HL Deb 28 June 1923 vol 54 cc714-32

THE EARL OF BIRKENHEAD had given Notice to ask whether the attention of His Majesty's Government has been called to the seizure on British ships in American waters of alcoholic stores to which the seals of the British Customs had been affixed; and to ask what is the policy of the Government in relation to the consequent difficulties by which British shipping is confronted.

The noble and learned Earl said: My Lords, we have recently been exhorted by distinguished authority to keep cool in dealing with this matter. I am not sure that any of us have shown any temptation to examine the matter in any but a spirit of complete calmness. It is, I suppose, generally recognised in this country that no friendly and reasonable representation that might be made, on behalf of British interests, to the American Government could fail to receive a friendly and reasonable reception. Indeed, it would be an amazing circumstance if the contrary were predicted. It would be as amazing as to put it forward that if the American Government thought a legitimate American interest was being injured in this country, it would not be proper for them in courteous and reasonable language to put forward the grounds which had led them to that conclusion.

What are the circumstances which, to-day, threaten so much injury to what is perhaps almost the most important industry in this country—namely, our mercantile marine? It is, of course, the operation of prohibition in the United States of America, in so far as that operation has been made to extend over neutral shipping in territorial waters. One may clear the ground at once by pointing out, what is of course elementary, that no one in England has the slightest pretension or slightest desire to make any criticism of any kind at all as to the domestic policy of the United States of America in relation to the drink problem. The same distinguished authority to whom I referred a moment ago has again exhorted us to allow them to make this experiment in their own way, and without any interference from this side of the water. We have not the slightest claim or title to interfere, and we have not made the slightest attempt to interfere, with the workings of this great experiment, as it is called, of prohibition in the United States. Our concern begins and ends with the effect of that which is done in American territorial waters to British ships and to that which is contained in British ships.

It is rather important that our minds should be clear upon certain legal points which are involved, and which, I think, can be quite compendiously and clearly explained. It was at one time supposed by a considerable school among international lawyers that when a British merchant ship left a British port in order to proceed on a voyage she carried with her, for all absolutely domestic purposes, the nationality of the country whose flag she flew so completely that she was sometimes said, in the jargon of the legal textbooks, to carry with her wherever she went, for all domestic purposes, the territoriality of the country to which she belonged, and so it was said that merchant ships were territorial. I limit that claim, even in its most extreme form, and for evident reasons, to matters which are domestic to the ship—that is, to all that takes place within the little economy of the small society which constitute the crew and the passengers of the ship. Obviously, it never could apply to any contact between those on board the ship and those who lived in the country within whose territorial waters she lay. On the whole, and taking a balance of the authorities, that view did not commend itself, and the view which has, on the whole, prevailed, both in the United States of America and in this country, is that, for reasons of comity, and for reasons of convenience, foreign countries are extremely reluctant to interfere with anything that is purely domestic which takes place upon a neutral ship in territorial waters, but that there is no legal right which protects those who are on board a neutral ship from the operation of the domestic law of the country in whose territorial waters she lies.

So much for the law of the matter. Now let us consider what has happened in this case. I observe with interest and with pleasure that many distinguished Americans, and among them many distinguished American lawyers, are evidently extremely sorry that a situation quite beyond the power of the American Law Courts, if I understand the situation aright, to correct, but by no means beyond the power of diplomacy to correct, has produced a series of accidents which, from every point of view, can only be described as unfortunate. The Volstead Act, which made prohibition effective, became law in circumstances which are well known to your Lordships. It is certainly no exaggeration to say that it is doubtful whether a single competent lawyer in the United States of America ever suspected, ever dreamt, at the time the Volstead Act became law, of such a consequence following upon it as has been produced by the judgment of the Supreme Court.

Your Lordships know well that the effect of the judgment of the Supreme Court is that if a neutral ship proceeds to an American harbour containing alcoholic stores at all, be they under official British seal or not, they are liable to seizure in the American port, with the obvious consequence that the neutral vessel cannot conceivably, unless it adopts the inconvenient and expensive course of obtaining liquor outside the territorial limit, have any alcohol for the return voyage. This was the decision, of the Supreme Court of the United States, and it is proper that it should be made plain, though most of your Lordships need no assurance upon the point, that the Supreme Court of the United States of America is not only technically one of the most accomplished tribunals in the world, but it is also one whose single-minded desire to reach a true conclusion upon such problems of law as present themselves before it is universally recognised with admiration by lawyers all the world over. I may begin, therefore, by laying it down in the clearest possible terms that the Supreme Court took the relevant sections before them, examined them as lawyers, and reached the conclusion which, by a majority, they have confirmed, the conclusion being that, whatever the intention of the Legislature was, the effect of the legislation which they have passed is such as to exclude from the United States waters alcoholic liquor, even officially under bond, and to render that a legitimate object of forfeiture.

The first observation which falls to be made is this. That which the Supreme Court has declared it proper and legal to do is not in any way required for the purpose of making prohibition effective. That is the reason why it is to diplomacy, and not to law, that British shipping is, I think, entitled to look for some help in the very difficult situation in which it finds itself at this moment. The papers have been lightly saying, "Let the British shippers institute a test case in the Courts of the United States and carry it to the Supreme Court." I cannot myself see the usefulness of this advice, nor can I believe it is a course which any practical person is in the least likely to adopt. The Supreme Court of the United States has just applied its mind to this very state of facts, and it has pronounced upon them. It is not, believe me, a Court of such instability of view that it is in the least likely, in two, or three, or four months to adopt a different view; indeed, the period would be longer, because at the present moment there are very considerable arrears before the Supreme Court, so that it might easily take eighteen months, or even two years, before a final decision was pronounced by the Supreme Court. But whenever that decision is pronounced there is not the slightest reason to suppose that a Court which holds itself just as surely bound by deliberate conclusions, deliberately reached, as your Lordships do when you sit judicially, will reverse the conclusion which it has already reached and already published.

We are, then, face to face with this situation, that there is small hope of any recourse to the Law Courts by any British shipowners. What, then, is the alternative? Are we to say at once that, for a purpose which does not in any way make ineffective the attempt to make prohibition complete in the United States of America, without even a word of friendly discussion with the United States of America—are we to say to our shipowners, who constitute so important a part of our commercial interest: "We cannot give you the slightest help; there is nothing that it is in our power to do, and you must hereafter make up your minds, if you go to an American port, that you must only take so much alcohol as will suffice for the crew and the passengers until you reach the port to which you sail, and you and the passengers must be content to come home from the United States of America to a British port without any alcohol at all on board"?

Observe how complete are the guarantees to the American Government that there will be no violation of any kind at all of their Prohibition Law. I can quite conceive the American Government saying: "It is not consistent with our view that alcoholic liquors should be consumed on any neutral ship so long as it is within American territorial waters." That would be logical and intelligible, and I, for one, should find no occasion whatever to criticise such a decision. But, of course, that is not what they say. They say: "Not only shall you not consume alcohol upon British ships in American waters, but you shall not even keep it there under the official British seal"; and, if I may say so with great respect, I think the Prime Minister, in the answer which he gave in the House of Commons a night or two ago, a little underrated the importance of the official seal.

It is perfectly true that sometimes—though, much more rarely, I think, than the Prime Minister appeared to suppose—occasions do arise for touching the seals which have been imposed by other nations. But the importance of the seal here is not to found upon it any technical case that it is illegal to touch it. The importance of it is this, that it does afford the American Government the pledge of the representatives of the British Government that that seal will not be touched while the vessel is in American waters, and that there cannot be, either directly or even in the most indirect way, any consumption of liquor in American waters. But it is interesting to notice that the American Government themselves, at a time of diplomatic discussion with Spain which preceded a very critical period, made use of the following expression— We do not question the right of every nation to prescribe the conditions in which the vessels of other nations are admitted to its ports. But nevertheless we point out that those conditions ought not to conflict with the received usages which regulate commercial intercourse between civilised nations. Those usages are well known and long established, and no nation can disregard them without giving just cause of complaint to the nations whoso interests would be affected by their violation. No one could state in more admirable and restrained language the kind of case which, in justice to the great shipowning interest of this country, I suggest to the Government it is their duty, through diplomatic channels, to make.

In this connection it is interesting to notice that there were two dissenting judgments delivered by the Supreme Court. In one of those dissenting judgments a very interesting expression occurred to which, I have no doubt, the attention of the Leader of the House has been directed. It was Mr. Justice Sutherland, I think, who said— A merchant ship of one country voluntarily entering the territorial limits of another subjects herself to the jurisdiction of the latter. The jurisdiction attaches in virtue of her presence, just as with other objects within those limits. During her stay she is entitled to the protection of the laws of that place, and, correlatively, is bound to yield obedience to them. Then there is an even more important passage in the judgment of the majority, to which I commend the attention of the Leader of the House—it was a majority judgment— Of course, the local sovereign may, out of consideration of public policy, choose to forgo the execution of its jurisdiction or exert the same in only a limited way, but this is a matter resting entirely in its discretion. Now, I, cannot conceive how the Supreme Court, arriving, and, I rather infer, reading respectfully between the lines, arriving somewhat reluctantly, at a conclusion the inconvenience of which to friendly neutrals must have been so apparent, could have made it more plain that there did nevertheless survive its decision a mean6 by which an inconvenience so intolerable and so unnecessary might be avoided. And they made it plain in the passage I have just read that the execution of the jurisdiction may be foregone by the, local sovereign out of considerations of public policy, and that this is a matter solely in the discretion of the executive Government.

The suggestion which I make to the Government is this, that it would not be right that an inconvenience not required, as I have pointed out, by the social policy of the United States, in no way necessary in order to make that policy either effective or consistent and, by universal admission, involving the passenger vessels of this country not only in great inconvenience but in very great financial loss, it may be, should be passed in absolute silence by the Government: so far as official communication is concerned. That would be, I think, both unfortunate and unnecessary. As I have already-attempted to point out, there is no nation in the world that has at the same time a higher conception of common sense, of reasonableness, and of law than the United States: and it is to me quite inconceivable that representation made with the tact and the courtesy of which the Secretary of State for Foreign Affairs is capable would be received by them with anything but the greatest possible respect and friendliness.

I hope that it will be possible for the diplomacy of this country to do what I know for certain many responsible American citizens are anxious that it should do—to make such a representation to the United States of America and to ask them, in the exercise of that discretion which the majority of the Judges of the Supreme Court carefully pointed out that they possess, to introduce some mitigation of this system which, while maintaining unimpaired the policy of the United States Government in relation to this matter, will at the same time relieve British shipping of a very serious and, as many of us think, a very unnecessary burden.

THE SECRETARY OF STATE FOR FOREIGN AFFAIRS (THE MARQUESS CURZOK OF KEDLESTON)

My Lords, this is a very difficult and delicate matter raising, as the noble and learned Earl has pointed out, grave issues both of International Law and of policy and, as such, I am personally very glad that it was brought before your Lordships' House, as it was bound in any case to be, by such an acknowledged authority upon International Law and practice as the noble and learned Earl who has just addressed us. It is a question that clearly ought to be dealt with, as indeed he dealt with it, in language of extreme circumspection, and he did not need to urge your Lordships to examine it in an atmosphere of calmness because we may truthfully say that that is an invariable feature of our proceedings.

Now, the noble and learned Earl was, I think, right in saying that there are certain aspects of this case which it is unnecessary for us to allude to this afternoon. We are not concerned here, as he quite fairly pointed out, with the policy of prohibition now being pursued by the United States Government. Different views may fairly be held both upon that policy itself and upon the methods by which the American Government is carrying it out. That is a matter—I think he used the phrase—of the domestic policy of the United States Government upon which we, as a Government, are not concerned to express any opinion and which is really not relevant to anything that we are discussing this afternoon. Neither have we any desire, nor have I any intention, here to discuss the interpretation by the Courts of the United States of the laws of the United States. That also would be outside the purview of our debate. Nor, again, are we here to discuss the legal right of the United States to impose conditions upon foreign vessels entering then-waters, because that is a position about which International Law is decisive.

What we are concerned with this afternoon—and I think the noble and learned Earl used the very words which I am about to employ—is the treatment that has been meted out to British shipping in United States territorial waters, and what we have to consider is the degree to which that treatment conforms to or departs from international practice. That is a very important question, and, as defined by the noble and learned Earl, it is a question to be resolved not so much by considerations of law as by the methods and tactics of diplomacy. That I understand to be the general object of the questions he put to mo to-night. At one period of his remarks he seemed to assume—and I am not complaining, because, of course, he had not official knowledge—that His Majesty's Government might conceivably have treated the case that has thus arisen in absolute silence. That is far from having been the ease, and my object in replying to him will be to state succinctly and consecutively to your Lordships' House the steps that His Majesty's Government have taken from the start. If I do that I think I shall satisfy the quite legitimate curiosity which the noble and learned Earl has expressed.

This case has not arisen solely, although it has come to a head, in the past few weeks. The question whether the Volstead Prohibition Act applied to foreign merchant vessels in the United States territorial waters was first heard of by us in October of last year. At that date the Attorney-General of the United States gave a ruling that it did so apply. The steamship companies then took the matter into Court, and His Majesty's Ambassador at Washington, on instructions from us, addressed a note to the United States Government in which, while questions of International Law were reserved for future consideration, we made representations on the ground of what were described as certain broad and important international considerations of a wholly general nature not necessarily in any way connected with the use of alcoholic liquor as a beverage. We pointed out that for any State even constructively to project the operation of its strictly domestic municipal law on to foreign vessels on the high seas (which was the practical effect of the American ruling) would be unprecedented, and that if this course were to be adopted by other States it would subject all shipping other than coast-wise shipping to the evils flowing from a conflict of authority. The United States Government acknowledged the receipt of this note, but they did not enter into any discussion of the arguments which it contained.

We then come to the decision of the Supreme Court. That was given on April 30 last, when the American Supreme Court, with one dissentient, made a ruling which interpreted the Volstead Prohibition Act as forbidding the carriage of liquor, even under seal, on merchant vessels, either foreign or domestic, within the territorial waters of the United States.

THE EARL OF BIRKENHEAD

I thought there were two dissentients.

THE MARQUESS CURZON OF KEDLESTON

My information is that there was only one. This ruling was given on an appeal from the decision of a New York district court entered by the twelve British, Italian, French and United States steamship companies. Effect was at once given to the ruling under a series of Regulations to be enforced on all vessels leaving their home ports after the 10th June last. These Regulations provided, as your Lordships will have seen from the newspapers, for the seizure of all liquor on such vessels, except such as was carried under the law of the vessel's country, and within an amount adjudged reasonable by the United States authorities for medicinal purposes.

Since the ruling of the Supreme Court was given we again, in May last, addressed the United States Government. We pointed out that while we did not dispute that a ship entering the territorial waters of a country subjects itself to the jurisdiction of that country, yet the extent to which each country should compel the observance of its own laws on the ships of another, and the nationals on board those ships, was of primary importance in the regulation of intercourse between nations, and we said that in our view the jurisdiction could not be exercised except to restrain acts calculated to disturb public order. We further pointed out that an impossible position would be created in international voyages if the precedent now proposed were made general, and if conflicting national laws were imposed by each nation on the vessels of other nations within their territorial jurisdiction. Accordingly, we urged the United States Government to discuss this matter with the other maritime Governments before making so material a departure from the common practice of all nations. At the same time, we instructed our Ambassador at Washington to place himself in communication with his French, Spanish, Italian, Danish, Dutch, Swedish and Norwegian colleagues with a view to ascertaining what action they were taking. Although it was not found possible to arrange for concerted representations, some of the other nations, notably the French, having already lodged a protest on their own account and on grounds similar to those advanced by us, all the Governments mentioned above have since made representations. The reply of the United States Government came in the first week of June, and while undertaking to consider in a friendly spirit the views advanced in the British Note, it expressed the inability of the American Government to discuss the legality in an international sense of the operation of an Act of Congress the scope of which, within the territorial limits of the United States, had been authoritatively decided by the Supreme Court.

What is the legal position as interpreted by His Majesty's Government, acting upon the advice of their legal authorities? It is as follows. There are two recognised principles of International Law which prevent us from contending that the United States have committed any violation of International Law in forbidding foreign vessels to bring alcoholic liquor within their waters. The first is that foreigners and foreign ships trading with a country must comply with its laws. The second is that every sovereign independent State is supreme over all persons and property within its dominions, including ships within its territorial waters. That is the strict interpretation and definition of the law, but there are, as was pointed out by the noble and learned Earl, other considerations of equal, or, at any rate, of scarcely inferior, validity and importance. In the case, for instance, that has arisen of foreign ships coming within the waters of a State for trade or for other purpose, the principles to which I have referred cannot be pushed to extremes, but must be applied with moderation and good sense. This becomes clear if one considers that a ship is a travelling unit which passes from one State to another and, therefore, cannot escape the necessity of complying with other legal systems which may not be in every respect consistent with the law of the particular country which it may happen to be visiting at the moment. Furthermore, it is universally recognised that a ship stands in a particularly close relationship to the State whose flag she flies and that on many matters it is to the general convenience that all Governments should recognise the law of the flag State as paramount.

The net result of this complex of considerations has, therefore, been that on many matters the practice has grown up that a State should not exact compliance with its own law even though a ship is within its waters, but should leave such matters to be regulated by the law of the flag State. This, however, is international practice rather than International Law and, accordingly a departure from it involves a breach, not of International Law, but of the comity of nations. The sanction for it, such as there is, is that if a State acted unreasonably towards the ships of other nations when they came within its jurisdiction, it would find that its own ships were unreasonably treated when they were within foreign jurisdiction. It was a statement of this case, of these propositions, in other terms but in better language, that was the substance of the declaration read by the noble and learned Earl just now and which formed part of the declaration made some time ago, I forget exactly when, by the United States Government to the Spanish Government in connection with a case not analogous to this but which raised the same broad considerations.

Then I come to the case to which the noble and learned Earl alluded only in a few sentences, the seizure in the last few days, in New York harbour, of the liquor under seal in British and other foreign vessels, and here, I think, there has been some misapprehension as to what I am told is the ordinary practice. The noble and learned Earl alluded to an answer which was given by the Prime Minister in another place two days ago, and he seemed to think that that did not altogether cover the ground. The case, as I am informed, stands as follows. The British Customs seal is affixed as a matter of routine in all cases where goods which are subject to the higher rates of duty (wines, spirits, tobacco, etc.) are exported from this country under bond as part of "ship's stores." The only obligation which is entailed by this procedure is that the seal shall not be broken within British territorial waters. For this purpose, bond is given by the shipowners and an entry is made in the log of the time and position at which the seal is broken. Such seals have, therefore, no sacrosanct character, and His Majesty's Government cannot object to their being broken by United States officials within United States territorial waters. The noble and learned Earl, speaking, of course, with vastly greater experience than I possess, said that corresponding cases rarely occurred in this country. That is not my information. I am told that foreign Customs seals are habitually broken within British territorial waters with the object of checking the amounts of articles subject to duty in the United Kingdom which are included in the returns of "ship's stores" furnished to the British Customs by the masters of the vessels.

Now we come to the action that has been taken in consequence of this seizure in the United States. It is quite true to point out—I think the noble and learned Earl hinted at it—that the object of the British shipping companies in bringing liquor under British Customs seal into New York was not—although I have seen it assumed that it was—in order to bring a test case into Court. Their intention was, while affording the United States Government every possible guarantee that the liquor was not to be landed in the United States, to see whether that Government really meant to proceed in violation of international practice and to refrain from availing themselves of what was regarded as the loophole in the Supreme Court's decision. When speaking of the "loophole" I am alluding to the sentence in the finding of the Court which was quoted by the noble and learned Earl, particularly to that passage in which the Court use these words: Of course, the local sovereign may, out of consideration of public policy, choose to forgo the execution of its jurisdiction, or exert the same in only a limited way, but this is a matter resting solely in its discretion. There is another consideration which in common fairness we must remember. It is this. The real motive of the United States Government in allowing the matter to come to a head at the present time is most probably their desire to put pressure on us to check the traffic in contraband liquor carried on from British territory (mainly, the West Indies) and under the British flag by vessels which hang about outside American territorial waters. This appears from the fact that the latest proposals addressed to His Majesty's Government by the United States Government couple the two questions.

The history of these proposals is as follows: In June, 1922, the United States Government proposed, through His Majesty's Chargé d'Affaires at Washington, the conclusion of a Treaty for the purpose of checking liquor smuggling and the recurrence of certain irregularities, such as the issue of double clearance papers and the grant of British registration to American vessels on fraudulent pretences, which had been proved against the local authorities in the Bahamas. The proposed Treaty was to obtain reciprocal provisions authorising the authorities of each Government to exercise a right of search over vessels of the other beyond the three-mile limit to the extent of twelve miles from the shore. His Majesty's Ambassador at Washington was instructed to decline to enter into any arrangement of the kind proposed, on the ground that His Majesty's Government have consistently opposed any extension of the limit of territorial waters such as was suggested. We felt that the outbreak of smuggling which had led to the proposal could not be regarded as a permanent condition, and while we were, therefore, desirous of assisting the United States Government to the best of our ability in the suppression of the traffic and in the prevention of the abuse of the British flag by those engaged in it, we did not feel that we could properly acquiesce, in order to meet a temporary emergency, in the abandonment of a principle to which we attach great importance. At the same time we undertook, short of entering into a Treaty of the kind proposed, to take any steps within our power to prevent any infractions of the local law by persons engaged in liquor smuggling.

That was the general tenor of our reply to the proposal from the United States Government, the reply being given by us in September, 1922. There the matter rested until a fortnight ago. When these seizures were made, and after the Regulations of the United States Government against the carriage of liquor by foreign vesesls had been put into effect, the United States Government reverted to their proposal for a Treaty extending the three mile limit to the twelve-mile limit. This extension was proposed by them only a few days ago, about ten days ago, as a temporary and ad hoc arrangement, which was not to be regarded as extending territorial limits as hitherto accepted but merely as conferring the right of search and seizure on the officers of one country against the vessels of the other in cases where there is reason to believe that the vessel, or those controlling her, are engaged "in the wilful commission of acts which constitute a violation of the laws of the State of which such boarding officer is an official with regard to the unloading or importation of any article or articles."

The proposed Treaty then went on to provide for a modification of the Prohibition Act and a reversal of the Supreme Court's ruling by permitting the bringing of articles, the importation of which is forbidden by the laws of either party, within the territorial waters of that party subject to such article being kept under seal until the vessel leaves territorial waters. This proposal, which is a somewhat complex one, is now under consideration by a Committee which is sitting under the chairmanship of the Under-Secretary for Foreign Affairs. This Committee is in close communication with other Departments of His Majesty's Government. It would, of course, be quite premature to say, and, indeed, I do not know, what will be the result of their labours, but this I can say, that there is no chance of our agreeing in any circumstances whatsoever to the proposal for a twelve-mile limit.

I have now given in chronological order an account of the present position, of the steps that led up to it and of the line that has been taken by His Majesty's Government. I have shown to your Lordships that, so far from having indulged in only one word or a few words of friendly discussion with the United States Government, we have been engaged in that discussion for the best part of a year. That discussion is continuing at the present moment. I hope that what I have said will convince the House that we are thoroughly alive to the importance of the case, and that the channels of diplomacy to which the noble and learned Earl made such frequent appeal are being utilised to the best of our ability to find an exit from a situation which is undoubtedly disagreeable and which ought not to be allowed to continue.

VISCOUNT GREY OF FALLODON

My Lords, I know nothing about this subject except so much as may be gathered from the newspapers, but sufficient is known of it generally to give rise to some degree of anxiety as to the effect which this question may have on the relations between the two countries. The noble Marquess said that this state of affairs, which ho implied must necessarily be exasperating to the United States Government (he did not use that word, but I think that was the sense of his remarks)—the fact that there are, just outside American territorial waters, and perhaps in British territory outside those waters, elaborate and continuous preparations afoot to import liquor illegally into the United States—was a temporary state of things which was not likely to continue. If that is so, if these manifestations disappear in a short time, that particular risk of friction between the two countries will be out of the way.

But I do not know that it is likely to be a temporary state of things. If the Prohibition Act in the United States is not temporary—and we are told that it is not temporary, and so far as we can judge it is not intended to be a temporary Act at all—then the particular inducement to continue this sort of practice will also continue, and I think there is a real risk of friction between the two Governments if this kind of thing goes on indefinitely. It is undoubtedly irritating to both sides. It is obviously inconvenient for the United States that neutral ships should come into their waters having under seal a store of liquor which, the moment they leave the United States port, can be opened on the high seas and served to all passengers on those ships. That means that all neutral vessels taking passengers into United States ports have a great advantage over United States ships, which cannot have any liquor on board and which cannot therefore supply that form of pleasure to their passengers on the voyage. It must necessarily be an exasperating state of things for a Government to see neutral vessels leaving its shores equipped with this advantage which passenger ships of their own nationality are unable, are indeed forbidden, to provide.

On the other hand, it is undoubtedly exceedingly irritating to neutrals that their ships, that British ships, for instance, should go to the United States ports, should carry liquor in such a way that it cannot possibly contribute to the breaking of the law within the territorial waters of the United States, should stay in port without committing any breach of the United States law in spirit or in practice, and yet should be deprived of that liquor in such a way that every British subject who leaves a United States port on a British ship is compelled not only to observe the Prohibition Law, as he is bound to do while he is in the United States, but to observe it for a week or so after he has left United States territorial waters altogether. Anybody who has listened to the speech of the noble and learned Earl behind me must realise that we do feel, that British subjects and British shipowners naturally must feel, a sense of grievance. At the same time it must be remembered that great breaches of the United States law are said to be taking place and to be due to the action of neutrals outside.

The only conclusion which I would draw is this. I think it is very desirable that the two Governments should come to some arrangement. I gather that the United States has made a proposal on the subject. I quite agree that the three mile limit constitutes a doctrine of International Law so important and so generally recognised—by the United States Government, I understand, as well as by us—that we should be very chary indeed of consenting, even temporarily, to anything which might look like a breach of that doctrine. It is, indeed, possible to maintain that the mere fact that by mutual consent for a particular purpose a doctrine is waived is in itself a confirmation of the general rule of that doctrine by both parties. But I agree that it is a matter which wants to be very carefully watched. I should, however, be hopeful that His Majesty's Government might find some way out, and that the United States Government on their side would be more willing to meet our grievances if we could meet the complaint of the illegal importing of liquor from British ships in some better way than simply by suggesting that in time it will come to an end of itself; because I very much doubt whether it will come to an end of itself. I think we may do a good deal to meet the United States Government in that direction, but it must be done in such a way that it does not merely deal with such illegal traffic as may be going on in British ships without touching the activity of other neutrals. Whatever action is taken must not involve simply a disability to British Colonies or British shipping without also putting the same disability upon other neutrals.

I admit that the question is an exceedingly difficult one and I would only suggest to the noble Marquess that it would be undesirable that irritation should be allowed to increase and the matter allowed to drift without a real attempt by the two Governments to settle it. If there does not seem to be any likelihood of progress, I think it would be very desirable to discuss with the United States Government whether it would not be to the advantage of both countries that the whole of the correspondence which has passed between the two Governments, not merely with regard to this aspect of sealed liquor on our ships but with regard to the whole question, should be published, so that the people of both countries may at any rate be in possession of the full facts of the case.

THE EARL OF BIRKENHEAD

My Lords, I am very much indebted to the noble Marquess for the extremely full reply he has made to my observations and I shall read it with great care in the OFFICIAL REPORT to-morrow, because it is full of technical matters. The interesting speech which the noble Viscount has just made contained much with which I agreed, but there were two observations with which I do not agree so fully. He spoke in the first place of this illegal English trade for the purpose of evading the American laws. The whole point of it is that it is not illegal. It might be illegal for American ships to engage in it, but it is not in the least illegal for English ships.

VISCOUNT GREY OF FALLODON

I quite agree. That is a verbal inaccuracy on my part. I should have said a practice which is not illegal on the part of British Colonies or ships, but which could lead to illegal importation into the United States. I quite accept the correction of the noble Earl with regard to the technical part.

THE EARL OF BIRKENHEAD

The second point is that when the noble Viscount balanced two exasperating circumstances he put it in this way. He said it must be very exasperating to the United States to see the ships of neutrals leaving that harbour in which the Statue of Liberty stands—this is my language and not that of the noble Viscount—stocked with these refreshing beverages, and to know that their own ships are entirely bankrupt of these too delightful refreshments, and that it is, on the other hand, exasperating to Englishmen to know that for four, or five, or six days they have to do without those refreshing beverages, although their abstinence does not make any contribution to the cause of prohibition in the United States. But mark you how ill-balanced those exasperations are. The United States Government can alter it to-morrow, and we cannot, and every time that the Statue of Liberty ironically smiles on the vessels which sail past her, on their way to Southampton and Liverpool, if she ever reflects on the august experience which now crowns her, I hope she will reflect upon the difference of our fates.

House adjourned at five minutes before seven o'clock.