Reparations-Shipping

This memorandum is to confirm the telegram sent to you advising
that the ship 'ADRIAN' had been finally awarded to Australia by
the Assembly of I.A.R.A. [1]

When the vote was taken on the complete recommendations of the
Shipping Committee to the Assembly the delegates of India and
Egypt voted against the recommendations of the Committee. The
reasons for their negative vote was that neither country had
received from its Government authority to accept the ships
offered, but had also not received information that the offer made
was non-acceptable. As a result of the non-unanimous vote the
decision of the Assembly was deferred under the rules of the
Agency for eight days, during which time either or both nations
could register their desire for arbitration. On the 28th May Egypt
indicated that she accepted the ship offered, whereas India
totally withdrew her claim for shipping, being prepared to let her
non-acceptance of any value of ships allow her a greater value of
industrial equipment under Category B. These two decisions,
therefore, made the decision of the Assembly unanimous and the
ship was duly allocated.

Arrangements are being made with the British Ministry of Transport
who at present have control of the 'ADRIAN', for the necessary
papers to be prepared to allow the ship to be taken over by
Australia. In the case of the 'ADRIAN' this vessel was seized by
Britain at the time of the capitulation and is at present awaiting
the decision of the Prize Court as to whether or not she will be
granted as prize to Gt. Britain. In the meantime Gt. Britain, in
the spirit of the Potsdam Agreement, has made available as
reparations the 'ADRIAN' and many other ships which are at present
also subjects of litigation in the Prize Court. Until the decision
has been reached it is not possible to pass the property of the
ship to Australia, but the procedure to be adopted is that of
chartering the vessel to us at the charge of one penny per annum.

and immediately the ship has been awarded to Gt. Britain it will
be sold to Australia for the price of one penny.

The necessary documents covering this transfer and also the
agreement about the payment of capital and working repairs, and
how these will be borne by Australia and Gt. Britain are being
prepared by the British Ministry of Transport and will be
submitted to the Resident Minister within the next few days for
signature and payment of the necessary chartering fee.

Regarding the putting of the 'ADRIAN' into commission Westralian
Farmers London have received authorisation from the Shipping Board
to get this matter in hand and they are taking immediate steps to
that effect.

When the signing of the chartering documents has been completed
the responsibility of the ship will then be with the Westralian
Farmers and no further action will be necessary by the Australian
Reparations Legation. There will, however, be the necessity for
the Resident Minister, or whom he may appoint, to sign the Bill of
Sale at the required time. It will be probably some time before
the outstanding Bill of Costs estimated at 10,000 will be
presented for consideration by the British Ministry of Transport
at which time a decision will need to be arrived at between both
parties as to what extent of the costs are of a capital nature,
these being payable by Australia and those which are normal
maintenance costs involved by Gt. Britain during the use of this
vessel, and which are payable by Gt. Britain. A similar division
of expenses will arise regarding the repairs which will need to be
authorised by Westralian Farmers to put the ship into commission.

It will be remembered in this regard that the value given to the
ship for reparation purposes-27,000-was based on the condition of
the ship at the time of capitulation of Germany. For instance if
the ship had suffered damage through bombing or any other reason
necessitating the capital expenditure of 10,000 it could be
assumed that the 1938 value of the ship in good condition would
have been 37,000. As a matter of fact the cost of a similar ship
on today's building costs is stated to be approximately
50/60,000.

The British shipping authorities have a very high regard for the
'ADRIAN'. They state that it is a most handy coastal vessel and it
was only under pressure from our delegation that they withdrew
their own claim for this vessel.

G. W. SHARWOOD
Chief Administrative Officer
Australian Scientific and Technical Mission