Memorandum of Conversation, by the Assistant Secretary of State (Berle)
Lord Lothian37 came in today, at his request.
He wished to know what the status of the proposed Wakama protest was. I told him that so far as I knew all save two or three governments had assented to it and that I supposed it would be coming along in due course. The Ambassador inquired whether it was to be published. I said I was not clear on the point but I thought he could assume that it would be. He rather indicated the hope that it might not be; saying that these protests gave considerable aid and comfort to the enemy. I said that the present protest was more or less formal.
I then said that in my judgment his government probably had profited more than anyone else from the Declaration of Panama, whose operation he appeared to fear. Particularly, the patrolling operations had undoubtedly made it difficult for violations of neutrality to take place, and the principal result was that raiders in the Atlantic had been unable to get supplies through unneutral use of American shores. In consequence, I thought, they had every reason to welcome the operation of the neutrality patrol.
The Ambassador then asked what action was brewing with regard to the Hannover. I said that we were as yet collecting facts on that and I could not say how matters would go.
The Ambassador asked the status of the Neutrality Committee at Rio.38 I said that the governments had now given that Committee full competence to deal with violations of the neutrality zone; and that they were meeting in the not distant future; and that I presumed they would take up and report on and deal with many of these incidents.
The Ambassador then asked whether determination would be taken as to the matter of German ships blockaded in the harbors of the American republics.39 He said that some of these ships he thought had gone out and sunk themselves in the neutrality zone primarily to make trouble for the British.
I said that this thesis seemed a little extreme to me; our impression was that they received general orders to attempt the run home, perhaps because they feared that ultimately they might be taken over, though of course we were in the dark as to the motives of Berlin in issuing [Page 710] such orders. Some 90 ships had originally been blockaded; and we understood that of these only 52 remained.
The Ambassador asked whether it was planned to run these ships within the neutrality zone and I said that there were no plans of that kind. We had considered that situation but had not formulated any definite ideas, since circumstances had made that unnecessary. Naturally, to have our inter-neutral communication in the hands of a belligerent line would not be a wholly safe position for neutral trade, since it would tend to encourage trouble; and this was one consideration.
The Ambassador asked about possible transfers of these ships to neutral flags, pointing out that his government had declined to recognize the validity of such transfers.
I said that we had taken a contrary position, namely, that if the transaction was in good faith and not a cover for belligerent activities, we felt that it was permissible. Lord Lothian observed that the question really came down to “good faith”; their lawyers construed any attempt to escape from the consequences of belligerency by transfer to a neutral flag as being “bad faith”. I said that if, for instance, a neutral government seized ships blockaded in its harbor for their national use or to collect a debt, that question would not arise. In such case the transfer was not to escape the consequences of belligerency; indeed, it would not be a consensual transfer at all. However, I said the problem did not immediately arise, though conceivably it might arise in future. Lord Lothian observed that this was true: and that the German interest appeared to be to diminish the total amount of shipping in existence, in order to affect Allied communications. He said he hoped that if transfers were undertaken, we might discuss them with him, first. He gave this merely as a personal suggestion, though he thought his government would agree.
I said that while I could give no assurance in the matter, I personally agreed. It was not our desire to present the belligerent governments with a fait accompli but wherever possible to settle matters by negotiation and I personally would advocate this course, though as he would readily agree, I had no instructions in the matter. I gathered that the British government is beginning to consider that the time may come when there is a distinct advantage in having these ships under a neutral flag and plying the ocean.
I said that our desire to discuss these matters had been evidenced in the case of the Stella. I had asked Mr. Butler, of the Embassy, to come down and requested him to take action, so that if the Nicaraguan government had taken over the Stella, the British ships in those waters might not molest her until the matter had been thoroughly threshed out; likewise, we had encouraged the Nicaraguan government to continue its discussions with the British government in case the transfer [Page 711] were not complete. The fact proved to be that the transfer was not complete; the Nicaraguan government had dropped the proposed acquisition; as a result, the Stella case was now ended.