File No. 411.57N83/27
The Acting Secretary of State to the Chairman of the Shipping Board ( Hurley)
My Dear Mr. Hurley: Replying to letters of Mr. Stevens and Mr. Rublee of August 3, asking to be advised whether the State Department has any objection to the Emergency Fleet Corporation proceeding “at once to requisition all ships in process of construction in American yards in order that their completion may be expedited,” the final disposition of the ships to be determined later, and in so far as any ships are being built for foreign governments, citizens or subjects such disposition to be decided upon after consultation with those governments.
It was explained orally by Mr. Rublee that this inquiry referred only to merchant ships in course of construction (not launched) in the United States for private citizens or subjects (including any [Page 615] vessels possibly commandeered or otherwise taken over by their Governments) of Great Britain, Norway, Colombia, and Argentina. Mr. Rublee stated that Colombia and Argentina had only one ship each in course of construction in American yards, and that if any objection to the taking over of these ships was raised, they might be entirely disregarded.
In reply I beg to advise you that upon an examination of the treaties between the United States and the countries mentioned which might have a bearing upon this subject and of the rules of international law and custom involved, the Department perceives no objection internationally to taking over the construction of the ships described merely for the purpose of expediting their completion, so long as the Government is willing to make just indemnification for any losses which might result from such action.
In reaching this conclusion I have taken into consideration the statement of Mr. Stevens that he yesterday notified the Norwegian Minister and the British Ambassador by telephone in regard to the proposed action of the board, and that neither protested against such action; and also the statement in Mr. Balfour’s letter of May 231 last to Mr. Denman to the effect that if the United States Government informed the British Government that the speediest construction and putting in commission of the maximum number of oceangoing ships depended upon taking over, varying or cancelling any contract or contracts then placed by the British Government, his Government would not stand in the way, even if it were decided that these ships should be owned by the United States and fly the American flag. I have also not been unmindful that if the parties in interest should feel so disposed they might endeavor to raise legal difficulties over alleged government ownership, requisition, or other form of control over the ships laid down or the materials for their construction. These eventualities, however, may be met when they arise, and as they would not necessarily involve our international relations, I have not regarded them as sufficient grounds upon which to raise objection to the action contemplated by the board.
In this relation, I should add that the Norwegian Government has called the attention of this Government to its view that “just compensation” would not seem to comport with retaining a quarter of the admitted value of the ship pending final adjudication, and without any allowance for interest on the sum retained. The British Ambassador also transmitted a communication on the subject, dated July 25,2 which was sent to the Shipping Board for its information on the first instant.
[Page 616]Upon a formal notice from you that the board has decided to take the contemplated action, the Department will duly inform the diplomatic representatives concerned.
Sincerely yours,