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tions. Under the circumstances we consider best confirm sale collecting at once purchase money of the seven steamers committed leaving for the present Virginia, Martha Washington free. Laura, Alice under offer here.

I told Mr. Haight that this Department had no objection to selling the Austrian ships to the American owners; that this Department knew of no restrictions and recognized no restrictions. Mr. Haight stated that he had full authority to sell the ships without restrictions that the ships were worth more than with restrictions. I told him that the Shipping Board, Mr. Chamberlain of the Bureau of Navigation, and this Department had no objection to the sale, but I warned him personally and confidentially that I could not guarantee and would not guarantee that this Government would not under certain circumstances requisition the ships for such purposes as the Government might wish to use them.

File No. 863.852/13

The Minister in Switzerland (Stovall) to the Secretary of State


BERNE, April 17, 1917.
[Received 4.20 p. m.]

779. Replying No. 1644, 7th April. For Phelps Bros. [from Austro-Americana]:

Approve your action for our boats. You have authority together with Buenos Aires without referring any more to us to sell best possible all our other steamers, namely Martha, Virginia, Laura, Alice. Instruct our captains to cooperate fully with you. Provide for them, officers, and whole crew adequate board and continue payments as heretofore unless you secure them adequate employment. Cable name of European bankers who will pay us. Working on Tripcovich, Atlantica, and Orient steamers and cabling later [regarding] Austro-Americana crew.


File No. 863.852/20

The Minister in Switzerland (Stovall) to the Secretary of State


BERNE, May 4, 1917, 5 p. m.
[Received May 5, 8.45 p. m.]

865. Referring to my telegram 848 [748], May 1,1 and Department's telegrams 515, April 14, and

1644, April 7, to Embassy,

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Vienna, relative to sale of ships of Austro-Americana Steamship Co., have to report that Mr. York-Steiner acting for Austro-Americana requested good offices of Legation to ascertain whether sale of ships has been completed. York-Steiner states that Austro-Hungarian Ministry for Foreign Affairs sent telegram April 17 through Stockholm for Austro-Hungarian authorities in United States or those acting on behalf of such authorities to close Austrian registry of seven ships belonging to Austro-Americana and sold American buyers for United States registry as advised Department's 1644, April 7, to Embassy, Vienna. York-Steiner desires to know whether sale and change of registry mentioned in Department's 1644 have been satisfactorily completed.

He states that if sale of other ships already authorized can be effected he will endeavor to cause action of Austrian authorities to change register. York-Steiner stated that he feared telegram of Austro-Hungarian Foreign Office mentioned above relative to change of registry had not reached proper authorties as he was aware that Germany opposed sale of Austrian ships and desired to hinder steps taken to effect it.


File No. 863.852/25

The Minister in Switzerland (Stovall) to the Secretary of State


BERNE, June 5, 1917, 5 p. m.

[Received June 7, 11.45 a. m.]

1004. For Phelps Bros. [from Ferruccio Schiavon]:

June 3. Your three cables May 19.1 Official permit to sell all steamers granted, provided buyers are private concerns and guarantees are given of trading during the war only between American ports excluding English and French Dominions, and for Shanghai property including China and Dutch India. Provided also cash payment European neutral countries, Spain excluded. Swedish Legation already instructed to close registers. Also our officials, Shanghai, Rio, Buenos Aires, accordingly instructed.

Always on above conditions you are definitely authorized to sell:

(1) Agreeably with Antonio, highest possible, Martha, Virginia, Laura, Alice. Strongly hope you getting at least $300 per gross ton passenger steamers. Understand Virginia undamaged.

(2) Shanghai property according your cable 19th,1 if better impossible, provided Shanghai agents have not already sold vessels. [Owners] consider repairs survey cannot exceed $120,000 1 Not printed.

59665-33- -29

for whole property. They would like to limit their liability but leave it to your discretion.

(3) Tripco[vich]-22 per cent your commission, American legal expenses, the transfer charges for buyers' account: two parcels [vessels?] totalling 13,200 tons, minimum according your cable 19th. Himalaia, 8,100 tons, superior boat considered worth over $200, minimum $150, per ton dead weight, limiting owners' liability for repairs $20,000.

(4) Atlantica property according your cable 19th, try utmost to improve.

(5) Borneo best possible, at least basis of Campania, Franconia. Owing to supposition Borneo undamaged, expect you will improve.

(6) Agreeably with Antonio, Erodiade minimum $130 ton dead weight.

Arrange remittance possibly according your cable 23d May,1 whole amount for all owners, while for us and Atlantica 20 per cent remain at your and Buenos Aires' disposal. Acknowledge receipt of 34th cable.1 Inform quickly result of your negotiations, cabling names of European bankers, stating amounts transferred under name Fratelli Cosulich for accounts of each owner. Powers [of attorney] will be filed next week by all interested neighbors [sic] with your Legation at Berne. Cable firm offer agreeable with Antonio for Siam and two Adria steamers in Brazil. Cable what improvement obtained for all ships including first seven boats, should trading restrictions removed. Cable whether you can make us firm offer for Hamburg and Bremen ships stating conditions by cable. Ferruccio Schiavon.


File No. 863.852/50

The Secretary of State to the Minister in Switzerland (Stovall)


WASHINGTON, June 21, 1917. 686. For Ferruccio Schiavon, Lucerne [from Phelps Bros.]: Yours 11th received.1 Conforming your 3d have sold, to net owners except [sic] less expenses, Virginia $202.50, Borneo $144, Erodiade $162, Himalaia $171, other two Tripco[vich] $144, Atlantica two $162. All sold [under] full restrictions and in present condition free of any liability of owner for damage. For all eight steamers we have closed subject to your confirmation at $15 gross additional per dead-weight ton for removal of all restrictions. Answer quick. . . .2


Not printed.


In a telegram forwarded by the Minister in Switzerland, July 3, the agent of the Austrian owners reported: "Sale eight boats approved by all concerned." (File No. 863.852/61.)

File No. 863.852M36/29

Memorandum of the Assistant Solicitor for the Department of State (R. W. S. Hill)

December 19, 1917.

DEAR MR. WOOLSEY: On August 17, the United States Shipping Board informed the Department that they desired to seize for immediate military purposes an "interned" Austrian vessel, if the President and the Department of State deems such a course entirely proper in view of our international obligations, and inquired whether article 9 of our treaty of 1829 with Austria-Hungary would, in view of this Department, prevent the seizure of this vessel.

On August 28, the Department replied, advising that no objection was perceived to such seizure, so far as article 9 of the treaty mentioned was concerned, and added, "as the vessel in question is not enemy property it is presumed that the Government will be prepared to indemnify the owners if the vessel is taken over for Government purposes."

On August 31, the Shipping Board enclosed to the Department a copy of the following notice to Phelps Bros. & Co., the United States agents of the Austrian steamship Martha Washington:

Please take notice that the United States, through the United States Shipping Board, hereby requisitions the Austrian steamship Martha Washington now lying at the port of New York, to meet the urgent military necessity of the Government at this time.

We shall be pleased to confer with you respecting the terms of this requisition.

It is assumed that this vessel was requisitioned in the exercise of authority conferred upon the Board by the President in pursuance of the authority vested in him by the act approved June 15, 1917:

To purchase, requisition, or take over the title to, or the possession of, for use or operation by the United States any ship now constructed or in the process of construction or hereafter constructed, or any part thereof, or charter of such ship.

On September 17, the United States Shipping Board requested to be informed whether the question of determining and paying charter hire should be left entirely to diplomatic negotiations now or after the war, or whether it was agreeable to the State Department that the Shipping Board should determine the terms of hire and notify the State Department of the arrangement reached.

In reply the Department, on October 10, informed the Shipping Board that it perceived no reason why the Board should not endeavor to reach an arrangement with the interested parties respecting charter hire for this vessel.

Enclosed with the letter of the Shipping Board of September 17, was a copy of a letter of same date, from the Board to Phelps Bros. & Co., in which they state:

By our notice that we would be pleased to discuss with you the terms of requisition of the Martha Washington, we did not intend to indicate that we were opening the way to negotiations for the charter of this vessel as this vessel has been requisitioned under a right clearly defined under international law. The urgent military necessity which calls forth the exercise of this power equally demands that no delay of negotiations should obstruct the right of the Government to use her immediately.

Compensation will of course be paid in due time to the proper parties for the use of this ship. It is for the purpose of determining a fair rate of hire and of settling the disposition of the money due for the use of the Martha Washington that we suggested a conference.

While the above provisions of the act of June 15 would apparently permit this Government to take over the title to this vessel, it would appear from the foregoing letter of the Shipping Board of September 17, 1917, that only the use of the vessel was requisitioned. In this relation the Commissioner of Navigation advises that American registry has not been granted this vessel. It appears that subsequent to the requisition of the vessel, negotiations were entered into by the Shipping Board, with those interested in the vessel, with a view to purchasing same, but no agreement appears to have been reached with regard thereto at the time of our declaration of war against Austria-Hungary. In a letter dated November 29, the Shipping Board referred to the possible purchase of this vessel, stating, although she has been requisitioned, as you know, and is actually in the service of the Army, we think that money can be saved if we buy her at approximately $2,250,000." In this circumstance, if as appears to be the case, the title to this vessel did not vest in the United States when requisitioned there would appear to be no reason why this Government, through the Shipping Board, should not take over the title to the vessel in the exercise of authority conferred upon the Board by the President in pursuance of the authority vested in him by Joint Resolution of May 12, 1917


to take over to the United States the immediate possession and title of any vessel within the jurisdiction thereof, including the Canal Zone and all territories and insular possessions of the United States except the American Virgin Islands, which at the time of coming into such jurisdiction was owned in whole or in part by any corporation, citizen, or subject of any nation with which the United States may be at war when such vessel shall be taken, or was flying the flag of or was under register of any such nation or any political subdivision or municipality thereof; and, through the United States

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