300.115/13263

The Consul General at London (Skinner) to the Secretary of State

No. 4753

Sir: I have the honor, with further reference to my dispatch No. 4443, dated July 10, 1917, File No. 350,3 on the subject of the release of certain parcels of needles upon deposit of the invoice value of the merchandise in the British Prize Court, to report that this office has had some correspondence with H.M. Procurator General on the [Page 603]subject of certain conditions sought to be imposed upon such releases.

The question first arose in a letter from H.M. Procurator General dated June 12, 1917, reading in part as follows:—

“In those cases in which the packets in the s.s. United States have already been dealt with by Order of the Prize Court, it would appear that the most convenient way of meeting the requirements of the American firms concerned would be to arrange with the Admiralty Marshal for the usual conditions against re-export to be waived, and to leave the American firms concerned to purchase the goods when offered for sale under the Order of the Court. In other cases in which the decree of the Court has already been made, it would be a condition of release that the invoice value of the goods (converted into sterling at the pre-war rate of exchange) should be deposited in the Prize Court in full settlement of all claims.”

The following communication dated August 24, on the same subject, was next received by this office:—

“I am directed by H.M. Procurator General to refer to the letters from this Department of the 12th and 26th June, and to ask whether from the former letter you have understood that in cases in which needles are released upon the deposit of the Invoice value in Court, such an arrangement is to be regarded as in final settlement of all claims by the American firms making the claim.

“This condition has not been specifically stated in every letter, in which you have been informed that the arrangement is practicable, although it was intended that it should be applied, and to avoid any misunderstanding he will be glad to know what view you have taken with regard to this point.”

Under date of August 30, 1917, I replied as follows:—

“I have the honor to acknowledge the receipt of your letter of August 27 [24?], in which you inquire whether, according to my understanding, in cases in which needles are released upon deposit of the invoice value in Court the arrangement is to be regarded as in final settlement of all claims by the American consignee and to state in reply that the answer is in the negative.

“Permit me to draw your attention again to the note of the British Government dated April 24, 1916,4 setting forth that they are prepared to concede that waivers of the right to put forward claims for compensation, when made a condition of release, would be a hardship, and further, that no attempt will be made to enforce such as have already been given.”

H.M. Procurator General, under date of September 1st. replied as follows:—

“I am directed by H.M. Procurator General to acknowledge receipt of your letter of the 30th ult., and to say that he does not agree that the arrangements which have been made to facilitate the release [Page 604]for transmission to the United States of America of parcels of Needles detained from the mails, come within the terms of the Note from H.M. Government of the 24th April 1916, to which you called attention, inasmuch as in all these cases the Crown is clearly entitled to proceed in the Prize Court and obtain an order for sale and detention of the proceeds.

“The present arrangements are a special concession on the part of H.M. Government to meet what is understood to be a pressing need in the United States.

“So far as concerns the parcels which have only been dealt with by the Prize Court, the matter perhaps hardly arises, as effect is given to the arrangement by consent being given to an Order for sale of the goods to the American firms concerned at the price which is agreed.

“With regard, however, to those parcels which have not already been dealt with by the Prize Court, it is considered that the compromise should be accepted in settlement of all claims, as indeed has been expressly stipulated and agreed in several of the cases. Perhaps, therefore, you will be kind enough to review the matter in the light of these observations, and favour me with any further remarks which you may have to make.”

In connection with the statement in the fourth paragraph of the above letter “it is considered that the compromise should be accepted in settlement of all claims, as indeed has been expressly stipulated and agreed in several of the cases,” I may say that H.M. Procurator General evidently refers to certain cases which have been settled direct with the agents of the American claimants without intervention from this office, and as an example of such a settlement I beg to bring to your attention the following copy of a letter from Thomas Cooper and Company as Agents for the American claimants, Hays Kaufmann and Lindheim, dated August 28, 1917:—

“We have received a letter from Messrs. Hays Kaufmann & Lindheim incorporating a telegram from yourself reading as follows:—

‘Authorities prepared to release all these United States Needles on deposit value except items already sold at Court’s orders.’

“We should be much obliged to you if you would be good enough to inform us whether the authorities have intimated to you that they are prepared to release these goods without any conditions as to the abandonment of any claim for the return of the amount of deposit or in respect of any claim for losses or damages, as we have been in communication with H.M. Procurator General with a view to obtaining the release of several parcel post shipments of needles and he has written to us intimating that he is prepared to consent to the release of the goods ‘upon deposit in the Prize Court of the invoice value of the goods converted at pre-war rate of exchange,’ but stipulating that ‘ such releases are to be in full and final settlement of all claims by the American claimants, either for the return of the money deposited or compensation for detention of the parcels.’ We have written to the Procurator General asking him whether the terms which he now stipulates for are different to those which the [Page 605]‘authorities’ have offered you, but up to the time of writing we have not received his reply.”

The following is a copy of my letter dated September 6th. 1917, to H.M. Procurator General:—

“I have the honor to acknowledge the receipt of your letter dated September 1st. 1917, advising that in your opinion the terms of the Note from H.M. Government of April 24, 1916, do not apply to the release of needles detained from the mails.

“However, as I am still of the belief expressed in my letter to you of August 30, 1917, it seems wise to forward the correspondence on this subject to the Department of State. If there has been a change of views since from those expressed in the Notes of the American Government dated October 21, 1915,5 and January 4, 1916,6 I will advise you at the earliest possible opportunity.”

The following is a copy of letter from H.M. Procurator General dated September 8th. 1917:—

“I am directed by H.M. Procurator General to acknowledge the receipt of your letter of yesterday stating that you remain of the belief expressed in your letter of the 30th August that the settlement of claims for the release of needles comes within the terms of the note of H.M. Government to the United States Government of the 24th April 1916, in which it was stated that they were prepared to concede that waivers of the right to put forward claims for compensation when made a condition of release, would be a hardship, and that no attempt would be made to enforce such as had already been given.

“While the Procurator General sees no reason to depart from the view expressed in his letter of the 1st inst., it does not appear that the matter is of sufficient importance to be made a matter of principle, and he will not, in dealing with these claims, require the release to be accepted in final settlement, in the sense that it will preclude the American claimants from being heard, if they so desire, at the conclusion of the War when the ultimate disposal of the particular funds in Court is under consideration, but it must be understood that other claims if any, must be made at the time when the case is brought before the Court for hearing.

“It may be convenient to state shortly how it is proposed to deal with these goods. The needles appear to fall within two classes; (a) those which have already been dealt with by the Prize Court and ordered to be sold and the proceeds of sale detained, and (b) those which are awaiting hearing and have not yet been made the subject of an Order of the Court.

“In dealing with class (a) it is proposed that consent should be given to an Order for the sale of the needles by private treaty to the American firms to whom the parcels were originally consigned, at the invoice price converted at pre-war rate of exchange, and to supplement this consent with permission for the parcels to be forwarded to their destination. In view of the political importance [Page 606]which attaches to this particular class of goods, the sanction of the Prize Court to this somewhat irregular procedure has been obtained.

“With regard to goods falling within class (b) consent will be given to an Order for release of the goods for transmission to their destination, upon deposit of the Invoice value converted at pre-war rate of exchange.

“The Procurator General will be glad to learn that these observations and proposals meet with your concurrence.”

I have replied to H.M. Procurator General as follows:—

“In reference to your letter of September 8th. 1917, in regard to the release of needles, I have the honor to state that I have read its contents with interest and attention. While I much appreciate your valuable assistance in releasing goods now urgently required for work of national importance, I regret to add that I cannot concur with your proposals insofar as they limit or circumscribe the opportunity of the consignees to establish what they may conceive to be their rights at some future time.”

In connection with the above correspondence I may add that because the liability to rust makes the needles detained quasi-perishable, and because mills in the United States contributing at the present time very largely to the allied military resources are in urgent need of the needles at once in order to continue their work, a prompt release of the present detentions is expedient from the English point of view, especially as an arrangement by which the invoice value is deposited, adequately protects all possible British interests. The requirement, therefore, that in addition to the deposit, American claimants should release any claim for damages resulting from this detention seems entirely unnecessary. For these reasons, and because, as I have understood, the American Government has not acknowledged the validity of these detentions in the first instance, it is obvious that even if American shippers should make the deposit on the terms suggested by the British authorities, the Department of State might at a later date disregard any release as of no force—given under circumstances amounting to duress.

I therefore ask to be instructed if the Department has changed its views from those expressed in paragraph 31 of its Note to the British Government dated October 21, 1915.

I have [etc.]

Robert P. Skinner