of the cargo was completed on December 20th. The refusal to license the cargo certainly had no effect on the position of the ship after the cargo was removed. The War Tade Board not only granted licenses for cargoes for Sweden but assisted in obtaining British letters of assurance for those cargoes while these ships are said to have been detained.

The ARBITRATOR: We will adjourn until tomorrow morning at 10 o'clock.

(At 4:30 o'clock p.m. an adjournment was taken until 10 o'clock a.m. of the following day, Wednesday, May 18, 1932.)

EIGHTH MEETING

WEDNESDAY, MAY 18, 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: You may proceed.

ARGUMENT OF MR. METZGER-Continued

Mr. METZGER: If Your Honor please, I will begin this morning with the last paragraph on page 7 of the Swedish Answer. It is there stated that the official agencies of the Government of the United States, purporting to act within the scope of their official duties, refused to permit the Pacific to leave the harbor of Newport News with her cargo. The officials and agencies of the Government mentioned were the Department of Commerce, the Exports Administrative Board, and the War Trade Board. The Exports Administrative Board and the War Trade Board

had at no time any authority with respect to the clearance of vessels. Those boards had no authority to refuse or to permit vessels to leave ports of the United States. The Department of Commerce had no authority with respect to the clearance of vessels, except on review where collectors of customs refused to grant clearance.

It is further stated at page 7 of the Answer of the Kingdom of Sweden that on October 15, 1917 (p. 59, Swedish Answer) the agencies of the Government previously mentioned instructed all collectors of customs that no vessels should be permitted to clear without a license for her bunker fuel, irrespective of its origin, and, on November 2, 1917 (p. 60, Swedish Answer) that no vessel whatever should be cleared for any of the northern neutral countries without special instructions from the Bureau of Transportation of the War Trade Board. It will be noted that this instruction, as described, was sent on October 15; and particular attention was called to the Dutch ship Zeelandia. The telegram quoted was sent to the collector of customs at New York. The letter of November 2d which was sent to collectors of customs at seaports will be found on the next page (p. 60).

The communications to which reference is here made could have had no effect on the movement of the Pacific or the Kronprins Gustaf Adolf until those communications were acted upon with respect to the ships mentioned. Those communications could not be applied to the Pacific and the Kronprins Gustaf Adolf until applications were made in accordance with the laws of the United States for clearance for the ships. Instructions, if these communications are to be regarded as instructions, had no effect on the clearance of a ship until an application for clearance was made. The effect of the communications of October 15 and November 2, to which reference is made, was not given consideration by collectors of customs because applications for clearance had not been made to collectors of customs. The position of the Pacific and the Kronprins Gustaf Adolf in the ports of the United States

would have been precisely the same if those communications had not been sent as it was after those communications were sent, because no effect could be given to those communications, in so far as clearance of the ships was concerned, until application for clearance was made. Not only did the owner of the ships fail to apply for clearance but he did not apply for licenses for bunker fuel which, as we have seen, was said to have originated outside the United States but which the record shows was taken on board in United States ports.

As to the communication of November 2, 1917, which is said to have directed that no vessels should be cleared for any of the northern neutral countries without instructions from the Bureau of Transportation of the War Trade Board, it may be said that even if the War Trade Board had authority to control clearance of ships and the communication of November 2 were to be regarded as an authorized instruction, the communication even then had no application to the Pacific and the Kronprins Gustaf Adolf because applications for clearance had not been made. Collectors of customs were not in a position to refer to the Bureau of Transportation of the War Trade Board for special instruction, applications for clearance for ships until applications for clearance were made to the collectors of customs. Until applications for clearance were made to the collectors of customs there was no occasion or opportunity and it was impossible to seek the special instructions which the communication of November 2, 1917, purported to require. Until applications for clearance were made to collectors of customs the communication of November 2, even if it were to be regarded as an instruction in every sense of the word, had no effect on the Pacific or the Kronprins Gustaf Adolf. The communication of October 15 and the communication of November 2 had no effect on any ship until application for clearance was made. The communications mentioned had no effect on the granting of licenses for the taking out of bunker fuel until applications for licenses to take out bunker fuel on

ships were made. Inasmuch as no applications were made for clearance for the Pacific or the Kronprins Gustaf Adolf and inasmuch as no applications were made for licenses for bunker fuel brought in on the two ships, the communications of October 15 and November 2, 1917, were not applied to the Pacific or the Kronprins Gustaf Adolf and the position of those ships in the ports of the United States was not affected in any way by those communications. There is no more reason to regard the utterances of October 15 and November 2 as detaining the ships than there was to regard the law itself as effecting detention.

It is stated at page 8 of the Answer of Sweden that the collectors were governed by the orders of October 15 and November 2. That is the second line, page 8. Collectors could not be governed by these orders until applications were made for clearance. Until applications for clearance were made and the question presented in that manner to the collector of customs as to what action they should take in the premises, the collectors were not called upon to act and had no occasion or opportunity to apply the communications of October 15 and November 2, and it was not possible for them to be governed by those communications or even by mandatory statutes because there was not before them any matter requiring or permitting action by them, in so far as the two ships were concerned.

It is further stated at page 8 of the Answer of Sweden that the War Trade Board, that the proper and supreme authority in the premises, through Mr. Richards, informed Ekstrom, Dean, and Nordvall that no license would be granted for the return to Sweden, in ballast or otherwise, of either the Kronprins Gustaf Adolf or the Pacific. This statement is confusing because it speaks of granting license for the return of ships to Sweden in ballast or otherwise. Licenses were not granted for the movement of ships. Licenses were granted for the taking of merchandise out of the United States. The licensing agencies of the Government had authority to grant or to refuse to grant licenses for the taking out of merchandise.