7th, 1916, which the American Secretary of State characterized as being "at variance with the law and practice of nations in several respects" and who affirmed that the "United States reserves all of its rights in the premises, including the right not only to question the validity of these rules but to present demands and claims in relation to any American interests which may be unlawfully affected directly or indirectly by the application of those rules." To this communication the British foreign office replied that if the rules of the Order in Council were "not deemed by the United States to be in accordance with international law they should be challenged in the Prize Court." 2 To this suggestion the Secretary of State replied that "of course the United States has no intention to resort to British courts for the maintenance of such of its national rights as may be infringed by Orders in Council of Great Britain.'

11 3

Throughout the controversy the position maintained by the United States was that a neutral government is not obliged to leave its citizens to exhaust the remedies afforded by the Prize Courts of the belligerent whose alleged unlawful acts have deprived them of their rights but that it has a right to espouse and prosecute their claims for damages through the diplomatic channel without regard to the decisions of the Prize Courts. It called the attention of the British government to several instances during the American Civil War when the British government demanded through diplomatic channels damages for seizures and detentions of British vessels alleged to have been made without legal justification, several of the demands being made while the claims were before the American Prize Courts.*

The British foreign office, however, asserted that these cases established the very proposition for which it was contending, namely, that in cases where the Prize Court has power to grant relief there is no ground for diplomatic intervention and it

'Mr. Lansing to Chargé Laughlin, Sept. 18, 1916, Spec. Supp. to 11 Amer. Jour. of Int. Law, p. 1.

2 Ibid., p. 2.

'Ibid., p. 2. In a note of July 14, 1915 (Supp. to 9 ibid., p. 153), the Secretary of State instructed Mr. Page to inform the British government that "in so far as the interests of American citizens are concerned, the government of the United States will insist upon their rights under the principles and rules of international law as hitherto established . . without limitation or impairment by Orders in Council or other municipal legislation by the British government, and will not recognize the validity of Prize Court proceedings taken under restraints imposed by British municipal law in derogation of the rights of American citizens under international law."

The Secretary of State to Mr. Page, Oct. 21, 1915, Spec. Supp. to 10 Amer. Jour. of Int. Law, at p. 85.

pointed out that while in two of the instances cited by the American Secretary of State, the United States government discontinued the prize proceedings and admitted the right of compensation; in the others the proceedings in the Prize Court were continued and the British government acquiesced in its decisions.1 Sec. 26. When Prize Court Decisions Reviewable. But while the British government maintained that neutrals who claimed that their rights had been infringed upon must first exhaust the remedies provided by the establishment of the Prize Court and that it was open to them to contend that the Orders in Council complained of were inconsistent with the principles of international law and therefore not binding upon the Prize Court, it admitted that if the Court declined to accept such contention and its decisions were upheld by the Judicial Committee of the Privy Council, on appeal, and the government of the United States considered that the decisions were incorrect and in violation of the rights of American citizens, it was then open. to the American government to claim that they should be "subjected to review by an international tribunal." This principle, that the decisions of national Prize Courts may "properly be subject to international review," had, it was added, been conceded by Great Britain in Article 7 of the Jay Treaty of 1793 and by the United States in the treaty of Washington of 1871. In the present case if the Prize Court and the Judicial Committee, on appeal, should hold that the Orders in Council and instructions of the British government in matters relating to prize were in harmony with the principles of international law and the United States government should 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." 2

1 Ibid., pp. 140 and 142 ff.

'Sir Edward Grey to Mr. Page, July 31, 1915, Spec. Supp. to 9 ibid., 163. As to the controversy between the British and American governments in the case of the Wilhelmina see ibid., pp. 176 ff. In this case the American government protested against the institution of prize proceedings against the cargo on this vessel, on the ground that the cargo (consisting of foodstuffs) was not subject to seizure as contraband because it was not destined for the use of a belligerent government or its armed forces. The British government, however, maintained that the legality of the seizure was a proper question for prize adjudication and it added that, if the owners of the cargo desired to question the validity under international law of the action taken by the British government "they would have every opportunity of establishing their case in due course before the Prize Court.' The American government should therefore await the result of the Prize Court proceedings before having recourse to diplomatic intervention. Assurance was given that if the

It does not appear that the decisions of any Prize Court during the late war were submitted to review by an international tribunal.1 But instances were not lacking in which vessels or cargoes condemned by the Prize Courts were upon the demand of interested governments released or compensation made for the goods thus condemned.2

Sec. 27. The Same. Cases During the World War. It may be observed in this connection that Article 440 of the Treaty of Versailles obliged Germany to accept and recognize as valid all decisions of the Prize Courts of the allied and associated powers, so far as they related to German ships and cargoes and the payment of costs in connection with prize proceedings, and to renounce any claim arising out of such decisions, on behalf of any German national. On the other hand, the allied and associated powers reserved the right to examine all decisions and orders made by the German Prize Courts, whether they affected the property rights of the nationals of those powers or of neutral powers and Germany agreed to furnish copies of all the docugoods were found by the Prize Court to be contraband the owners would be "equitably indemnified." In the Chicago Packing House cases (the Kim and Other Vessels) pressure was brought by the claimants upon the American government to insist upon a settlement through the diplomatic channel rather than to leave it to the decision of the British Prize Court. Judge Simeon E. Baldwin, adverting to this demand, observed that it was "opposed to our whole policy from the beginning of our national history." And he added, "by that we have always, in dealing with countries having similar institutions to our own and courts which have won general confidence as real tribunals for the administration of justice, been ready to wait until those courts have spoken their last word, before our Executive Department finds fault with their government for its course of action." 9 Amer. Jour. of Int. Law (1915), p. 800.

But the decisions of the Belgian Prize Council condemning and confiscating for the benefit of the Belgian State German ships while interned in the river Scheldt within the jurisdiction of the Netherlands were in effect overruled by the action of the allied powers at Spa in July, 1920. See Sec. 67, infra.

See, for example, the case of the Silesia, an Austro-Hungarian merchant vessel which was condemned by the Chinese Prize Court (Judgments of the High Prize Court of the Republic of China, p. 88), which subsequently became the property of a Chinese citizen who leased it under the name of the Hwayih to the government of Czecho-Slovakia and while in the port of Trieste at the end of the year 1919 (then Italian territory) it was put under sequestration and by a decision of the Italian Prize Commission was awarded to its original owners. Against this decision the Chinese government protested on the ground that the vessel had been regularly condemned by a Prize Court of China, that the matter was res judicata and consequently the Italian Prize Court had no jurisdiction to review the decision. The Italian government recognized the justice of the Chinese position and released the vessel. Fauchille, op. cit., t. II, p. 587.

As is well known the British government compensated in large measure the owners of the cargoes on the Kim and other vessels, although they had been condemned by the Prize Court as good and lawful prize. In fact, 90 per cent of the proceeds of the condemned cargoes (in some cases 95 per cent) were paid to them. The American Meat Packers' Agreement, VIII Lloyd 473.

ments constituting the record of the cases and to accept and give effect to the recommendations made after such examination of the cases. A similar provision was embodied in the treaties with Austria (Art. 378), with Bulgaria (Art. 296) and with Hungary (Art. 361).

In the case of the Gelderland1 a Dutch ship which had been condemned by the German Prize Court and subsequently recaptured by the Belgian naval forces in the port of Zeebrugge and made the object of prize proceedings before the Belgian Prize Council, the original Dutch owners invoked the clause of Article 440 of the Treaty of Versailles relative to the examination by the allied and associated powers of the decisions of the German Prize Courts when they affected the rights of nationals of neutral powers. The Prize Council, however, held that Article 440 did not apply to ships captured by Germany and subsequently recaptured by an allied power; that it was not the intention of the article to confer upon the prize tribunals of the allied and associated powers authority to reexamine the decisions of the German Prize Courts, but that this reëxamination was a governmental or diplomatic matter and since the Belgian government had not exercised its right of examination under the treaty, the decision of the German Prize Court condemning the ship must stand. Having been recaptured by the Belgian forces it was a lawful prize and was condemned as such by the Belgian Prize Council.

IV

REWARDS FOR NAVAL SUCCESS

Sec. 28. Prize Bounty. In Great Britain the jurisdiction of the Prize Court includes the power to determine whether in a particular case of capture the captors are entitled to prize bounty. By section 42 of the Naval Prize Act, 1864, and the Order in Council of March 2, 1915, issued in pursuance thereof, the officers and crews of such British war ships as were actually present at the taking or destroying of an enemy armed ship were entitled to have distributed among them as prize bounty a sum calculated at the rate of £5 for each person on board the

Text in 47 Rev. de Droit Int. et de Lég. Comp. (1920), pp. 125 ff.; also Moniteur Belge, Oct. 30, 1919, p. 5773.

2

enemy ship at the beginning of the engagement.1 The Prize Court was given jurisdiction to interpret this legislation and to judge on the basis of the facts in each particular case whether the conditions under which prize bounty was allowable were present. In the case of the Sydney Sir Samuel Evans declined. to place a "too narrow construction" upon the words "on board" and awarded prize bounty in respect of members of the crew of an enemy ship (the Emden) destroyed by an Australian man-ofwar, who although they were not actually "on board" at the beginning of the engagement were in fact in attendance in some form or other, or, as part of the enemy crew, were engaged in work connected with the service on which the enemy vessel was Before the World War it was the practice in England for the Crown to whom a prize had been condemned to distribute the proceeds among those immediately responsible for the capture. The practice, however, was open to the objection that it worked injustice to others who rendered equally important services in naval warfare, and who went unrewarded (see the remarks of Sir John Simon in the case of the Chile). Accordingly, by an Order in Council of Aug. 28, 1914, the existing practice was abolished (Supp. to the London Gazette, Aug. 28, 1914), and it was announced that in lieu of the old system of distribution there would be established a system of bounties and gratuities. The new system was put into effect by an Order in Council of March 2, 1915, referred to above (London Gazette, March 2, 1915). Under the old practice the sums received by captors were sometimes fabulous in amount, a writer in the London Times citing an instance in which a captain's share amounted to £40,000 and that of every man on board to £200.

V Lloyd 288; II Br. & Col. Pr. Cas. 231. As stated in the preceding note the old British practice was to award the prize in its totality to the captors. As was said in the Oscar II (X Lloyd 273): "In the old days

the captor brought his capture into the Prize Court, and if he got condemnation, he put the value of it into his pocket." Germany, on the contrary, never adopted the practice of awarding the captors a share of the prize, but during the World War liberal bounties appear to have been accorded naval commanders or seamen, especially of submarines. The Belgian, Chinese, and Japanese Prize Court regulations declare that condemned prizes shall be the property of the State. By a French law of March 15, 1916, the total proceeds of condemned prizes were to be paid into a special fund to be distributed as indemnities to invalided or wounded officers and seamen and their widows and orphans. Before the enactment of this law the French Prize Council in pursuance of the existing legislation condemned the prizes "for the benefit of the captor officers and crew" (the Porto and the Barmbek), but after the enactment of the law of 1916 they were adjudged to "the ayant droit conformably to the laws and regulations in force" (the Frieda Mahn). By the Italian Rules of Mar. 25, 1917, the proceeds were put at the disposition of the minister of marine who was authorized to grant, according to special circumstances, a share of the prize to the captors. In every case, subject to one exception, one-fifth of the value of the prize had to be paid into the invalid fund for the benefit of invalid and wounded seamen (Arts. 110-111). By later decrees the captors were allowed 2 per cent of the value of Austrian prizes_destroyed (Verzijl, op. cit., p. 223). By a Siamese decree of July 20, 1917, the whole matter of granting prize money was left to the decision of the King.

The distribution of the proceeds of condemned ships and cargoes captured by the joint forces of two or more allied powers was regulated by Art. 5 of the Convention of Nov. 9, 1915, between Great Britain and France to which Italy and Russia subsequently adhered (See Sec. 18 infra). Application of the article was made by the French prize council in the cases of the Corcovado and the Oscar II, 27 Rev. Gén. (1920), Jurispr. 60, 85.