811.114 Miserinko/91

The Acting Secretary of State to the British Chargé (Mallet)

Sir: With reference to the Ambassador’s note No. 194, of June 27, 1936, and subsequent communications, regarding the seizure by the United States Coast Guard authorities of the motor vessel Miserinko, registered at Bridgetown, Barbados, in the name of the Marion Elizabeth Shipping Company, Limited, of Lunenburg, Nova Scotia, Canada, the following information is furnished:

The appropriate authorities of this Government have made a careful investigation of this case and are convinced that the Miserinko was actually owned and controlled by one Ralph Bitters, of East Orange, New Jersey, a citizen of the United States, and other American citizens. The vessel was generally known as “Bitters’ boat” and was to all intents and purposes a vessel of the United States. According to statements made by Captain George L. Lohnes and a member of the crew of the Miserinko following their arrest, Bitters directed its operations in detail, paid their wages and also paid the expenses for repairs to the vessel. There is evidence to show that Bitters had the vessel tied up for about two months at a shipyard in Brooklyn, New York, [Page 112] and that in October 1934 Captain Lohnes and a crew went from Nova Scotia to Brooklyn to take charge of it. While the Miserinko was lying at the Brooklyn shipyard it was reconditioned and painted by the crew. There is also evidence to show that Bitters intended at one time to have the Miserinko converted into a yacht. Affidavits substantiating these statements are in the possession of the appropriate authorities of this Government but copies thereof are not furnished at this time as they may be required for use in legal proceedings which are contemplated against other persons suspected of being involved in violations of the laws of the United States. However, should you wish to see them they will be made available to you.

The Miserinko was built at Meteghan, Nova Scotia, Canada, in 1931, by the Meteghan Shipbuilding Company. The manager of the company, Mr. J. T. Deveau, recently informed an officer of this Government that he knew nothing about the owners of the vessel and had no records which would give any information regarding the transaction. He stated that the engine for the boat was shipped from New Jersey and that later a smaller engine was installed. According to records on file, the Standard Motor Construction Company, 172 Whiton Street, Jersey City, New Jersey, shipped a Diesel engine, 280 HP, to the Meteghan Shipbuilding Company, Meteghan, Nova Scotia, in June 1931, and in September of the same year a smaller engine of 150 HP was shipped by the same firm to the same consignee. Ralph Bitters is understood to have had an interest in the Standard Motor Construction Company, of New Jersey, and thus, from the very beginning of the history of this vessel there is an indication of his connection with it.

Although the Marion Elizabeth Shipping Company, Limited, the registered owner of the Miserinko, was organized in 1925 with the following incorporators:

  • John W. Westhaver, Lunenburg, Nova
    Scotia, Master Mariner . . . . . . . Sixty shares
  • G. Alvin Himmelman, Lunenburg, Nova
    Scotia, Master Mariner . . . . . . . . One share
  • W. Pitt Potter, Lunenburg, Nova
    Scotia, Barrister . . . . . . . . . . . . One share
  • Bessie M. Smith, Lunenburg, Nova
    Scotia, Stenographer . . . . . . . . . . One share
  • Christian Iversen, Lunenburg, Nova
    Scotia, Master Mariner . . . . . . . . One share

Mr. Christian Iversen, the President of the Marion Elizabeth Shipping Company, Limited, informed a representative of this Government that he organized the company at the request of parties unknown and that the sixty-four shares of stock are owned by persons [Page 113] other than those who were listed as the incorporators. He added that he is unaware of the names or addresses of any of the owners. John W. Westhaver, who subscribed for sixty shares of stock in the company, is said to be at present a butcher in Lunenburg.

Christian Iversen is understood to be a Danish-born subject and an investigation made in 1934 did not disclose that he has acquired Canadian citizenship.

Mr. Iversen also stated that he has from time to time assisted in organizing companies of this nature because of an understanding that the provisions, supplies and other facilities necessary for the operation of the ships will thereafter be purchased through him. The Lunenburg agents of the Miserinko were Robin, Jones and Whitman, of which firm Mr. Iversen is said to be the manager.

The directors of the Marion Elizabeth Shipping Company, Limited, were reported to the Canadian Registrar of Joint Stock Companies under date of July 13, 1936, to be as follows:

  • Christian Iversen, President, Lunenburg, N. S.
  • L. J. Iversen, Secretary, Lunenburg, N. S.
  • Bessie S. Iversen, Director, Lunenburg, N. S.

However, according to information received from the American Consulate General at Halifax, Nova Scotia, Canada, Mr. L. J. Iversen notified the Provincial Secretary on the same date, July 13, 1936, that the “Company is now cancelled.” He stated that he was acting on the responsibility of his father and himself, respectively president and secretary of the company; that he, his father, and Mrs. Iversen each held one share and that a block of sixty or sixty-one shares was issued in blank but he does not know who owns these shares. He added that Westhaver has no connection with the company.

There is enclosed a chronological outline16 of the operations of the Miserinko from the time it was built in 1931 to the date of seizure and it will be seen that during its entire period of activity it was apparently engaged solely in facilitating the illegal introduction of intoxicating liquors and alcohol into the United States. I would call your particular attention to the more recent activities of this vessel which are typical of its history since the date it was commissioned:

On January 13, 1936, the Miserinko cleared Lunenburg, Nova Scotia, ostensibly for St. George’s, Bermuda. It took on board a cargo of alcohol in tins from a vessel at sea (probably the British Oil Screw Florann) and proceeded to a position off the coast of the United States. It was found on January 18, 1936, by the United States Coast Guard Patrol Boat Icarus about 58 miles southeast of Barnegat Light Vessel, off the coast of New Jersey. It was again found by the Coast Guard plane Adhara on January 21, 1936, about 80 miles east of Cape May [Page 114] Inlet, New Jersey. During the latter part of January 1936 the Miserinko entered United States waters and, from a position about one-half mile off the coast of New Jersey, near Little Egg Inlet, transferred 1,365 cans of alcohol to a scow or float which was towed to that Inlet. On February 5 it was found by the Coast Guard Patrol Boat Galatea about 95 miles east by south of Atlantic City, New Jersey, and was trailed. The trail was later lost. On the night of February 14, 1936, it came to a position about 1½ miles off the coast of New Jersey, within the territorial waters of the United States, where it was boarded by a group of citizens of the United States, including Bitters, who directed the Miserinko’s movements. The Miserinko, acting under orders received from Bitters, then proceeded to the Gulf of Maine. On the night of February 16, 1936, it entered Little Harbor, near Portsmouth, New Hampshire, and discharged some 500 cans of alcohol. On this occasion Bitters again directed the Miserinko’s movements, boarded the vessel and directed the unloading, and gave orders to the master concerning a return to Lunenburg for the purpose of having repairs effected. The Miserinko arrived at Lunenburg about the 21st of February, 1936.

On February 27, 1936, the Miserinko left Lunenburg, Nova Scotia, again clearing ostensibly for St. George’s, Bermuda. It took on board from a vessel at sea (probably the British Oil Screw Reo II) another cargo of alcohol in tins and proceeded to a position off the coast of New Hampshire. Information had been received that an attempt would be made to land the alcohol in approximately the same place as the previous point of delivery. On the afternoon of March 14, 1936, the United States Coast Guard Plane CG–137 sighted the vessel standing in for the coast of New Hampshire toward the position previously designated by Ralph Bitters. Upon encountering the plane the Miserinko reversed its course and stood off-shore, where it was later seized by the Coast Guard Patrol Boat Harriet Lane. It was taken to Portland, Maine, where the vessel and its cargo of alcohol were libelled by the United States for forfeiture under Section 3 of the Anti-Smuggling Act of August 5, 1935 (U. S. C. Title 19, Sec. 1703). A copy of the libel, dated April 13, 1936, is enclosed.17

On April 15, 1936, one Louis Halle, New York City, consented, as attorney for the Marion Elizabeth Shipping Company, Limited, that a decree be entered for the forfeiture of the vessel and cargo. A certified copy of his consent is enclosed.17 There are also enclosed copies of the final decree and of the orders for the disposition of the vessel and cargo.18

[Page 115]

You will observe from Section 5 of the libel that one of the causes of forfeiture alleged is

“That at all times hereinafter mentioned, the said motor vessel Miserinko was operated under certificate of British registry dated at Bridgetown, Barbados, British West Indies, on December 21, 1931, but that said Motor Vessel Miserinko was substantially owned and controlled by a citizen of the United States within the meaning of and for the purpose of Section 3 of the Anti-Smuggling Act.”

Also in Section 9 of the libel it is stated:

“That said motor vessel Miserinko and her cargo were seized as aforesaid because said motor vessel Miserinko was a vessel of the United States within the meaning of the Act of August 5, 1935 (Anti-Smuggling Act) …”19

To these allegations the alleged owner, through its attorney, filed no defense but did file a written consent that a decree of forfeiture of the vessel and cargo be entered. If the claimants should now contend that the Miserinko is not an American-owned vessel, the burden of proof would be on them to show the contrary, in accordance with the principle laid down by Sir Samuel Evans in the case of the Steamships Genesee, Kankakee and Hocking in which he made the following statement:

“There is abundant authority to show that especially where there are circumstances of suspicion or doubt, the burden rests upon claimants to satisfy the Court of the honesty and justice of their claim; and that this is not discharged merely by technical proof, or production of formal documents. The Court expects to be informed with candour and accuracy of the circumstances leading up to and accompanying the acquisition of the vessel in the usual way of business, and to nave laid before it any contemporaneous correspondence or documents which the circumstances indicate must have existed.” (VIII Lloyd’s Reports of Prize Cases 81.)

Lord Parmoor, in rendering the judgment of the Judicial Committee of the Privy Council in the same case on appeal, made the following statement with regard to the funds with which the vessels were purchased, in order to prove actual ownership:

“Their Lordships are not satisfied that Wagner has fully disclosed the whole character of the transaction involved in sending remittances to Denmark, and the evidence as it stands is in their opinion insufficient to discharge the burden of proof which in this matter rests upon the appellant company.” (VIII Lloyd’s Reports of Prize Cases 123.)

I would also refer you in this connection to the cases of the Polzeath (Probate Reports 1916, 241) and the St. Tudno (Probate Reports 1916, 291). In the former case Lord Justice Swinfen Eady stated: [Page 116]

“And so here, in considering what is the principal place of business of the company, one has to consider the centre from which instructions are given, and from which control is exercised on behalf of the company over the employees of and the business of the company, and where control is exercised, and the centre from which the company is managed without any further control except such control as every company or the directors of a company are liable to by the larger body which they represent, the shareholders of the company in general meeting.”

In view of the facts set forth above, which seem to show clearly that the British registration of this vessel was procured merely as a cloak to hide the illegal activities of certain American citizens, I trust that you will agree with me that the Miserinko was not entitled to the use and protection of the British flag but, on the contrary, that it had been desecrating this flag for a long time by using it to shield the unlawful enterprises of its actual owners. I hope that an investigation will be made into the bona fides of the British registration and in this connection I would refer to Mr. Chilton’s note No. 578, of July 10, 1923,20 with respect to the seizure of the alleged British Schooner Henry L. Marshall,21 which appears to be a similar case. In that note Mr. Chilton stated that:

“owing to the circumstances in which she [the Henry L. Marshall]21a secured her British registry [the vessel]21a was not recognized by His Majesty’s Government as entitled to British registry. Consequently, His Majesty’s Government have not felt called upon to assert the principle at stake on her behalf, since, as far as His Majesty’s Government are concerned, the Henry L. Marshall remains an American vessel.”

With reference to the Ambassador’s note No. 226, of July 18, 1936, regarding the arrest and imprisonment of the master and certain members of the crew of the Miserinko, I am in receipt of a letter from the appropriate authorities of this Government stating that after the seizure of this vessel on March 14, 1936, it developed that about a month previously, that is, on the night of February 16, 1936, the same vessel and crew, as stated above, had landed a cargo of approximately 500 three-gallon cans of contraband alcohol at Little Harbor, near Portsmouth, New Hampshire. Accordingly, the facts were presented to the Grand Jury at Concord, New Hampshire, and the crew of the vessel, together with Ralph Bitters and certain other American citizens, were indicted for conspiracy to violate the Tariff Act.

The master and crew of the Miserinko pleaded guilty to the indictment and the master, George L. Lohnes, the mate, Herbert Knickle, [Page 117] the cook, Titus Mossman, and the seaman, Bronson Cluett, were sentenced as stated in the Ambassador’s note. The case of Harold Westhaver, Chief Engineer, was continued to the November term of court for sentence and he has been released on $500 bail. Mossman and Cluett have been released as their terms have expired. With respect to Captain Lohnes and Mate Knickle, the authorities of this Government state that their release on bail would not be appropriate. The proper procedure to secure their unconditional release would appear to be for counsel for the prisoners to present to the court that imposed the sentences a motion setting forth such facts as he deems sufficient to warrant reduction of the sentences to the time served. The term of court at which the sentences were imposed expires on the 31st instant. However, the United States Attorney at Concord, New Hampshire, has been telegraphically instructed to move for an indefinite extension of the term for the purpose of this case.

Accept [etc.]

William Phillips
  1. Not printed.
  2. Not printed.
  3. Not printed.
  4. None printed. The final decree was dated April 17, 1936, Portland, Maine; the order of disposition, April 21, 1936, Portland, Maine, District Court of the United States, District of Maine, SS: Southern Division.
  5. Omission indicated in the original.
  6. Foreign Relations, 1923, vol. i, p. 163.
  7. 292 Fed. 486.
  8. Brackets appear in the original instruction.
  9. Brackets appear in the original instruction.