Horace Gray

“ The Panama was a steamship of 1432 tons register; was owned by the Compania Transatlantica, a corporation of Barcelona in Spain; sailed under the Spanish flag; had a commission as a royal mail ship from the government of Spain; carried a crew of 71 men all told, who had been shipped at different times at Havana; and her usual course of voyage included the ports of New York and Havana, and Progreso, Vera Cruz and other Mexican ports, with general cargoes, passengers, and mails. ”

“ Her whole armament had been put on board by the company in compliance with its mail contract with the Spanish government (made more than eleven years before, and still in force) , which specifically required every mail steamship of the company to 'take on board, for her own defense,' such an armament, with the exception of the Maxim gun and the Mauser rifles.
That contract contains many provisions looking to the use of the company's steamships by the Spanish government as vessels of war. Among other things, it requires that each vessel shall have the capacity to carry 500 enlisted men ”

“ Upon full consideration of this case, this court is of opinion that the proclamation, expressly declaring that the exemption shall not apply to any Spanish vessel having on board any article prohibited or contraband of war, or a single military or naval officer, or even a despatch, of the enemy, cannot reasonably be construed as including, in the description of 'Spanish merchant vessels' which are to be temporarily exempt from capture, a Spanish vessel owned by a subject of the enemy; having an armament fit for hostile use ”

“ Merchandise of the first class, destined to a belligerent country or places occupied by the army or navy of a belligerent, is always contraband; merchandise of the second class is contraband only when actually destined to the military or naval use of a belligerent ”

“ At the time of her capture, she was on a voyage from New York to Havana, and had on board two breech-loading Hontoria guns of 9 centimeter bore, one mounted on each side of the ship, one Maxim rapidfiring gun on the bridge, twenty Remington rifles and ten Mauser rifles, with ammunition for all the guns and rifles, and thirty or forty cutlasses. ”

“ She was, then, enemy property, bound for an enemy port, carrying an armament susceptible of use for hostile purposes, and herself liable, upon arrival in that port, to be appropriated by the enemy to such purposes.
The intent of the fourth clause of the President's proclamation was to exempt for a time from capture peaceful commercial vessels; not to assist the enemy in obtaining weapons of war. This clause exempts 'Spanish merchant vessels' only ”

“ The company, when beginning to build a new ship, shall submit to the minister of the colonies her plans as prepared for commercial and postal service; 'the minister shall cause to be studied the measures that should be taken looking to the rapid mounting in time of war of pieces of artillery on board of said vessel ”