811.801/484½

The German Embassy to the Department of State

[Translation]

Memorandum

On February 4th of this year, two bills regarding navigation were introduced in the Congress of the United States which present grave dangers for German shipping.

S. 3501 and H. R. 8874 call for an extension by law of the concept of “fighting ship” and S. 3502 and H. R. 8875 for an extension of the concept “coastwise navigation”, which would mean a serious prejudice to the principle of freedom of navigation.

[Page 925]

The bill concerning “fighting ships” would, on the one hand, seriously hinder any further development of international navigation, as every new installation of a ship in a service, every change in passenger or freight rates, in fact, even every change in the time of sailing could be declared by the United States Shipping Board, as a unilateral act, and without granting a hearing to the parties, as unjustified competition, and punished by refusal of outward clearance. According to the tenor of the bill, there is even a possibility that the defensive measures taken by a foreign navigation line, with regard to freight and passenger rates, against an American ship newly entered into competition, might be considered by the Shipping Board as “unjustified competition”, within the meaning of the law, and prosecuted.

The provision of law, as at present proposed, presents the danger of eliminating from navigation between other countries and the United States, all competition, without regard as to whether it is healthy or unhealthy, to the greatest disadvantages of American and foreign firms and individuals interested in commerce and relations with the United States.

The bill, which is intended to subject transportation of passengers from an American port via a nearby foreign port, back to an American port, to the existing restrictions on coastwise navigation, would, on the other hand, materially prejudice or make quite impossible the cruises developed by foreign navigation companies during long years of practice, which form a legitimate branch of international navigation.

Furthermore, it has always been a recognized principle of international law, that the transportation of passengers and freight on the high seas should be free and open to the ships of all nations on equal terms. By the contemplated extension of the coastwise navigation concept a considerable portion of the transportation of passengers and freight, which has hitherto been unrestricted, would be claimed as the special privilege of a specific national flag.

Aside from these general considerations of international law, weighty objections may be raised based on treaty rights against the proposed extension of the concepts of “fighting ships” and “coastwise navigation”.

The contemplated provision of law with regard to a new interpretation of the concept, “fighting ship”, is in conflict with Article VII of the German-American Treaty of Friendship, Commerce, and Consular Rights,10 according to which the liberty is granted to the nationals of one contracting party, to visit without hindrance, with [Page 926]their ships and cargoes, all places, ports, and waters of all kinds, within the territorial limits of the other party, which are now or may be in the future open to foreign flags, commerce, and shipping. It would be inconsistent with this provision, if outward clearance were refused to a German ship, on the ground of an alleged infraction, concerning which the Shipping Board, alone, and as a unilateral act, would pass judgment.

The extension of the concept of coastwise navigation, on the other hand, is inconsistent with Article XI of the German-American Treaty of Friendship, Commerce and Consular Rights, the basis of which was the concept of coastwise navigation as accepted at the time of the conclusion of the treaty. A unilateral extension of this concept cannot be approved. The value of these provisions concerning navigation contained in the said Treaty would be considerably diminished for Germany by such an extension. The fine of $200 per passenger, which would be required in the case of round trips, which hitherto under the treaty were not considered as coastwise navigation, must be regarded as a violation of this treaty.

In conclusion, it may be pointed out, in the regard to the bills discussed above, that German shipping has contributed in a high degree to bring about the surplus in German balance of trade, the transoceanic service maintained by it being not the smallest factor in this respect. It cannot be the intention of the United States to limit this possibility on the part of Germany by restricting to unreasonable limits the freedom of movement of her ships on the high seas in a long established legitimate trade, in violation of the Treaty existing between the two countries.

The German Embassy would appreciate it if the Department of State of the United States would see to it that the above-mentioned points are taken into consideration by the competent American officials in the discussion of the bills.

  1. Treaty of December 8, 1923, Foreign Relations, 1923, vol. ii, p. 29.