IV. ACTS NOT PROHIBITED. 1. SALE OF MERCHANT SHIPS. $ 1307. It is not a violation of the neutrality laws of the United States for a merchant or ship owner to sell his vessel and cargo (should the latter even consist of warlike stores) to a citizen or inhabitant of Buenos Ayres (then an insurgent belligerent). Nor will it make any difference whether such sale be made directly in a port of the United States, with immediate transfer and possession thereupon, or under a contract entered into here, with delivery to take place in a port of South America. Rush, At. Gen., 1816, 1 Op. 190. "If vessels have been built in the United States and afterwards sold to one of the belligerents and converted into vessels of war, our citizens engaged in that species of manufacture have been equally ready to build and sell vessels to the other belligerent. In point of fact both belligerents have occasionally supplied themselves with vessels of war from citizens of the United States. And the very singular case has occurred of the same shipbuilder having sold two vessels, one to the King of Spain and the other to one of the southern republics, which vessels afterwards met and encountered each other at sea. During the state of war between two nations the commercial industry and pursuits of a neutral nation are often materially injured. If the neutral finds some compensation in a new species of industry, which the necessities of the belligerents stimulate or bring into activity, it can not be deemed very unreasonable that he should avail him self of that compensation, provided he confines himself within the line of entire impartiality, and violates no rule of public law." 66 Mr. Clay, Sec. of State, to Mr. Rivas y Salmon, Spanish chargé, June 9, Mr. Clay's opinion is cited and followed in Mr. Bayard, Sec. of State, to "Shipbuilding is a great branch of American manufactures, in which the citizens of the United States may lawfully employ their capital and industry. When built they may seek a market for the article in foreign ports as well as their own. The Government adopts the necessary precaution to prevent any private American vessel from leaving our ports equipped and prepared for hostile action, or, if it allow, in any instance, a partial or imperfect armament, it subjects the owner of the vessel to the performance of the duty of giving bond, with adequate security, that she shall not be employed to cruise or commit hostilities against a friend of the United States. "It may possibly be deemed a violation of strict neutrality to sell to a belligerent vessels of war completely equipped and armed for battle, and yet the late Emperor of Russia could not have entertained that opinion, or he would not have sold to Spain during the present war, to which he was a neutral, the whole fleet of ships of war, including some of the line. "But if it be forbidden by the law of neutrality to sell to a belligerent an armed vessel completely equipped and ready for action, it is believed not to be contrary to that law to sell to a belligerent a vessel in any other state, although it may be convertible into a ship of war. "To require the citizens of a neutral power to abstain from the exercise of their incontestable right to dispose of the property, which they may have in an unarmed ship, to a belligerent, would in effect be to demand that they should cease to have any commerce, or to employ any navigation in their intercourse with the belligerent. It would require more—it would be necessary to lay a general embargo, and to put an entire stop to the total commerce of the neutral with all nations; for, if a ship or any other article of manufacture or commerce, applicable to the purpose of war, went to sea at all, it might directly or indirectly find its way into the ports, and subsequently become the property of a belligerent. 66 The neutral is always seriously affected in the pursuit of his lawful commerce by a state of war between other powers. It can hardly be expected that he should submit to a universal cessation of his trade, because by possibility some of the subjects of it may be acquired in a regular course of business by a belligerent, and may aid him in his efforts against an enemy. If the neutral show no partiality; if he is as ready to sell to one belligerent as the other; and if he take, himself, no part in the war, he cannot be justly accused of any violation of his neutral obligations." Mr. Clay, Sec. of State, to Mr. Tacon, Spanish min., Oct. 31, 1827, MS. See, also, Mr. Clay, Sec. of State, to Mr. Rebello, Brazilian chargé, May “On the 19th ultimo you telegraphed to the Department inquiring 'Can Americans sell steamers to Chinese? You were answered to the effect that the inquiry was too vague to admit of intelligent examination. "On March 20 you repeated the inquiry in a modified form, Can American steamers here be sold to Chinese?' H. Doc. 551-vol 7——61 "The question is still too obscurely presented to admit of a reply by telegraph covering the different cases which it presents. There are alternative aspects to each fundamental point covered by your inquiry, thus: "(1) Are the steamers in question registered vessels of the United States plying between our ports and those of China, or are they for eign-built vessels in Chinese waters which have become the property of citizens of the United States through bona fide purchase? "(2) Are the owners of the steamers residing within or without the jurisdiction of China? "(3) Is it proposed to sell them to the Chinese Government, or to individual subjects of China? "(4) Are they to be employed as regularly enrolled vessels-of-war or as privateers under Chinese commission issued to individuals, or as Government transports, or as merchant vessels in legitimate trade with unblockaded ports, or as blockade-runners? "Any given combination of these points would involve a distinct application of international law thereto. "Assuming that the owners of the steamers are within Chinese jurisdiction, as the steamers appear to be, judging from your second telegram, the intervention of the consular officers of the United States would be required, in case of sale to aliens, to cancel the papers under which the steamers now bear our flag. If they are regularly regis tered vessels, the registry is to be destroyed and one-half of it sent to this Department. If they are foreign built and owned by American citizens, the certified bill of sale allowed under paragraph 340 of the Consular Regulations of 1881 should be canceled by the consul: and if the new transfer should take place at another consulate than that at which the original purchase of the vessel was recorded, official correspondence between the two consulates would be needed to effect such cancellation. "It would, however, be manifestly improper for any official of the United States to take part in the transfer of a steamer, or of any property whatever, for a warlike purpose, to a belligerent towards whom the United States maintained a position of neutrality. "If, however, the proposed transaction should be clearly and posi tively determined to be wholly pacific, and not intended in any way directly or indirectly to favor the employment of the vessel for or in aid of any hostile purpose, the intervention of the consul to cancel the existing documents of the vessel would not violate any interna tional obligation on the part of this Government. The utmost discretion and the most evident and positive proof of the legitimacy of the transfer would, however, be necessary, and in case of doubt. however remote, it would be the consul's duty to decline to intervene in the transaction. 66 Your inquiry is susceptible of still another aspect, for you may have desired to know whether you were under any obligation to prevent the transfer of American-owned steamers to the flag of China, whether with pacific or with hostile intent. In any case where the ultimate object of the transfer is or may appear to be hostile, and where consular intervention is necessary to effect a valid transfer, the withholdment of such intervention would be the limit to which a consul could go to prevent such unlawful change of ownership. But if the legalization of the sale should be unnecessary, there would be no international obligation on the consul to prevent the seller from alienating his property, nor would any preventive means appear to be within the consul's reach, in such a manner as to impute responsibility to him for failure to employ them. The consul would have no more control, and consequently no more responsibility, in in the case of transfer of the American vendor's property by private contract and simple delivery within Chinese jurisdiction, than in the case of a private contract on the part of the same vendor to lend his personal aid to either belligerent. In either case, the party alienating his property or his services does so at his own risk and peril. "This instruction, although covering only a part of the hypothetical field embraced in your inquiries, may serve to guide you in whatever specific case may be presented; but if you should be in doubt on any point involved, precise instructions will be given to you thereon." Mr. Bayard, Sec. of State, to Mr. Stahel, consul at Shanghai, Apr. 14, 1885, For. Rel. 1885, 170, enclosed with Mr. Bayard to Mr. Smithers, acting minister to China, No. 428, April 20, 1885, id. These vessels had been previously sold to citizens of the United States by Chinese. (President Arthur's annual message of 1884, and §§ 323, 324, supra.) "The distinction between fitting out and arming ships of war for the service of a belligerent, which is not permissible, and selling to such belligerent ships to be converted into men-of-war and munitions of war, which is permissible, may be thus explained: It is not indictable for a gunsmith to sell a pistol to a party who may use it unlawfully, even though the vendor may have reasons to suspect the object. of the purchase. It would, however, be unlawful for the gunsmith to join in arranging a machine by which a specific unlawful purpose is to be achieved. It is not unlawful, in other words, to be concerned. in preparations which will not, unless diverted by an independent force, produce a violation of law. It is, however, unlawful to be concerned in putting in actual operation dangerous machines. He who is concerned in fitting out and arming a man-of-war for the purpose of preying on the commerce of a friendly state, or of attacking its armed ships or ports, is as much concerned in the attack as he who takes part in manufacturing and planting a torpedo in a frequented channel is responsible for the mischief done by the torpedo. This distinction has been already asserted in the cases which rule that it is an indictable offense to be concerned in counseling and aiding a specific attack, but not an indictable offense to be concerned in selling arms by which such attack is to be made." Wharton, Int. Law Digest, III. 525. During the civil war in Chile in 1891 the Peruvian Government detained at Callao the steamer Mapocho, of the South American Steamship Company, which the company intended to place at the disposal of President Balmaceda by virtue of the company's contract with the Chilean Government. The steamer was capable of transporting 3,000 soldiers. The agents of President Balmaceda made every effort to secure the departure of the vessel from Callao, but the Peruvian Government detained it there till the close of the The case is fully detailed in the report of the Peruvian foreign office for 1891, page 20. war. Mr. Elmore, Peruvian min. of for. aff., to Mr. Dudley, Am. min., July 23, 1898, enclosed with Mr. Dudley to Mr. Day, Sec. of State, July 21, 1898, MS. Desp. from Peru. "In January of the present year the Chilean Congress is reported to have refused to accept a very high price offered by an American firm for six war ships, doubtless believing that the ships were destined for either Russia or Japan. A new, though cognate, question has. however, been raised by the sale of certain German liners to Russia. which forthwith, after rechristening, commissioned them as armed cruisers. If these vessels were, as is alleged, subsidized by their own Government, with a view to their employment by that Government in case of need, it has been urged with much force that they practically form part of the reserve of the imperial German navy, and that, therefore, Germany being neutral, they could not be lawfully sold to a belligerent. It would seem that the opinion of the law officers to which Mr. Balfour alluded in August, 1904, was not given with reference to precisely the facts above stated.” Holland, Neutral Duties in a Maritime War, April 12, 1905, Proceedings of the British Academy, II. 2. |