File No. 862.85/313
The Secretary of State to the Peruvian Minister ( Freyre y Santander )
Sir: I have the honor to acknowledge the receipt of the memorandum which you addressed to the Department of State on February 6,1 stating that the Congress of Peru has approved a bill whereby the Government of Peru is authorized to take possession of all means of transportation, depositing previously their value in the Peruvian Caja de Depositos y Consignaciones, and further, that the bill grants the owners the right to regain possession of their property six months after the Government declares that the circumstances which justified this requisition exist no longer.
The memorandum further sets forth that the Government of Peru is empowered by the above mentioned bill to expropriate the German ships at present in Peruvian ports, after depositing their value, and that, in consequence, that Government is disposed to enter into an agreement with the Government of the United States with the purpose of utilizing these ships, provided the Government of the United States formally assures the Government of Peru of its support in case of reprisals by the Government of Germany against the Government of Peru after the termination of the war.
In reply to this memorandum, I beg to inform you that the Government of the United States is equally desirous of entering into an agreement with your Government for the purpose of utilizing the above-mentioned vessels and wishes to present for its consideration the following proposal:
- First. The vessels now interned in Peruvian ports shall be taken over by the Peruvian Government under their recent statute authorizing such action.
- Second. The vessels shall then be repaired by and at the initial expense of the United States Shipping Board; the cost of such repairs, however, to be deducted from the charter hire as it shall eventually become payable.
- Third. The United States Shipping Board shall proceed to repair these vessels with all expedition.
- Fourth. From the moment when the vessels are repaired and placed in seaworthy condition, charter hire shall be paid monthly [Page 667] by the United States Shipping Board to the Peruvian Government at the rate of $8.25 per deadweight ton per month, all expenses charterers’ account.
- Fifth. The vessels shall be chartered for the period of the war.
- Sixth. Delivery of the vessels to the United States Shipping Board shall be made at port of repair; redelivery at the expiration of the charter period to be made at a Peruvian port.
- Seventh. If the Peruvian Government shall later determine to retain these vessels for a period after the war, the United States Shipping Board shall have the option of continuing their charter for the first six months of that additional period.
- Eighth. The use of the vessels chartered to the United States Shipping Board shall be unrestricted.
- Ninth. The valuation of the vessels shall be fixed, for purposes of marine and war-risk insurance, at $175.00 per deadweight ton.
With reference to the requirements of the Peruvian law to the effect that the value of the vessels shall be deposited pending the termination of the war, the Government of the United States, through the United States Shipping Board, will be disposed to be of financial assistance to the Peruvian Government in this matter, provided the proposal is accepted in principle.
I also wish to add that the Government of the United States will be disposed, upon the acceptance of its above-mentioned proposal, to give to the Government of Peru its official undertaking, that it will accord to that Government all possible support in the case of any international claim being made upon the Government of Peru, after the termination of the war, by the Government of Germany, in connection with the use of these vessels.
- Not printed.↩