being shipped. The shipowner is permitted to exempt himself for faults or errors of navigation after the voyage commences. The carriers, however, have, with considerable success, endeavored to evade the payment of claims by placing upon the shipper or consignee the virtually impossible burden of proving that the loss or damage sustained was in fact due to the negligence or fault of the carrier.

As a result of this state of affairs, bills of lading have come to be popularly regarded as "documents of irresponsibility," although this classification is hardly justified, as carriers frequently pay claims which under the conditions of the bill of lading they are not required to recognize. A mere reading of many of our bills of lading gives a shipper or an interested holder a feeling of helplessness and raises serious doubt as to its actual value. To make a bad situation worse no two countries have the same bill of lading laws, and every steamship company offers the shipper a different contract covering the ocean transportation of merchandise. The result has been that neither the shipper nor the banker, with whom the document is lodged as collateral, is in a position to ascertain his status; nor can the insurance underwriters determine their actual risks when insuring shipments of goods, as they do not know where the liability of the shipowner begins or ends. Our bills of lading are so lengthy and involve such cumbersome legal clauses that most shippers have come to regard one bill of lading as good, or rather as bad, as another. In exercising discretion as to their responsibilities, the steamship companies have in a sense exercised their ingenuity, with the result that practically no two bills of lading are the same, and, in the ordinary course of business, the various parties, through whose hands the document passes, do not have the time, inclination or ability to ascertain whether or not the provisions, most of them in fine print, really make up what the business world considers a "bill of lading." It is usually only in case of trouble that the holder of a bill of lading realizes to his sorrow that his bill of lading is not what he believed it to be. Furthermore, the holder must in each instance assure himself that in the event of litigation the terms of the document in his possession will adequately protect his interests as construed by the laws of the country in which suit is brought.

The result of all this' has been confusion, misunderstanding, and financial loss. In some instances protection has been obtained through effecting insurance, but the holder of a bill of lading often finds that he has fallen between the restrictions set forth in the bill of lading and the risks assumed by the insurance company; true this is frequently due to inexperience but more frequently it is an outgrowth of the lack of uniformity of bills of lading and the manner in which the steamship companies have contracted themselves out of legal responsibility.

The World War presented abnormal conditions and resulted in litigation which for the most part served to further complicate the issue, and led to further "protective clauses" in bills of lading whereby the steamhsip companies attempted to relieve themselves of responsibility for about every conceivable happening.

The legislative bodies of the different countries attempted, from time to time, to grant relief to the shippers, but internationally the results were anything but uniform. For instance, in Great Britain, "freedom of contract' was allowed and the steamship companies therefore inserted in their bills of lading practically any clause that they liked. In the United States, on the other hand, the situation had developed on precisely the contrary theory-that is, that it was against public policy for carriers to exempt themselves from liability for the negligence of their agents. Certainly everyone interested in cargo is to-day definitely committed to the proposition that "freedom of contract" between shipper and carrier is a pure fiction; that, for most shippers, and certainly at all times of shortage of tonnage, the shipper has no voice in determining the terms of his bill of lading, and merely has the option of accepting the bill as tendered by the carrier, or not shipping at all.

To sum up, the interests of all concerned with our ocean bills of lading have suffered because of lack of uniformity in definition of the liability of the carriers; indefensible_clauses have been included which the shipper failed to examine critically. In fact, the entire subject has been treated vaguely; our bills of lading have been hedged with exceptions, and their legal aspects have become capable of varying interpretations due to the dissimilar laws of different countries. result is that a bill of lading has indeed become an uncertain document.

The

THE HAGUE AND BRUSSELS CONFERENCES

In an endeavor to cope with the difficulties outlined above, a conference was held at The Hague in 1921, attended by shippers, shipowners, bankers and insurance underwriters. This conference, endeavoring to divide the risks of transportation fairly between the ship and its cargo, adopted regulations setting forth the responsibilities which the shipowners should properly assume and the rights and immunities to which they were justly entitled. Forthwith many of the leading steamship lines voluntarily adopted the recommendations made by the conference. But if a uniform code governing ocean bills of lading were to be adopted, internationally, much more than private action was required, and, accordingly, a diplomatic conference was held in Brussels in 1922, attended by the accredited representatives of 24 of the leading commercial nations of the world. At that conference The Hague rules were subjected to further careful scrutiny and, with certain amendments, were unanimously approved in the form of an international convention. In 1923, a committee of the diplomatic conference again convened at Brussels, and the rules were once more carefully studied and two or three additional minor changes were made. After this general agreement, it was still necessary for the different countries to formally ratify the work of their representatives. Great Britain already has ratified the convention and given it legislative force. In 1924 Parliament passed the "Carriage of goods by sea act, 1924," which makes The Hague rules effective in that country. The convention has been formally signed by the American Ambassador to Belgium; it was submitted to the United States Senate for approval shortly before the last session adjourned, but action is still to be taken in the matter.

The Hague rules, as embodied in the Brussels Convention (the complete draft of these rules will be found in the appendix appearing at the end of this pamphlet), begin by defining the principal terms employed in the rules. Certain liabilities and responsibilities are imposed upon the ocean carrier, and certain rights and immunities granted; the carrier is permitted to increase his responsibilities and to grant additional privileges, but nothing in the bill of lading voiding any of the responsibilities laid down by the rules will be legally valid. The carrier is required before and at the beginning of the voyage to exercise due diligence to make the ship seaworthy, to properly man and equip the ship, and to make all holds, in which goods are carried, fit and safe for their receipton, carriage, and preservation. He is required (subject to Article IV which sets forth the carrier's rights and immunities) to properly and carefully load, handle and discharge his cargo. The bill of lading issued upon receipt of the goods must show, as furnished by the shipper, the leading marks for identifying the shipment and either the number of packages or pieces or the quantity or weight, as the case may be, provided the carrier does not have reasonable grounds for suspecting that such description does not accurately cover the goods being shipped.

The bill of lading, which must also indicate the apparent order and condition of the goods, is regarded as prima facie evidence of the receipt of the goods as described. The shipper's representations as to these points are deemed to be warranties, and if subsequently proven incorrect the shipper is required to indemnify the carrier against all loss, damage, and expenses resulting from the inaccuracies covering these particulars; but, and this is worthy of note, the carrier's right to such indemnity does not limit his responsibility or liability under the bill of lading to any person other than the shipper. The carrier is required, upon demand, to give a "shipped" bill of lading or to supply an "on board" indorsement, probably by reason of the fact that a court (decision rendered by Justice McCardie, King's bench division, July, 1921, in re Diamond Alkali Export Corporation v. Fl. Bourgeois) has held that a so-called "received for shipment" bill of lading is not strictly a bill of lading under a c. i. f. contract. Unless notice of loss or damage is given to the carrier at port of discharge before, or at the time of, removal into the custody of the person entitled to delivery, as stipulated in the bill of lading, such delivery is regarded as prima facie evidence of the delivery by the carrier of the goods as described in the bill of lading; although if the loss or damage is not apparent, three days are allowed within which such notice must be given. One of the most important stipulations of The Hague rules is that the owner of the goods has a year in which to file suit for loss or damage, regardless of whether or not any notice of claim has been given. To realize the importance of this change, it is only necessary to study the bills of lading which have been in use heretofore, and which have required claims to be presented and suits to be brought within a period so short that often the time limit had expired before the owner of the goods knew that a loss had occurred.

It has been usual for bills of lading to bar claims if not presented within 30 or 60 days, and some bills were so drawn as to require the presentation of claims within 48 hours after the goods were delivered.

Under The Hague rules, certain rights and immunities are granted the carrier, following the long-established belief that steamship owners should be encouraged to invest their capital in expensive ships and should not be required to run all of the risks which are inherent in the business. Obviously, many risks are more economically imposed upon the insurance companies, which are paid to assume the risks of transportation and can give each commodity and customer the special consideration which the situation requires.

Neither the carrier nor the ship is held liable for loss or damage resulting from unseaworthiness, unless caused by want of due diligence to make the ship seaworthy and to provide that the ship is properly manned, equipped, and made fit for the transportation of the goods. However and this is another advantage of The Hague rules bills of lading, emphasized by proponents of the measurewhenever loss or damage has resulted from unseaworthiness, the burden of proving the exercise of due diligence is on the carrier. The carrier may not be held responsible for loss or damage arising or resulting from the act or negligence of the master or the ship's servants in the navigation and management of the ship; or from fire unless caused by the fault or privity of the carrier. Furthermore the carrier is not responsible for loss or damage resulting from the followingperils and accidents of the sea, act of God, act of war, act of public enemies, arrest or restraint of princes, rulers, or people, or seizure under legal process, quarantine restrictions, act of omission of the shipper or owner of the goods, his agent or representatives, strikes or lockouts, riots and civil commotions, saving or attempting to save life or property at sea, wastage in bulk or weight or any other loss or damage arising from inherent defect, quality, or vice of the goods, insufficiency of packing or marks and latent defects not discoverable by due diligence. And finally, the carrier is not responsible for loss or damage arising without the fault or privity of the carrier or without the fault or neglect of the agents or servants of the carrier; but here again, fortunately for shippers and holders of bills of lading, the burden of proof is on the carrier who must show that the claimed loss or damage did not result from the fault or neglect of the carrier or his servant. Deviation for the purpose of saving or attempting to save life or property at sea is permitted, as well as other reasonable deviation.

Another beneficial and noteworthy provision of The Hague rules is the stipulation which makes the carrier liable for loss or damage up to £100 per package, or unit, unless a greater value shall have been declared by the shipper and inserted in the bill of lading. This is important when we recall that present limits are usually either $100 or $250; in fact one instance is recorded of a limit of 10 francs. In addition, no prorating clause is contained in The Hague rules and the carrier must pay up to £100 per package and not a proportionate amount of the actual value.

The rules specifically permit the carrier to destroy goods of an inflammable, explosive, or dangerous nature, without compensation to the owner if such goods are delivered to a carrier without disclosing their dangerous character and they become a menace during the voyage. Special bills of lading may be issued provided the circumstances do not lend themselves to a shipment under The Hague rules; such bills of lading, however, must be nonnegotiable and so marked.

We have endeavored to set forth in this section the more important phases of The Hague rules in the belief that American shippers and bankers are not cognizant with the terms as outlined by the international convention. The provisions impose heavy additional responsibilities on our ocean carriers, but it is believed that the greater care demanded of the carriers will benefit all parties concerned, and international uniformity will be of great advantage to everyone. Shippers, carriers, and underwriters can adapt themselves to any reasonable conditions provided they are uniform and stable. Once their liabilities and risks are known they can adjust their charges and premiums to fit them.

OBJECTIONS CONSIDERED

Some objections to The Hague rules have been voiced by those who feel that certain phases of the rules do not meet all possible requirements. It must be remembered that The Hague rules are in the nature of a compromise. No parties concerned with the contract should expect to be entirely satisfied; neither the shipper, carrier, banker, nor underwriter should hope to be benefited 100 per cent. On the other hand, only those who approach the rules with hostile intent can fail to see the vast improvements over the conditions which have existed for

years past. It has been estimated that shippers, underwriters, and bankers will secure about 90 per cent of the changes for which they have been contending and they should be content with the bargain. It is a mistake to attempt any material change in a document which has been agreed upon at an international conference after years of debate.

In fairness to the subject, however, we must necessarily consider the principal objections which have been offered, and endeavor to point out how the present well-nigh intolerable situation will be improved by adoption of The Hague rules. Some claim they do not wish to give up the benefits conferred by the provisions of the Harter Act. It should be borne in mind that The Hague rules are patterned after the Harter Act, some provisions being practically identical. It is claimed that the provision in the rules to the effect that the contract of carriage only "covers the period from the time when the goods are loaded on to the time they are discharged from the ship" is unfair. The Hague rules aim to define risks of carriage by sea and do not undertake to amend local laws covering a steamship company's liability as warehouseman or bailee. The customary obligation of a warehouseman (and as such the carrier acts before loading and after discharge) is to use ordinary care and skill. If The Hague rules are adopted the provisions of the Harter Act, covering the period before loading and after discharge, will still apply, and if necessary further amendments may be made to the Harter Act covering this period. In addition, The Hague rules present advantages to shippers over and above the benefits conferred by the terms of the Harter Act. Possibly the three most noteworthy of these, besides the international uniformity which will result, are:

1. The carrier is prohibited from limiting his liability below £100 per package. 2. Shippers and/or owners are allowed a year within which to bring suit for loss of, or damage, to their goods.

3. Innumerable "exception" clauses are eliminated, and the owners of damaged or lost goods are not required to prove that the loss or damage was due to the carrier's negligence; the burden of proving that loss or damage was not the result of the carrier's negligence has been placed on the carrier.

Because of the fact that a consignee is usually not present at the actual time of discharge of his shipment certain interests claim that he is not in a position to file written notice of claim for loss or damage, as the rules require in all cases except where such loss or damage is not apparent. (Art. III, sec. 6.) But it is to be noted that in the absence of such notice of claim the removal of the goods is merely regarded as "prima facie evidence of the delivery by the carrier of the goods as described in the bill of lading." This means that the consignee must only show that the loss or damage was not caused after removal from the ship; the recipient or shipper of the merchandise is allowed a year in which to file suit before the carrier is freed of liability as compared with the short periods permitted under present-day bills of lading. (Failure to comply within even a short limit affords a complete bar to any claim.) Furthermore, it should be borne in mind that, under existing conditions, the consignee must prove that the loss or damage is caused by the carrier's negligence, whereas under The Hague Rules the carrier must prove the loss or damage did not result from his negligence or fault or that of his servants.

It is claimed by some that the shipowner should be liable for the acts of the master, pilot, and other employees in the management and navigation of the ship. (Art. IV, sec. 2a). But the bills of lading we now use provide this same exemption, and always have, and it is surely better that loss or damage resulting from such acts or negligence in the navigation and management of the ship should be covered by insurance, just as is true of the customary "perils of the sea.'

Article IV, section 2q, relieving the carrier of liability for "any other cause arising without the actual fault or privity of the carrier or without the fault or neglect of the agents or servants of the carrier" has been criticized as being unnecessary and unfair. The fact is that similar provisions are found in practically all of our bills of lading now, and it is believed that the best results will be accomplished if carriers are held for their own negligence only. Serious losses by pilferage, for instance, were prevalent during and after the World War, resulting in the refusal of underwriters to insure more than 75 per cent of the risk against pilferage. It is sufficient to say that, under a Hague Rules bill of lading, full cover is now obtainable, inasmuch as the carrier, under the rules, is required to prove that the pilferage was not caused by his agents or servants or through their negligence. Deviation for the purpose of saving life is recognized as just and proper, and deviation to save property is usually not criticized. The Hague rules, in addition, permit any "reasonable deviation." This is objected to by some shippers. But let us ascertain what deviation is allowed to-day. The following clause,

possibly a bit extreme, although by no means unusual, is found in a bill of lading: "with liberty * * * to proceed to, and stay at any ports or places whatsoever (although in a contrary direction to, or out of, or beyond, the route to the said port of discharge), once or oftener, in any order backwards or forwards, for loading or discharging cargo or passengers, or for any purpose whatsoever. * * *"" Surely a Hague rules bill of lading, permitting only "reasonable deviation," is preferable to one containing any clause such as the above, and such clauses will not disappear from our bills of lading until The Hague rules are adopted.

Some shippers make the claim that they were not properly represented at the conference which framed the rules. Admitting this to be the case, that would not be a valid argument, per se, for declining to lend support. It should be borne in mind that these rules have been tried, at first through voluntary adoption, now through legislative enactment, and found satisfactory by British shipping companies. One steamship company (Furness, Withy & Co. (Ltd.) in introduction to their pamphlet, Addendum to Liner Bills of Lading) reported in 1924 that they had issued over 100,000 copies of bills of lading under the rules "without a single case of litigation or even dispute as to the meaning and construction of the terms of the rules." Incidentally these bills of lading do not contain a disproportionate number of clauses; they are printed in readable type, arranged by headings and readily enable the holder to ascertain the scope of the document. The observation of a judge of the United States Circuit Court of Appeals (Judge Chas. M. Hough in his letter of April 28, 1926, addressed to Hon. Joseph C. Grew, Acting Secretary of State, Washington) is also of interest in this connection. He stated in 1926 that during the two years the rules had been in force, not a single instance had been reported of litigation arising out of them; during the same period, however, he himself had heard at least 20 cases depending upon the interpretation of the "unreformed" bill of lading. Such concrete evidence of the "workability" of The Hague rules would seem to justify their adoption.

The Hague rules convention, while admittedly a compromise, endeavors to secure an international agreement unifying the various laws of the world's maritime nations, no two of which have the same law applicable to the lengthy and cumbersome provisions of manifold types of bills of lading which are received and negotiated by importers, exporters, and bankers throughout the world. The Hague rules are a long step in the right direction. They eliminate most of the objectionable exceptions and objections commonly found in bills of lading. The rules are complete and self-contained, and do not assume or depend on the law of any particular country to provide the basis of liability. They impose certain minimum responsibilities on carriers, and, more important, once they are universally adopted, international uniformity is assured. All parties concerned will know definitely where they stand, and what their responsibilities and rights

are.

The uniform adoption of this convention, coupled with suitable legislation, would materially simplify and standardize present-day bills of lading and in the accomplishment of such constructive work the United States should take a leading part. The resulting uniformity would be of inestimable service to all users of bills of lading, and, what is perhaps of greater concern to our shippers and bankers, would strengthen the value of ocean bills of lading as collateral, and furnish that feeling of protection and security which, unfortunately, is now wholly lacking. With a uniform law, even if it were not an altogether satisfactory one, the doubt and uncertainty now prevailing would be eliminated. After The Hague rules are adopted, it is probable that the International Chamber of Commerce, which has done so much to secure their approval, will undertake the problem of securing uniform forms of bills of lading; with different laws, such as we have to-day, any attempt to adopt uniform forms is useless.

WHAT TO DO ABOUT THE QUESTION

Mark Twain is frequently quoted as saying that while everybody talked about the weather nobody did anything about it. In fairness to the worthy activities of certain individuals and associations, this is not literally true as far as The Hague rules are concerned. It is a fact, however, that while resolutions have been passed supporting the project, comparatively little enthusiasm has been aroused, due possibly to lack of appreciation by bankers, shippers, and other parties at interest, of the advantages of the rules. It is hoped that this paper may serve to help in spreading "the good word" and lead to definite action on

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