The papers in this case are forwarded for advice as to the reply which should be given to Messrs Balchin Limited on the question asked therein.

The statement of fact is as follows:

The s.s. Setos is a German owned vessel under time charter to a British firm-Messrs W.R. Grace & Co. of London and San Francisco.

The vessel left Pugit Sound with a cargo of timber consigned to W. Balchin Ltd, Sydney.

The cargo belongs to and has been paid for by the consignees. Balchin Ltd state that as far as they are aware the vessel carries no contraband of war.

In reply to an inquiry by this Department Balchin Ltd stated they were unable to say when the time charter of the ship expires, or when its delivery is to be taken by the owner. They stated however, that it is the invariable rule of the time charterers Messrs Grace & Co. to redeliver the ships on the west coast of South America, and they would cable for information (13.8.14).

They ask the following question:

Should this steamer arrive at the Port of Sydney, will she be permitted to enter and discharge her Sydney cargo of lumber and then depart to Newcastle and discharge her Newcastle cargo without interference from the Customs or Naval Authorities and after her discharge is completed would she be permitted to resume her employment and to peaceably leave the Port of Newcastle? They have now produced for the inspection of the Collector of Customs, New South Wales, two cables received from the charterers in San Francisco as under:

Dated 8th August-Setos arrived neutral port Honolulu; owners have instructed captain remain.

Dated 14th August-Setos charter party covers redelivery Valparaiso Pisagua on completion present voyage.

In my opinion it is impossible for the Commonwealth Government to give the permission asked for. The ship is an enemy ship, and, on the high seas, would be lawful prize, and subject to capture by any British warship.

[Vol.13,p.28]