Foreign Relations of the United States Diplomatic Papers, 1935, General, The Near East and Africa, Volume I

811.801/578

The British Embassy to the Department of State

Aide-Mémoire

A Notice (Investigation—Section 19 of Merchant Marine Act, 1920) was issued by the United States Shipping Board Bureau of the Department of Commerce on January 22nd, 1935. Attached to it was a proposed report, based upon an investigation by the Division of Regulation of that Bureau into conditions alleged to be unfavourable to shipping in the foreign trade resulting from competitive practices of owners, etc., of foreign vessels.

2. The Notice stated that any exceptions to or other comments on the rules and regulations proposed in the report should be addressed to the Division of Regulation on or before February 25th, 1935. It is understood that the representatives of certain British and other foreign shipping interests were in the actual event courteously granted an extension of time; and have presented such exceptions and comments from the point of view of their particular interests.

3. The following are the views expressed by the Board of Trade of His Majesty’s Government, after discussion with British shipping interests, on certain of the proposed rules and regulations:—

4. It is observed that the purpose of the proposed rules is to safeguard regular Conference lines against rate cutting; and that there is no intention to interfere with genuine tramp business. It is feared nevertheless that the order as drafted, and particularly rules 5 and 6 thereof, would in practice result in such interference. Strong representations have been made to the Board of Trade by British tramp shipping interests, who point out that the rules in question are not wide enough to cover much genuine tramp business that has been carried on for many years. For example, in relation to rule 5, timber is a genuine tramp cargo, but is always marked. Grain may be shipped in bags, as well as carried as a bulk cargo. Goods may be loaded for several shippers in a vessel chartered by a load broker.

5. Further, in cases where a vessel is time chartered by a firm in the United States or elsewhere, any penalty for breach of the order should, it is suggested, surely lie, not against the ship owner, who might be ignorant of the use to which the ship is to be put, but against the time charterer.

6. It is urged that the transportation at least of cargo in any case in which all the cargo carried in the ship is carried under a charter party whether or not there is more than one charter party should be exempted from the scope of the order. Furthermore, it is felt strongly that any penalty for a breach of the regulations should apply to the charterer and not to the ship owner in any case in which control of the ship rests with the former in a matter to be dealt with under the terms of the order.

7. Under rule 4 of the proposed order it is apparently intended to give the Department of Commerce the power to grant exemptions. In this connection it is suggested that unless the provisions of rules 5 and 6 are considerably liberalised the demand for such exemptions may well and reasonably become overwhelming. Moreover, the delay in dealing with such applications for exemption or a refusal to grant them would undoubtedly lead to difficulties, not only as between shipping companies and the Department, but even between the United States and foreign governments.

8. His Majesty’s Embassy will be most grateful if the State Department will be good enough to see that the competent authorities of the United States Government take full account of the above considerations as soon as may be possible.

Washington , April 4, 1935.