The British Ambassador (Halifax) to the Secretary of State
Sir: I have the honour to refer to your note No. 740.0012 European War 1939/10864 of July 29th, 1944, about the disposal of vessels recaptured from the enemy and to inform you that the views of His Majesty’s Government in the United Kingdom on the points therein raised are as follows:
- His Majesty’s Government regret that the statement in paragraph 3 of your note questions for the first time the whole principle of a general arrangement. His Majesty’s Government remain firmly of the conviction that, in the absence of an agreement on general principles on the lines suggested in the memorandum85 enclosed in my note No. 286 of May 23rd, 1944, (hereinafter referred to as the memorandum), the disposal of every recaptured ship would be subject [Page 156] to interminable negotiations with consequent detriment to the war effort of the United Nations.
- With reference to paragraphs 1, 2 and 10 of your note, the proposal of His Majesty’s Government was that the Commander-in-Chief as defined in paragraph 4, of Part III of the memorandum should keep the ship for his own immediate use if he so requires. As soon as he releases the ship it comes under the control of the Combined Shipping Adjustment Board, a joint agency created by the two Governments to deal with Merchant Ships, for use in the general war effort, that is, in connection with the prosecution and completion of the war in Europe and the Far East. In no circumstances would recaptured ships escape use in the war effort. The jurisdiction of the Combined Shipping Adjustment Board in this regard is recognized by those Allied Governments to whom copies of the memorandum were handed, and any ships turned over to such Allied Governments would remain under the control of the Combined Shipping Adjustment Board by virtue of special agreements already made with these Allies.
- With regard to paragraphs 5, 6 and 7 of your note, His
Majesty’s Government appreciate the helpful comments of the
United States Government and suggest in the interest of
clarity that the words “after satisfaction of the reasonable
claims of underwriters” at the end of the first sentence of
paragraph 2(d) of Part II of the
memorandum should read “subject to the safeguarding of any
rights which the underwriters may have”. This would make it
clear that no new rights would be conferred on underwriters
but that their rights if any would merely be preserved.
Consequent upon this amendment it is suggested that
paragraph 2(d) of Part II could be
shortened to read as follows:
“(d) In the case of vessels in respect of which total losses have been paid by underwriters, the return to a government under the arrangements contemplated in this Memorandum will be made subject to the safeguarding of any rights which the underwriters may have.”
- With reference to paragraph 8 of your note, as was pointed
out in the memorandum, there may be cases in which it is
subsequently proved that the true owner of a particular
vessel is a State or national of a State other than that in
which the vessel is registered or that parties who are not
nationals of the State of registration hold equities in the
vessel or the right to possession thereof. In such cases it
is understood that the Allied Government to whom the vessel
has been transferred for operation by virtue of registration
has, by such transfer, acquired custody only and will
release the vessel or make such other adjustments as may be
necessary in the circumstances. His Majesty’s Government
therefore agree that the final determination [Page 157] of title must depend on the
facts in each case. In order to clarify this position it is
suggested that paragraph 2 of Part II of the memorandum
should be amended to read as follows:
“(e) There may be cases in which it is subsequently proved that the true owner of a particular vessel is a State or national of a State other than that in which the vessel is registered or that parties who are not nationals of the State of registration hold equities in the vessel or the right to possession thereof. In such cases it is understood that the Allied Government to whom the vessel has been transferred in accordance with paragraph 1, Part II, of this memorandum has, by such transfer, acquired custody only and will release the vessel or make such other adjustments as may be necessary in the circumstances.”
“(f) In cases where the owner of a vessel—whether a United Nations Government or a national of a United Nations Government—has been indemnified by underwriters, the turning over of a vessel to that Government without taking into account such indemnification would be in the nature of a gift and, in such instances, it is agreed that appropriate equitable adjustments will be made between the governments concerned.”
- With regard to paragraph 4 of your note, His Majesty’s Government welcome the United States Government’s agreement with their views in regard to the disposal of cargoes found on recaptured ships.
- With reference to paragraph 9 of your note, His Majesty’s Government confirm that the expression “all liabilities, including costs of repairing and reconditioning, in respect of the vessel”, as it appears in paragraph 2(c) (ii) of Part II of the memorandum, is intended to cover the cost of repairing or reconditioning recaptured vessels whether already settled or not, and propose that the memorandum be amended accordingly.
- His Majesty’s Government hope that the above explanations will enable the United States Government to proceed with a formal agreement on the lines suggested in paragraph 2 of my note No. 286 of May 23, 1944. At the same time, they would be grateful for an early reply86 to the question raised in paragraph 7 of this Embassy’s Aide-Mémoire of February 7, 1944, as to whether the United States Government are prepared to take powers similar to those which have been taken by His Majesty’s Government in order to ensure that claims for prize salvage will not be brought against British ships in American courts.
I have [etc.]
- Not printed.↩
- The Department did not reply until March 2, 1945, when it declared its willingness to proceed to the conclusion of a formal agreement along lines suggested by the British in their notes of May 23 and October 30, 1944. For text of agreement effected by exchange of notes signed at Washington May 7 and June 15, 1945, see Department of State Treaties and Other International Acts Series No. 1556, or 60 Stat. (pt. 2) 1909.↩