File No. 658.119/382
The Chargé in Great Britain ( Laughlin ) to the Secretary of State
[Received May 28, 12.20 p.m.]
10191. War Trade Board [from Sheldon]:
No. 621. Referring to State Department’s telegram No. 7775, War Trade Board No. 494, May 7 [17], 4 p.m. The reduction in the [Page 1234] amount of tonnage to be chartered to the Allies under the Swedish tonnage agreement, from 500,000 to 400,000, is undoubtedly due largely to the negotiations which the Swedes have had with the Germans. I have seen what purports to be a copy of the Swedish German agreement which limits the tonnage to 400,000 and roughly speaking, binds Sweden to use the rest of her tonnage “exclusively for Swedish requirements.” In addition, I think Carlsson’s statements are well founded, that he has had great difficulty in getting the Swedish owners to agree to provide the total of 400,000 tons. The foregoing will give you some idea of the difficulties of arranging any more satisfactory tonnage contract.
It now appears Swedish ships, totaling 12,000 tons, lying idle in French ports, were requisitioned by the French some time ago. The Swedish representatives insist that this 12,000 tons be included in the 400,000 tons to be chartered to the Associated Governments. If this point is not conceded, the agreement can probably not be consummated. It is proposed by the British representatives that the above 12,000 tons be deducted from the 200,000 tons for use outside the war zone, reducing this figure to 188,000 tons, and that it be added to war zone tonnage, making the latter 212,000 tons. This arrangement will probably be satisfactory to Sweden. The changes in the Swedish tonnage agreement, dated January 21,1 now suggested, are as follows:
Article No. 1. No change.
Article No. 2. The amount of tonnage may be increased to 112,000 [212,000] tons as above, Lloyd’s summer freeboard stipulated. Add before the last paragraph: “Vessels, time-chartered, under the provisional tonnage agreement of January 1918, shall be considered as included in those time [chartered] under this clause, as soon as charters of these vessels have been signed. In accordance with the provisions of this clause, a list of ships to be drawn up and agreed upon, vessels to be over 500 tons.”
Article No. 3. The amount of tonnage may be reduced to about 188,000 tons, as above, Lloyd’s summer freeboard stipulated, and it is also provided that if general war zone is extended beyond limit in force January 20, owners of ships chartered under this agreement shall have the option of a rechartering on terms and conditions set out in clause No. 2, such tonnage to be added to the tonnage referred to in clause No. 2. Swedish representatives insist that all charters be at the same rate of 35 shillings per ton dead-weight per month, and that the insurance premium of one per cent per month [Page 1235] which will be deducted from the hire money be reduced to half of one per cent. We are inclined to recommend the acceptance of this offer.
Article No. [4]. “Swedish tonnage to the amount of at least 150,000 total dead-weight tons to be employed in the service of the regular Swedish oversea lines trading in accordance with the plan attached provided the cargo carried in such vessels is subject to the approval of the Associated Governments, preference to be given to particular descriptions of cargo [at the request of] the government concerned. If at any time approved cargo should not be available in Sweden on the outward line, any ballast voyages from Sweden to be subject to the approval of the Associated Governments.”
[Article] 5. The minimum speed of vessels in Anglo-French-Swedish trade reduced from 8 to 7½ knots. The 100,000 tons mentioned shall be maintained in this trade so long as the loss of Swedish ships in Anglo-French-Swedish trade does not prove so great as to make this impossible. It is provided that the Swedish Government will grant licenses for trade, either for the Commission for Relief in Belgium or for Allied interests outside the war zone, to Swedish vessels not required for Swedish shipping as provided for under the general agreement, or as otherwise approved by the Associated Governments, and not coming under clauses 2, 3, 4 and 5.
[Article] 6. No change.
[Article] 7. No change.
[Article] 8. Modified to reserve 60,000 tons out of 100,000 mentioned in clause No. 5 for transport of goods from Sweden to the United Kingdom and France at limited rates of freight payable in sterling, not exceeding certain agreed figures which shall be based on a rate of £10 per [St. Petersburg] standard of 165 cubic feet of timber (deals, battens, and boards) from Gothenburg to Hull and other cargo in proportion.
[Article] 9. Second paragraph of agreement of January 21 is changed to read as follows: “Swedish vessels, including regular liners referred to in clause 4, proceeding to and from South America will take the northabout route and will call at Halifax, if required by His Majesty’s Government. They will bunker in a United States bunkering port and will take sufficient coal to carry them to South America and back to the United States of America. Regular Swedish liners referred to in clause 4 will be supplied with necessary bunkers, including fuel oil for motor vessels, at bunkering stations to be agreed upon.” Carlsson will recommend that provision be [Page 1236] made whereby cargo space from United States to South America will be equally divided between Sweden and United States on all outbound vessels. It is believed that this is the maximum concession we can obtain.
Article 10. Substantially no change.
[Article] 11. In the first sentence ships trading in Swedish interests included among those that are, so far as it is practicable, to receive coals, oils, and so forth in accordance with the provisions of the agreement. Additional clause is added as follows: “No guarantees or undertakings whatsoever in regard to the further employment of the vessels will be insisted on. As already advised, condition for the supply of such coals, oils, stores, and provisions and any undertakings previously given in return for such supplies shall be suspended as regards vessels trading under this agreement from the date on which the agreement comes into force. It is understood that the provision in the preceding sentence does not apply to vessels time-chartered under clauses 2 and 3.”
[Article] 12. No change.
[Article] 13. “Swedish vessels engaged in the Anglo-Swedish-French trade, in accordance with this agreement, shall be allowed to bunker, load, and clear immediately when ready without waiting for releasing tonnage, so long as vessels are not held up on the Swedish side, or so long as total tonnage in Swedish ports does not exceed amount in Swedish ports on January 1, 1918.”
[Article] 14. First paragraph modified to read as follows: “The charters of the ships referred to in clauses 2 and 3 shall be effected for the duration of the war, subject to the right of any owner to withdraw his vessel on the expiry of four months from date on which notice of termination of the general agreement between Sweden and the Associated Governments is given by the Swedish Government, or on the expiry of three months from the date on which such notice is given by the Associated Governments.” Carlsson requests a letter stating that in case voyages are not complete, we will grant one or two weeks’ grace with reference to the delivery of ships which should be completed in two months; this was tentatively agreed to.
[Article] 15. No change.
[Article] 16. So that charterers may not place more than two representatives on time-chartered ships.
[Article] 17. No change.
[Article] 18. Now reads: “Half of the time charters under this agreement will be effected with nominees of the United States Government, [Page 1237] and half with nominees of the Inter-Allied Chartering Committee in London.”
Article No. 19. Following is substituted: “Vessels time-chartered under clauses 2 and 3 of this agreement shall not be armed and shall be navigated under Swedish flag and with Swedish crews, subject to the provision of clause 16.”
Article No. 20. “Vessel’s referred to in clause 2 shall be redelivered at a United Kingdom port, or elsewhere by mutual agreement. Vessels referred to in clause 3 shall be redelivered at a United States port or elsewhere by mutual agreement. On the termination of this agreement, all ships which on January 1, 1918, were in Scandinavian or Baltic ports, or those which on that date were on passage to such ports and shall have reached their destinations, shall be allowed to return to Sweden, and all ships lying on that date in Holland, Spain, or other neutral countries outside Scandinavia shall be allowed to return to the country where they were lying, or if that country then is at war with the Associated Governments, to return to Sweden, provided the ships which on January 1, 1918, were in United States or Allied ports, or on passage to such ports and have reached their destinations, return to such ports. Ships returning to Sweden or neutral port in accordance with this clause shall be supplied with sufficient coal, oil, and stores to enable them to reach their destination without any conditions whatsoever in regard to their future employment.”
In financial arrangement, the Swedish Government will undertake to make plans for the investment or deposit of one-half of the moneys due for the loss of ships under the tonnage agreement, in the Allied countries, from which payments are due, subject to the conditions per our cable No. 6007 [607], May 17.1 It will undoubtedly be impossible to make any provision for the investment or deposit of freight money.