411.58J63/24
The Swedish Minister (Boström) to the Secretary of State
My Dear Mr. Secretary: I had the honour to call upon you on June 13, in regard to the claim of my Government (which was filed June 15 [16], 1927) on account of the detention in 1917–1918 of two ships belonging to the Rederiaktiebolaget Nordstjernan, the Kronprins Gustaf Adolf and the Pacific. Unhappily, I found that you had been called to New York. Since I was not able to see you [Page 837] personally, I am taking the liberty of writing in this letter a short review of the case.
In June, 1917, the Kronprins Gustaf Adolf, and in July, 1917, the Pacific entered American harbors. The Gustaf Adolf came in in ballast expecting to take a cargo to Finland. The Pacific came in with a cargo of nitrates bound from South America to Sweden. Both vessels on entering American waters had in their bunkers sufficient fuel oil to go from the United States to Sweden. After some discussion, the cargo of nitrates was unloaded and no question has been raised with reference to that cargo. The questions involved concern simply the detention of the vessels contrary to treaty provisions.
When the vessels sought to leave the United States in ballast for Sweden, they were informed by the War Trade Board that they could not obtain clearance without an export license for the fuel oil which they had in their bunkers. And the War Trade Board made it a condition precedent to the granting of licenses that the owner should agree to surrender its right to the free use of these vessels and others which it owned, guaranteed by Articles 7, 12 and 17, of the treaty between the United States and Sweden of April 3, 1783, revised by the treaty of July 4, 1827.
Your Excellency will not fail to observe that these two vessels were not permitted to leave United States waters, although they proposed to take out no cargo and no fuel except what they had entered with.
Upon the owner refusing the conditions, licenses were refused and the vessels were not permitted to depart until June, 1918, when the owner accepted the required conditions, somewhat modified.
My government immediately presented the matter to Mr. Lansing, then Secretary of State, by note of November 24, 1917, drawing his attention to the treaty provisions and requesting that the vessels be permitted to depart. Mr. Lansing, after some intermediate correspondence, replied on June 26, 1918, that the law under which the export licenses were required, applied to the fuel oil and that the treaty provisions in question did not prevent the requiring of such licenses as a condition of departing from the United States. Within a few days of the receipt of this note, the owner in order to obtain the use of its vessels, yielded to the War Trade Board, and secured the release of the vessels.
I feel confident that so distinguished a jurist as Mr. Lansing would not have found that the treaty provisions were inapplicable had it not escaped his attention that the agreement demanded by the War Trade Board, as the condition of granting the licenses, was the surrender of rights guaranteed by the treaty. The principle applicable has been often stated by the Supreme Court of the United [Page 838] States but never more concisely than in Barron v. Burnside, 121 U. S. 186:
“As the … statute makes the rights to a permit dependent upon the surrender by the foreign corporation of a privilege secured to it by the Constitution and laws of the United States, the statute requiring the permit must be held to be void.”
I can not, therefore, escape the conclusion that the treaty guaranteed the privilege of complete freedom of navigation to nationals of the two contracting parties, and that the action of the War Trade Board in conditioning the granting of export licenses upon the surrender of treaty rights was an infraction of the treaty. It is especially gratifying to me that this view accords with the interpretation placed by the Department of State upon the similar provisions of Article VII of the treaty between the United States and Spain of 1795, which was subsequently accepted by the Spanish Government. (Moore, Int. Arb. 1033–35)
After the release of the vessels the matter of compensation for the loss sustained by the detention was discussed informally from time to time with officials of the Department of State by representatives of the owner. But the matter of preparing and presenting a formal claim was delayed and greatly hampered by the sudden death of Mr. Eckstrom, the New York representative of the owner. Since presentation of the claim in 1927, I have conferred with the Solicitor of the Department of State regarding it.
The Solicitor has suggested that the owner should have brought either a petition for a writ of mandamus or an action at law for damages in the United States District Court against the Collectors of the ports of New York and Norfolk for their failure to grant clearance. But neither of these proceedings could have secured for the owner his treaty rights or compensation for their denial. As Mr. Lansing pointed out in his note of June 15, 1927 [June 26, 1918], Title VII “makes no distinction between the exportation of an article of commerce and the taking out of an article which has never been entered at a customs house of the United States, and never left the ship on which it entered the territorial waters of this country”. The Collector, therefore, was not only under no legal obligation to grant clearance, in the absence of an export license, but was actually under a legal duty to refuse clearance. The fact that this law conflicted with a prior treaty did not, under well recognized rules of law laid down by the Supreme Court, make it any less binding upon courts of the United States.
There was no obligation upon the owner to do a futile thing in order to preserve its right, through my Government, to appeal to Your Excellency that just compensation be made possible for the loss [Page 839] sustained. I am the more convinced that this will be the view taken by Your Excellency since it has already prevailed in the case arising from the claim of the Royal Holland Lloyd out of the refusal of the Federal authorities to grant clearance to the Dutch vessel, Zeelandia, from October, 1917, to March, 1918, under the same authority invoked in the present case. In that case, no suits were filed by the owner in American courts, but the case was considered through diplomatic channels and procedure developed for its disposition upon its merits.
In addition to conferences with the Solicitor of your Department, I had several talks with your distinguished predecessor, Honorable Frank B. Kellogg, and he indicated to me that he recognized that my Government has a just claim, and that the United States Government ought to make amends in some form or other, but before the negotiations could be brought to a conclusion, his term of office ended.
I am aware of the immense load of responsibility you have undertaken and the many matters pressing for your attention, and I have been reluctant to urge the matter of my Government’s claim upon your attention. And I hope you will not think me insistent in writing this letter; rather my thought is that it may summarize the situation for you, and therefore, to some extent, facilitate your study of the case. I would be much obliged if Your Excellency could find time to peruse all our notes and memoranda, in which, I believe, all the contentions made by the Solicitor have been conclusively answered. It is my hope that the soundness of the claim will be recognized and that it might be possible to reach an agreement as to the exact damages suffered, thus avoiding the lengthy and costly proceedings of arbitration.
I beg you to inform me when it will be convenient for Your Excellency to discuss the matter with me orally, and remain, my dear Mr. Secretary,
Yours very sincerely,