441.11 W 892/37
Memorandum by Mr. Spencer Phenix, Assistant to Assistant Secretary of State Olds
The British Ambassador called by appointment to see the Secretary this morning and discussed with him further the claims question. Mr. Phenix was present during a part of the conversation.
The British Ambassador referred to his conversation of last Thursday with the Secretary and said that he had concluded that he could not recommend to his Government that any steps be taken looking to a discussion of the embargo claims arising out of the operations of the British Navy in preventing commodities necessary in Germany’s conduct of the war from reaching that country. He said that he did not see how the United States could now put forward any claims of that character. In reply to a question as to what he meant to imply by the word “now”, Sir Esme stated that the United States by entering the war on the side of the Allies gained the benefit of the British blockade policy without which the defeat of Germany would have taken much longer and cost the United States much more in money and lives. In this same connection he also said that the United States after its entry into the war cooperated with Great Britain and the Allies in the economic blockade of Germany, and through rationing agreements and other measures applied the principle of the economic blockade even more rigidly than had theretofore been done. In these circumstances Sir Esme stated that his personal opinion was that the United States was scarcely justified in seeking [Page 223] to collect damages from Great Britain on account of the particular claims in question. It was suggested to the Ambassador that while the measures taken by the United States had for their purpose preventing necessary commodities from reaching Germany, and to that extent were comparable to the measures taken by Great Britain to that end, the actual steps taken by the United States were different in that they did not involve the seizure of vessels and cargoes on the high seas. Sir Esme replied by referring to the Allied blockade councils upon which the United States was represented, and repeated his belief that our participation in these blockade measures made it very difficult for his Government to see any merit in the claims and damages arising out of the blockade prior to our entry into the war.
The Secretary summarized the facts in certain of the cases presented to the Department and handed to the British Ambassador informally brief memoranda setting forth the facts in five cases presented to the Department.
The British Ambassador asked again if it would not be possible to settle the intergovernmental claims concerning which there was no substantial dispute before considering further the private claims, and he was again told that the preferable procedure seemed to the Department to be to consider all claims at the same time.
The position taken by the British Ambassador indicated that were the Department to address a formal note to the British Government suggesting the examination of all claims by commissioners representing the two governments and the arbitration of those concerning which no agreement could be reached, the British Government would reply that it would not consent to the consideration of the so-called blockade claims. Sir Esme pointed out that the average Englishman would be unable to understand why such claims were presented and why his Government should consider them, indicating that the state of public opinion in Great Britain was very sensitive on this point. It was observed that the United States had its public opinion also, and that apart from the question of payment of individual claims was a larger question of principle underlying the blockade operations of the British forces.
Since it appeared that the initiation of formal exchanges on the subject of these claims might not lead to a satisfactory adjustment of the questions at issue, the suggestion was made, very informally, and without indicating that it was a policy which the Department was willing at the moment to adopt, that the whole matter remain the subject of informal treatment in the hope that during such informal consideration a solution of the vexing problem might be reached. It was suggested more specifically that a representative of the British Embassy call at the Department and be informed of the general categories [Page 224] of claims which had been presented by American nationals, so that the scope of these claims might be more clearly understood by the British Government. It was also suggested that the Department might, provided it received some assurance from the British Government that this procedure would be acceptable, undertake to make a preliminary survey of the claims now on file with it for the purpose of eliminating from further consideration those claims where in all the circumstances the claimants did not appear to be entitled to the Department’s support; that in respect of the remaining claims it endeavor to bring its information up to date and that having done so it send a representative, or representatives, with all the relevant documents to London (where the records of the British Government and of the prize courts are easily accessible) for the purpose of discussing informally and without publicity with representatives of the British Government the various claims; that the representatives of the two Governments endeavor to agree in as many cases as possible and that an effort be made in respect of particularly contentious cases to provide for their adjustment through a lump sum settlement, rather than by agreement as to the individual cases.
Sir Esme stated that a procedure along the foregoing lines seemed to him to have considerable merit, and he intimated that it might be viewed with sympathy by his Government. The Secretary said he would consider the question more carefully and see if it would be feasible for him to propose such a procedure in a more formal manner. Sir Esme suggested that if this could be done it might take the form of an aide memoire which he could telegraph to London. The Secretary said that at all events he would reply to Sir Esme’s recent communications on this subject as soon as he possibly could.