File No. 195.1/270

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

Dear Mr. Secretary: Referring to my letter of January 12 on the subject of the transfer of the flag after the outbreak of hostilities I beg to state that I have just received a communication from Sir Edward Grey. He is very much concerned by the serious question raised by the transfer of the Dacia to the American flag. This ship has been now for five months in port to evade capture. She has been transferred to the American flag in order that she may come out without risk. This appears to Sir Edward Grey to be clearly a case of transfer in order to avoid capture and thus to be open to objection as being contrary to accepted principles of international law. The British Government is most reluctant to interfere in the matter but they feel that if they recognize the transfer of the Dacia it will clearly be followed by the wholesale transfer of German ships to neutral flags to the enormous relief of Germany and the greatest prejudice to British interests. It will in effect be a change involving tremendous advantage to non-belligerents and a corresponding disadvantage to others if Great Britain waives her right to treat the Dacia as a German vessel.

Sir Edward Grey tells me that if the cargo of the Dacia consists as reported of cotton or other non-contraband cargo His Majesty’s Government is prepared to purchase the cargo at the sum which the owners would have realized had the cargo reached its German destination. But the British Government must bring the vessel before a prize court if she is captured.

Sir Edward instructs me to explain to you unofficially what precedes, and to add that the object of His Majesty’s Government is not to raise a discussion or to ask the United States Government to take any action themselves but in the interests of friendly relations Sir Edward [Page 681] thinks it desirable that the United States Government should be informed in advance of the position in which Great Britain will be placed with regard to the Dacia. Sir Edward wishes that the above communication should be made unofficially. Should any question be raised as to the right of the British Government to act as proposed I am to call your attention to the following extract from the German naval prize regulations:

Article 12. Those ships are to be considered enemy ships which have been transferred from enemy to a neutral flag since the outbreak of hostilities: (a) If the officer commanding is not convinced that transfer would have taken place even had the war not broken out, for example, by inheritance or in accordance with a building contract.

... in connection with Article 13. If the transfer to neutral flag took place within thirty days before outbreak of war, ship is to be treated as hostile.

... (b) If there is an actual prospect of proving before the prize court that transfer was effected so as to evade the consequences of the character of the ship as an enemy ship (compare Article 12, a), for instance, if after the transfer the ship is employed on the same route as before.

Believe me [etc.]

Cecil Spring Rice