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Shipping Board, or any department or agency of the Government, to operate, lease, charter, and equip such vessel in any service of the United States, or in any commerce, foreign or coastwise.

R[ALPH] H[ILL]

File No. 863.85/20

Mr. Charles S. Haight 1 to the Counselor for the Department of State

(Polk)
NEW YORK, December 21, 1917.

[Received December 22.] MY DEAR FRANK: I have learned today, with a good deal of apprehension, that the question of seizing the Martha Washington as an enemy vessel was being seriously considered yesterday by the Shipping Board. It seems to me that such action would be inopportune at the present time, for the following reasons:

1. As you know, Phelps Bros. & Co. have been cooperating with the Shipping Board for some two or three months past, in an effort to acquire the Austrian ships in Spain, which number 23. Now that the question of remitting the money for the last vessels sold has finally been settled, Phelps Bros. are at last in a position to press their negotiations. It is unfortunate that the license to remit could not be obtained from the War Trade Board and the whole transaction consummated before the United States declared war upon Austria. However, that milk has already been spilled. Our declaration of war has now rendered the transaction more difficult, and I very much fear that the seizure of the Martha Washington may still further jeopardize our success, since the action of the owners upon any offer of purchase must depend very largely upon the attitude of the Austrian Government, and that attitude cannot be improved by the seizure of the Martha.

2. Up to the present time, all other Austrian ships in American ports have been acquired by purchase, the Martha Washington being the only one left. It seems to me that it would be wise not to create the necessity for an after-war discussion with Austria, when only one ship is involved.

3. If the Martha is seized, compensation probably will have to be paid her owners after the war, and, if so, we can hardly pay less than requisition rates. I am positive that a buyer could be found (if the Shipping Board does not wish to pay the owners' price) who would purchase the vessel today and agree to accept from the Shipping Board the requisition rate for her employment by the Government so long as the war lasts. This method would not only simplify pending negotiations but would evade all possible after-war discussion and would keep the vessel under the American flag or some Allied flag for the after-war trade.

* Of Haight, Sanford & Smith, New York City.

If you agree with me in the above, could you consistently use your influence to safeguard the situation? Very sincerely yours,

CHARLES S. HAIGHT File No. 863.852M36/10 The Commissioner of the Shipping Board (Page) to the Counselor for the Department of State (Poll)

WASHINGTON, January 9, 1918.

[Received January 10.) MY DEAR MR. POLK: Yesterday you received a memorandum conicerning the status of the Austrian steamship Martha Washington. One reason why the Board, through its Admiralty Counsel, advised against seizing her, was the fear that our negotiations for Austrian tonnage in Spain might be adversely affected by such action.

It appears to us now, however, that there is a way in which both the question of the Martha Washington and the other vessels can be brought to a head quickly, and with that object in view we have taken Mr. Phelps into consultation. The enclosed cablegram is the result of our conference and is forwarded to you for approval.?

In this cablegram Phelps indicates that he might sell the Martha Washington at the named price, if authority to sell this vessel is coupled with authority to sell the Spanish vessels. If a firm offer should come back on this basis, we stand ready to forego the exercise of our power to seize the Martha Washington. If no firm offer comes, we are not precluded from seizing her.

I am strongly of opinion that this cable will tend to clarify the situation, and if such course of dealing with Austria at the present time meets with the approval of the Department of State, I should like to recommend that it be sent. Very truly yours,

C. R. PAGE

File No. 863.852/209b
The Secretary of State to the Chargé in Switzerland (Wilson)

[Telegram]

WASHINGTON, January 9, 1918, 7 p. m. 1315. For Ferruccio Schiavon, Lucerne, from Phelps :

Referring ours 5th 1 Martha: trying to obtain advantageous firm offer, avoiding seizure with attending tie-up of funds pending peace,

*Not printed.

'Infra.

on basis of prompt remittance but your views too high. Might obtain $2,500,000 with prompt authority coupled with authority for Spanish property. If above workable, think we can obtain increase of $10 per ton on your six in Spain per ours November 231 and December 201 if outside steamers obtainable on basis our offer November 271 or slightly better.

LANSING

Executive Order No. 2859-A, May 11, 1918, Authorizing the Taking

Over of the Martha Washington WHEREAS the following Joint Resolution adopted by Congress was approved by the President May 12, 1917:

Joint resolution authorizing the President to take over for the United States the possession and title of any vessel within its jurisdiction, which at the time of coming therein 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, or was under register of any such nation, and for other purposes.

Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, that the President be, and he is hereby, authorized 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 Shipping Board, or any department or agency of the Government, to operate, lease, charter, and equip such vessel in any service of the United States, or in any commerce, foreign or coastwise.

SEC. 2. That the Secretary of the Navy be, and he is hereby, authorized and directed to appoint, subject to the approval of the President, a board of survey, whose duty it shall be to ascertain the actual value of the vessel, its equipment, appurtenances, and all property contained therein, at the time of its taking, and to make a written report of their findings to the Secretary of the Navy, who shall preserve such report with the records of his department. These findings shall be considered as competent evidence in all proceedings on any claim for compensation."

AND WHEREAS the following vessel was, at the time of coming into the jurisdiction of the United States, owned in whole or in part by a corporation, citizen or subject of the Empire of Austria-Hungary, a nation with which the United States is now at war, or was flying the

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* Not printed.

flag of or under the register of the Empire of Austria-Hungary, or of a political subdivision or municipality thereof: Passenger steamship, Martha Washington, now lying at the port

of New York. IT IS THEREFORE ORDERED th through the United States Shipping Board there be taken over to the United States the possession and title of the aforementioned vessel. The United States Shipping Board is further hereby authorized to repair, equip and man said vessel; to operate, lease or charter the same in any service of the United States, or in any commerce, foreign or coastwise; and to do and perform any and all things that may be necessary to accomplish the purposes of the Joint Resolution above set forth.

WOODROW WILSON THE WHITE HOUSE,

11 May, 1918.

File No. 863.852/299

The Acting Director of the Bureau of Enemy Trade, War Trade Board (Fuller), to the Counselor for the Department of State (Polk)

WASHINGTON, May 22, 1918.

[Received May 23.] DEAR SIR: We are in receipt of an application from Phelps Bros. & Co., of New York City, for license to transmit an amount not exceeding $800,000 to Fratelli Cosulich, Vienna, Austria, for account of the owners of the following ships: Virginia, Erodiade, Borneo, Budapest, Franconia, Himalaia, Campania, Morowitz.

These ships were sold last summer by Phelps Bros. & Co. acting as agents for the Austrian owners, to the Kerr Navigation Co., and we understand that it was one of the terms of the sale that the purchase price was to be remitted to the Austrian owners, and that the Government sanctioned this arrangement.

In addition to the price fixed, it was agreed that if the former Austrian owners released certain covenants restricting the trading limits of these ships, an additional sum of $15 per ton should be paid by the purchaser. Subsequently this release was given by the Austrian sellers, and the above-mentioned sum of approximately $800,000 thereupon became due.

The Shipping Board at first requested that we withhold for the time being the issuance of the license to remit the additional $800,000, because of certain other transactions then pending. To-day, however, we are in receipt of a letter from the Shipping Board stating

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that it now sees no reason why the license should not be granted. License was sometime ago issued to Phelps Bros. & Co. to remit the original purchase price of these ships to Austria.

Since we are informed that you are familiar with the original arrangement in regard to the purchase of these ships and the remittance of the proceeds, we write to request your recommendation as to the desirability of allowing this further remittance to go forward. Very truly yours,

BUREAU OF ENEMY TRADE By PAUL FULLER, Jr.

File No. 863.852/299

The Acting Secretary of State to the Acting Director of the Bureau of Enemy Trade, War Trade Board (Fuller)

WASHINGTON, June 6, 1918. Sir: I acknowledge the receipt of your letter of May 22, 1918, in which you express the desire to be informed as to the State Department's attitude towards an application of Phelps Bros. & Co., of New York City, for a license to transmit an amount not exceeding $800,000 to Fratelli Cosulich, Vienna, Austria, for the account of the owners of eight Austrian ships purchased by the Kerr Navigation Co.

The Department felt at the time when the question of remitting the original purchase price of these ships was discussed that we were bound to facilitate the conclusion of this transaction. The considerations which led the Department to adopt this attitude several months ago have lost none of their validity and would appear to apply with equal cogency to the present remittance. The Department, therefore, recommends the issuance of the license necessary to the making of this remittance. I am [etc.]

FRANK L. POLK

File No. 863.852M36/10a
The Secretary of State to the Minister in Switzerland (Stovall)

[Telegram]

WASHINGTON, June 6, 1918, 8 p. m. 2042. Following from Phelps for Ferruccio Schiavon, Lucerne, Switzerland, June 6:

Answering your inquiry relative Martha Washington, regret opportunity lost on account of delay. Steamer definitely seized and both time and amount of compensation uncertain. Phelps.

LANSING

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