458.11 Dexter and Carpenter/163

The Secretary of State to the Chargé in Sweden (Crocker)

No. 180

Sir: Referring to the correspondence heretofore exchanged between the Department and the Legation concerning the claim of Dexter and Carpenter, Incorporated, against the Government of Sweden, and especially to your despatch No. 677 [657] of February 17, 1933, you are now instructed to address a note to the Foreign Office which, after appropriate introductory remarks, should state:

“My Government has given very careful consideration to the note of February 9, 1933, from the Foreign Office regarding the claim in question and, while it appreciates fully the views set forth therein, in defense of the position of the Swedish Government, it cannot but experience a feeling of deep regret at the ultimate conclusions of the Swedish Government. These conclusions are made to rest, in substance, upon the hypothesis that the repeated, protracted and painstaking consideration given the controversy between Dexter and Carpenter, Incorporated, and the Swedish National Railways by the courts of the United States, upon the initiative of the Swedish National Railways, amounts, so far as concerns the substantial justice of the controversy, to a nullity, and that, from the standpoint of the Swedish Government, justice as between the contending parties can only flow from decisions of the Swedish courts after renewed litigation of an expensive and protracted nature.

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“My Government also observes with regret and concern the inadequacy of the proposal of the Swedish Government that:

‘If … the United States Government are of the opinion that the standpoint of the Swedish Government, when referring the matter to a Swedish court, is in conflict with international law, then the Swedish Government are equally as willing as they are under obligation, to allow this question to be decided by international arbitration.’

“Such a proposal appears to subordinate the substance to the form—to subordinate entirely the matter of substantial justice in order to debate a technical question of procedure.

“In its simple elements, the present case is as follows:

“The Swedish National Railways engaged in certain purely business transactions in the United States. From those transactions differences developed as to the rights of the parties. The Swedish National Railways appealed to the courts of the United States for an adjudication of those rights. The defendants in answering the suit of the Swedish National Railways advanced certain counter claims. The resulting controversy progressed in a regular manner, and with the concurrence of all parties concerned, through many stages of litigation. The Swedish Government is not understood to have questioned the regularity of any of those proceedings or of the resulting judgments. It was only after the responsibility of the Swedish National Railways to the American defendants (counter-claimants) had been definitely and finally established that the Swedish Government through its Minister advanced the thesis that that judgment should not be carried into execution because of the fact that the Swedish National Railways was a branch of the Swedish National Government and, as such, exempt from such execution. That thesis of the Swedish Government was accepted by the Courts of the United States and execution of the judgment of the court was abated.

“In advancing that contention, the Swedish Government, however, did not challenge the regularity of the judgments of the courts of the United States. The only question now open to discussion is, therefore, that as to whether the final judgment of those courts is a judgment which should be respected, not that as to whether the parties litigant should be compelled to incur the expense and spend the time necessary to litigate the entire question anew in order to determine whether the Swedish courts might reach the same conclusions as the courts of the United States. For this reason my Government feels that, on further consideration of the case, the Government of Sweden will realize that an adjudication of the case in the Swedish Courts would not necessarily settle the issue.

“It will be readily apparent that if the Swedish Courts should reach conclusions different from those reached by the Courts in the United States, it would not necessarily follow that those conclusions were correct and there would still remain the question as to whether the judgments of the courts of the one or the other country should be respected. Justice unduly delayed is justice denied. The ultimate result of the proposal of the Swedish Government, if acted upon, would therefore appear to defeat, to a large extent, the ends of justice.

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“In view of the fact, as above indicated, that there has been a complete adjudication of the issues involved in this case, in the forum chosen by the Swedish National Railways, and since execution of the final judgment rendered in that forum is in suspense on the request of the Swedish Government, simply on the ground that, if executed, it would directly affect the Swedish Government and therefore should not be so executed, the only question for consideration at this time is whether that judgment should be respected or rejected by the Swedish Government.

“The Swedish Government has indicated its willingness to arbitrate this case; also its readiness to give earnest attention to any other proposal from the Government of the United States for settlement of the controversy, provided the points of view of the Swedish Government receive due and sufficient consideration.

“The Government of the United States is prepared to go to arbitration. It is also prepared to enter into friendly discussions of the subject with the Government of Sweden with a view to arriving at a less formal solution of the question. This latter method would perhaps be more in accord with the cordial relations existing between our two Governments, and would at the same time avoid giving unpleasant notoriety to the controversy. If, therefore, it meets with the views of the Swedish Government, the Government of the United States would be prepared to enter at once upon oral discussions of the subject with a view to arriving at an adjustment of the claim that would be satisfactory to both parties.

“My Government would be pleased to be informed at the earliest practicable moment which of these lines of procedure would be more agreeable to the Swedish Government.”

You will please supplement this communication by such oral representations as to you may seem appropriate and urge for an early acceptance of the Department’s proposal, advising the Department by cable the substance of the reply of the Foreign Office.

Very truly yours,

For the Secretary of State:
William Phillips