811.114 Great Britain/439
Memorandum by the Assistant to the Secretary of the Treasury (Graves) of a Conference With the Counselor of the British Embassy (Osborne)22
The conference was arranged by Mr. Hickerson of the State Department, apparently at the request of Mr. Osborne.
Mr. Osborne stated that the various notes from the State Department to the British Ambassador relating to the subject of smuggling of distilled spirits from British ports or in ships of British registry into the United States had been transmitted to the British Government; that the British Government (Board of Trade) had for months been making a strong effort to solve the problem, but without any success up to the present time; that he had recently received dispatches from his Government discussing the situation at length, but indicating that there was very little if anything which could be accomplished along the lines of the expressed desires of this Government. He said that this was due to two things: first, that the laws of Great Britain relating to shipping afford no basis for the cancellation of registry for offenses such as we have complained of, since these offenses are not per se violations of British law, and, second, that the virtually autonomous character of the Colonial Governments involved renders them to all intents and purposes free from control by the Home Government.[Page 406]
I called to Mr. Osborne’s attention the fact that this Government had suggested in its recent notes that it should be possible effectually to control the situation without in the least doing violence to any basic principle of British law relating to the registry of ships for the foreign trade; that is to say, through such devices as (a) requiring landing certificates, and (b) prohibiting the clearance of vessels for the high seas with cargoes obviously intended to be smuggled directly or indirectly into the United States. I brought to Mr. Osborne’s notice in this connection the situation which now exists at Newfoundland, which appears to require landing certificates in respect of all classes of cargo outbound from Newfoundland (including “in-transit” goods), excepting alcohol and alcoholic beverages. I told him that my information was that Newfoundland is, practically speaking, in a state of receivership at the present time and subject to the control of the British Government; and that under the circumstances it would seem to be a simple matter to secure, by Order in Council or otherwise, a modification of the Newfoundland customs law or the regulations promulgated thereunder, which would eliminate the exception or exemption now accorded in the case of alcohol and alcoholic beverages. Mr. Osborne said that our information was correct with reference to the present status of the Government of Newfoundland; that he was unable to see why there should be any difficulty in bringing about the suggested modification of the Newfoundland law or regulations; that he would accordingly take steps to have this specific proposition called immediately to the attention of the British Government, with the recommendation that action be taken in accordance with our suggestion on this point.
I suggested to Mr. Osborne that similar steps might likewise be taken in other British possessions, pointing out in this connection that our understanding was that the Government of Bermuda had assured our Consul there (in connection with a recent reduction of duty on distilled spirits) that the Bermudan Government would insist upon the posting of a proper bond upon all exports of distilled spirits from Bermuda, to be discharged only by the subsequent presentation of landing certificates proving that the cargo had been entered at the declared port of destination. I suggested that if Bermuda was able to effectuate this arrangement, it would be difficult to understand why any other British colony should not be in a position to do the same thing if it so desired. Mr. Osborne agreed with this view.
At the end Mr. Osborne seemed to feel that there probably was a basis for a solution of the problem, along the lines which have been suggested, in so far as it relates to cargo shipped outward from [Page 407] British possessions like Newfoundland, Bermuda, British Honduras, etc. He does not, however, at the present time see any way to deal with ships of British registry which pick up cargo at other than British ports, carry it to points on the high seas, and discharge it to shore-contact vessels. I suggested that, for the time being, this was probably a matter of secondary importance; that we would consider it a great step forward if a way could be found to cut off exportation from, or transshipment through, British colonies; and that we would be quite willing to leave for future consideration all other elements of the problem.
Mr. Osborne stated that nothing was said in the dispatches which he had received from his Government bearing directly upon the suggestions made by this Government with respect to landing certificates; that he would call these suggestions again to the attention of his Government, and press them for action accordingly.
Mr. Osborne stated that it would probably be advantageous for him personally to make a trip to St. Johns, Newfoundland, for the purpose of contacting Government officials there, and indicated that he would make this trip if he could find the time.
Mr. Osborne asked, and I undertook to answer, a number of questions with reference to the identity of the persons operating and financing smuggling operations. With respect to the Sweeney case, I pointed out that the British Government was without jurisdiction, since Sweeney is a citizen of Canada.
I have sent to Mr. Osborne, at his request, a copy of the sections of the customs law of Newfoundland which relate to landing certificates, and a copy of the Decree promulgated by the Government of Cuba banning exports of alcohol to points known to be bases of supply for smugglers; and I agree to attempt to secure for his use copies of the customs laws of all British possessions in North and Central America and the West Indies.
My understanding with Mr. Osborne is that to-day’s conference is to be regarded as preliminary only. We arranged to meet for a further conference upon the return of Commander Thompson23 to Washington, and for such later conferences as occasion requires.
Mr. Osborne asked me to give assurance to Secretary Morgenthau that the British Government was much concerned about this whole matter and would undertake to cooperate with this Government in every possible way.