CO885-(25-26) — Page 668

00:

APPENDIX A.-REPORTS.

In their present report the Committee propose to confine themselves to the case of the ships condemned as prize, reserving for a subsequent report the case of the enemy ships sentenced to detention. It is submitted that the question of the application of the scheme to vessels before the Prize Courts, but not yet adju- Such vessels will dicated, must in each instance wait over until adjudication.

then, unless ordered to be released, fall automatically within one or other of the above two classes.

In the first place the Committee would remark that, from a variety of causes, very few of the vessels of any size (apart from sailing vessels) which have been condemned in the Prize Court in this country or in the Prize Courts oversea have been sold, so that no final disposition has yet been made of the bulk of the prizes. Of the unsold prizes, almost all those remaining afloat and deemed capable of useful employment have been taken over by His Majesty's Government; a few, It follows that certain however, have been retained by Oversea Governments. Oversea Governments will require to be approached as to the prizes under their direction if the Shipping Controller wishes to bring them within the scheme.

Further, it is possible that the Departments concerned may desire that the references to the Dominion and Indian Governments shall extend to vessels con. demned in their Prize Courts which have since passed into the service of His Majesty's Government. In this connexion the Committee have particularly in and later mind the case of the 8.8. "Birkenfels " (renamed "Tandem ” "Polshannon "-6,121 tons gross), which was condemned in the Prize Court at Cape Town and was transferred by the Committee to the Admiralty in August, 1915. It is conceivable that in such a case the Oversea Government concerned may wish to be given an option of securing the vessel, or may desire that she should be set aside for the replacement of locally registered or owned tonnage which has been lost by war

risk.

The Committee would consequently recommend that no action should be taken towards the inclusion in the scheme of the ships dealt with in the Prize Courts in the self-governing Dominions or India without prior consultation with the Colonial and India Offices.

As to the power of the Crown to give a good title to vessels condemned in British Prize Courts, the Committee consider that the decree of condemnation vests the property in the Crown and enables it to give a good title.

The Committee have in fact sold nine condemned ships. The ships were sold under the procedure provided for in the Order in Council No. 338 of 22nd March, 1911, that is to say, they were, after the Crown took possession, registered as "belonging to His Majesty, represented by the Commissioners for executing the office of Lord High Admiral, etc." (see Article 2 of the Order in Council), and a bill of sale was then executed by two Lords Commissioners under Article 4. The title so given has never been questioned.

With reference to the question whether any and what steps will be necessary to make good the value of ships transferred under the proposed scheme, the Com- mittee would in the first place observe that the Prize Fund is built up out of the proceeds of sale of Droits of the Crown, and therefore it is necessary to see that its rights are not infringed. On the other hand, the Exchequer only is interested in the proceeds of sale of Droits of Admiralty, subject to the claims, if any, of Oversea Governments.

The manner of assessment of the liability of the Crown to the Prize Fund in respect of Droits of the Crown which have been ordered to be delivered to the Crown is laid down by the Naval Prize Act, 1918. See Part 1 of the Schedule, Section (2), which is as follows :-

Where any ship or goods condemned by any Prize Court, being Droits of the Crown, have, whether before or after the condemmation, been delivered to the Crown with or without the payment of any money into Court, or any undertaking to pay any money into Court, a sum equal to the valua of the ship or goods. at the date of delivery, together with interest from the date of such delivery, after deducting any money which has been paid into Court, or which may be payable under any such undertaking in respect of the ship or goods in question."

As to the rate of interest to be allowed under this provision, the Committee understand that it has been agreed between Their Lordships and the Admiralty that a rate of four per cent, compound interest, with half yearly reats, shall be paid in respect of sums due by His Majesty's Government to the Prize Fund.

APPENDIX A.-REPORTS.

61

It appears to follow, then, that in the case of Droits of the Crown it will be necessary for the Department disposing of a vessel to consult with the authority administering the Prize Fund as to the assessment of the credit to be given to the Prize Fund for the vessel. In instances where the prize has been delivered to the Crown without the payment of any money into Court, or any undertaking to pay any money into Court, it would be open to the parties to come to an agree- ment independently of the Prize Court, but some further application to the Court would be required to close the proceedings in instances where sums of money have been paid in or undertakings given. The form of such application to the Court will of course depend upon the circumstances in each case.

In regard to ships adjudged to be Droits of Admiralty, it would seem that professional valuations are unnecessary excepting in cases where a claim is advanced by an Oversea Government, nothing beyond a book transaction between two Depart- ments being involved. In instances, therefore, where His Majesty's Government alone are concerned, an application to the Prize Court for the release of any sum paid into Court in respect of the delivery of the vessel, or for the cancellation of any undertaking that may have been given, appears to be the only action required. In cases in which Oversea Governments are concerned, by reason either of their wishing to take over vessels themselves, for replacement of lost vessels requisitioned hy them or otherwise, or of their claiming an interest in vessels proposed to be taken over by His Majesty's Government, further financial adjustments between His

be necessary.

The Majesty's Government and the Oversea Governments may Committee do not feel that they are in a position to advise upon this point. They are not aware that any decision has yet been taken as to the policy to be pursued As regards in respect of Droits of Admiralty dealt with in Oversea Courts. Droits of the Crown, the position has to a large extent been determined by the Naval Prize Act; but the provision of the Act (quoted above) in regard to the valuation of vessels delivered to the Crown gives rise to one question that should be mentioned. The Government taking over a ship will no doubt accept responsibility for the credit due to the Prize Fund under this provision of the Act; but there will presumably be a difference between that credit and the value of the vessel at the date of the transaction. The disposal of this difference would appear to depend largely on the question of the rights (if any) of the Oversea Governments in relation to Droits of the Crown, as to which also, so far as the Committee are aware, no decision has been taken.

EDMOND J. W. SLADE,

SIR,

G. JONES,

Acting Secretary. 16th October, 1918.

Annexure to (2).

for the Committee

Ministry of Shipping, 19th July, 1918. WITH reference to the discussion at the meeting of your Committee on the 18th instant on the subject of the disposal of prize and detained vessels in the service of the Ministry of Shipping, I am directed by the Shipping Controller to inform you that he has obtained the sanction of the Lords Commissioners of His Majesty's Treasury to replace requisitioned vessels lost through war risk in kind where such replacement can be made by agreement with the owners. possibly available for replacement are:-

The vessels

(a) the merchant vessels purchased by His Majesty's Government during

the war;

(b) the standard and other merchant vessels built for the Government in

this country;

(c) vessels which have been treated as constructive total losses and have been

permanently repaired by the Government;

(d) prize ships:

(e) detained enemy ships.

As regards the last two classes the Controller would be glad if your Committee would be so good as to consider, if necessary after consultation with the other

611

י

19

PUBLIC RECORD OFFICE

C.O.

Reference :-

885/25

PUBLIC RECORD OFFICE, LONDON

ALLY WITHOUT PERMISSION OF THE BE REPRODUCED PHOTOGRAPHIC-

COPYRIGHT PHOTOGRAPH-NOT TO