CARG0K3:
TITLE
**7/ 1/40.
No. 12.
BRITISH EMBASSY,
WASHINGTON, D.C.
January 4th, 1940.
Lord,
I hare the honour, with reference to
my despatch No. 1255 of November 11th last regarding
the Neutrality Act, to transmit to Your Lordship
herewith a copy of a telegram received on December
13th by the Collector of Customs in New York from
the Commissioner of Customs.
2. It will be seen from this telegram
that the Department of Justice in Washington has
ruled that the title to any goods transported to
Canada from this country whether by land or by
inland water transport must first be transferred to
foreign ownership if the ultimate destination of
such goods is a belligerent state outside the areas
enumerated in section 2 (g) of the Act. This
ruling would seem to conflict with the terms of
section 2 (f) of the Act which specifically provide
that the provisions of section 2 (c)   -   the transfer
of title provisions   -   should not apply to any
goods, other than arms, ammunition and implements of
war, transported from the United States to Canada
and Mexico by land, by air or by American vessels on
the Great Lakes and frontier rivers.       In issuing
this ruling the United States authorities would
appear to be in a way reverting to the principle
enunciated/
The Right Honourable
The Viscount Halifax, K.O. ,
etc.,   etc., etc.
FRH:*:CL:KIP
enunciated in Bection 2 (a) of the old Neutrality Act
wherein it was provided that the cash and carry
provisions should apply to those articles specifically
enumerated in the President's Proclamation which were
exported not only direct to a belligerent state but
indirectly through any neutral state.
3. The effect of the ruling will be to
prevent goods being exported over land or by the Great
Lakes from this country to Canada for subsequent
re-shipment to the United Kingdom without title having
previously been transferred. It will be seen
however that the Customs authorities are not required
to insist on evidence as to the ultimate destination of
the goous being furnished unless they have reason to
believe from the shipping documents or otherwise that
this destination is a belligerent state outside the
permitted area. Furthermore the .department of
Justice's ruling does not affect the transport of goods
to Canada by sea nor apply the transfer of title
provision to articles other than war material carried
in American or neutral vessels to ports on the ;est
Coast of Canada or on the East Coast west of latitude
66°.
the High COiiimissioner at Ottawa.
I have the honour to be,
with the highest respect,
My Lord,
Your Loraship's most obedient,
humble servant,
4.
I am sending a copy of this despatch to
(•fi.J