4. As illustrating further the attitude adopted by the judges of British prize courts toward these two sources of law, the municipal legislation of its sovereign on the one hand and the principles of international law on the other, I should like to refer your Excellency to a classical passage in the judgment of Lord Stowell, in the case of the Fox, in which that famous Judge observed in the course of the discussion:

66

"A question has been stated: What would be the duty of the court under Orders in Council that were repugnant to the law of nations? It has been contended on one side that the court would at all events be bound to enforce the Orders in Council, on the other that the court would be bound to apply the rule of the law of nations adapted to the particular case, in disregard of the Orders in Council. This court is bound to administer the law of nations to the subjects of other countries in the different relations in which they may be placed toward this country and its Government. That is what others have a right to demand for their subjects, and to complain if they receive it not. This is its unwritten law, evidenced in the course of its decisions and collected from the common usage of civilized States. At the same time, it is strictly true that by the Constitution of this country the King in Council possesses legislative rights over this court and has power to issue orders and instructions, which it is bound to obey and enforce; and these constitute the written law of this court.

"These two propositions, that the court is bound to administer the law of nations and that it is bound to enforce the King's Orders in Council, are not at all inconsistent with each other, because these orders and instructions are presumed to conform themselves, under the given circumstances, to the principles of its unwritten law. They are either directory applications of those principles to the cases indicated in them-cases which, with all the facts and circumstances belonging to them and which constitute their legal character, could be but imperfectly known to the court itself; or they are positive regulations, consistent with these principles, applying to matters which require more exact and definite rules than those general principles are capable of furnishing.

"The constitution of this court, relatively to the legislative power of the King in Council, is analogous to that of the Courts of Common Law relatively to that of the Parliament of this Kingdom. These courts have their unwritten law, the approved reasons, principles of natural reason and justice; they have likewise the written or statute law in Acts of Parliament, which are directory applications of the same principles to particular subjects or positive regulations consistent with them upon matters which would remain too much at large if they were left to the imperfect information which the courts could extract from mere general speculations.

"What would be the duty of the individuals who preside in these courts if required to enforce an Act of Parliament which contradicted those principles is a question which, I presume, they would not entertain a priori because they will not entertain a priori the supposition that any such will arise. In like manner this court will not let itself loose into speculations as to what would be its duty under such an emergency; because it cannot, without extreme indecency, presume that any such emergency will happen. And it is the less disposed to entertain them because its own observation and experience attest

the general conformity of such orders and instructions to its principles of unwritten law."

5. The above passage has recently been quoted and adopted by the President of the prize court in the case of the Zamora, in which Sir S. Evans said: "I make bold to express the hope and belief that the nations of the world need not be apprehensive that Orders in Council will emanate from the Government of this country in such violation of the acknowledged laws of nations that it is conceivable that our prize tribunals, holding the law of nations in reverence, would be called upon to disregard and refuse obedience to the provisions of such orders."

6. In the note which I handed to your Excellency on the 23d of July, I endeavored to convince the Government of the United States, and I trust with success, that the measures that we have felt ourselves compelled to adopt, in consequence of the numerous acts committed by our enemies in violation of the laws of war and the dictates of humanity, are consistent with the principles of international law. The legality of these measures has not yet formed the subject of a decision of the prize court; but I wish to take this opportunity of reminding your Excellency that it is open to any United States citizen whose claim is before the prize court to contend that any Order in Council which may affect his claim is inconsistent with the principles of international law, and is, therefore, not binding upon the court. If the prize court declines to accept his contentions, and if, after such a decision has been upheld on appeal by the Judicial Committee of his Majesty's Privy Council, the Government of the United States of America consider that there is serious ground for holding that the decision is incorrect and infringes the rights of their citizens, it is open to them to claim that it should be subjected to review by an international tribunal.

7. This principle, that the decisions of the national prize courts may properly be subjected to international review, was conceded by Great Britain in Article VII of the Jay treaty of 1793 and by the United States of America under the Treaty of Washington of 1871. Your Excellency will no doubt remember that certain cases (collectively known as the "Matamoros cases") were submitted to the commission established under Articles XII-XVII of the Treaty of Washington. In each of these cases proceedings in prize had been instituted in the prize courts of the United States, and in each case the judgment of the Supreme Court, the court of last resort in cases of prizes, had been obtained. The United States filed a demurrer in these cases, alleging that, as they had been heard by the prize courts of the United States of original and appellate jurisdiction, the decision of the appellate court was final, and no claim based upon it could be made before the commission. The demurrer was unanimously overruled and the cases heard, and the agent of the United States, in his reports of the proceedings of the commission, stated that he, personally, maintained no doubt of the jurisdiction of the commission as an international tribunal to review the decisions of the prize courts of the United States where the parties alleging themselves aggrieved had prosecuted their claims by appeals to the court of last resort; as this jurisdiction, however, had been sometimes questioned, he deemed it desirable that a formal adjudication by the commission should be held upon this question.

8. The same principle was accepted both by the United States

Government and his Majesty's Government in 1907 in connection with the proposed establishment of an international prize court, although certain constitutional difficulties have led the United States Government to propose that the right of recourse to the international prize court in connection with a decision of the Supreme Court of the United States should take the form of a direct claim for compensation.

9. It is clear, therefore, that both the United States Government and his Majesty's Government have adopted the principle that the decisions of a national prize court may be open to review if it is held in the prize court and in the Judicial Committee of the Privy Council, on appeal, that the orders and instructions issued by his Majesty's Government in matters relating to prize are in harmony with the principles of international law; and, should the Government of the United States unfortunately feel compelled to maintain a contrary view, his Majesty's Government will be prepared to concert with the United States Government in order to decide upon the best way of applying the above principle to the situation which would then have arisen. I trust, however, that the defense of our action, which I have already communicated to your Excellency, and the willingness of his Majesty's Government (which has been shown in so many instances), to make reasonable concessions to American interests, will prevent the necessity for such action arising.

10. In any case, I trust that the explanations given above will remove the misapprehension under which I cannot but feel the Government of the United States are laboring as to the principles applied by British prize courts in dealing with the cases which come before them.

I have, &c.,

(The New York Times, August 4, 1915.)

E. GREY.

No. 64. British note, July 31, 1915, replying to No. 58. The Secretary of State for Foreign Affairs to the American Ambassador.

The note which your Excellency addressed to me on the 17th inst. respecting the detention of the cargo of the steamship Neches has, I need hardly say, received the careful attention of his Majesty's Gov

ernment.

The note which I had the honor to send to your Excellency on the 23d instant has already explained the view of his Majesty's Government on the legal aspect of the question, though it was prepared before your Excellency's communication of the 17th had been received, and, pending consideration by the Government of the United States of the views and arguments set forth in the British note of the 23d, it is unnecessary for me to say more on the question of right or of law. There is, however, one general observation that seems relevant to the note from your Excellency's respecting the cargo of the Neches. It is the practice of the German Government, in the waters through which the Neches was passing, to sink neutral as well as British merchant vessels, irrespective of the destination of the vessel or origin of the cargo, and without proper regard or provision for the safety of passengers or crews, many of whom have lost their lives in consequence. There can be no question that this action is contrary to the recognized and settled rules of international law, as well as to the principles of humanity.

His Majesty's Government, on the other hand, have adhered to the rule of visit and search, and have observed the obligation to bring into port and submit to a prize court any ships or cargoes with regard to which they think they have a good case for detention or for condemnation as contraband.

His Majesty's Government are not aware, except from the published correspondence between the United States and Germany, to what extent reparation has been claimed from Germany by neutrals for loss of ships, lives, and cargoes, nor how far these acts have been the subject even of protest by the neutral Governments concerned.

While those acts of the German Government continue, it seems neither reasonable nor just that his Majesty's Government should be pressed to abandon the rights claimed in the British note of the 23d and to allow goods from Germany to pass freely through waters effectively patroled by British ships of war.

If, however, it be alleged that, in particular cases and special circumstances, hardships may be inflicted on citizens of neutral countries, his Majesty's Government are ready in such cases to examine the facts in a spirit of consideration for the interest of neutrals, and in this spirit they are prepared to deal with the cargo of the Neches, to which your Excellency has called attention, if it is held that the particular circumstances of this case fall within this category. [I have, &c.,

(The New York Times, August 4, 1915.)

E. GREY.]

No. 65. Fourth American note, August 16, 1915, in regard to the "William P. Frye."

The Secretary of State to the American Ambassador at Berlin. You are instructed to present the following note to the German Minister for Foreign Affairs:

Under instructions from my Government, I have the honor to inform your Excellency, in reply to your note of July 30 in regard to the claim for reparation for the sinking of the William P. Frye, that the Government of the United States learns with regret that the objections urged by it against the submission of this case to the prize court for decision have not commended themselves to the Imperial German Government, and it equally regrets that the reasons presented by the Imperial German Government for submitting this case to the prize court have failed to remove the objections of the Government of the United States to the adoption of that course. As this disagreement has been reached after the full presentation of the views of both Governments in our previous correspondence, a further exchange of views on the questions in dispute would doubtless be unprofitable, and the Government of the United States therefore welcomes your Excellency's suggestion that some other way should be found for settling this case.

The two methods of settlement proposed as alternative suggestions in your Excellency's note have been given careful consideration, and it is believed that if they can be combined so that they may both be adopted they will furnish a satisfactory basis for the solution of the questions at issue.

The Government of the United States has already expressed its desire that the question of the amount of indemnity to be paid by the

*See Nos. 37, 39, 43, 52, 55, 62.

Imperial German Government under its admitted liability for the losses of the owners and Captain on account of the destruction of the Frye should be settled by diplomatic negotiation, and it entirely concurs with the suggestion of the Imperial German Government that the simplest way would be to agree, as proposed in your note, “* that each of the two Governments designate an expert and that the two experts jointly fix the amount of indemnity for the vessel and any American property which may have been sunk with her," to be paid by the Imperial German Government when ascertained as stated in your note. It is assumed that the arrangement will include some provision for calling in an umpire in case the experts fail to agree.

The Government of the United States notes that your suggestion is made with the express reservation that a payment under this arrangement would not constitute an admission that American treaty rights had been violated, but would be regarded by the Imperial German Government merely as fulfilling a duty or policy founded on existing treaty stipulations. A payment made on this understanding would be entirely acceptable to the Government of the United States, provided that the acceptance of such payment should likewise be understood to be without prejudice to the contention of the Government of the United States that the sinking of the Frye was without legal justification, and provided also that an arrangement can be agreed upon for the immediate submission to arbitration of the question of legal justification, in so far as it involves the interpretation of existing treaty stipulations.

There can be no difference of opinion between the two Governments as to the desirability of having this question of the true intent and meaning of their treaty stipulations determined without delay, and to that end the Government of the United States proposes that the alternative suggestion of the Imperial German Government also be adopted, so that this question of treaty interpretation can be submitted forthwith to arbitration, pursuant to Article XXXVIII of The Hague convention for the pacific settlement of international disputes.

In this way both the question of indemnity and the question of treaty interpretation can promptly be settled, and it will be observed that the only change made in the plan proposed by the Imperial German Government is that instead of eliminating either one of its alternative suggestions, they are both given effect, in order that both of the questions under discussion may be dealt with at the same time. If this proposal proves acceptable to the Imperial German Government, it will be necessary also to determine whether, pending the arbitral award, the Imperial German Government shall govern its naval operations in accordance with its own interpretation, or in accordance with the interpretation maintained by the United States, as to the obligations imposed by their treaty stipulations, and the Government of the United States would be glad to have an expression of the views of the Imperial German Government on this point. LANSING.

(The New York Times, August 18, 1915.)

No. 66. British proclamation, August 21, 1915, declaring cotton contraband of war.*

Now, therefore, we do hereby declare, by and with the advice of our Privy Council, that, during the continuance of the war, or until we

*See Nos. 6, 10, 31.