Thomas O. Osborn to Evarts, March 31, 1879

No. 86. Mr. Osborn to Mr. Evarts.

Sir: The correspondence which I inclose refers to three English-built steamships, recently purchased at Valparaiso by Henry L. Stevens, an American citizen domiciled in Chili, and treats of three questions, to wit:

• The good faith of such purchase.
• The character of the protection to which such ships are entitled from the American Government.
• The right of such vessels to carry the American nag, and to be clewed by American consuls.

It appears that these ships were purchased by Mr. Stevens, on the 27th of February last, from the South American Steamship Company, a Chili corporation. The bill of sale was recorded in the consulate at Valparaiso and a certificate to that effect made on the original, pursuant to, sections 220 and 221 of consular regulations.

Rear-Admiral C. R. P. Rodgers, from on board the flag-ship Pensacola in tie harbor of Valparaiso, under date of March 13, addressed me a note in which he expressed a doubt concerning the legitimacy of these transfers, and requested that I should inform him, in view of the probability of a war between Chili and Peru, if said ships were entitled to his protection. I immediately inclosed a copy of the admiral’s note to the consul at Valparaiso, and directed him to enter upon a thorough investigation concerning the legitimacy of said transfers, and to revoke the action therein taken by him, if it should be developed that they were not made in perfect good faith.

It will be seen from, the consul’s report that he concludes that the sale was made in good faith, and that the action of the consulate was in every respect proper. The report is quite lengthy, but inasmuch as it treats of the matter of this class of transfers in general, and refers to numerous precedents which tend to sustain that officer in his view of his duties I trust you will give it a careful consideration.

To the latter clause of my reply to Rear-Admiral Rodgers, I wish to call your especial attention. It will be observed that in responding to the admiral’s request, I therein gave him my views of the status of foreign-built vessels owned by American citizens, and of the character of the protection to which they are entitled. If I have erred it might, perhaps, be well that I should be informed.

Can vessels so purchased carry the American flag, and should they be cleared by our consular officers? The action of the United States authorities in Peru concerning one of said ships, the “Itata,” would seem to render it important that the views of the government in this regard should be more clearly defined. I request that the letter of Consul McKellar on this subject, which is inclosed, shall receive that consideration which the importance of the subject of which it treats would seem to demand.

It appears that the Itata was cleared from the American consulate at Valparaiso for Callao, and that soon after her arrival at that port her captain was directed by the United States consul, who was acting under instructions from Minister Gibbs, to haul down the American flag under which she had sailed from Valparaiso. I have a note from Minister Gibbs wherein he inform sme of his action in this matter, and explains that his course was based upon the theory that registered vessels only have the right to use the American flag. Section 226 of the consular regulations will, I admit, bear an interpretation consistent with this view, yet I can hardly believe that the State Department intended that this section should be so construed. Sections 220, 221, and 225 clearly recognize the right of American citizens to purchase foreign-built ships, and acknowledge the obligation of the government to afford them, at least, a qualified protection. I am not prepared to believe that the department desired to be understood as saying that our citizens might purchase these ships, but that they should not sail them. And yet I submit that Mr. Gibbs’s interpretation leads to this. In this connection I beg to call your attention to an opinion of Mr. Gushing, to which reference is made on page 6 of the “Digest of Opinions and Leading Cases on International taw” recently forwarded by the State Department to this legation.

That there may be no conflict with our authorities in Peru I have directed the acting consul at Valparaiso to clear only registered vessels for Peruvian ports until he shall be further instructed.

I have, &c.,