Memorandum Handed by the British Chargé ( Butler ) to the Secretary of State on January 13, 1941

Gulf Belgian Tankers

If the U. S. Navy requires that these particular vessels should be available for requisitioning by them, we are of course ready, with the Belgians, to seek a practical solution of this problem. In view of the wish of the U. S. G.5 to help us in our shipping needs, we feel sure that some arrangements satisfactory to the U. S. Navy, the Belgians, and ourselves can be made, perhaps on the basis of the agreement with Standard Oil Company. In this case the Standard are again hoisting the Belgian flag on their two Belgian tankers, which will remain in American service; while two substitute vessels are being transferred from the Panamanian flag for British use.
Any practical solution must, however, uphold those principles of national and international law which are surely the equal concern of the U. S. G. as well as of H. M. G.6 and the Belgians.
It is an unfortunate fact that the desire of the U. S. Navy for these particular vessels was not made known to either the Belgians or to H. M. G., before the arbitrary and illegal action of the Gulf and Belgian Gulf corporations took place.
The transfer of ownership from a Belgian to a United States corporation, without the assent of the Belgian Government, is in flagrant violation of Belgian law. This action is a bold attempt on the part of a corporation with international affiliations to flaunt its independence of the Government of the country in which it is domiciled. This effort constitutes open defiance by a corporation of the authority [Page 5] of a belligerent Government to requisition vessels under its registry and owned by a corporation domiciled within its jurisdiction. The attempted transfer of flag is contrary to the principles of International Law.
The Gulf Company had previously acquiesced in the requisitioning order of the Belgian Government and had been permitted to operate the vessels for their own account in Western Hemisphere waters under a general license until November 20th. In October they were notified by the Belgians that from November 21st these vessels would be chartered to the British Ministry of Shipping, because of our urgent need for tanker tonnage. The only answer to this notice was a statement that the vessels had been sold by the Belgian Gulf to the American parent and had been registered under the flag of Panama.
The Gulf Corporation has been singularly uncooperative in our war effort. They have even on occasion threatened to discontinue sales to the United Kingdom of lubricating oils important for the defense of Great Britain. On the face of it, the attempted transfer of ownership and flag appeared to be a dishonest effort on the part of the Gulf to shirk their responsibilities to the Belgian State when the going was rough and to keep these vessels for their own use at a time when Belgium and her Allies sorely needed them, after the Gulf had for many years secured the advantages of operating a fleet under the Belgian flag.
The Belgian Government felt it necessary to take immediate steps in the appropriate District Court of the United States to render the sale of these tankers a nullity. The Belgian Government also decided to bring the facts to the attention of the U. S. G. In both of these procedures the Belgians had the full support of H. M. G.
Although the beneficiary interest in these tankers, built in Germany, Holland, France, and Great Britain, is American, the ships flew the Belgian flag and were owned by a Belgian company. There is adequate precedent in both U. S. law and policy to support the right of the Belgian Government to prohibit transfer and to requisition these ships. Furthermore, if the actions of the Gulf Company were allowed to stand, it would appear to constitute a violation of treaty agreements between the United States and Belgium.
Because of this and because the principles involved must be matters of the highest concern not only to the Belgian Government but also to H. M. G. and the U. S. G., it was hoped that the U. S. G. would intervene with such steps as might be proper to secure speedy and favourable determination of the issue in the courts.
Any weakening of these principles by legal delay or by inconclusive decision would lessen our control under International Law over many hundreds of thousands of tons of shipping and would affect [Page 6] the right of a belligerent nation in time of emergency to control the property of its citizens.
It was only subsequently that either ourselves or the Belgian Government learned that the actions of the Gulf Oil Corporation had received prior assent of the U. S. G., because these ships are of a type of which the U. S. Navy is short. It is understood that the U. S. Navy, while having no immediate need for the ships, is adamant that they should be registered under a flag which will make them immediately available for requisitioning for U. S. service.
In view of this new development, we can only reiterate our willingness with the Belgians to explore the possibility of a practical solution which will meet the needs of the U. S. Navy. We feel sure, however, that the U. S. G. will agree that any such solution must be reached by a method which supports the authority of the Belgian Government to prohibit the transfer of ownership or flag of these vessels without its assent, and which upholds the vital principles of International Law and good faith which are involved.
  1. United States Government.
  2. His Majesty’s Government.