Mr. METZGER: The order of October 9, 1917, made no change in the status of the bunker fuel on board the Kronprins Gustaf Adolf or the Pacific. Prior to October 9, licenses were required for bunker fuel obtained in United States ports. Both ships had taken fuel in United States ports. Whatever regulations or rulings were applied to the fuel oil on the two ships they were applied to fuel oil taken on board at United States ports. The Kronprins Gustaf Adolf was not in a position to undertake a voyage without taking on bunker fuel and ship stores in the United States. The ship had taken on fuel oil in the United States in September 1917, prior to the date of the ruling of the War Trade Board.

So at that time it involved a question of taking out fuel oil which had been obtained in a United States port, not fuel oil which had been obtained elsewhere.

I was going to describe the bunker fuel status of the Pacific, but I think that has been adequately taken care of in the case of both ships. It will be recalled that the Pacific entered the port of Newport News to await the granting of letters of assurance for the cargo of the British Government. It will be recalled that the owner of the ship was endeavoring to arrange with the British Government to have the ship call at Halifax instead of at Kirkwall. Early in August the British Government informed the owner of the ship that it would grant no facilities for the transportation of the cargo of nitrate which was on board the Pacific; whereupon the owner of the ship initiated efforts to sell the cargo in the United States. On September 27, 1917, Mr. Nordvall enlisted the assistance of Mr. McCormick of the War Trade Board to bring about the sale of the nitrate in the United States, and through Mr. Nordvall's efforts the nitrate was eventually sold to the War Department. The Pacific was at no time in a position to clear from Newport News with the cargo of nitrate. That is, it was in no better position at any time subsequent to the date of her entry than she was at that

The master of the ship was not in a position to declare a port for which clearance was desired. Application for clearance was not made.

The change made by the ruling of October 9, 1917, applying the licensing regulations to bunkers and ship stores which were not taken on board in United States ports, did not affect the bunkers and ship stores on board the Pacific, which had taken bunkers and ship stores in a United States port. Furthermore, no occasion or opportunity was afforded to apply the ruling of October 9 to the Kronprins Gustaf Adolf or the Pacific because no application was made for license for the fuel oil which the ship brought into the country and no applications were made for clearance. Until those applications were made the authorities of the United States could take no action applying the order to fuel oil on the ships or affecting the ships through the operation of that order.

I quote further from page 48 of the Case of the Kingdom of Sweden:

The conditions attached to such bunker licenses have already been detailed and included both an undertaking that the vessel would return with cargo to the United States and that the remainder of the Johnson Line fleet would be made subject to control by the War Trade Board.

The record of this case does not contain any evidence that the War Trade Board proposed to the Johnson Line conditions on which licenses for bunker fuel would be granted prior to February 1918.

On February 7 Mr. Munson proposed conditions on which facilities for voyages would be granted for the Pacific and the Kronprins Gustaf Adolf. One of the proposals contemplated that they return to the United States.

At this point I call attention to an exchange of correspondence between Mr. Hugeson of the British Foreign Office and Mr. Carlsson, a representative of the Swedish Government, which is found at page 19 of additional documents of the Kingdom of Sweden. These are enclosures to a communication which was sent to Mr. Chadbourne

from Captain Fisher of the British War Mission. I quote the third paragraph of the communication from the British Foreign Office to Mr. Carlsson:

The basis of both the modus vivendi and the permanent shipping arrangement is that at the end of the modus vivendi or on the termination of the permanent agreement the Swedish ships now in Sweden (or other corresponding tonnage by mutual agreement) shall be at liberty to return to Sweden, whilst those ships which before the agreement were in the United Kingdom or elsewhere outside Sweden (or other corresponding tonnage by mutual agreement) will return to Allied ports, the steamers Alida (1309) and Helios (935) excepted, which being now at Buenos Aires will have the right to return there.

Then Mr. Carlsson's reply follows in the next enclosure:

I herewith only beg to acknowledge receipt of your letter of 1st instant, and at the same time to confirm that the arrangement set forth in the said letter is in accordance with what has been agreed between us during our discussions of the modus vivendi agreement.

That seems to indicate that there had been an understanding in negotiating the modus vivendi that Swedish ships which were in the United States or elsewhere outside of Sweden would return. There are other documents in the record which indicate that an application had been made for facilities for voyages and in the application an undertaking had been made that the ships would be returned to the United States. I will come to that later.

The alternative proposal contemplated that vessels be sent to the United States from Sweden to replace the Pacific and the Kronprins Gustaf Adolf. There is no evidence of record that it was proposed at any time that the Johnson Line subject all the vessels of its fleet to control by the War Trade Board.

We have discussed that before.

As has been seen, the first proposal made by the War Trade Board of conditions on which facilities would be granted for the Kronprins Gustaf Adolf and the Pacific was made on February 7, 1918. Those proposals involved the granting of licenses for cargoes, bunkers and ship stores obtained in United States ports. They obviously could

not have put the Pacific under detention as of August 2, 1917, and could not have put the Kronprins Gustaf Adolf under detention as of November 1, 1917. There is no competent evidence that the licensing authorities imposed any condition on the granting of licenses for bunker fuel for either ship prior to February 1918. Those proposals involved the granting of licenses for cargoes, bunkers, and ship stores obtained in the United States ports. They obviously could not have put the Pacific under detention as of August 2, 1917, and could not have put the Kronprins Gustaf Adolf under detention as of November 1, 1917.

I will not be able to finish the next topic until closing time and may not find a good place to break, so, if permissible, I would like to stop now.

The ARBITRATOR: Very well. We will continue at half past two.

(At 12 o'clock noon, a recess was taken until 2: 30 o'clock p.m. of the same day.)

AFTERNOON SESSION

The proceedings were resumed, pursuant to adjournment, at 2: 30 o'clock p.m.

The ARBITRATOR: Proceed, sir.

ARGUMENT OF MR. METZGER-Continued

Mr. METZGER: I quote from page 48 of the Case of the Kingdom of Sweden, as follows:

Late in October, however, the War Trade Board informed Ekstrom that the bunkers on board the Pacific and the Kronprins Gustaf Adolf came within the export proclamation and that bunker licenses enabling the vessels to obtain clearance would not be granted unless the owner agreed to the conditions imposed.

It will be recalled that the Kronprins took on board about 183 tons of bunker fuel at New York, and that the Pacific took more than 5,000 barrels of bunker fuel at the Canal Zone.

The ruling of October 9, 1917, to which reference was made this forenoon changed existing regulations as to bunker fuel and ship stores which were not taken on board at a United States port and had no application, so far as bunker fuel and ship stores and the two ships were concerned, as both had taken bunker fuel and ship stores on board in the United States. Furthermore, applications were not made for bunker fuel and ship stores which the ships brought into the United States.

In support of the statement now under examination reference was made in the Case of the Kingdom of Sweden to the affidavit of Mr. Johnson and to his letter of October 31 addressed to the Minister for Foreign Affairs of Sweden. The affidavit will be found at page 154 of the Swedish Appendix..

In the second paragraph beginning on page 154 Mr. Johnson states that on October 31 the Johnson Line received a cable from its representative in the United States to the effect that the American authorities had informed its representatives that the Kronprins Gustaf Adolf could not sail without a bunker license for the fuel oil which the vessel had brought into the United States from Sweden and that the condition of such a license was that the vessel must return at once to the United States.

The ARBITRATOR: Which cable? Have we this cable? Mr. METZGER: It is quoted in the note-I presume it is the same note-to the Minister for Foreign Affairs of October 31, which begins at page 156.

The ARBITRATOR: Yes, it is quoted on page 157.

Mr. METZGER: There are two points to be noted. The first is that Mr. Johnson stated that Mr. Ekstrom had reported that the ship could not sail without license for the fuel oil which the vessel had brought into the United States from Sweden, and the second point is that the condition on which a license was obtainable was that the vessel must return to the United States.

The first point is of importance because it reveals the source of the misinformation which has permeated so