rection in Cuba, and they will be applied in deciding cases properl falling within their provisions.

10. As to the first clause of Article VII of the said treaty, wherei it is agreed that the subjects and citizens of each nation, their vessels or effects shall not be liable to any embargo or detention on th part of the other for any military expedition or other public o private purpose whatever, the Commission holds that whether or no the clause was originally intended to embrace real estate and per sonal property on land as well as vessels and their cargoes, the sam has been so construed by the United States, and this construction has been concurred in by Spain; and therefore the Commission wil adhere to such construction in making its decisions. (Special Report of William E. Fuller, Assistant Attorney General, 155.)

In its successful contention with the Spanish Govern ment as to the meaning of article VII of the Spanish treaty the Government of the United States refuted the argument now put forward by the Agent of the United States. It is not possible to distinguish article VII of the Spanish treaty from article XVII of the Swedish treaty. It is further to be observed that the United States successfully contended that under the Spanish treaty property belonging to citizens of the United States could not be embargoed or detained by the Spanish Government. Such a rule covers the cargo of the Pacific and the bunkers of both the Pacific and the Gustaf Adolf.

The Agent for the United States has referred to several stipulations in the treaty of July 4, 1827, and contends that since there appears in these stipulations such phrases as "wherever commerce is permitted" (art. I), "all that may be lawfully imported" (art. III), or "lawfully exported", that it was contemplated in that treaty that prohibitions of exports might be imposed. I need not dwell long on this point. For as the United States concedes in Answer, article XVII of the treaty of 1827 reincorporates all the pertinent stipulations of the treaty of 1783. And the United States likewise contends, this treaty of 1827 must be read in its entirety as an integral, coordinated whole. It is perfectly clear that these early sections in the treaty of 1827 reserve the power to deal with foreign commerce and to

regulate both imports and exports. We need not consider the nature of these rights in detail, however, since it is likewise clear that they are to be exercised in strict conformity with article XVII of the earlier treaty. It is clear, therefore, that these articles in the treaty of 1827 can have no application to Swedish goods on Swedish vessels and in no way detract from the guarantee, again specifically granted, that vessels of either country, together with the merchandizes and effects thereon, may freely depart from ports of the other country.

In conclusion, I have considered the law applicable to the facts as stated by Mr. Burling; and I have shown, I hope, that these vessels were detained in violation of the treaty of April 3, 1783, as reincorporated in the treaty of 1827. My colleague, Mr. Acheson, will continue the argument at this point.

The ARBITRATOR: We will adjourn until tomorrow morning.

(At 4: 20 o'clock p.m. an adjournment was taken until 10 o'clock a.m. of the following day, Wednesday, May 11, 1932.)

THIRD MEETING

WEDNESDAY, MAY 11, 1932

MORNING SESSION

The Arbitration was convened at 10 o'clock a.m., in Hearing Room No. 1 of the United States Board of Tax Appeals, Internal Revenue Building, Washington, D.C., pursuant to adjournment.

PRESENT: Honorable Eugene Borel, Arbitrator,

Robert Perret, Esq., Secretary General.

The American Government was represented by their Agent, Mr. J. A. Metzger, assisted by Messrs. Bert L. Hunt, James O. Murdock, Frederic A. Fisher, and Miss Ann O'Neill.

The Swedish Government was represented by their Agent, His Excellency W. Boström, Swedish Minister at Washington, assisted by Messrs. Edward B. Burling, Osten Unden, George Rublee, Dean G. Acheson, and H. Thomas Austern.

The ARBITRATOR: I think we may open the hearing. We have received the full shorthand report of yesterday. It is understood that any observation of the parties concerning these reports may be made at the opening of any hearing, and if observations are not made I take it for granted the reports are correct. That will apply also to the official record of the proceedings.

Mr. ACHESON: We have one request to make in regard to the record of the proceedings. We have been going over the reports each day which have been made so far, and we have discovered a few typographical errors. We are listing those on a piece of paper and we will tomorrow morning hand to the Tribunal and to our opponents, as

well as to the Secretary, a list of the corrections which we wish to have made in the transcript of the record.

The ARBITRATOR: All right.

Mr. ACHESON: There is one this morning which I should like to call the Arbitrator's attention to at the present time, because it may confuse him. It is on page 203 of the report of yesterday afternoon. This will also be corrected in due form but it may confuse the Arbitrator in the meantime. On page 203, in the third line, the words "in the treaty between France and the United States" should read "in the treaty between Prussia and the United States.' 99 Also three lines below that, Mr. Unden says "Treaty between France" and so forth. That was a slip. It is the same treaty. It is the treaty between Prussia. [The above-mentioned corrections have been made in this print-EDITOR.]

ARGUMENT OF MR. DEAN ACHESON, ON BEHALF OF THE KINGDOM OF SWEDEN

Mr. ACHESON: Thus far, if it please the Court, my colleagues have stated the position of Sweden in regard to the facts upon which the case is based. That was done by Mr. Burling in his opening statement. Mr. Burling was then followed by Professor Unden, who stated the position of Sweden in regard to the law which is applicable to those facts. The portion of the argument which falls to me is to deal with the defenses which the United States has raised to the claim of Sweden. Before taking up the separate defenses which the United States has raised I should like, as briefly as possible, to summarize the position of Sweden as it has been stated thus far by my colleagues, Mr. Burling and Mr. Unden. I would like to do that in the inverse order in which they were stated. I will first of all summarize our position on the law and then summarize our position on the facts to which that law is to be applied.

It is very difficult to summarize Professor Unden's argument. It was stated so compactly and with so much

scholarship and thoroughness that it is very difficult to boil it down any more compactly than he did himself. However, it may be possible to state the outstanding conclusions which he reached in regard to the treaty.

Professor Unden stated that the treaty of 1783, which was reincorporated in the treaty of 1827, is made up of two great jural principles and only two. There are two principles laid down in that treaty in two sections of it. All the rest of the treaty is merely administrative provisions for carrying out those two great principles. Those two principles taken together are a complete Magna Charta of neutral rights in war time. They are a complete protection to neutral trade so long as neutral trade is not directly used to benefit the enemy.

One of those principles is stated in article VII of the treaty and it is amplified in the three following articles. I read briefly from the beginning of article VII:

All and every the subjects and inhabitants of the Kingdom of Sweden as well as those of the United States, shall be permitted to navigate with their vessels in all safety and freedom and without any regard to those to whom the merchandizes and cargoes may belong, from any port whatever.

Then the same provision is applied to the inhabitants of the United States.

And as it is acknowledged by this treaty, with respect to ships and merchandizes, that free ships shall make the merchandizes free, and that everything which shall be on board of ships belonging to subjects of the one or the other of the contracting parties shall be considered as free, even though the cargo, or a part of it, should belong to the enemies of one or both; it is nevertheless provided that Contraband goods shall always be excepted.

Then articles VII, IX, and X go on to deal with what shall be regarded as contraband merchandise, and the principle is again summed up in article X. After stating that only the specified articles shall be regarded as contraband, the treaty says, speaking of goods other than contraband:

On the contrary, they may be freely transported by the subjects of the King and of the United States, even to places belonging to an