103.9164/3432: Telegram

The Ambassador in the United Kingdom ( Winant ) to the Secretary of State

3373. To Admiral Land and Morse from Reed. Refer your 2808, April 10.

1.
I have informed Lord Leathers that I am now authorized to approach the Allies with him subject to the reservations in your cable. On the basis of preliminary discussions with his staff, it appears that MWT will probably be unwilling to approach the Allies at this late stage with the proposal that the questions reserved by you should be left for later determination.
2.
As you know, the British Foreign Office, with the approval, in principle, of the State Department, submitted the memorandum of October 22 to the Allies sometime ago. The Norwegians, Belgians, Dutch and the French Committee have now agreed to the proposals contained therein. MWT state that arrangements similar to those contained in this memorandum have already been put into effect on a joint basis by AFHQ79 in the Mediterranean and it would be awkward to go back on this precedent. The MWT considers itself committed to the proposals already agreed to with the Allies and would be extremely loath and much embarrassed to propose such a substantial modification of these arrangements as you suggest.
3.
It appeared from your cable 2185 of March 2380 that the principal questions at issue between the Foreign Office and the State Department [Page 151] related to the questions of reimbursement of British Underwriters and Prize Court proceedings. The reservations in your 2808 cover a much broader field and appear to us and to MWT to nullify many of the basic provisions of the October 22 memorandum. In an effort to determine whether the issues between us could not be narrowed we have obtained from MWT copies of the October 22 memorandum as submitted by the British Embassy in Washington to the State Department, the Department’s reply dated January 20 and the Embassy’s counter reply dated February 7. It appears from these documents that the only difference between us relates to the exceptional case where total losses have been paid by Underwriters on an Allied ship which the Germans have taken in prize and is reprized by the Allies. If this is the case it should at least be possible to proceed in our discussions with the Allies with a much more limited reservation than that contained in your 2808.
4.
The position of the MWT on this narrow issue is as follows:
They admit that prize or reprize proceedings would probably have the effect of cutting off all legal rights of underwriters. They believe, however, that in the great majority of cases the British Government will be the underwriters and that in almost every instance where payments have been made against total loss the payments have been made to the Allied Governments rather than to their nationals. Since it is agreed as a matter of equity rather than law to return to the government of former registration vessels recaptured from the Germans, the British feel it is eminently proper that the receiving government shall, as a matter of equity should, make an appropriate adjustment in regard to the total loss claims paid by the British Government as underwriters. In any case the four Allies in question have agreed to satisfy the claims of the underwriters. If necessary in order to permit an immediate joint approach to the Allies, MWT might be willing to hold any payments made by the Allies in trust pending later determination of the issue between the State Department and the Foreign Office.
5.
I am not clear that I have properly interpreted the State Department’s position, therefore hesitate to make any recommendation. I do not feel, however, that it is reasonable to press Lord Leathers to proceed jointly on the basis of the reservations contained in your 2808, at least until further clarification and instructions from you. I am doubtful whether the Allies would agree to the reservations, and even if they did agree, I see little advantage to be gained by reaching an agreement on such a limited basis. Leathers and I are in complete agreement that it is urgent for us to make a joint approach to the Allies at the earliest possible moment. It seems to me not only undesirable but quite impracticable for our two governments to take different positions with regard to recaptured ships, due to the difficulty in determining [Page 152] for whom the supreme commander is acting in a particular case of recapture. We must reach an agreement between ourselves on the whole issue and present a joint view to the Allies. I strongly recommend that you take the matter up with the State Department immediately and that every effort be made to reach an immediate agreement with the British so that we can proceed. [Reed.]
Winant
  1. Allied Force Headquarters.
  2. Not printed.