811.801/477

The British Embassy to the Department of State

Memorandum

On February 4th two bills were introduced into the House of Representatives dealing with “Tourist Cruises” and with “Fighting Ships”. They were referred to the Committee on Merchant Marine, Radio and Fisheries, have been reported out, the former with an amendment, and now await further action. Identic bills were simultaneously introduced in the Senate. His Majesty’s Embassy desire to draw the earnest attention of the State Department to these proposed measures.

H. R. 8875.

Cruises for tourists in ocean liners were first organized some thirty years ago in Europe. At that time there were some English, and later some German companies who in the summer months conducted tours to the fiords of Scandinavia and to the Arctic Seas north of Sweden. It was found that a latent demand existed for these pleasure tours on the ocean and developments soon followed. Cruises were organised in the winter months from England to the [Page 917]Mediterranean and to the West Indies, and before the Great War a certain number of tours were arranged from New York to the Mediterranean. It was indeed natural that in winter travellers should seek the sunshine and the diminution of traffic in the North Atlantic made the services of large ships available to meet the demand.

Until after the war there was no development of this pleasure-cruise traffic from the ports of the Atlantic seaboard to the tropical seas of America. There had of course for many years been a regular traffic to the Bermudas, conducted by British lines sailing on regular schedules, and there were also regular lines, both British and American, serving the traffic between American ports and the Bahamas and West Indian Islands, but these lines mainly served ordinary business and commercial purposes, and, though travellers might take the voyage for pleasure only, no effort was made till recent years to cater to the desire of those travellers who could not afford the time for a Mediterranean voyage, who yet desired a cruise in a warm climate, or who, when visting a foreign winter resort, might prefer to travel on a large and luxurious ship. The efforts of British and other ships in these directions have to a large extent created a demand by furnishing the means of satisfying it. The business so created is honourable and unexceptionable, and has assumed large proportions both here and in other parts of the world. So far as British ships are concerned the share of this traffic that has fallen to them has been won in open competition, free and fair, with the ships of many other nations, and without the help of any form of subsidy.

According to the House Committee’s Report the bill H. R. 8875 is designed to stop the so called “cruises to nowhere” (which are not interesting); to prevent these foreign ships, in the course of a tour, from landing their passengers for a few hours on American soil (a practice which has been incidental and infrequent only); and, apparently, to diminish competition with American ships. In effect the Bill makes the cruises now conducted to foreign ports completely impossible. Except under a prohibitive penalty a British ship is debarred under the bill from embarking passengers at an American port, carrying them to foreign ports, and returning them to American territory. A traveller might embark on one of the regular British vessels plying to Bermuda, but if he returned on the same vessel and on the same trip he would involve her owners in a fine of $200.

The bill involves legislative principles of a new and striking character. Laws relative to Coastwise Shipping are usually regarded [Page 918]as of a domestic nature, indeed their provisions are unaffected by the stipulations of Treaties prescribing free navigation. The proposed law in substance simply extends the limitative effects of the Coastwise Shipping Law, a domestic law, so as to make it embrace British territories. Such a measure could hardly fail to arouse deep resentment even if it did not also inflict serious material injury, both to those territories and to a legitimate shipping interest.

H. R. 8874.

This bill extends the definition of a “fighting ship” by including foreign ships used so as to produce excessive and unwarranted competition with American ships in any particular trade. The United States Shipping Board shall determine, finally and without appeal, whether a foreign vessel is a fighting ship, and the foreign vessel so certified by the Board shall be refused clearance in that trade. His Majesty’s Embassy must question whether in a matter touching so closely to the rights of property, an Administrative Board, such as the United States Shipping Board, is a proper body to discharge such judicial functions as those of pronouncing final decisions in so important a case. Apart from this it appears doubtful whether any body or any Court could justly construe “unwarranted and excessive competition”, or the effect of putting additional ships into certain trades.

To strengthen the legislation relative to fighting ships must, among other effects, have that of establishing a practical monopoly for present shipping companies on certain routes. This must not only restrict the freedom of shipping to find the trades where its services at any moment are desired, but it must operate also to the serious disadvantage of shippers, who cannot wish to find themselves at the mercy of particular lines or conferences. It would seem that under the proposed legislation, in any given trade from an American port, either the clients of that trade must for ever be content with existing facilities, or the privilege of improving those facilities is liable to be restricted to American ships only. Yet surely it is to the interest of all trade in general, and of shippers and travellers in particular that the latter should be able to enjoy improvements of their facilities with the least possible limitation.

His Majesty’s Embassy must point out that, in the spirit of commercial nationalism which at present so unfortunately prevails among the nations of the world, the introduction of new restrictive principles in international commerce, or the strengthening of old ones, has an unfortunate tendency to provoke the enactment of [Page 919]similar measures by other Governments and so to increase further the disastrous commercial paralysis from which the world is now suffering. There is nothing in logic or in law to prevent the adjective “fighting” as used in the Bill from being applied to other things than ships—to manufactures, to raw materials, or to any commodity which is a subject of international trade. It cannot surely be desired to open the door to this kind of legislation.

Again, the present unparalleled freight depression is largely due to the great excess tonnage over the world’s needs. The world’s shipping amounts to some 70 million gross tons as compared with some 49 million gross tons before the war. The greatest increase has taken place in the American Mercantile Marine which now amounts to some 13½ million gross tons (including idle tonnage and excluding shipping on the lakes) as against 2 million tons in 1913. In view of these facts, and supposing for a moment that a few years ago other nations had passed laws similar to H. R. 8874, there would hardly be a trade in which it might not have been said that the American ships engaged were fighting ships.

The object however of the present representation is to urge a different spirit. All nations are suffering acutely under the present depression and it is not by fighting ships or by any other sort of fighting that relief can be found. The trade between the United States and the United Kingdom is still vast. Even in 1931 America’s exports to the United Kingdom amounted to $455,000,000 while her imports from the United Kingdom totalled $135,000,000. It is the desire of His Majesty’s Government and surely of the United States Government also to develop and increase this valuable exchange, but no commerce can flourish except in a spirit of mutual forbearance. His Majesty’s Embassy submits that the legislation proposed in H. R. 8874 and H. R. 8875 contravenes this spirit and earnestly begs the State Department to take what measures are possible to prevent the enactment of these measures.