PROVISIONS GOVERNING PRIVATE PROPERTY ON HIGH SEAS 39

which provided for the right of visit and search of vessels and for the removal of contraband with subsequent full payment to the owners of the goods.

The situation provided for in these articles renewed from the former Prussian treaties was furnished by the Franco-Prussian war. At the outbreak of the war Germany announced that private property on the high seas would be exempt from seizure without regard to reciprocity. This policy went beyond the provision contained in the treaty with the United States, since it included private property carried in enemy vessels. It was, however, later

13

usually arise respecting merchandise of contraband, such as arms, ammunition, and military stores of every kind, no such articles carried in the vessels, or by the subjects or citizens of either party, to the enemies of the other, shall be deemed contraband, so as to induce confiscation or condemnation and a loss of property to individuals. Nevertheless, it shall be lawful to stop such vessels and articles and detain them for such length of time as the captors may think necessary to prevent the inconvenience or damage that might ensue from their proceeding, paying, however, a reasonable compensation for the loss such arrest shall occasion to the proprietors; and it shall further be allowed to use in the service of the captors the whole or any part of the military stores so detained, paying the owners the full value of the same, to be ascertained by the current price at the place of its destination. But in the case supposed of a vessel stopped for articles of contraband, if the master of the vessel stopped will deliver out the goods supposed to be of a contraband nature, he shall be admitted to do it, and the vessel shall not in that case be carried into any port, nor further detained, but shall be allowed to proceed on her voyage.

All cannons, mortars, fire-arms, pistols, bombs, grenades, bullets, balls, muskets, flints, matches, powder, saltpeter, sulphur, cuirasses, pikes, swords, belts, cartouche boxes, saddles and bridles, beyond the quantity necessary for the use of the ship, or beyond that which every man serving on board the vessel, or passenger, ought to have; and in general whatever is comprised under the denomination of arms and military stores, of what description soever, shall be deemed objects of contraband."

13 F. R., 1870, p. 217.

Secretary Fish wrote to Baron Gerolt, the German minister to the United States in regard to the announcement of German policy:

Count Bismarck's dispatch

"The Government of the United States receives with great pleasure the renewed adherence of a great and enlightened German government to the principle temporarily established by the treaty of 1785, and since then advocated by this Government whenever opportunity has offered. shows that North Germany is willing to recognize this principle (even without reciprocity) in the war which has now unhappily broken out between that country and France. This gives reason to hope that the Government and people of the United States may soon be gratified by seeing it universally recognized as another restraining and harmonizing influence imposed by modern civilization upon the art of war."

abandoned by Germany, who revoked her declaration" on the ground that the treatment of German merchant ships by France made it necessary to give up the position taken earlier in the war. Upon the revocation of the order, however, Bismarck assured the United States Government that all action toward American vessels would, as a matter of course, be in accordance with the provisions of the treaty of 1799,15 exempting from seizure, when carried in American vessels, all private property except contraband. The latter might be removed from the vessels and used by the belligerent power if compensation were later made to the owners. In taking this stand Bismarck therefore based the policy of the North German Union in this regard on the narrower principle of Article XIII, revived from the treaty of 1799, rather than on the broad principle of "free ships make free goods" embodied in Article XII revived from the treaty of 1785.

14 F. R., 1871, pp. 403 ff.

On receiving notice of the revocation of the German declaration the American Secretary of State expressed to the German minister the

"great regret with which the Government of the United States receives the information that circumstances have arisen which, in the opinion of the government of North Germany, justify its withdrawal from a position which the Government of the United States regarded with very great satisfaction as taken in the best interests of civilization."

15 F. R., 1871, pp. 411 and 412.

There was a misunderstanding at first as to the scope of the first declaration by Germany. The United States considered that since no mention had been made concerning contraband, the declaration exempted this form of “private property" also; and therefore that even though its protection when carried by French ships had been withdrawn, it would still be exempt from seizure when carried by American vessels. Bismarck, however, declared that mention of contraband had not been made in his first declaration, because it was assumed that "according to international usages," contraband had always been considered subject to seizure. He set forth that this principle had been endorsed by the United States itself in 1856 in regard to the declaration of Paris. Upon being asked to adhere to the four provisions of the Paris declaration the United States had "declared its readiness to do so only on condition that the property of subjects of a belligerent state should be exempt from capture at sea, by the war vessels of the other party, contraband of war excepted."

APPLICATION OF TREATY OF 1828 TO FRANCO-PRUSSIAN WAR 41

The negotiations on this subject are significant aside from their immediate concern, because of the fact that the treaty of 1828 was assumed without question to be binding upon the North German Union, although it had been concluded only with Prussia. The United States also assumed that its obligations as a neutral under that treaty were binding upon it in relation to the North German Union just as they would have been were Prussia alone involved in the war. This was illustrated in the neutrality proclamation issued by President Grant, in which he set forth the rights and duties of American citizens as determined by the neutrality law of the United States and by its 'treaty obligations. The President applied to the situation at that time the treaty privilege of the belligerent to carry in and out of the ports of the neutral without search or hindrance, any prizes captured from the enemy. This privilege he declared under the Prussian treaty of 1799, revived by the treaty of 1828, to be still in force.16 Later in the intercourse between the two countries doubt was expressed at various times by each of the nations as to whether the treaty of 1828 and certain other treaties formed with individual German States before the unification could be considered valid for the whole empire.

16 F. R., 1871, p. 46.

BY THE PRESIDENT OF THE UNITED STATES OF

AMERICA.

A PROCLAMATION.

(August 22, 1870-Enjoining neutrality in the present war between France and the North German Confederation and its allies.)

"And I do further declare and proclaim that by the nineteenth article of the treaty of amity and commerce which was concluded between his Majesty the King of Prussia and the United States of America, on the 11th day of July, A. D. 1799, which article was revived by the treaty of May 1, A. D. 1828, between the same parties and is still in force, it was agreed that 'the vessels of war, public and private, of both parties, shall carry freely wheresoever they please, the vessels and effects taken from their enemies, without being obliged to pay any duties, charges or fees to officers of admiralty, of the customs, or any others; nor shall such prizes be arrested, searched or put under any legal process, when they come to and enter the ports of the other party, but may freely be carried out again at any time by their captors to the places expressed in their commissions, which the commanding officer of such vessel shall be obliged to show."

By the treaty of 1828,17 Prussia and the United States had guaranteed to each other freedom of commerce and navigation. There was to be no discrimination in the form of tonnage dues or other port charges, in the ports of either nation against the vessels of the other. The vessels of each country in this respect were placed on an equal footing with its own national vessels except in the case of the ships engaged in coastwise trade. Similarly with regard to imports it was agreed that there should be no discrimination in the form of duties placed on the products of one country upon their importation into the other. Though the term "most-favored-nation" was not used in the treaty the two countries established their relations on this basis. The idea was embodied in Articles V and IX of the treaty, which read as follows:

ARTICLE V.

"No higher or other duties shall be imposed on the importation into the United States of any article the produce or manufacture of Prussia, and no higher or other duties shall be imposed on the importation into the Kingdom of Prussia of any article the produce or manufacture of the United States, than are or shall be payable on the like article being the produce or manufacture of any other foreign country. Nor shall any prohibition be imposed on the importation or exportation of any article the produce or manufacture of the United States or of Prussia, to or from the ports of the United States or to or from the ports of Prussia, which shall not equally extend to all other nations."

ARTICLE IX.

"If either party shall hereafter grant to any other nation any particular favor in navigation or commerce, it shall immediately become common to the other party, freely where it is freely granted to such other nation, or on yielding the same compensation, when the grant is conditional."

It will be seen that this latter article is in a sense contradictory to the former. Article V, if taken literally, establishes an uncon

17 Malloy, Vol. II, pp. 1496 ff.

MOST-FAVORED-NATION PRINCIPLE UNDER TREATY OF 1828 43

ditional most-favored-nation basis in respect to import duties. If this article steed alone in the treaty it would be difficult to see how either of the contracting parties could grant, for instance any tariff reduction to any third nation, without extending the same favor automatically and unqualifiedly to the other contracting party. Article IX, however, places an important restriction on this sweeping most-favored-nation principle. Each of the contracting parties can claim from the other, according to this article, the benefits of a privilege granted to a third nation, only if that privilege was extended gratuitously to that third nation. Otherwise there must be a bargaining. The second contracting party must offer to the first some favor equivalent to that offered by the third nation, before it can become entitled by the treaty to the privilege under discussion. In short, Article IX establishes the restricted most-favored-nation theory or reciprocity.18

Though frequently made the basis of diplomatic negotiations between the two countries, the treaty of 1828 was never formally extended to the whole German Empire. The nearest approach to any statutory recognition was the fact that the constitution19 of the German Empire declared that all legislation concerning customs duties and commerce and all organization for the protection of German trade and navigation should be under the supervision of the empire. No mention was made, however, of the past legislation or contracts on this subject made by the individual States. The applicability, therefore, of the constitutional provisions to the treaty of 1828 with Prussia, or to the similar treaty

18 For the interpretation of these articles by the two nations see Chapter III "Commercial Relations." The United States held consistently to the principle of reciprocity. Germany's policy varied. The German Government at times acted on the principle of unrestricted and at times on the principle of restricted most-favored-nation treatment in regard to the United States.

See also Sen. Doc. 29, 62nd Cong., 1st Session.

Also article on "Most-favored-nation Relations, German-American," by Dr. G. M. Fisk in Journal of Political Economy, March, 1903, and the work by Richard Calwer, Berlin, 1902, entitled "Die Meistbeguenstigung der Vereinigten Staaten von Nordamerica."

19 F. R., 1871, Article 4 (pp. 384 and 385) and Article 35 (pp. 387 and 388).