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APPENDIX A.-REPORTS.

will be found in the collections of papers identified as Miscellaneous No. 312, Miscellaneous No. 323, and Miscellaneous No. 332.

32. In January, 1916, the Committee were invited by the Colonial Office to assist in the arrangements connected with the shipment of logwood from Jamaica to this country in the transport Verdala." In particular, on account of the congestion on the railways, the Committee arranged for the transhipment of the logwood at Cardiff, for conveyance to Hull, into a steamer under the direction of the Admiralty Coasting Trade Office, and advised as to the apportionment of the freight as between the Transport Department and the Admiralty Coasting Trade Office.

33.

Insurance of vessels employed in trade.

Before leaving the question of the actual employment of ships in trade, the Committee desire to remark that, apart from the instances where it has been possible to put the cost of insurance on to other parties, they have not insured vessels in their fleet excepting as regards protection and indemnity risks.

34. The non-insurance of risks which would ordinarily be covered by insurance proved, however, to be disturbing to the arrangement of the Committee's accounts, both by showing extraordinary losses in the case of voyages where vessels were either lost or seriously damaged, and excessive profits in the case of voyages where no casualty occurred, and to remedy this state of affairs it was decided that a fund should be constituted to cover the principal risks which were carried by the Committee without insurance.

35. The scheme as developed has provided for the insurance against war and marine risks of hulls and machinery as well as of disbursements (including premiums incurred on each voyage), and the state of the fund on the 30th September last will be seen from Appendix "B" to this report. It will be noticed that five vessels have been lost whilst directly in the service of the Committee, and it should be remarked that some of the entries in the account may call for variation when the extent of the Committee's liability for these vessels has been definitely determined.

36. The Committee desire to record that Mr. B. A. Glanvill, of Messrs. Glanvill, Enthoven, and Company, has been good enough to undertake, without any remuneration, the fixing of the rates of premium for the various hypothetical insurances, and has greatly assisted the Committee in other matters connected with this scheme.

Insurance of detained enemy vessels whilst laid up in port.

37. The Committee would next refer to a scheme which, in accordance with the views of the Treasury (communicated in a letter to the Admiralty,dated the 18th January, 1915), was instituted in the early part of 1915 for the insurance against port risks of detained enemy vessels whilst laid up in oversea ports

38. The correspondence with the insurance brokers in connexion with this scheme, which operated from the 27th January, 1915, in the case of the vessels which had then been sentenced to detention by the Prize Court at Alexandria, and from the 29th January, 1915, in the case of vessels which had been sentenced to detention by other Oversea Courts, is set out in the collection of papers identified as Miscellaneous No. 312. In the case of vessels which were sentenced to detention subsequently to the commencement of the scheme, the insurance applied as from the date of the Order for detention, and in all cases the risk ceased when the vessel was brought into service.

"

39. In all, some eighteen ships have been brought within this scheme, the premiums amounting to the sum of £3,240 12s. 3d. gross, and £3,015 11s. 4d. net.

40. A claim was made upon the underwriters in the case of the s.s. Koerber' in consequence of a fire in that vessel whilst at Alexandria in August, 1915, and was settled at a figure slightly in excess of £8,000.

41. This insurance scheme is closed, with the possible exception of certain small craft dealt with at Hong Kong, as to which particulars are still awaited, and the Oversea Governments concerned have been apprised of the premiums paid from the point of view of a possible recovery from the enemy owners, if and when the vessels are returned to them or compensation paid for their non-return.

Disposal of prize vessels.

42, As indicated in their First Interim Report, and emphasized in their Fourth Interim Report, it was the intention of the Committee that the condemned

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APPENDIX A.-REPORTS.

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vessels should be sold as early as possible, care being exercised that the market should not be overloaded at any one time, but, from a variety of causes, only nine vessels in all have been sold by them.

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and

43. The first vessels to be sold by the Committee were the steamships Australia and "Furth" (both dealt with in the Colombo Prize Court) and the sailing vessel "Heinz" (condemned by the Prize Court at Cape Town). These were disposed of in the early part of 1915. The s.s. London as she lay at Colombo, and the s.v. "Heinz" as she lay at Simonstown, Australia" was sold in but the s.s."Furth" was sold after removal to this country.

44. Other vessels sold during 1915 were the steamships "Emil" (both dealt with by the Prize Court at Alexandria), whilst the s.&

"Concadoro " Adolf" (dealt with by the Gibraltar Prize Court), the s.s. "Senegambia" (Hong Kong Prize Court), the s.s. "Nicolaos" (Alexandria Prize Court, but only condemned as to sixty per cent.), and the s.v. at Freetown) were sold by the Committee during 1916.

Werner. Vinnen " (condemned in the Prize Court vessels were all sold after removal to this country, and were mostly vessels that were The six last-mentioned unsuitable for use by the Transport Department.

and "Furth were sold by private treaty,

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45. The steamships "Australia favourable offers having been received before the general policy in regard to sales was settled, but all other vessels sold by the Committee were disposed of by public auction, conducted either by Messrs. Č. W. Kellock and Company or Messrs. Lachlan and Company, who are the brokers employed by the Admiralty Marshal, and were sold under the special conditions in force at the time concerning the sale of prize ships.

46. These conditions provided, inter alia, for the exclusion of foreign bidders other than the citizens or subjects of certain Allied States with which special arrangments had been made, and the text of the conditions in the case of the s.s. "Nicolaos," being the last steamer sold by the Committee, is set out in Appendix "C" to this report.

47. Following the practice then adopted by the Admiralty Marshal in this country in regard to prize sailing vessels, Allied and neutral buyers were permitted to bid for the sailing vessel " concerned, it was decided that the conditions in force in regard to steamers, in so Heinz," but, after reference to the departments far as the admission of foreigners was concerned, should apply in connexion with the sale of the s.v. Werner Vinnen."

48.

The terms arranged with the brokers mentioned in paragraph 45 pro- vided for a commission of one per cent. to the auctioneers upon the gross proceeds of all sales until the gross proceeds reached a total of £150,000, the rate falling to one-half per cent. in respect of the next £100,000 and to one-quarter per cent. thereafter.

49. The purchasers of all the vessels sold by the Committee, and the prices realized, are set out in Appendix "D," and the proceeds are at present held by the Committee.

50. All other condemned vessels which came into the Committee's hands, excepting those lost at sea and one sailing vessel which has recently been taken over from the Prize Court at Halifax, Nova Scotia, have been transferred to the Director of Transports. The sailing vessel to which reference has just been made is the Svithiod," the sale of which has been postponed on account of adverse market conditions, and which in the meantime is being employed in trade. The respective dates of loss or of transfer of the condemned vessels are indicated in the Appendix "A" to this report.

51. The Committee are not aware what is the present employment of such of the vessels handed over by them to the Director of Transports as are still afloat nor when these vessels are likely to be freed for final disposal. They assume that the Shipping Controller, under whom the Director of Transports now acts, will arrange for the disposal of these vessels, either under the scheme forming the subject of the Committee's Eighth Interim Report or otherwise, as and when the vessels can be made available, but they feel it incumbent upon them to suggest that the arrangements for the final disposal of the vessels should not he decided unon without full consideration of the agreements entered into with the Allied States anent the disposal of prizes.

Disposal of detained enemy vessels.

52. The ultimate fate of the detained enemy ships must, in the view of the Committee, depend upon the manner in which the terms of the Treaty of Peace are interpreted by the Prize Court and carried out.

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APPENDIX A.-REPORTS.

53. As has been mentioned in paragraph 28 supra, five detained enemy vessels remain under the control of the Committee at the present time. One of these, the 8.8. "Diana," the Nigerian Government is desirous of purchasing outright, and it is understood that the Colonial Office are in direct communication with the Treasury upon this matter.

Disposal of prize cargoes.

54. The Committee have hitherto referred only to their operations in con- nexion with vessels, and they now desire to record the action taken in connexion with the disposal of prize cargoes.

55. The Committee were not called upon to undertake responsibility for the disposal of the cargoes of the vessels which were navigated to their original ports of destination, since the cargoes in these cases remained subject to the Orders of the Prize Court concerned in so far as they had not been definitely released by the time of departure of the respective vessels. The Committee did, however, arrange for the insurances of the cargo in some instances, and in the case of certain parts of the cargo of the steamships "Barenfels" and "Gutenfels," being enemy cargo under lien to British banks, they negotiated, on behalf of the Procurator of the Prize Court at Alexandria, an agreement with the banks concerned for the delivery of such cargo to the banks upon special terms.

56. In other instances, however, the Committee have directly undertaken the disposal of prize cargo. At the same time they wish to make it clear that they have not interpreted their reference as in any manner limiting the responsibility of the Marshals of the Oversea Prize Courts in the matter of the disposal to the best advantage of the cargoes coming before their respective Courts, and have them- selves only intervened in instances where there was no probability of a. satisfactory price being secured by local sale, or where the cargo in question was required in this country for Government use, or for other special reason.

57. Generally speaking, the procedure adopted by the Committee in the case of prize cargo disposed of by them has been to bring the cargo in question to the notice of any Department of His Majesty's Government likely to be interested, and, failing agreement with any Department, brokers have been employed to dispose of the cargo in the ordinary market. In this connexion the Committee wish to place on record their high appreciation of the valuable assistance which has been extended to them throughout by the Admiralty Marshal in this country, Mr. H. W. Lovell, and his deputy, Mr. M. Rackham. These gentlemen have been good enough to advise the Committee in various matters pertaining to the disposal of cargoes in this country, and the Committee are particularly indebted to them for their aid in securing for the Committee the benefit of the advantageous rates of commission which the Admiral Marshal was able to secure for the handling and sale of the multitudinous cargoes dealt with by him. There have been cases where, owing to special circumstances, such as the small size of a consignment and the unusually heavy amount of work involved, the Committee have felt compelled to remunerate their brokers in excess of the scales which was known to have been agreed upon between the same brokers and the Admiralty Marshal: these cases, however, have been few in number, and even in such cases the knowledge of the arrangement between the Admiralty Marshal and the brokers has operated to secure for the Committee the benefit of rates below the prevailing commercial rates.

58. To show the extent of the responsibilities in connexion with the realization of prize cargoes, it may be stated that the gross proceeds of cargo sold by the Committee up to the present time amount to £125,638 3s. 4d., repre- senting a wide variety of commodities. In addition, the Committee have superin- tended the shipment of cargo to this country, or elsewhere, for disposal by the Admiralty Marshal.

59. The cargo removed by the Committee from oversea ports for the purpose of sale elsewhere has in some cases been transported in prize tonnage under the Committee's control, while in other cases requisitioned or free tonnage has been employed. In general, the cargo has been insured during the voyage against marine and war risks, but the Committee have had no occasion to prefer any claim under such insurances. Owing to the fact that the value and condition of the cargo at the time of shipment have in most instances been unknown, the insurances, particularly those in connexion with a full ship's cargo which was handled for the account of the Admiralty Marshal, have involved considerable labour, as it has been found necessary to arrange covers for very approximate figures, and to adjust with the insurers upon the basis of the actual proceeds of the goods when sold.

APPENDIX A.--REPORTS.

Insurance of prize cargo whilst in port.

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60. The Committee have also been brought into touch with the cargoes dealt with in the Oversea Prize Courts in consequence of a fire insurance cover which they arranged in the early part of 1915 for cargoes awaiting adjudication in the Oversea Prize Courts. This scheme also was instituted in pursuance of the views expressed in the aforementioned Treasury letter of the 18th January, 1915, and the correspondence with the insurance brokers and other documents describing the scheme are included in the collection of papers identified as Miscellaneous No. 312.

61. The scheme applied as from the 27th January, 1915, in the case of cargoes then in the custody of the Prize Court at Alexandria and within its terms, and from the 29th January, 1915, in the case of cargoes in a similar position in the other Oversea Prize Courts, whilst all cargoes thereafter proceeded against in the Oversea Courts automatically fell within the scope of the cover (unless specially exempted) as from the date of the issue of the writ in each case. ordinary course the insurance continued until release, sale, requisition, or con- In the denination, whichever was the earlier, but after the scheme had been working for some time the cover was extended so as to continue until sale or requisition in the case of the cargoes condemned in the Prize Court at Alexandria as disposed of prior to condemnation.

were not

62. The scheme has also been utilized, by arrangement with the Admiralty Marshal and the Insurance Companies, for the insurance of certain cargoes in oversea ports for which the Admiralty Marshal in this country had become responsible, and also for the insurance, whilst in this country awaiting disposal, of prize cargo removed from an oversea port to this country.

63. The Committee naturally had to apply to the Marshals of the Oversea Courts for the various particulars to enable the scheme to be worked and for the collection and remittance of the premiums.

64. In the case of goods sold under the direction of the Court the instructions for carrying out the scheme provided that the premiums were to be deducted from the proceeds of sale, whilst in the case of cargo released the scheme provided for the collection of the premium from the party taking release, unless evidence was adduced that the goods were effectively insured elsewhere, and were consequently exempted from the Committee's cover. In the case of released items it is interesting

to observe, in view of the doubt which was felt on the point at the time when the cover was arranged, that no instance has been brought to the notice of the Com- mittee where a party taking release of goods has declined responsibility for the payment of premium due under the cover when demanded at the time of the release of the goods. There have been instances where, either by inadvertence or by a mis- understanding of the scope of the cover, the Marshals have failed to demand the premium at the time of release, and where subsequent efforts towards recovery present difficulties, but the Insurance Companies have generously waived their claims to premium in many of these cases, and in others the Committee have been able to meet the losses from credits accruing to them from other transactions under the scheme.

65. The Committee have been allowed a commission of ten per cent, upon all premiums, the balance on this account on the 30th September last amounting to the sum of £1,008 11s. 4d.

66. Moreover, there is a small balance in hand resulting from over-collections, mainly through the demand and payment of premium in respect of periods during which the cargoes in question were not, upon a strict reading of the cover, at the risk of the Insurance Companies

67. This last-mentioned balance, however, and possibly also a further credit which is likely to accrue to the Committee by virtue of the operation of the clause in the cover limiting to a value of £250,000 the amount at the risk of the Insurance Companies in any one vessel, may ultimately have to be drawn upon for the settle- ment of cases where no premium, or an insufficient premium, has been collected.

68 Although some thousands of items of cargo have been within the cover, the Committee have to record that only one fire claim has been preferred against the Insurance Companies up to the present time. The fire in question occurred in certain cargo landed in Jamaica from the s.s. "Bethania," and the claim was settled at the sum of £755. The net premium paid to the Insurance Companies up till the 30th September last amounts to the sum of £9,304 3s. 9d.