740.00112 European War 1939/9754

The Department of State to the British Embassy


Reference is made to the British Embassy’s Aide-Mémoire of November 15, 1943, with which was transmitted a copy of a memorandum dated October 22, 1943, on the use and disposal of vessels captured or found by Allied forces in the course of operations for the liberation of Europe, confined to vessels which formerly belonged to the Allied Governments or their nationals, and a copy of a second memorandum drawn up as an addendum65 to the former memorandum and setting out the procedure proposed for dealing with cargoes found on such vessels at the time they are captured or found by Allied forces. The Embassy states that on October 22, 1943, “with the approval of the United States Government”, the British Government transmitted to the Allied Governments the proposals contained in the memorandum of that date for the treatment of recaptured vessels. The Embassy inquires whether the Government of the United States concurs in the terms of the addendum dealing with cargoes, and states that it is proposed to communicate to the Allied Governments suitable sections of the addendum comparable with those of the original memorandum of October 22, 1943.

Informal communications between the Embassy and the Department of State develop the fact that the text of the proposals of October 22, 1943 relating to recaptured vessels was not submitted for approval to the Government of the United States, and that the Embassy intends that the first sentence of the British Aide-Mémoire should be read as meaning only that the Government of the United States had approved the informing of the Allied Governments of the policy agreed upon in principle.

The Department of State finds itself in general accord with the [Page 145] position taken in the British memorandum of October 22, 1943 relating to recaptured vessels, with the exception of paragraph (d) on the last page under (B) 2, where the statement is made that “the return to a Government under the arrangements contemplated in this memorandum can only be made after satisfaction of the claims of the underwriters”, whether the underwriters be an Allied Government or private underwriters. The Government of the United States is of the opinion that when a vessel has been captured by the enemy and condemned as prize by an enemy prize court, all prior title, rights and interest are ipso facto cut off, and that in case of recapture by the country whose flag it originally flew or by an Allied Power it becomes good prize for the captor. The Allied Powers may agree, if they so desire, to return such vessels to the country whose flag they carried prior to capture by the enemy, and may do so under such terms and conditions as they see fit, but it is hardly seen why there should be an implication that the underwriters must be treated on the basis that they “have become the owners or are entitled to claim ownership”. It is recognized that under the municipal law of various states, including the United States and Great Britain, an underwriter by payment of the loss becomes subrogated by operation of law to such rights, if any, as the insured may have in regard to that loss. This may be a basis for favoring the underwriter over the original owner if the vessel is to be restored to either of them, or for requiring the original owner to repay the underwriter if the vessel is to be restored to the original owner who has already been paid by the underwriter for the loss. But when the vessel is to be turned back to a government, it would appear that since the rights of the former owner and of the underwriters alike were cut off by the capture and condemnation of the vessel by the enemy, there may be presented a question whether any remuneration for the return of the vessel to the state of which the former owner was a national might more appropriately be made to the governments obtaining the right to the vessel by recapture, or disposed of in some other way among the United Nations as their interests may be made to appear.

As for the cargoes, it would seem desirable that all cargoes on such vessels should be submitted to adjudication in prize courts in order that it may be determined whether they constitute good prize or whether in the case of neutral or Allied owners compensation would be in order. Generally speaking, requisition presupposes a duty to make compensation, hence the desirability of determining by judicial methods the right to condemn without compensation. Requisition similar to that under the Defense Regulations in British ports may not be practicable in some of the Allied States, and in such cases prize court proceedings may be necessary for this reason as well.

  1. Addendum not printed.