The Secretary of State to the Belgian Ambassador (Van der Straten-Ponthoz)

The Secretary of State presents his compliments to His Excellency the Belgian Ambassador and has the honor to acknowledge the receipt of his communications, no. 556 of January 25, 1941 and no. 831 of February 6, 1941, regarding the four Gulf Oil tankers lying at Port Arthur, Texas, pending the outcome of libel proceedings instituted in the United States District Court at Beaumont, Texas.

The Ambassador states that these vessels which were owned by the Belgian subsidiary of the Gulf Oil Company, an American corporation, were requisitioned by the Belgian Government pursuant to action taken on May 17, 1940; that during the period from July 14 until November 1940 authority was given the Belgian company to operate the vessels under a licensing system; that at the end of October 1940 notice was given to the company that upon the termination on November 21, 1940 of the license the vessels were to be turned over under time charters to the British Government; that at the beginning of November, and without notice to the Belgian Government, the vessels were sold by the Belgian company to its parent company in the United States and were transferred to the Panamanian flag. This action, it is stated, was illegal for the reasons, first, that Belgian law prohibits the sale of a vessel under the Belgian flag without the formal approval of the Government and, second, the sale of requisitioned vessels is not permissible.

The Ambassador suggests that, since this litigation may keep the vessels tied up for a period of from twelve to eighteen months, an [Page 10] arrangement should be brought about by which they may be put into operation; that to this end the Belgian Government would be prepared, if the vessels were restored to the Belgian flag, to consent to their transfer to the United States flag, in order that they may be available when and if they are required for the United States Government service.

The concrete proposal as stated in the Ambassador’s note of January 25 and the enclosure thereto is that two of the vessels be kept in the service of the American company and that the other two be allotted to the British Government, it being understood that if the two vessels which would be turned over to the British Government were needed by the United States, they would be made available on the basis of an exchange of equivalent tonnage.

It appears from the exchanges of communications which Captain René Boël, Chief of the Belgian Economic Mission in London, and Sir Ashley Sparks, representative of the British Ministry of Shipping in the United States have had with Mr. B. P. Newton and Mr. David Proctor, representing the Gulf Oil Company, that the proposal of the Belgian Government has already been discussed by the gentlemen mentioned and was not acceptable to the Corporation, the latter being unwilling to have the vessels retransferred to Belgian registry and ownership.

Quite apart from the merits or demerits of the Ambassador’s proposal, the Department of State is not in a position to require the American company to agree to any particular kind of settlement, although naturally it would be glad to see a satisfactory adjustment of the controversy. While it is noted that the Belgian Government attaches considerable importance to the change from the Belgian to another flag, it is also to be remembered that the ships were and are in fact the property of an American corporation.

In this situation the Secretary of State would suggest for the consideration of the Belgian Ambassador the desirability of bringing about a termination of the libel proceedings under circumstances which would permit the vessels to remain under the control of the American company. It would seem that the interests and contentions of both parties might be adequately safeguarded by a stipulation which could be filed with the court stating in effect that the proceedings are to be terminated without prejudice to their respective rights and contentions and with the purpose of making the ships available for use at a time when the shortage of desirable tonnage is becoming acute.

If such an arrangement should be looked upon with favor by the Belgian Government, the Secretary of State would be glad to take up the matter with the American company.