course of the war he releases a belligerent from the consequences of military operations. This question is of course both difficult and complicated and no doubt, should the occasion arise, would become the subject for discussion.
I am [etc.]
- Date of receipt not indicated.↩