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Copies of the correspondence on file in the department are not transmitted herewith for the reason that they have been summarized in the statement submitted with this letter. All or any

part of the correspondence will, of course, be furnished should the Congress so desire.

It will be noted from the inclosed copy of a communication from the Director of the Bureau of the Budget, to whom the matter was referred, that the proposed action is not in conflict with the financial program of the President.

Respectfully,

The PRESIDENT,

FRANK B. KELLOGG.

The White House.

BUREAU OF THE Budget,
Washington, November 30, 1927.

MY DEAR MR. SECRETARY: I have from Assistant Secretary of State Carr his letter of June 28, 1927, and subsequent correspondence from the State Department, relative to securing relief from Congress for the payment of expenses incurred by Richard L. Sprague, American consul at Gibraltar, in providing relief for the crew of the American steamer Kanabec.

This is a meritorious case which requires action by Congress before it can be settled and its presentation for legislative consideration toward authorizing an appropriation of the amount necessary will not be in conflict with the financial program of the President. Having in mind that Richard L. Sprague is not entitled to reimbursement for moneys exceeding those which he has actually expended in the settlement of this claim, I would suggest that the request for legislative relief be so worded as to authorize an appropriation for the reimbursement of Mr. Sprague for moneys which he advanced to the members of the crew of the Kanabec and money paid by him to Smith Imossi & Co., pursuant to the judgment of the Supreme Court of Gibraltar, dated April 17, 1926, and payment to Smith Imossi & Co. of the amount remaining unpaid under said judgment. This phase of the matter has been discussed with representatives of the State Department who, I am informed, concur therein.

Sincerely yours,

The SECRETARY OF STATE.

H. M. LORD, Director.

STATEMENT OF FACTS BELIEVED TO JUSTIFY CONGRESSIONAL RELIEF FOR CONSUL RICHARD L. SPRAGUE IN THE SUM OF $2,176.82

A claim in the sum of $2,176.82, submitted by Consul Richard L. Sprague to the Comptroller General of the United States with the administrative approval of the department, for expenditures made in the relief of American seamen from the steamer Kanabec at Gibraltar, in 1920, was disallowed. As the expenditures were made with a view to protecting American interests and destitute American seamen, and as the consul will be obliged to pay these expenditures out of his personal funds, it is felt that for equitable and

humanitarian reasons, as well as in the interests of the morale of the Consular Service, the claim should be submitted to the Congress for consideration in the hope that an appropriation will be made reimbursing Consul Sprague.

The following statement of facts is respectfully submitted:

The American steamer Kanabec, owned by the French-American Lines, arrived at Gibraltar about August 22, 1920, en route from Marseille to Philadelphia. When ready to sail, Smith Imossi & Co., a local supply house, brought suit in the Gibraltar Admiralty Court and arrested the ship to obtain payment for supplies previously furnished. In the litigation, other claims, including those for wages to crew and officers, were set up and after judgment against the vessel, it was sold at auction in March, 1921, for £1,070 ($4,815.00 at the rate of exchange at that time). As these proceeds, however, were used to defray court costs and other claims having legal priority, nothing was left for the payment of the crew's wages.

The consul at Gibraltar on October 7, 1920, cabled to this department that there was no coal on board for the vessel and crew, and unless the owners should act he requested authority to purchase coal, which was urgently needed.

The consul cabled on October 23, 1920, that in view of unsatisfactory sanitary conditions and for the safety of the vessel and the members of its crew, he had considered it necessary to buy 50 tons of coal and 60 tons of fresh water. He added that the crew would leave the vessel unless advances were made, and that the crew complained that allotments to their families had been suspended, so that the situation was critical.

The consul cabled on October 25, 1920, that the vessel had coal and water to last until the 10th of November, but that it had no stores nor slop chest, and that the captain was unable to obtain further supplies except for cash. The consul added that the crew might be returned to the United States as consular passengers provided a guaranty could be given that the balance of wages due them would be paid when they arrived in the United States and that provision must be made at once for the care of the crew.

On receipt of the foregoing information, the receiver for the French-American Lines, which owned the Kanabec, replied that he was making every effort to obtain funds.

On November 5 the consul cabled that judgment would probably be rendered within a few days to sell the Kanabec; that wages were due the crew and officers aggregating about $27,000; and that a desperate condition of affairs existed on the vessel. He pointed out that the vessel was without coal, water, or provisions.

On November 9, 1920, the consul cabled that the crew was ashore, that there were no supplies on board, and that the crew were being treated as destitute American seamen.

On January 16, 1921, the consul cabled that the steamer had been put up for auction on three different occasions, and that no bidders had appeared at the reserve fixed by the court, £14,000. Mr. Sprague added that he had succeeded in repatriating 23 out of the crew of 39, and that he was endeavoring to repatriate the remainder, who were still destitute at Gilbraltar and were receiving Government relief. On January 22, 1921, Mr. Sprague cabled that he might arrange a postponement of the sale of the vessel for 15 days, in

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accordance with the request of the attorney for the receiver, if the American bondholders and creditors would put up bail for the pending auctions, for necessaries, and for the payment of the balance of the wages due the crew. He added that 16 members of the crew were still at Gibraltar receiving relief, because they refused to leave Gibraltar unless the full amount of their wages were paid. He added that the hotels where they were lodged demanded payment of board and lodging for crew, amounting to about £800 ($3,600), and that the vessel might still be put in condition so that it could sail within a few days, and that the remaining members of the crew might be induced to continue the voyage.

However, on January 15, 1921, the attorney for the receiver notified the department that in accordance with an order of the United States District Court of the Southern District of New York, the receiver had abandoned the steamer Kanabec to whomsoever might be interested therein and Consul Sprague was advised of this development.

On January 29, 1921, the department received a communication from the Consolidated Marine Engineers' Beneficial Association, No 33, of 26 Park Place, New York City, stating that their organization had received a letter sent by the engineers of the steamship Kanabec, complaining of the inability of the crew to obtain their wages. The letter from the engineers read in part as follows:

We are hanging on here, as we see no other way of doing anything. Some of the men have left with 25 per cent of their wages, but we can't see it that way.

"Can't the receivers be made to pay for the crew, as our dependents are starving and the consul refuses to advance any money? We have not received any money for seven months and no one takes any interest in us here. We are simply thrown ashore as destitute seamen. The ship has been up for sale three times and the ring will not let her be sold. It seems a made-up thing to do us out of our wages. This has been going on since the 22d of August. Will you kindly cable us instructions?"

Another letter, dated January 12, 1921, received by the department from the officers in charge of the ship reads in part as follows: "On September 21, the ship was placed under arrest for the crew's wages and reimbursements by Capt. P. P. Taylor. The captain engaged J. Imossi lawyer for the crew. October 5 we ran out of coal and water. October 23 a large part of the crew went to the consul and asked for coal and water and the same was sent out to the ship that very afternoon. November 3 to November 8 we had very little to eat. November 5, without coal. November 9 all of the crew came ashore to live, as there was no more food on board the ship and was treated as destitute seamen. * The American counsul here is sending the men away, which will leave on 25 per cent of the wages and J. Imossi is paying the 25 per cent. I have $1,840 due me up to date. My wife and four children have only received three of the six allotments due her in the past seven and one-half months and they are in terrible circumstances. On December 8 she said she would have to sell the furniture and place the children in a charitable institute as she was unable to support them. We have not received one penny of our wages since August 17; it is a disgrace to the American Government. The American

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consul gives us a few shillings now and then; the last he gave us 5 shillings on December 24 and to-day is January 12. It is hard to keep clean on that amount. Our articles expired December 3, 1920."

As confirming the foregoing description of the destitute conditions in which the officers and crew found themselves, it may be added that two members of the crew were arrested and found guilty of stealing from the ship about 100 fathoms of manila rope to the value of about £100, and in reporting these circumstances the consul pointed out that "the peculiar circumstances in which these men were placed should be taken into consideration * * *. The crew of the steamship Kanabec had received no wages and this extremely uncomfortable and awkward condition, while not justifying the action, made temptation very strong, so that what was done would probably never have been thought of under ordinary circumstances." The vessel was eventually bought in at auction in March, 1921, by the largest creditor, Smith Imossi & Co., who were forced to this purchase for their own protection and offered to resell the vessel for the price paid, plus one-fourth of £450, their original claim, and £550, which they had paid to the crew as advance of wages. Briefly therefore, while keeping the department fully informed, Mr. Sprague, on receiving a deputation from the crew which pointed out that there was some food on board the ship which could be used by the crew if coal and water were supplied to the ship, ordered coal and water on October 23, since the boarding of the men on shipboard on this basis, where they could live on the food aboard ship, was little different than the expenses would have been to board and lodge the crew on shore and would also accomplish the additional important function of protecting the vessel and thereby interests of the American owners, bondholders, and the crew's claims for wages; it may be readily seen that to keep the vessel in the custody of its American master and crew at this juncture, that is, when the consul caused coal and water to be furnished, was sound business judgment and the only practicable way to keep the vessel in condition to sail for the United States, in the probable event the receiver for the owning company was successful in the efforts he was making to raise funds for its release.

It is important to note that the Kanabec was not sold by the Admiralty Court at Gibraltar until the third auction held for the purpose, because at the first two auctions the reserve of £14,000 fixed by the court was not offered. This minimum valuation indicates the extensive interests which the American consul was seeking to protect, and it is also a matter of general knowledge that because ship's tonnage values underwent an unprecedented drop in 1921, only £1,070 ($4,815), was finally realized from the sale. Furthermore, although there is no real market for ships' tonnage except at large shipping centers, yet had it been possible for the receiver of the Kanabec to take advantage of the protection offered by the consul's action, as the consul reasonably anticipated, and had liquidation been effected at an American port, there is little doubt it would have yielded a sufficient sum to pay all the consul's claims as well as the large sums which had been earned and were justly due as wages to the members of the crew.

Before leaving the consideration of the expediency of the consul's action, it is desired to call attention to the fact that whenever a steamship is abandoned and its fires drawn, the machinery deteriorates very rapidly and in a short time the vessel becomes unable to proceed to sea without costly repairs. It was this deterioration which the consul strove to avoid.

The American consul at Gibraltar, Mr. Richard L. Sprague, either expended or has become legally responsible for the following items of relief extended to members of the destitute crew of the American steamship Kanabec and the Comptroller General of the United States considers these expenditures in the circumstances above set forth do not comply with the strict requirements of claims to be paid from the congressional appropriation for "Relief and protection of American seamen," as understood by his office:

Obligations and expenditures of Consul Sprague

October 25, 1920. Furnished to steamship Kanabec by Smith Imossi & Co., Gibraltar, upon guaranty of payment by American consul, Gibraltar, 50 tons of coal and 60 tons of water; for which said consul has either paid from personal funds or has become legally bound therefor (£423.15).

August 20, 1920, to February 23, 1921. Small advancement of American consul at Gibraltar to destitute members of the crew of American steamship Kanabec for mending clothes and shoes, toilet necessities, postage, etc.

Total....

$1, 897. 87

278. 95

2, 176. 82

The Comptroller General allowed expenditures for relief extended by the consul in this case after November 20, 1920, when it became necessary to furnish subsistence to the members of the crew of the Kanabec in hotels and lodging houses on shore in Gibralter and similar expenditures under comparable circumstances have been allowed in other cases. It therefore appears that had the consul incurred expenses in maintaining these seamen on shore for the 19 days, that is, October 22 to November 9, 1920, both dates inclusive, during which the crew were maintained on the vessel by the above expenditure of £423.15 for coal and water, such expenses would have been allowed and paid from the regular appropriation for the "Relief and protection of American seamen." It has been ascertained that the expense of maintaining the crew in hotels and boarding houses for the period in question would have been £373.16, only £49.19 less than the amount actually expended.

It is believed that all the items procured through the advancement of £278.95 made by the consul, as shown above, would have been approved and paid by the Comptroller General in the regular course of seamen's relief if, instead of giving the seamen cash, they had been purchased or furnished directly by the consul and the usual vouchers procured and submitted therefor. All these items were necessities. for destitute men, but at the time they were furnished there seemed to be no uncertainty of the consul's ability to reimburse himself from the proceeds of the judicial sale of the vessel.

In judging the correctness of the consul's action in this case it is earnestly requested that his responsibility, legal, equitable, and humanitarian be carefully appraised. He is not only charged by Federal statute with the duty of furnishing subsistence and transportation to the United States to destitute American seamen found

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