The Secretary of State to the Minister in Denmark ( Davis )
279. Your 461 October 3, 6 p.m. War Shipping Administration is concerned due to an intimation that certain attorneys interested in Danish shipowners’ claims for compensation for vessels requisitioned by US Maritime Commission may propose to Danish Government that it requisition such claims for the purpose of converting them to national claims in order to circumvent provisions of Article II paragraph (a) of Arbitration Treaty of 192885 and thereby attempt to establish a basis for securing arbitration of these private claims as national claims, despite fact that Article II actually endorses general principle of international law requiring exhaustion of local remedies in all such cases. If this Government were to concur in such procedure, [Page 591] it would thereby establish a precedent opening door for circumvention of local remedy rule by other governments in similar future cases. Such a course of action by Danish Government might give rise to impression it desired in that manner to evade its own treaty commitments. While Department is not disposed to believe Danish Government could be persuaded to contemplate such a procedure, it is felt that such possibility should be avoided if it exists. Therefore, in your discretion, indicate to Foreign Minister86 in discrete manner nature of rumors reaching this Government and intimate to him our feeling that the international embarrassment which would result from such a course of action should be avoided; also that Ministry should not be misled by any suggestions that this Government has not seriously endeavored to reach satisfactory settlement of the claims without the necessity of court proceedings. Negotiations with owners and their attorneys have been under way more than 2 years and fact that settlement has not already been reached derives largely, it is believed, from same psychology in certain quarters as that which would prompt suggestion of requisition of claims by Danish Government for purpose of evading the treaty obligations. Further efforts to find proper and expeditious solution of claims are now being made by President’s appointment of an Advisory Board consisting of three prominent jurists to advise on some of the most troublesome questions involved. Board will hear contentions of all parties concerned.
If in your opinion the Foreign Minister should not be approached at this time with reference to this matter, please advise the Department by telegraph of your estimate of the likelihood of the Danish Government entertaining serious thought to such proposals.