(M. 1766.)
Sir, Shepperton, Middlesex, 14th March, 1867.
I have to acknowledge receipt of your letter of the 6th inst., but it is very little satisfaction to know that the principle of limited liability is applied in all the Federal Courts of the United States to British Shipowners, whilst in all the State Courts of that country their responsibility is altogether unlimited. To say that they have the advantages of limited liability, so long as they keep away from the ports of that country, is to suggest that if we wish to avoid unlimited responsibility, we must renounce our carrying-trade with America.
The Board of Trade would also appear to be under the impression that there is so little chance of any serious claim ever being made, that the alteration of the law of the States is of little consequence to us, and that it is not worthy of the trouble it would involve; but a case in point has just come under my notice which signally illustrates the force of the remonstrative observations I have ventured to make.
The screw steam-ship Keder, belonging to Messrs. G. and I. Burns, of Glasgow, and their partners, sailed from New York 31st August, 1864, and on the following day came into collision with the Czarina, an American barque, of from 500 to 600 tons, which had on board a cargo of sulphur, shumac, and fruit. The Czarina was abandoned in a sinking state. As the evidence shows that the Keder was not to blame, the owners of that vessel hoped that nothing more would be heard of the matter; but only a few days ago they received a letter from Sir Edward Cunard, their correspondent at New York, stating that he had just been called upon to give bond for one hundred and twenty-five thousand dollars, on account of the cargo of the Czarina, and adding that he had also been called upon to give bond for the vessel, though the amount in the latter case is not mentioned. It is estimated that the value put on the Czarina and cargo will be something like 40,000l. Supposing the Keder to be in fault, her liability, according to British law, would be restricted to 8l. per ton of her own gross tonnage, viz. 14,264l., whereas, according to the law of the State of New York, she may be held liable in this case for 40,000l., being more than double her value; and if the Czarina and cargo had been more valuable than they are stated to be, the liability of the owner of the Keder would of course have been correspondingly increased. In a word, it would have been practically without limit.
