Chapter XXXVIII: Appendix: No. 3

Foreign Office, 21st September, 1866.

SIR,

I am directed by Lord Stanley to acknowledge the receipt of your letter of the 31st ultimo, in which you call his Lordship’s attention to the state of relations existing between this country and the United States with regard to the Navigation Laws; and in expressing to you Lord Stanley’s thanks for this further communication, I am to inform you that the same has been referred to the Board of Trade, whose observations thereupon will be communicated to you as soon as their answer shall have been received; and the delay in receiving their report is the reason for your letter not having been sooner acknowledged.

I am, Sir, your most obedient humble servant,

E. C. EGERTON.

To W. S. LINDSAY, Esq.,
Manor House, Shepperton.

Foreign Office, 26th September, 1866.

SIR,

With reference to my letter of the 21st instant, I am directed by Lord Stanley to state to you that his Lordship is fully alive to the importance of the points on which you have urged that a satisfactory understanding is desirable with the United States, but that since the date of your letter to Lord Lyons of the 21st of September, 1860, the first two of the seven questions enumerated in it have been settled by the adoption of one uniform system of rules of the road, and of lights to be carried at sea by maritime nations generally, including the United States.

As regards the third question, viz., the limitation of shipowners’ liability, the Lords of Trade have pointed out to Lord Stanley that the law of this country has undergone some modification since 1860. By the Merchant Shipping Acts Amendment Act, 1862, the limit of such liability was readjusted, and the limitation was extended to foreign ships in cases arising in British courts concerning matters within their jurisdiction.

Inasmuch, however, as this extension was not made specially for the benefit of foreigners, but with the view of establishing a just and uniform rule of law, no steps were taken to secure reciprocal legislation in foreign countries.

If the law at present in force in the United States is liable to the same objection as the law formerly in force in this country, and is found to be attended with the inconveniences which were experienced here, it may be presumed that the United States Government will probably find it for their interest to amend it in a similar sense and on similar grounds; but Lord Stanley sees no reason at present for opening special communications with that Government on the subject.

With respect to the remaining four questions alluded to in your letter, I am to state to you that the matters to which they relate are under consideration.

I am, Sir, your most obedient, humble servant,

E. C. EGERTON.

To W. S. LINDSAY, Esq.,
Manor House, Shepperton.

Manor House, Shepperton, Middlesex,
29th September, 1866.

MY LORD,

I have to acknowledge receipt of your letters of 21st and 26th inst., and I am glad to learn that two of the questions to which I ventured to direct your Lordship’s attention have, since 1860, been settled in a satisfactory manner.

As regards the third, viz., the limitation of shipowners’ liability, may I trouble you with an extract herewith[314] from the ‘New York Herald’ of 10th October, 1860, as the question is therein, I think, correctly stated. Since then I am aware that there has been an amendment in our law relating to the liability of Shipowners; but it would appear from the communication you have received from the Lords of Trade that while we have extended the limitation to foreign ships in cases arising in British courts, we have overlooked altogether the still more important part of the question so far as this country is concerned, and that is the unlimited liability of British shipowners in cases arising in foreign courts. If such is the fact, then we, I fear, have neglected a favourable opportunity of inviting foreign nations to place our ships in their courts on the same terms as we had placed their ships when thrown into our courts. Had we done so, I think the Government of the United States would have readily met us in so just and reasonable a request.

Considering, then, the position in which British shipowners would be placed if an action was raised against them in foreign courts for the recovery of claims arising through a collision at sea, your Lordship will perceive that this is not a question in which foreigners alone are interested, for we have given them all they asked in our courts, but one which deeply affects the interests of British subjects, and which, now more than ever, requires adjustment by special communication with the United States and those other countries where the responsibility of British shipowners is still unlimited. Since we have conceded all they require, it may be found more difficult now to obtain the necessary alterations in their law than it would have been at the time to which my previous communications referred; but I daresay that when the justice of our claim is represented, steps will still be taken to grant in their courts the same limitation of responsibility to our Shipowners as we have granted to their Shipowners in our courts.

I am gratified, to learn that the other questions are under consideration, and

I remain, my Lord,
Your most obedient humble servant,

W. S. LINDSAY.

To the Right Hon. Lord STANLEY, M.P.,
Secretary of State for Foreign Affairs,
&c. &c. &c.

Foreign Office, 3rd October, 1866.

SIR,

I am directed, by Lord Stanley, to acknowledge the receipt of your letter and its inclosure of the 29th ultimo, respecting the liability of British shipowners in suits arising in foreign courts out of collisions at sea; and I am to acquaint you in reply, that Lord Stanley will not fail to give this question due consideration, and will communicate with you further on the subject after he has consulted the Lords of the Committee of Privy Council for Trade.

I am, Sir, your most obedient humble servant,

E. C. EGERTON.

To W. S. LINDSAY, Esq.

Foreign Office, 14th November, 1866.

SIR,

With reference to your letter of the 29th September last regarding the laws of the United States and of other foreign countries, with regard to the liability of British shipowners in cases of loss by collisions at sea, I am directed by Lord Stanley to inform you that his Lordship learns from the Lords of Trade that, by the common law of this country, and by the maritime law, as administered in our Admiralty Courts, the Shipowner was formerly personally liable to the whole extent of his fortune for any damage done by his ships through default of his servants. The legislature, however, long since passed statutes limiting the liability, and the limitation, with some variations, still continues.

It was, however, held that the statutes being municipal laws, did not affect cases where foreign ships were concerned, and where the collision or casualty happened on the high seas, but that such cases must be governed by the general maritime law of the world, which was assumed to be the same with our common law. This was, perhaps, too hastily assumed, inasmuch as most maritime countries adopted the principle of limiting the Shipowners’ liability much earlier, and to a greater extent than Great Britain.

The consequence was, that if a collision happened between two British ships, the British law of liability applied, and whichever might be in fault, the liability was limited. On the other hand, if a collision happened between a British and a foreign ship on the high seas, or between two foreign ships on the high seas, and the case came into our courts, then whichever was in fault, the liability was unlimited.

This law was unequal, but in no way specially injurious to the foreigner. The British ship, if in fault, was equally liable with the foreigner; and as the British ship is generally to be found at home, and as the British shipowner resides here, the British shipowner being thus more likely to be the defendant, was likely the more often to suffer.

The law was consequently altered by making the limitation of liability apply in all cases coming into our courts, whether the ships were both British or both foreign, or one British and one foreign.

And as the change was simply an improvement of our own law, and conferred no especial advantage upon foreigners, it was not thought necessary or desirable to delay it for the purpose of obtaining similar changes when desirable in the laws of foreign nations.

I am, Sir, your most obedient humble servant,

JAMES MURRAY.

To W. S. LINDSAY, Esq.

Manor House, Shepperton, Middlesex,
28th November, 1866.

MY LORD,

I received in due course your Lordship’s letter of the 14th inst., which does not, however, appear to me to touch the main point of my previous communication, viz., the unlimited liability to which our Shipowners would still be subjected in cases of collision arising in various foreign courts. For instance, if one of our Transatlantic steam ships engaged in the conveyance of our mails came into collision—a very possible event—with one of the numerous steam vessels owned in the United States, freighted with passengers, cargo, and specie, of great value, the consequences, under the existing law of that country, might prove not only most disastrous to the owners of the British ship, but also very detrimental to the public service.

As I understand the law of the United States, the owners of our mail steamer, if at fault, would be responsible to the full extent of their means for all the loss the owners of the American steamer had sustained; if so, the result would be the seizure of the British steamer whenever she reached an American port; and, possibly, if the loss sustained was very great, the seizure of all the vessels in port belonging to the same owner, and thus our mail service for the time might be suspended.

It is to this grave contingency I am anxious to direct your Lordship’s attention, in the hope that you may see the urgent necessity of taking such steps as you may deem most expedient to induce the Government of the United States to place our vessels in their courts on the same footing in regard to the limitation of liability as we now place the owners of their vessels in our courts.

I am, my Lord, your most obedient humble servant,

W. S. LINDSAY.

To the Right Hon. the Lord STANLEY, M.P.,
Secretary of State for Foreign Affairs,
&c. &c. &c.

Board of Trade, Whitehall,
25th February, 1867.

SIR,

With reference to your letter of the 29th September, 1866, addressed to the Secretary of State for Foreign Affairs, and to previous correspondence upon the subject of the law of the United States as affecting the liability of the Shipowner in cases of loss by collision at sea, I am now directed by the Board of Trade to transmit to you the accompanying copy of a despatch and inclosures received through the Foreign Office from her Majesty’s Minister at Washington upon this subject.

I have the honour to be, Sir,
Your obedient servant,

THOMAS GRAY.

To W. S. LINDSAY, Esq.,
Manor House, Shepperton.

(Copy.—M. 1268.)

Washington, 23rd January, 1867.

MY LORD,

In reply to your Lordship’s despatch, marked “Commercial No. 7,” of the 14th November last, on the liability imposed by the laws of the United States on Shipowners in cases of collision, I have the honour to enclose copy of an opinion of Mr. Carlisle, the legal adviser of this Legation.

Your Lordships will gather from it that the principle of limited liability has been adopted by the laws of the United States, and is applied in the Federal courts. But the injured party may apply to a State court if the defendant is within its jurisdiction, and bring an action on the case, and it is doubtful whether such a court would limit the measure of damages by the principles contained in the Act of Congress.

I have, &c.,

(Signed) F. W. A. BRUCE.

To Lord STANLEY,
&c. &c.

(Copy.)

Washington, 22nd January, 1867.

SIR,

I have the honour to return herewith the papers in relation to the question of the liability of Shipowners in cases of collision.

The only Act of Congress touching the subject is that of March 3rd, 1851, which in its third section limits the liability in such cases. A copy of this section is enclosed herewith. This language is explicit and comprehensive, making no distinction on account of the nationality of the ship; nor have I been able to find that such a distinction has been suggested in any adjudicated case under this statute.

For my own part I entertain no doubt that the limitation of liability which it prescribes would be held in all _courts of the United States_ as applying equally to foreign as to American ships.

The Courts of Admiralty are, by the constitution of the United States, exclusively of the Federal Government. If therefore the remedy in cases of collision were exclusively in Admiralty Courts, the Act of 1851 would completely cover the question.

But there is a remedy at common law, which is open to the injured party at his election. He may maintain his action on the case, which is a transitory action, wherever he can find the owner of the offending vessel, in the same manner and to be determined by the same principles as if the plaintiff’s coach or his person had been injured by a collision occasioned by the unskilful driving of the defendant’s coach.

Such an action may be brought in any court of general jurisdiction in any of the States of the Union; and it may be doubted whether this Act of Congress would be available to limit the measure of damages in these courts, though undoubtedly a convention between Great Britain and the United States, with a proper Act of Congress to carry it into effect, would accomplish the object.

I have, &c.,

(Signed) J. M. CARLISLE.

To Sir F. BRUCE, S.S.B.,
&c. &c. &c.

(Copy.)

_An Act to limit the Liability of Shipowners and for other
purposes._

(Approved March 3, 1851.)