R
5238
PUBLIC RECORD OFFICE
Reference :-
TTIEN C.O.
.885
16 PUBLIC RECORD OFFICE, LONDON
ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC- COPYRIGHT PHOTOGRAPH-NOT TO
No. 25.
(Western PACIFIC: AUSTRALIA.)
LAW OFFICERS to FOREIGN OFFICE.
[Claim of Messrs. Burns, Philp, and Co. against the German Government for losses in the Marshall and Caroline Islands.]
SIR,
Royal Courts of Justice,
February 6, 1906. We were honoured by the Secretary of State's commands signified to our predecessors in office by Mr. Villiers in his letter of the 14th November, 1905, stating that he was directed to transmit the papers relative to the claim of Messrs. Burns, Philp, and Co. (Limited), against the German Government for losses which they considered they had suffered through the action of the German authorities in the Marshall Islands and the Caroline Islands, and requesting their opinion whether a claim could properly be supported by His Majesty's Government, and, if so, on what grounds, and how far the various items specified in the Schedule of the claims presented were admissible if substantiated by evidence.
We have taken the matter into our consideration, and, in obedience to his commands, have the honour to
Report-
That although the object of the Declaration signed at Berlin on the 10th April, 1586, is defined in the preamble to be "reciprocal freedom of trade and commerce in the possessions and Protectorates of the two Governments within the limits therein specified, yet the operative words used in paragraph 2 of the Declaration do not exclude the contention of the German Government that either Government is left. with a free hand to impose taxes and duties (however hardly they may tell on general commerce) in its own territory'so long as they do not differentiate against the subjects of the other State. We think that it was not intended to limit the rights of either party in respect of internal taxation of administration applicable equally to the subjects of both States.
As regards the Caroline Islands, we think the view put forward by His Majesty's Government is correct. The exclusion of these islands from the Declara- tion of the 6th April, 1886, when they belonged to Spain, was merely by way of reservation of the rights of third parties, but in their subsequent transfer to Germany they were brought within the scope of the Declaration of the 10th April. 1886. That Declaration applies to all future as well as existing possessions and Protectorates within the area then defined (see Article 1), and no such reservation or limitation as appeared in the Declaration of the 6th April, 1886, was necessary or would have been appropriate having regard to the purpose of the later Declara tion.
With regard to the Marshall Islands, the German Government has empowered the Jaluit Company to assume a position which is contrary to both the letter and the spirit of the Declaration of the 10th April, 1886. In effect, the German Govern· ment has conferred on a particular German subject, or group of subjects, the right to impose differential taxation against British subjects. In form the taxation. appears to fall equally on the Jaluit Company, but this is a form only as that Company only pays such taxes into its own coffers.
We think a claim for damages by Messrs. Burns, Philp, and Co. (Limited) may properly be presented to the German Government, subject to the following observa-
tions:-
Caroline Islands.
First Voyage-The actual expenditure incurred in the abortive voyage from the Marshall Islands is recoverable, together with an allowance for the loss of profit over and above such expenditure as they were reasonably entitled to expect.
This claim should be supported by vouchers, which ought to be in existence. Second and Third Voyages.—The whole loss of profits cannot be claimed. The vessel could have been employed in other, though probably less profitable, trading,
25 Wt 2615 #06 D&S 5 23745