The Secretary of State to Consular Officers
Accident Reports and Legal Proceedings Conducted for the United States Shipping Board
Gentlemen: Except in cases arising in European ports or ports where there are local representatives of the United States Shipping Board, masters of Shipping Board vessels have been instructed by the Shipping Board to report by telegraph to the nearest consular officers all cases of salvage, all total losses, all collisions and other accidents when the repairs will amount to $500.00 or more. After such notification consular officers will report the matter promptly to the Department by telegraph for the consideration of the Shipping Board. While masters have been instructed to submit written reports to the Shipping Board direct, the reports are necessarily incomplete and therefore consular officers will make full investigations and written reports in all cases reported by them in order that the interests of the Government may be fully protected.
All matters requiring legal attention in connection with Shipping Board vessels in foreign ports except ports of Europe and other ports where there are local representatives of the Shipping Board are to be reported promptly to the Department and instructions awaited before any action is taken.[Page 264]
All cases, however, of seizure, arrest, or attachment of Shipping Board vessels, when an agreement, undertaking, stipulation, or bond is requested to effect the release of the vessel, should be reported to the Department for instructions whether arising in European ports or other ports where there are Shipping Board representatives, or elsewhere outside American territory. In this connection Section 7 of the Act approved March 9, 1920, provides as follows:
“That if any vessel or cargo within the purview of sections 1 and 4 of this Act is arrested, attached, or otherwise seized by process of any court in any country other than the United States, or if any suit is brought therein against the master of any such vessel for any cause of action arising from, or in connection with, the possession, operation, or ownership of any such vessel, or the possession, carriage, or ownership of any such cargo, the Secretary of State of the United States in his discretion, upon the request of the Attorney General of the United States, or any other officer duly authorized by him, may direct the United States consul residing at or nearest the place at which such action may have been commenced to claim such vessel or cargo as immune from such arrest, attachment, or other seizure, and to execute an agreement, undertaking, bond, or stipulation for and on behalf of the United States, or the United States Shipping Board, or such corporation as by said court required, for the release of such vessel or cargo, and for the prosecution of any appeal; or may, in the event of such suits against the master of any such vessel, direct said United States consul to enter the appearance of the United States, or of the United States Shipping Board, or of such corporation, and to pledge the credit thereof to the payment of any judgment and cost that may be entered in such suit. The Attorney General is hereby vested with power and authority to arrange with any bank, surety company, person, firm, or corporation in the United States, its territories and possessions, or in any foreign country, to execute any such aforesaid bond or stipulation as surety or stipulator thereon, and to pledge the credit of the United States to the indemnification of such surety or stipulator as may be required to secure the execution of such bond or stipulation. The presentation of a copy of the judgment roll in any such suit, certified by the clerk of the court and authenticated by the certificate and seal of the United States consul claiming such vessel or cargo, or his successor, and by the certificate of the Secretary of State as to the official capacity of such consul, shall be sufficient evidence to the proper accounting officers of the United States, or of the United States Shipping Board, or of such corporation, for the allowance and payment of such judgments: Provided, however, That nothing in this section shall be held to prejudice or preclude a claim of the immunity of such vessel or cargo from foreign jurisdiction in a proper case.”1
In accordance with the provisions of the Act consular officers are not to claim any vessel or cargo referred to therein, immune from arrest, attachment or other seizure nor to execute any stipulation or [Page 265] undertaking except upon instructions from the Department. It is possible that in many cases consular officers will be instructed to grant a stipulation without surety and it is very important that the courts recognize such stipulation. A specimen of a stipulation which will probably satisfy all necessary conditions is enclosed for your guidance in case you are instructed to grant such a document.
The following cases are insured by the Shipping Board in the American Steamship Owners’ Mutual Protection and Indemnity Association:
1. Injury to any person, including members of the crew, passengers, persons on another vessel, laborers handling cargo, or any other person.
Cases under any Workman’s Compensation Act are not covered by P & I insurance, except by special arrangement. Such cover is usually provided by the contracting stevedore and included in the stevedoring rate.
Reasonable burial expenses are allowed, not exceeding $100.
2. Damages to other vessels and their cargoes otherwise than by collision, including damage by wash of steamer, crowding other vessels ashore, causing two or more other vessels to collide, etc.
3. Damage to docks, piers, jetties, breakwaters, buoys, cables and other fixed or movable objects; also damage to property on docks or piers. Each claim is subject to a deduction of $50.
4. Damage to cargo, or responsibility for cargo carried or to be carried, including shortages and overcarriages, (exclusive of shortage consequent on B/L guarantee). Subject to a deduction of $500 on each voyage, irrespective of the number of ports of call.
Packages declared by the shipper to have a value exceeding $1,000 each shall be specially reported and, in general, specially insured against loss or damage from any cause for which the vessel might be liable, including pilferage.
5. Expenses of removing wreck of the vessel, where the same are a legal charge. Each claim subject to a deduction of $50.
6. Expenses of repatriating members of the crew, where the same are a legal charge. Each claim subject to a deduction of $50.
Wages, as such, are not reimbursible by way of insurance.
7. Extraordinary quarantine expenses by reason of outbreak of plague, or other contagious disease, on board the vessel. Each claim subject to a deduction of $200.
8. Illness of passengers or crew. Subject to deduction of $50 in each port.
Reasonable burial expenses are allowed, not exceeding $100.
9. Net loss due to deviation to land an injured or sick seaman, in respect of port charges incurred or bunkers, stores and provisions consumed as the result of the deviation.
10. Expenses caused by smuggling or mutiny. Also expenses of defending unfounded claims brought by the crew, relating to terms and conditions of employment. (Note: Such claims of this character as are deemed in some degree to be wellfounded should be defended, if at all, by the United States Attorney.)[Page 266]
11. Customs and immigration fines, and other fines arising from neglect or default of Captain or crew. Each claim subject to deduction of $50.
12. Cargo’s proportion of general average, if not otherwise recoverable, as in cases where the G/A is brought about by the vessel’s negligence.
13. Legal and other expenses incurred in relation to any of the above risks, or when authorized in the interest of the Association.
Legal questions arising in Protection and Indemnity Club Insurance matters described above must be handled by attorneys employed by the American Steamship Owners’ Mutual Protection and Indemnity Association in foreign ports.
Notices of accidents of the above nature should be given to the Department and masters should be referred to the nearest representatives of the American P & I Association. A list of the representatives is appended.2
In acting as agents for the Shipping Board, consular officers must exercise due care that they do not impair their usefulness to this Government as consular officers and will be careful to keep the Department fully informed as to any action they may take in Shipping Board matters.
I am [etc.]