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International Business Law
and Its Environment
RICHARD SCHAFFER
Professor Emeritus (Ret.)
Walker College of Business
Appalachian State University
FILIBERTO AGUSTI
Senior Partner
Steptoe & Johnson LLP
Attorneys at Law
Washington, DC
LUCIEN J. DHOOGE
Sue and John Staton Professor of Law
College of Management
Georgia Institute of Technology
Australia • Brazil • Japan • Korea • Mexico • Singapore • Spain • United Kingdom • United States
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International Business Law © , Cengage Learning
and Its Environment, e WCN: 02-200-203
Richard Schaffer, Filiberto Agusti, ALL RIGHTS RESERVED. No part of this work covered by the copyright
and Lucien J. Dhooge herein may be reproduced, transmitted, stored, or used in any form or
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Printed in Canada
1 2 3 4 5 6 7 17 16 15 14 13
R. S.
To Avery, for her love, patience, and encouragement.
And to Richard T. Fenton, formerly of West Publishing and Foundation Press, for having brought the first
edition of this book to fruition.
F. A.
To my father, Filiberto, and my mother, Maria Luisa, who sacrificed so much that
I might be free to write as I wish; and to my wife, Suki, and our daughters, Caroline, Olivia, and Jordan,
for their abundant patience.
L. J. D.
To my wife, Julia, for her encouragement, support, and patience.
About the Authors
Richard Schaffer is Professor Emeritus of Business Law (retired) in the Department of

Finance of the Walker College of Business at Appalachian State University. He has taught
business law, international business law and transactions, and the law of international
trade and investment since 1977. Professor Schaffer received his J.D. from the University
of Mississippi and his LL.M. from New York University. From 1976 through 1982, he
assisted United Nations agencies in New York, San Jose, and Vienna, with projects examin-
ing the relationship between corrupt practices, multinational corporations, and
socioeconomic development, and served as rapporteur of UN working groups on
international economic crime. Schaffer was director of international business studies at
ASU and founder of its business study abroad programs. He has served as consultant to
business schools on the internationalization of curriculum, and to industry trade groups.
Professor Schaffer has extensive experience in business, including manufacturing and global
sourcing, and he regularly consults on matters related to the international home textile
industry.
Filiberto Agusti is a partner in the international law firm of Steptoe & Johnson
LLP, where he has practiced law since 1978. He represents governments, multinational
corporations, manufacturers, and investors in international arbitrations, lawsuits, and
negotiations, including bankruptcy reorganizations. Mr. Agusti has authored articles
for the Harvard Law Review and other legal publications. He is a frequent speaker at
professional seminars around the world and is a regular on camera commentator for
Univisión, Telemundo, and CNN en Español. Mr. Agusti was law clerk to Judge
William H. Timbers at the U.S. Court of Appeals for the Second Circuit in 1977–78.
He is a graduate of the Harvard Law School, where he was a senior editor of the Harvard
Law Review. He graduated summa cum laude with a B.A. from the University of Illinois
in 1974.
Lucien J. Dhooge is the Sue and John Staton Professor of Law at the Scheller College of
Business at the Georgia Institute of Technology, where he teaches international business law
and ethics and serves as the area coordinator in law and ethics. Prior to his tenure at the
Georgia Institute of Technology, Professor Dhooge practiced law for eleven years and served
on the faculty of the University of the Pacific in California for twelve years. He has authored
more than fifty scholarly articles, co-authored and contributed to thirteen books, and is a
past editor-in-chief of the American Business Law Journal and the Journal of Legal Studies
Education. Professor Dhooge has presented courses and research throughout the United
States, as well as in Asia, Europe, and Central and South America, and he has received
numerous research and teaching awards, including six Ralph C. Hoeber Awards for excel-
lence in published research. After completing an undergraduate degree in history at the
University of Colorado, Professor Dhooge earned his J.D. from the University of Denver
College of Law and his LL.M. from the Georgetown University Law Center.
iv
Brief Contents
Table of Cases xv
Table of Treaties xxi
Table of Statutes xxiii
Preface xxv
Acknowledgments xxxiii
Part One The Legal Environment of International Business 1
1 Introduction to International Business 2

2 International Law and the World’s Legal Systems 29
3 Resolving International Commercial Disputes 56
Part Two International Sales, Credits, and the Commercial

Transaction 85
4 The Formation and Performance of Contracts for the Sale of Goods 86
5 The Documentary Sale and Terms of Trade 120
6 Legal Issues in International Transportation 151
7 Bank Collections, Trade Finance, and Letters of Credit 182
Part Three International and U.S. Trade Law 213
8 National Lawmaking Powers and the Regulation of U.S. Trade 214

9 The World Trade Organization: Basic Legal Principles 236
10 Laws Governing Access to Foreign Markets 263
11 Regulating Import Competition and Unfair Trade 290
12 Imports, Customs, and Tariff Law 313
13 Export Controls and Sanctions 348
14 North American Free Trade Law 374
15 The European Union 407
Part Four Regulation of the International Marketplace 435
16 Marketing: Representatives, Advertising, and Anti-Corruption 436

17 Protection and Licensing of Intellectual Property 460
18 The Legal Environment of Foreign Direct Investment 494
19 Labor and Employment Discrimination Law 532
20 Environmental Law 564
21 Regulating the Competitive Environment 593
Index 623
v
Contents
Table of Cases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xv International Law 29

Table of Treaties . .. . . . . . . . . . . . . . . . . . . . . . . . . . . xxi Definition and Characteristics of
Table of Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxiii International Law 29
Preface . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xxv The Law of Treaties 30
Acknowledgments . .. . . . . . . . . . . . . . . . . . . . . . . . . . xxxiii Customary International Law 33
International Business Law and Crimes 36
Sources of International Business Law 36
Part One The Legal Environment of Crimes Related to International Business 37
International Business 1 Criminal Jurisdiction and the Extraterritorial Reach
of Domestic Law 38
CHAPTER 1 International Court of Justice 42
Introduction to International Business . . . . . . . . . 2 Ethics, Social Responsibility, and Codes of
Introduction 2 Conduct 44
International Business and Human Rights 44
Forms of International Business 2 International Labour Organization 45
Trade 2 The OECD Codes of Conduct 45
Licensing and Protection of Intellectual Property United Nations Global Compact 46
Rights 6 CERES Principles 46
Foreign Direct Investment 10 Corporate Codes of Conduct 46
Conducting Business in Developing and Newly Comparative Law: Differences in National Laws and
Industrialized Countries 11 Legal Systems 47
Developed Countries 12 Modern Japan: An Example of Legal Change 47
Developing Countries 12 Modern Legal Systems of the World 47
The Newly Industrialized Countries 13 Origins of Civil Law Systems 47
The Least Developed Countries 15 Origins of Common Law Systems 48
Some Common Risks of International Business 16 Differences between Modern Civil Law and Common
Distance and Logistics 16 Law Countries 49
Language and Cultural Differences 17 Islamic Law 49
Cross-Border Trade Controls 19
Currency Risk 19
Obtaining Professional Assistance 23 CHAPTER 3
Resolving International Commercial Disputes . .. 56
CHAPTER 2
Avoiding Business Disputes 56
International Law and the World’s Legal
Cultural Attitudes toward Disputes 56
Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Methods of Resolution 57
Introduction 29
vii
viii Contents
Alternative Dispute Resolution 57 Specific Performance 110

Mediation 57 Anticipatory Breach 111
Arbitration 57 Excuses for Nonperformance 111
Litigation 61 Impossibility of Performance 111
Jurisdiction 61 Frustration of Purpose 112
Venue 68 Commercial Impracticability 112
Forum Non Conveniens 68 The CISG Exemption for Impediments Beyond
Forum Selection Clauses 72 Control 113
Conflict of Laws 72 Avoiding Performance Disputes: Force Majeure
The Restatement (Second) of the Conflict of Laws 72 Clauses 113
Choice of Law Clauses 74
The Application of Foreign Law in American CHAPTER 5
Courts 75 The Documentary Sale and Terms of Trade . . . . 120
Enforcement of Foreign Judgments 77 Transaction Risk 121
Commercial Disputes with Nations 78 Delivery Risk 121
Sovereign Immunity 78 Payment Risk 121
Abstention Doctrines 79 The Documentary Sale 121
The Document of Title 122
The Bill of Lading 122
Part Two International Sales, Credits, and Rights of Purchasers of Documents of Title 124
the Commercial Transaction 85 Certificates of Inspection or Analysis 129
How Secure Are Documentary Payment Terms? 130
CHAPTER 4 Measuring Damages for Breach of the Documentary
The Formation and Performance of Contracts for Sale 131
Types of Ocean Bills of Lading 132
the Sale of Goods . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Other Types of Transport Documents 133
Introduction to Contracts for the International Electronic Data Interchange 134
Sale of Goods 86
Allocating Shipping Responsibilities and the Risk of
Cultural Influences on Contract Negotiations 86 Loss 134
Negotiating Contracts in Japan 86 Freight and Transportation Charges 134
The Law of Sales 87 Allocating the Risk of Loss 135
The Origin of Modern Sales Law 87 The Risk of Loss in International Sales under the
The Convention on Contracts for the International Sale CISG 136
of Goods (CISG) 89 Trade Terms 136
Applicability of the CISG to International Sales 89 International Rules for the Interpretation of Trade
Terms 136
Validity and Formation of International Sales E Terms 137
Contracts 92 F Terms 137
General Requirements for a Valid Contract 93 C Terms 143
The Effect of Illegality 93 D Terms 143
The Writing Requirement 93 Modification of Trade Terms 144
Problems of Contract Interpretation 94
Mutual Assent: The Offer 95
CHAPTER 6
Mutual Assent: The Acceptance 96
Standard Business Forms and Contract Legal Issues in International Transportation . . . . 151
Modifications 100 The Liability of International Air Carriers 151
Performance of Contracts 104 The Montreal Convention of 1999 152
Performance of Seller 104 Air Carrier’s Liability for Death or Bodily Injury 154
Performance of Buyer 105 Air Waybills and Air Cargo Losses 157
Remedies for Breach of Contract 108 Maritime Law and the Carriage of Goods by Sea 159
The Requirement of Fundamental Breach 108 Admiralty Jurisdiction in the United States 161
Seller’s Right to Cure 108 Cargo Losses and the Carriage of Goods by Sea 162
Price Reduction 109 Liability of the Carrier 163
Money Damages 109 The Per-Package Limitation 166
Contents ix
The Liability of Ocean Transportation Survey of U.S. Trade Legislation since 1962 222
Intermediaries 169 Enhanced and Emergency Powers of the
Freight Forwarders 169 President 223
Non-Vessel Operating Common Carriers 170 Federal-State Relations 223
Marine Cargo Insurance 171 The Supremacy Clause 223
Marine Insurance Policies 171 The Import-Export Clause 226
General Average 171 The Commerce Clause 227
Particular Average Claims 172 The Commerce Clause and Multiple Taxation 227
Types of Coverage 172 Federal Agencies Affecting Trade 230
United States Department of Commerce 230
CHAPTER 7 United States Department of Homeland Security 230
Bank Collections, Trade Finance, and Letters of United States Trade Representative 230
Credit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182 United States Department of the Treasury 231
The Bill of Exchange 182 International Trade Commission 231
The Origin of Bills of Exchange 182 The U.S. Court of International Trade 231
Brief Requirements of a Bill of Exchange 183
CHAPTER 9
The Documentary Draft and the Bank Collection
Process 183 The World Trade Organization: Basic Legal
Documentary Drafts Used in Trade Finance 184 Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 236
Credit Risks in Factoring Accounts Receivable: The Introduction to Trade Regulation 236
Rights of the Assignee 186 Reasons for Regulating Imports 236
The Letter of Credit 187 Tariffs 237
The Documentary Letter of Credit 187 Non-tariff Barriers to Trade 237
Law Applicable to Letters of Credit 188 History of Gatt 1947 238
The Independence Principle and Letters of GATT Multilateral Trade Negotiations 239
Credit 190 Transition from GATT to the WTO 239
Following a Letter of Credit Transaction 190 The World Trade Organization and WTO Law 240
The Rule of Strict Compliance 196 Organization of the WTO 240
Enjoining Banks from Purchasing Documents in Cases The WTO and U.S. Law 241
of Fraud 199
Confirmed Letters of Credit 200 Major Principles of WTO Trade Law 242
Standby Letters of Credit 204 Transparency 242
Other Specialized Uses for Letters of Credit 205 Tariff Concessions, Bound Rates, and Tariff
Electronic Data Interchange and the eUCP 205 Schedules 242
Letters of Credit in Trade Finance Programs 206 Nondiscrimination, Most-Favored-Nation Trade, and
National Treatment 244
National Treatment 244
Licenses, Quotas, and Prohibitions on Imports 247
Part Three International and U.S. Trade Exceptions Permitting Import Restrictions 251
Law 213 WTO Dispute-Settlement Procedures 251
WTO Reports as Legal Precedent 252
CHAPTER 8 Exceptions To Normal WTO Trade Rules 254
National Lawmaking Powers and the Regulation Trade Preferences for Developing Countries 254
of U.S. Trade . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214 Free Trade Areas and Customs Unions 256
The Separation of Powers 214
Legislative Power of Congress 215 CHAPTER 10
Presidential Power 215 Laws Governing Access to Foreign Markets . . . . . 263
President’s Inherent Powers 216 The General Principle of Least Restrictive Trade 263
The Treaty Power 219 Technical Barriers to Trade 265
Presidential Power and U.S. Trade Relations 220 The Protection of Public Health, Safety, or
The Reciprocal Trade Agreements Act of 1934 220 Welfare 266
Trade Agreements and Trade Promotion European Union Standards and Technical
Authority 222 Regulations 267
x Contents
Japanese Standards and Technical CHAPTER 12

Regulations 268 Imports, Customs, and Tariff Law . . . . . . . . . . . . . 313
Chinese Standards and Technical Dutiable Status of Goods 313
Regulations 268 Classification of Goods 314
The WTO Agreement on Technical Barriers to An Outline of the U.S. Harmonized Tariff
Trade 270 Schedule 314
International Organization for Standardization 273 Customs Valuation 322
Government Procurement 274 Rules of Origin 323
The WTO Agreement on Government Definition and Types of Rules of Origin 324
Procurement 274 Non-Preferential Rules of Origin 324
Trade in Services 275 Preferential Rules of Origin 327
The WTO General Agreement on Trade in WTO Agreement on Rules of Origin 327
Services 275 Marking and Labeling of Imports 327
Trade in Agriculture 276 Other Customs Laws Affecting U.S. Imports 328
Some Agricultural Trade Issues in the EU and Drawbacks 328
Japan 277 Foreign Trade Zones 329
The WTO Agreement on Agriculture 278 The Administration of U.S. Customs and Tariff
Sanitary and Phytosanitary Measures: Food, Animal, Laws 331
and Plant Safety 278 The Formal Entry 331
Codex Alimentarius 278 Liquidation and Protest 334
Other WTO “Trade-Related” Agreements 280 Enforcement and Penalties 335
Trade-Related Investment Measures 280 Binding Rulings 340
Trade-Related Aspects of Intellectual Property Judicial Review of U.S. Customs 340
Rights 281 Judicial Review of Customs Rulings 341
Trade Sanctions and U.S. Section 301: The Threat of
Retaliation 282 CHAPTER 13
Basic Section 301 283
Export Controls and Sanctions . .. . . . . . . . . . . . . . . 348
CHAPTER 11
Multilateral Cooperation in Controlling
Technology 349
Regulating Import Competition and Unfair
The Wassenaar Arrangement 349
Trade . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 290
History of U.S. Export Control Laws 350
Safeguards Against Injury 290 Changes in the Export Environment since 2001 350
The GATT Escape Clause 291 Balancing National Security with Economic
The WTO Agreement on Safeguards 291 Competitiveness 350
Safeguards against Injury under U.S. Law 293
Trade Adjustment Assistance 296 Export Controls on Commercial and Dual-Use Goods
and Technology 351
Unfair Import Laws: Dumping 297 Export Administration Act of 1979 and EAR
Reasons for Price Cutting in a Foreign Market 297 Regulations 351
The WTO Antidumping Agreement 297 Reasons for Control 352
U.S. Antidumping Investigations 297 Foreign Availability 353
The Material Injury Requirement 300 Exports and Re-exports 355
WTO Dispute Settlement in Dumping Illegal Diversions of Controlled Items 355
Cases 301 Deemed Exports 355
Dumping and Nonmarket Economy Export Licensing 356
Countries 301 End User Controls 356
Unfair Import Laws: Subsidies 304 Licensing Review Process 356
WTO Agreement on Subsidies and Countervailing Automated Export System 357
Measures 304 Extraterritorial Jurisdiction of Export Control
WTO Subsidy Dispute Settlement 306 Laws 359
Countervailing Duty Actions 306 Antiboycott Provisions 360
Subsidies and Nonmarket Economy Countries 307 Compliance and Enforcement 362
Judicial Review in Unfair Trade Cases 309 Economic and Financial Sanctions 365
Contents xi
Effectiveness of Economic and Financial CHAPTER 15

Sanctions 365 The European Union . . . . . . . . . . . . . . . . . . . . . . . . . . 407
Authority for U.S. Sanctions 366 History of the European Union 407
International Emergency Economic Powers Act 366 Founding Treaties 407
U.S. Sanctions on Trade with Cuba 368
Membership in the European Union 409
The Accession Process 409
CHAPTER 14
Structure of the European Union 411
North American Free Trade Law . . . . . . . . . . . . . . . 374
The European Council 411
The Philosophy of Economic Integration 374 The Council of Ministers of the European Union 411
Federal Model 374 The European Commission 412
Free Trade Area 375 The European Parliament 412
Customs Union 375 The Court of Justice of the European Union 413
Common Market 376 Distinctions among Institutions 414
Compatibility of Trade Areas with the WTO and Harmonization: Directives and Regulations 414
GATT 377
The European Union and the Regulation of Business:
The North American Free Trade Area 377 The Four Freedoms 417
Canada−U.S. Trade 378 The Free Movement of Goods 417
Mexico−U.S. Trade 378 The Free Movement of Services 420
The North American Free Trade Agreement 378 The Free Movement of Capital 423
National Treatment 379 The Free Movement of People 424
Rules of Origin 380 Other Areas of Integration: Some Examples 424
Goods Wholly Produced or Obtained in North The Common Agricultural Policy 424
America 380 Consumer Protection 427
Annex 401 Tariff Shift Rule of Origin 380 Energy and the Environment 427
The NAFTA Certificate of Origin 382 The Business Implications of the European
Standards and Technical Barriers to Trade 383 Union 428
Marking and Labeling Rules 385 The European Economic Integration Model and the
Trade in Goods: Sectoral Issues 385 Financial Crisis 428
Trade in Motor Vehicles and Parts 386 The Financial Crisis in Specific States 428
Trade in Textiles and Apparel 386 The EU’s Response to the Financial Crisis 430
Trade in Agriculture 386 The Future of the Euro 430
Government Procurement 387
Emergency Action to Protect Domestic Industry
(NAFTA Safeguards) 387 Part Four Regulation of the International
Trade in Services 388 Marketplace 435
Financial Services 388
Transportation 388 CHAPTER 16
Telecommunications 391 Marketing: Representatives, Advertising, and
Cross-Border Investment 391 Anti-Corruption . . . . . . . . . . . . . . . . . . . . . . . . . . . 436
NAFTA’s Investment Provisions 392 Regulation of Relationships with Representatives 436
Other NAFTA Provisions 393 Supersession of Agreement with Representative 437
Intellectual Property Rights 395 Tax and Labor Regulation and Principal Liability: The
Environmental Cooperation and Enforcement 396 Dependent–Independent Distinction 439
Labor Cooperation and Worker Rights 396 Regulation of Advertising Abroad 440
Rights to Temporary Entry 397 Truth in Advertising 440
Administration and Dispute Settlement 397 Content-Specific Regulations 442
NAFTA Fair Trade Commission 397 Marketing Considerations: The Nestlé Infant Formula
Case 445
Production Sharing: Assembly Plants and the Mexican
Maquiladoras 398 The Foreign Corrupt Practices Act 445
Assembly Plant Tariff Rules 399 Origins of the FCPA and Other Antibribery
Issues Related to the Mexican Maquila Laws 446
Industry 401 Structure of the FCPA 447
xii Contents
The Department of Justice Review Process 449 CHAPTER 18

FCPA Enforcement Actions 449 The Legal Environment of Foreign Direct
Territorial Jurisdiction over Non-U.S. Persons 451 Investment . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 494
Difficulty in Prosecuting Individuals for FCPA Choosing Foreign Direct Investment 494
Violations 452 Reasons for Foreign Direct Investment 494
Foreign Enforcement Actions 452 Methods of Foreign Direct Investment 495
International Refusal to Enforce Contracts Induced by The Legal Consequences of Foreign Direct
Bribery 454 Investment 497
Best Practices for the U.S. Businessperson 456
Country and Regional Risks in Foreign Direct
Investment 498
CHAPTER 17
Currency Risk 498
Political Risk and Government Stability 500
Protection and Licensing of Intellectual
Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 460 Attitudes Toward FDI in Developing Countries and the
Taking of Investor’s Property 502
Introduction 460 Sovereign Rights versus Investor Rights in Developing
Litigation 461 Countries 503
Reasons for Intellectual Property Transfer Threats to an Investor’s Private Property 505
Arrangements 462 Privatization 507
Intellectual Property Rights: Transfer Resolving Investment Disputes 509
Arrangements 463 The Use of Arbitration in Settling Investment
Right to Use and Conditions of Use 463 Disputes 509
Competitive Circumstances 464 Resolving Investment Disputes Before Courts 511
Confidentiality and Improvements 464 Taxation of Multinational Firms 517
International Protection for Patents, Trademarks, and The Government Dilemma in Taxing Multinational
Other Intellectual Property 465 Firms: Economic and Enforcement Problems 517
Paris Convention 465 Territorial and Extraterritorial Income 517
Patents 465 Systems for Taxing Multinational Firms 518
Trademarks 469 Other Issues in International Taxation 521
Domain Names 469
Copyrights 471 CHAPTER 19
Trips 473 Labor and Employment Discrimination Law . . . . 532
The Doha Declaration on Trips and Public Different Approaches to Labor Law 532
Health 475 Employee Participation in Strategic Decisions 532
The War of Geographical Indications 476 Impediments to Dismissal 534
Geographical Indications under the Doha Assumption of Employment Arrangements 535
Development Agenda 478 Employment Discrimination Outside the United
Continuing TRIPS Turmoil on Biodiversity 479 States 536
Nonenforcement of IPR Laws 480 The Extraterritorial Application of U.S. Employment
The Proposed Anti-Counterfeiting Trade Discrimination Law 537
Agreement 481 Defenses to U.S. Employment Law When Applied
The Mechanics of IPR Transfer Regulations 481 Extraterritorially 541
Prior-Approval Schemes 482 Antidiscrimination Laws Outside the United
Notification-Registration Schemes 482 States 543
The Gray Market 483 Foreign Laws Permitting Difficult Work
The Nature of the Problem 483 Conditions 553
Resolution of the Dispute 484 Unsafe Labor Conditions 554
Franchising: Licensing Outside the Technological Prison Labor 554
Context 485 Child Labor 554
Consequences of Participation in Illegal or Harsh
Antitrust Considerations 486 Work Conditions 555
Contents xiii
CHAPTER 20 CHAPTER 21
Environmental Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 564 Regulating the Competitive Environment . . . . . . . 593
Consideration of Varying Environmental Historical Development of International Competition
Requirements 564 Law 593
Differences in Regulatory Schemes 564 Basic Regulatory Framework 594
Environmental Law as an Anticompetitive Prohibitions Against Agreements to Restrict
Tool 565 Competition 594
Traditional International Remedies 566 Abuse of Dominant Market Position 596
The Polluter Pays: Responsibility for Mergers and Acquisitions 600
Pollution 566 Other Attributes of U.S. and Non-U.S. Competition
Pending ICJ Matters 566 Law 607
Regulation of Products That Violate Environmental Private Causes of Action for Damages 607
Objectives 568 Potential Criminal Liability 607
Regulation of Products with Article 101(3) and the Rule of Reason 608
Environmentally Objectionable Production Preapproval Procedures versus Litigation 608
Processes 570
Extraterritorial Effect of Competition Laws 609
Inadequacies of the Traditional International
The U.S. Effects Test 610
Pollution-Control System 574
The European “Implementation” Test 614
Emerging Problems and Solutions 574 Blocking Legislation 619
Regional Approaches 574
Index 623
Global Solutions 581
xiv Contents
Table of Cases
Principal cases are in bold type.
A. Ahlstrom Osakeyhtio v. Comm’n, 621–622 Barclays Bank PLC v. Franchise Tax Board of California, 227
A. Bourjois & Co. v. Katzel, 488–489 Basse and Selve v. Bank of Australasia, 131
ADC Affiliate et al. v. The Republic of Hungary, BAT Reynolds v. Commission, 1987 E.C.R. 4487, 620
International Center for Settlement of Investment Bende and Sons, Inc. v. Crown Recreation and Kiffe
Disputes, 516–517 Products, 116
Air France v. Saks, 154–155 Bernina Distributors v. Sewing Machine Co., 19, 20
Airtours v. Comm’n, 606 Bestfoods v. United States, 389
Aldana v. Del Monte Fresch Produce N.A., Inc., 562 Better Home Plastics Corp. v. United States, 324–325
Alfadda v. Fenn, 70–72 Biddell Brothers v. E. Clemens Horst Co., 129–130
Alfred Dunhill of London, Inc. v. Cuba, 519 Binladen BSB Landscaping v. The Nedlloyd
Allied Chemical International Corp. v. Companhia De Rotterdam, 168
Navegacao Lloyd Brasileiro, 126, 148 Board of Trustees v. United States, 228
Amerada Hess Corp. v. S/T Mobil Apex, 172 BP Oil International, Ltd. v. Empresa Estatal Petroleos de
American Banana Co. v. United Fruit Co., 614 Ecuador, 149
American Mint LLC v. GOSoftware, Inc., 110, 117 Briggs & Stratton Corp. v. Baldridge, 365–366
Anheuser-Busch Brewing Association v. United States, 328 Bulk Aspirin from the People’s Republic of China,
Animal Science Products, Inc. v. China Minmetals 306–307
Corp., et al., 619–620 Bulmer v. Bollinger, 418
Apple, Inc. v. Samsung Electronics Co., Ltd., 465–466 Calder v. Jones, 66
Argentina—Safeguard Measures on Imports of California v. American Stores Co., 604
Footwear, 295, 296–297 CamelBak Products, LLC v. U.S., 348
Arizona v. United States, 223, 224–226 Carlill v. Carbolic Smoke Ball Co., 445–446
Asahi Metal Ind. v. Superior Court of California, Carl Zeiss, Inc. v. United States, 322–323
Solano County, 63–64 Case Concerning the Factory at Chorzów (Poland v.
Asante Technologies, Inc. v. PMC–Sierra, Inc., 91–92 Germany), 42
Asoma Corp. v. M/V Land, 163 Case of New Zealand Mussels (Germany), 105
Badbwar v. Colorado Fuel and Iron Corp., 147 Chateau Des Charmes Wines, Ltd. v. Sabaté U.S.A.,
Banco General Runinahui, S.A. v. Citibank, 208 Ltd., 99–100
Bancroft & Masters Inc. v. Augusta Nat’l Inc., 66 Chevron U.S.A. Inc. v. Natural Resources Defense
Bank of America Nat’l Trust & Savings Assn. v. United Council, Inc., 304, 345
States, 523–524 Chicago Prime Packers, Inc. v. Northam Food Trading
Banque de Depots v. Ferroligas, 125 Co., 106–107
Barbara Berry, S.A. v. Ken M. Spooner Farms, Inc., 93 China—Certain Measures Affecting Electronic Payment
Barclay’s Bank, Ltd. v. Commissioners of Customs and Services, 291
Excise, 147 Cicippio-Pueblo v. Islamic Republic of Iran, 521
xv
xvi Table of Cases
C.J. Van Houten & Zoon v. United States, 322 Ferrostaal Metals Corp. v. United States, 329–330
Comité Interprofessionel du Vin de Champagne v. F. Hoffman-La Roche Ltd. v. Empagran S. A, 618, 624
Wineworths Group, Ltd., 480–482 Finnish Fur Sales Co., Ltd. v. Juliette Shulof Furs,
Commission of the European Communities v. Italian Inc., 75–77
Republic, 420–421, 424–426, 436 First Flight Associates v. Professional Golf Co., Inc., 26
Commission of the European Communities v. Fishman & Tobin, Inc. v. Tropical Shipping & Const. Co.,
Portuguese Republic, 422–423 Ltd., 180
Compaq Computer Corp. Subsidiaries v. Commissioner Foreign Corrupt Practices Act Review Opinion
of Internal Revenue, 525–527 Procedure Release 10-01, 454–455
Consumers Union of U.S., Inc. v. Kissinger, 233 Freedom to Travel Campaign v. Newcomb, 372–373
Courtaulds North America, Inc. v. North Carolina Frigaliment Importing Co., Ltd. v. B.N.S. International
National Bank, 197–198 Sales Corp., 26
Crosby v. National Foreign Trade Council, 225, 226 Gaskin v. Stumm Handel GMBH, 17–18
Cybersell, Inc. v. Cybersell Inc., 66 GATT Dispute Settlement Panel Report: Canada Import,
Daimler Chrysler AG v. Land Baden—Wurttemberg, 436 Distribution and Sale of Alcoholic Drinks By Canadian
Dayan v. McDonald’s Corp., 9–10 Provincial MarketingAgencies, 291
Delchi Carrier, SpA v. Rotorex Corp., 116 General Instrument Corp. v. United States, 404
Delovio v. Boit, 161 Geneva Pharmaceuticals Technology Corp. v. Barr
Department of Revenue of the State of Washington v. Laboratories Inc., 93
Association of Washington Stevedoring Cos., 227 Gibson-Thomsen Co. v. United States, 328
Department of Transportation v. Public Citizen, 395 Gonzales v. Chrysler Corp., 83
Diamond v. Chakrabarty, 471–472 Goodyear Dunlop Tires Operations, S.A. v. Brown, 82
DIP SpA v. Commune di Bassano del Grappa, 22–23 Gulf Oil v. Gilbert, 68
Dole v. Carter, 216–217
Hanil Bank v. Pt. Bank Negara Indonesia (Persero), 209
Eagle Terminal Tankers, Inc. v. Insurance Co. of
Hadley v. Baxendale, 209
USSR, 172
Heavyweight Motorcycles & Engines & Power-Train
Eastern Air Lines, Inc. v. Floyd, 157
Subassemblies, 298–300
Ehrlich v. American Airlines, Inc., 157
Harriscom Svenska, AB v. Harris Corp., 113–114
El Al Israel Airlines, Ltd. v. Tseng, 153–154
Hartford Fire Insurance Co. v. California, 41, 616–618
Electra-Amambay S.R.L. v. Compañía Antártica
Havana Club Holding v. Galleon, 374
Paulista Ind., 441–442
Heartland By-Products, Inc. v. United States, 326
Equal Employment Opportunity Commission v.
Herman Chang v. United States, 371
Arabian American Oil Co., 541–542
Hoffman Plastic Compounds, Inc. v. NLRB, 225
Equitable Trust Co. of New York v. Dawson Partners
Hy Cite Corp. v. Badbusinessbureau.com L.L.C., 83
Ltd., 197
European Commission Proceedings against Czech Hyundai Electronics Co., Ltd. v. United States, 258
Republic on the Race Equality Directive and the INA Corp. v. Islamic Republic of Iran, 509–510
Employment Equality Directive, 549–550 Inceysa Vallisolenta, S.L. v. Republic of El Salvador, 458
European Communities—Measures Affecting the Inner Secrets v. United States, 349
Approval and Marketing of Biotech Products, 264 In the Matter of Cross Border Trucking, 393–394
European Communities—Measures Affecting Asbestos In re Independent Service Organizations Antitrust
and Asbestos-Containing Products, 264, 573–574 Litigation CSU et al. v. Xerox Corporation, 491
European Communities—Measures Concerning Meat In re Union Carbide Corporation Gas Plant Disaster at
and Meat Products (Hormones), 264, 283–284 Bhopal, 14–15, 69
European Economic Community—Import Regime for INS v. Lopez-Mendoza, 225
Bananas, 247 Intercontinental Hotels Corp. v. Golden, 77
Executive Jet Aviation, Inc. v. Cleveland, 161 International Shoe Co. v. Washington, 62, 63–64, 66
Fallini Stefano & Co. s.n.c. v. Foodic BV, 106 Iragorri v. United Technologies Corp. & Otis Elevator
Federal Energy Administration v. Algonquin SNG, Co., 70–72
Inc., 233 ITC Report on Heavyweight Motorcycles, 298–300
Federal Republic of Germany v. European Parliament and Japan Line, Ltd. v. County of Los Angeles, 227, 228
Council of the European Union, 448 Japan—Taxes on Alcoholic Beverages, 249–250
Table of Cases xvii
J. Gerber & Co. v. S.S. Sabine Howaldt, 165–166 National Juice Products Association v. United States, 329
J. H. Rayner and Co., Ltd. v. Hambro’s Bank, Ltd., 209 National Thermal Power Corp. v. The Singer Co., 514–515
J. McIntyre Machinery, Ltd. v. Nicastro, 82 New Zealand—Comite Interprofessionel du Vin de
Joseph Muller Corp., Zurich v. Societe Anonyme De Champagne v. Wineworths Group, Ltd., 480–482
Gérance Et D’Armament, 615 Nissan Motor Mfg. Corp., U.S.A. v. United States, 334
Judgment of February 23, 1988 (Austria), 576–577 Norfolk Southern Railway Co. v. James N. Kirby, Ltd., 163
KMart Corp. v. Cartier, Inc., 489 Norfolk Southern Railway Co. v. Power Source Supply,
Kathleen Hill & Ann Stapleton v. Revenue Comm’rs & Inc., 93
Dpt. of Finance, 555–556 Nottebohm Case (Liechtenstein v. Guatemala), 42–44
Kiobel v. Royal Dutch Petroleum Co., 53, 559–561 Ofori-Tenkorang v. American Intern. Group, Inc., 545
Kisen Kaisha Ltd. v. Regal-Beloit Corp., 163 Olympic Airways v. Husain, 155–156
Kochi Hoso (Broadcasting Co.), 540 Paquette Habana, The, 32–33
Kruger v. United Airlines, Inc., 179 Pebble Beach Company v. Caddy, 65–67
Kumar Corp. v. Nopal Lines, Ltd., 144–145 Pesquera Mares Australes Ltda. v. United States
Leegin Creative Leather Products, Inc. v. PSKS, Inc., 612 (Chilean Salmon), 303–304
Liechtenstein v. Guatemala, 42–44 Pestana v. Karinol Corp., 148
Lite-On Peripherals, Inc. v. Burlington Air Express, Phillips Puerto Rico Core, Inc. v. Tradax Petroleum
Inc., 125, 126 Ltd., 148
Luke v. Lyde, 160 Pillowtex Corp. v. United States, 70–72
M. Aslam Khaki v. Syed Mohammad Hashim, 58–61 Piper Aircraft Co. v. Reyno, 71
MacNamara v. Korean Air Lines, 32–33 Poland v. Germany, 42
Mahoney v. RFE/RL, Inc., 547–548 Prima U.S. Inc. v. Panalpina, Inc., 170–171
Malgorzata Jany & Others v. Staatssecretaris van Pulp Mills on the River Uruguay (Argentina v.
Justitie, 552–553 Uruguay), 570–571
Marbury v. Madison, 80 Quality King Distributors v. L’anza Research Int’l.
Marlwood Commercial Inc. v. Kozeny, 458 Inc., 495
Maurice O’Meara Co. v. National Park Bank of New Québec (Procureur général) c. Entreprises W.F.H.
York, 190, 192–193, 199, 200 ltée, 447–448
Mavrommatis Palestine Concessions, 42 Raw Materials, Inc. v. Manfred Forberich GMBH &
MCC-Marble Ceramic Center, Inc. v. Ceramica Nuova Co., 117
D’Agostino, S.P.A., 94 Regent Corp., U.S.A. v. Azmat Bangladesh, Ltd., 200
Medellin v. Texas, 31 Republic of Argentina v. Weltover, Inc., 517, 518
Merrit v. Welsh, 325 Reyes-Gaona v. North Carolina Growers Ass’n,
Metalclad Corporation v. The United Mexican Inc., 543–544
States, 397, 398–399 Rio Properties Inc. v. Rio Int’l Interlink, 66
Michelin Tire Corp. v. Wages, 227 Robertson v. American Airlines, Inc., 179
Microsoft Corp. v. Commission of the European Russian Entertainment Wholesale, Inc. v. Close-Up
Communities, 600–603 International, Inc., 7–8
Mid-America Tire, Inc. v. PTZ Trading Ltd., 211 Samsonite Corp. v. United States, 403–404
Milliken v. Meyer, 63–64 Sanders Brothers v. Maclean & Co., 127
Mineral Park Land Co. v. Howard, 112 Sarl Louis Feraud International v. Viewfinder, Inc., 82
Mobile Communication Service Inc. v. WebReg, Saudi Arabia v. Nelson, 517, 518–519
RN, 473–474 Schaefer-Condulmari v. U.S. Airways Group, LLC, 179
Monarch Luggage Co. v. United States, 326 Scherk v. Alberto-Culver, 59–61
Morgan Guaranty Trust Co. v. Republic of Palau, 76 Schneider Electric SA v. The European
Morrison v. Nat’l Australia Bank LTD, 41 Commission, 607–608
M/S Bremen v. Zapata Off-Shore Co., 73–74 Schooner Exchange v. McFaddon, 78
National Farmers’ Union and Secrétariat général du Seaver v. Lindsay Light Co., 132
gouvernement (France), 429–431 Sebago Inc. v. GB Unie, SA,
National Group for Communications and Computers, Securities and Exchange Commission v. Siemens
Ltd. v. Lucent Technologies International, Inc., 116 Aktiengesellschaft, 456–457
xviii Table of Cases
Seung v. Regent Seven Seas Cruises, Inc., 82 United States—Certain Country of Origin Labeling
Semetex v. UBAF Arab American Bank, 200, 202–203 (COOL) Requirements, 290
Sharpe & Co., Ltd. v. Nosawa & Co., 132 United States—Countervailing Measures Concerning
Shaver Transportation Co. v. The Travelers Indemnity Certain Products from the European
Co., 175–177 Communities, 311–312
Shekoyan v. Sibley Int’l Corp., 544 United States—Import Prohibition of Certain Shrimp
Silhouette International Schmied GmbH & Co. KG v. and Shrimp Products, 264, 574–576
Hartlauer Handelsgesellschaft GmbH, 489 United States—Measures Affecting the Production and
Singh v. North American Airlines, 156 Sale of Clove Cigarettes, 275–277
Skeena River Fishery: Canada, 579–582 United States—Standards for Reformulated and
Sky Cast, Inc. v. Global Direct Distribution, LLC, 117 Conventional Gasoline, 264
Smith-Corona Group v. United States, 315 United States v. Aluminum Co. of America, 614–615
Smith Kline and French Laboratories v. Bloch, 57 United States v. Bowman, 41
Solae, LLC v. Hershey Canada, Inc., 99–100 United States v. Campbell, 40–41
Sony Magnetic Products Inc. of America v. United States v. Chmielewski, 362–363
Merivienti, 180 United States v. Curtiss-Wright Export Co., 215
Sosa v. Alvarez-Machain, 34–36 United States v. Golden Ship Trading Co., 339, 340–341
South-Central Timber Development, Inc. v. United States v. Guy W. Capps, Inc., 234
Wunnicke, 229 United States v. Haggar Apparel Co., 345, 404
Sport D’ Hiver di Genevieve Culet v. Ets Louys et Fils, 107 United States v. Lindh, 376
Sports Graphics, Inc. v. United States, 349 United States v. Mandel, 357, 358–359
Squillante & Zimmerman Sales, Inc. v. Puerto Rico United States v. Mead Corp., 345–346
Marine Management, Inc., 180 United States v. Microsoft, 611
St. Eve International v. United States, 349 United States v. Pink, 32
St. Paul Guardian Ins. Co. v. Neuromed Medical United States v. Ramzi Yousef, 40
Systems & Support, GmbH, 137–139 United States v. Roberts, 39–40
Star-Kist Foods, Inc. v. United States, 221–222 United States v. Romero-Galue, 41
Stichting ter Behartiging van de Belangen van United States v. Zhi Yong Guo, 363–364
Oudaandeelhouders in Het Kapitaal van Saybolt Ventress v. Japan Airlines, 32–33
International B.V. v. Schreiber, 452 Voest-Alpine Trading Co. v. Bank of China, 198–199
Sumitomo Electric Industries Ltd., 557 Xerox Corporation v. County of Harris, Texas, 234
Sztejn v. J. Henry Schroder Banking Corp., 200–202, 209 Warner Bros. & Co. v. A.C. Israel, 148
Tarbert Trading, Ltd. v. Cometals, Inc., 4–5 Waterproofing Systems, Inc. v. Hydro-Stop, Inc., 441
Tel-Oren v. Libyan Arab Republic, 41 Wilko v. Swan, 60
Tetra Laval BV v. Comm’n, 608, 609 WIPO Arbitration and Mediation Center, 473–474
Texas Instruments v. United States, 321 Wisconsin Dept. of Industry v. Gould Inc., 225
Thailand—Restrictions on Importation of Woodling v. Garrett Corp., 76
Cigarettes, 268–269 World Duty Free Company Limited v. The Republic of
Tokio Marine & Fire Ins. Co., Ltd. v. Nippon Express Kenya, 458–459
U.S.A, 168 Worldwide Volkswagen Corp. v. Woodson, 62
Transatlantic Financing v. United States, 16–17 W.S. Kirkpatrick v. Environmental Tectronics Corp., 520
Tribunal of International Commercial Arbitration at the WTO Report of the Appellate Body on European
Russian Federation Chamber of Commerce and Communities-Regime for the Importation, Sale and
Industry, 17 October 1995, 116 Distribution of Bananas, 256, 257–258
Tupman Thurlow Co. v. Moss, 229–230, 234 WTO Report on Argentina—Safeguard Measures on
Turicentro, S.A. v. American Airlines Inc., 619 Imports of Footwear, 295, 296–297
TVBO Production Limited v. Australia Sky Net Pty WTO Report on EC Measures Concerning Meat & Meat
Limited, 476–477 Products (Hormones Dispute), 283–284
Underhill v. Hernandez, 79 WTO Report on European Communities—Measures
United City Merchants (Investments), Ltd. v. Royal Bank Affecting Asbestos & Asbestos-Containing
of Canada, 209 Products, 573–574
Table of Cases xix
WTO Report on European Communities—Regime for WTO Report on United States—Countervailing

the Importation, Sale & Distribution of Bananas, Measures Concerning Certain Products from the
WTO (GATT) Report on European Economic European Communities (European Steel), 311–312
Community—Import Regime for Bananas, 257–258 WTO Report on United States—Import Prohibition of
WTO Report on India—Quantitative Restrictions on Certain Shrimp and Shrimp Products, 574–576
Imports of Agricultural, Textile, & Industrial WTO Report on United States—Sections 301–310 of
Products, 253–255 the Trade Act of 1974, 286–287
WTO Report on Japan—Taxes on Alcoholic WTO Report on United States—Standards for
Beverages, 295–297 Reformulated and Conventional Gasoline, 264
WTO Report on Korea—Measures Affecting Imports of WTO Report on United States—Subsidies on Upland
Fresh, Chilled and Frozen Beef, 264 Cotton, 309
WTO (GATT) Report on Thailand—Restrictions on Youngstown Sheet & Tube v. Sawyer, 217–219
Importation of Cigarettes, 268–269 Z.K. Marine, Inc. v. M/V Archigetis, 167–168
Table of Statutes
Table of Treaties and International
Agreements
Agreement on the Conservation of Nature and Natural General Agreement on Trade in Services
Resources (ASEAN), 584 (GATS), 244, 248, 279–280
Algiers Agreement, 371 Geneva Act of the Hague Agreement Concerning the
Anti-Counterfeiting Trade Agreement (ACTA), 485 International Registration of Industrial Designs, 470
Arab Convention on Commercial Arbitration, 58 Geneva Convention on the Execution of Foreign Arbitral
ASEAN Agreement on the Conservation of Nature and Awards, 58
Natural Resources, 584 Geneva Protocol on Arbitration Clauses, 58
Barcelona Convention for the Protection of the Hague Convention on the Service Abroad of Judicial and
Mediterranean Sea from Pollution, 584 Extra-Judicial Documents in Civil and Commercial
Basel Convention on Transboundary Movements of Matters, 67
Hazardous Wastes and Their Disposal, 587 Hague Rules. See International Convention for the
Berne Convention for the Protection of Literary and Unification of Certain Rules of Law Relating to Bills of
Artistic Works, 475 Lading
Brussels Convention on Jurisdiction and the Enforcement Hague–Visby Rules, 168
of Judgments in Civil and Commercial Matters, 64 Hague System for the International Registration of
Cancun Agreements, 589–590 Industrial Designs, 470
Central American Free Trade Agreement, 223 Helsinki Convention on the Protection of the Marine
Draft Treaty on Certain Questions Concerning the Environment of the Baltic Sea Area, 584
Protection of Literary and Artistic Works, 475 Inter-American Convention on International Commercial
European Convention on International Arbitration, 61 Arbitration, 58
European Convention Providing a Uniform Law on International Convention for the Unification of Certain
Arbitration (Strasbourg Convention), 58 Rules of Law relating to Bills of Lading (Hague
European Union - European Patent Convention, 470 Rules), 162, 169
European Union - Agreement Relating to Community International Union for the Protection of New Variety of
Patents, 470 Plants, 483
European Union - Maastricht Agreement, 411, 413 Kyoto Protocol to the United Nations Framework
European Union - Single European Act, 412, 583 Convention on Climate Change, 583, 589
European Union - Treaty Establishing a Constitution for League of Nations - Warsaw Convention of 1929,
Europe, 413 151–152, 154
European Union - Treaty of Maastricht, 413 London Convention for the Prevention of Marine
Friendship, Commerce, and Navigation treaties, Pollution by Dumping from Ships and Aircraft, 584
550–551 Madrid Agreement Concerning the International
General Agreement on Tariffs and Trade 1947 Registration of Marks of 1891 (Madrid Protocol), 473
(GATT), 242–243, 244, 247, 248, 267–268, 281, 285, Montreal Convention for the Unification of Certain Rules
295–297, 383, 305, 308, 381, 401, 482, 572–576, 578, 586 for International Carriage by Air, 31, 152–154, 157
xxi
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SOUNDING BY MACHINE
A glass tube with the upper end closed and the lower
end open is lowered in a special case to the sea bottom,
and then brought to the surface. As the tube descends,
the water compresses the air in the tube, and gradually
creeps up inside. The inside of the tube being of ground
glass the water leaves a mark showing how far it has
entered the tube. By laying the tube on a special scale the
depth to which the glass was carried can be gauged.
There are other methods not greatly dissimilar from this.
This tells them not only how deep the water is, but by putting
tallow or soap on the bottom of the lead weight they bring up sand or
mud or shells from the bottom. With this and the depth, a line is
drawn on tracing paper on the same scale as the chart. Along this
line these soundings and the kind of mud or sand the lead brings up
are marked, at intervals corresponding to the distance the ship has
sailed between soundings. The chart is printed with the depth of the
water in fathoms and with the kind of bottom that will be found. After
the navigator has compiled his data for a few miles the tracing paper
with the line on it can be moved about over the chart, and if care has
been taken in sounding and watching the speed and direction of the
ship, the navigator will find the place on the chart where his series of
soundings will match the printed soundings. Then he will know very
accurately where he is, even if it be a fog-enshrouded night.
Many, many important aspects of these three vital subjects have
been completely passed over in this short chapter. If, however, I
have been able to explain a little of the subjects, and if, particularly, I
have quickened the interest of any of my readers in them, my
purpose has been served. Going to sea is not so difficult as many
people ashore are prone to think. But becoming a thorough seaman
and a thorough navigator is not so simple, perhaps, as to become
adept at much of the work that occupies men ashore.
CHAPTER XI
LIGHTHOUSES, LIGHTSHIPS, AND BUOYS
J UST as the origin of ships is lost in the darkness of shrouded

time, so is the origin of lighthouses lost. Perhaps to guide
returning fishermen who all day and into the night had spread their
nets or cast their spears for food, the women of some savage tribe of
long ago built bonfires on the beach. Still that is a custom among
simple folk who live hard by the sea and secure their livelihood from
it.
From this the Egyptians of early times probably adopted their idea
of lights, that were burned every night at given spots near the shore,
in order that ships might find their way by them. Such fires were
tended in those early days by priests, and a priestly duty it was—and
still remains, although simple, quiet people now tend the lights and
consider it only a work to be done—but it is a work of infinite value to
the world of ships in which most of the reward lies in the knowledge
of a task well done.
A Greek poet, writing about 660 B. C., mentions a lighthouse at
Sigeum, a town near the site of ancient Troy, and this was one of the
very earliest lighthouses regularly maintained. But in the years that
followed this they probably became more and more numerous, and
as their importance was recognized they became more and more
similar in external appearance to those we know to-day. That this is
probably true seems to be borne out by the erection at Alexandria,
Egypt, about 275 B. C., of the famous Pharos, which, we are told,
was 600 feet high and similar in shape to the minarets so common in
Mohammedan lands to-day. That the structure was as high as it is
said to have been seems doubtful, but that it was of extraordinary
height is proved by its inclusion among the seven wonders of the
ancient world. So impressive a lighthouse could hardly have been
the first of its kind, although, no doubt, it far surpassed all others.
At the top of this great tower a fire was kept burning, and for nearly
sixteen centuries its great shaft stood the test of time, before it
collapsed in an earthquake. Centuries before its end, however, the
Mohammedan conquerors had come to be the rulers of Egypt, and
near the top of this great tower a small praying chamber was placed.
Perhaps from its great height the muezzin called the faithful to their
prayers, and certainly its graceful lines left a deep impression on the
Mohammedans, for from it came the idea that resulted in the
erection of the numerous minarets that mark almost every
Mohammedan city of the earth.
And ere the convulsion of Nature toppled this striking edifice to the
earth the idea of lighthouses had greatly widened, and widely
separated lands had built lighthouses of their own to guide the sailor
as he sailed the sea.
Rome built many along the coasts her ships were forced to visit,
one at Dover and one at Boulogne being, probably, the earliest on
the shores of England and of France. Both of these are gone,
leaving only traces of their existence, but the ruins of the ancient
tower at Ostia, at the mouth of the Tiber, still remain to remind us of
great galleys that were guided by its fire in the nights of the first
century after Christ. At Corunna, Spain, there still stands an ancient
Phœnician or Roman tower, known as the Pillar of Hercules, and
from its top, in ages now long dead, a flaring beacon marked the
spot for sailors far at sea.
But all of these earlier lighthouses were built on dry land, sheltered
by the shore from the crash of waves. It was the city of Bordeaux, on
the Gironde River in France, that first built a lighthouse on a wave-
swept rock to warn ships from its treacheries.
THE PHAROS AT ALEXANDRIA
One of the seven wonders of the ancient world, and
one of the first great lighthouses.
The Gironde River flows into the stormy Bay of Biscay, its wide
mouth often filled with foaming waves driving in from sea, which
crash upon a rocky reef that lies in the very centre of the estuary. So
great a toll of passing ships was taken by these rocks that the
thriving city of Bordeaux was like to lose its water-borne commerce,
and to keep the trade that meant so much to the city the citizens
agreed to mark the spot with a light. A simple tower was erected on
this spot about the year 805. For years it served, until Edward the
Black Prince, temporarily in control of the vicinity, erected a slightly
greater tower. For a time this, too, was kept, but finally, an aged
keeper having died, the fire was no longer lit. For many years the
rocks remained unlighted, and then, in 1584, during the reign of
Henry II of France, a new lighthouse was begun. For twenty-five
years the work of construction was under way, and when it was
completed it was the most magnificent lighthouse of all time. Nor has
another been built since to equal it in magnificence. About its base a
great stone breakwater was built, surmounted by a balustrade. The
lowest floor of the structure contains a beautiful hall and an
apartment originally intended for the king. Above is a chapel,
beautifully designed and decorated, and above this stands the tower
which contains the light. This, originally, placed the light about one
hundred feet above the rocks. Later the tower was increased in
height to 207 feet and now it is equipped with the most modern
apparatus, visible in clear weather for twenty-seven miles, to take
the place of the blazing log fire that for so long did its best to guide
the mariners in from sea.
Until the 18th Century the fires of these beacons burned wood,
and then coal came gradually into use. The objections to such fires
are obvious. They had no definite range, for fires died down or burnt
furiously, and when a strong wind drove in from sea the fire was
often all but hidden from sight of ships as it curled around in the lee
of the tower.
But America had been settled and had such lighthouses on its own
coast ere other methods superseded this.
The first lighthouse in the United States was the one on Little
Brewster Island on the south of the main entrance to Boston
Harbour. It was built in 1716, although the lighthouse now occupying
that site was erected in 1859. During the Revolutionary War the
structure was destroyed and rebuilt three times. The third structure
was a stone tower sixty-eight feet high, and four oil lamps were used
to illuminate it.
Wood and coal fires continued to be used, here and there, until the
19th Century was well begun. The last one of these in England to
give way to more improved methods was the Flat Holme Light, in the
Bristol Channel, where coal was burned until 1822.
THE TILLAMOOK ROCK LIGHT STATION
This great rock, which lies about a mile off the coast of
Oregon, was formerly a spot of terrible danger to ships.
Great difficulties had to be overcome in order to erect this
lighthouse, but now its 160,000-candle-power light is
visible, in clear weather, for eighteen miles.
During the 19th Century, however, great improvements were made

in lights, and equal improvements were made in the design and
construction of lighthouses. The story of the development of
lighthouses is one of dramatic intensity, filled with accounts of
heroism, of ingenuity and perseverance. And not only in the building
of lighthouses has heroism been shown. The courage of the quiet
men who man them—and women, too, for there are many to whom
lighthouses are entrusted—in itself is the subject for a book.
Courage and unselfish devotion to duty are the fundamentals upon
which keepers of lights base their helpful lives. Regardless of
comfort, regardless of danger, regardless of life itself, the light must
burn. No other duty or desire compares with that determination. And
so in calm or gale, in summer fog or storm-torn winter night, the men
who sail the sea have come to depend with simple and abiding faith
upon the lights, the foghorns, and the courage of the lighthousemen.
Whether the Atlantic pounds with mountainous seas the slender
shaft on Bishop’s Rock, or the Pacific piles its crashing surges high
at Tillamook; whether the hot winds of Arabia blister the paint on the
web of steel that holds the Red Sea light of Sanganeb Reef, or ice
encrusts the giant light that guards Cape Race, the light must burn,
and sailors out at sea sail past almost as confident of these lights as
of the stars.
To one who has not seen the vast strength of the angry sea my
words will mean but little, but any one who has seen needs no
description and will not forget. Imagine a slender tower, built amid
the smother of foam on a wave-swept rock. Imagine the supreme
impudence of man who boldly sets himself the task of building there
a cylinder of stone surmounted by a cage of glass. Nor does his
impudence end there. Although it may be that for weeks at a time no
boat may come near the spume and flying spray about the rocks
above which stands the tower, yet in the tower are men. They calmly
go about the tasks assigned to them. They polish the powerful
lenses about the light. Each night they light the lamp. When fog
obscures the spot they set their foghorn going. These are their
duties.
And when storm threatens, do they leave? Not so, for then above
all times is their duty clear.
Overhead fly the scurrying clouds before the storm. Below, the sea
turns gray. A whitecap dots the surface of the water, and a sudden
puff of wind leaves a ruffle of little waves as it passes. The clouds
grow darker and the lightning flashes. The thunder snaps and roars
and then comes the wind. Its voice is low at first as it whisks away
the wave crests and tears them into spray. The tattered water slaps
against the brown rock of the tower. The wind increases, blowing up
the waves. They pound with growing strength against the foaming
reef, and leap up higher toward the glass cage that marks the tall
tower’s crest.
CAPE RACE LIGHTHOUSE

A 1,100,000-candle-power light now marks the great
Newfoundland headland of Cape Race. Near this cape
lies the shortest sea route from the English Channel to
Boston and New York, and ships entering the St.
Lawrence River also must pass near it.
The lightning flashes more, the thunder roars again. The wind
goes wild and shrieks like mad, tearing water from the sea and
throwing it high over the summit of the tower. The great waves boom
as they pile up on the rocks. They crash against the tower which
shudders with the blows. Surge after surge pounds savagely on the
great rocks of the reef, and finally a mighty wave that seems to be a
giant effort of the madly tortured sea lifts a raging crest high up, and
drops it in the roaring surf. A great rock splits beneath the blow, the
wave runs up the tall thin shaft and dashes high above its top, and
then drops swiftly down, while there, unharmed amid the vastness
and the terror of the storm still stands the tower that puny man has
built to warn ships from the dangers that surround it.
The story of lighthouses is one to hold the interest of any one, and
many books have been written telling it. “Lighthouses and
Lightships,” by F. A. Talbot, is one of these, and from its pages one
may take a new impression of the men who spend their lives in
making the sea less dangerous for those who travel on it.
My task is different. I have space only to devote to why
lighthouses exist and how they help sailors. And with lighthouses I
shall include lightships—which, of course, are merely lighthouses
that float—and buoys, which are used for many things.
Originally it is likely that lights were built ashore in order that
sailors overtaken by night while on the sea could be directed to a
landing place. Compasses, of course, were unknown, and while it is
possible to sail a course by the stars, it is quite another matter to find
a landing place by such means. Consequently, lights were built to
mark shelving beaches or the entrances to harbours where ships
could be landed.
But the light erected in 805 by Bordeaux was for the opposite
purpose. It marked a place to keep well clear of, and lighthouses do
that to-day almost exclusively.
MINOT’S LEDGE LIGHT
Which marks, near the entrance to Boston
Harbour, a rocky reef seldom seen above the
surface of the water. From this spot, the famous
old skeleton iron lighthouse that formerly marked
the reef was swept by a gale in 1851.
If a reef lies near a course followed by ships a light must guard it.
If a sand bank is hidden from the sight of ships that might ground on
it a light must be there as a warning. If an island constitutes a
menace because swift currents flow past its shores a light must tell
the sailor where the danger lies. Nor are lighthouses useful only at
night. In daylight they form conspicuous marks from which the
navigator may learn his exact position. In fog their huge foghorns
wail like lost souls, sending warnings far into the engulfing mist in
order that sailors may hear and know that land is near. Then, too,
each light is individual. One flashes regularly, one irregularly, one red
and white, one red alone. Other lights are steady beams, but each
can be recognized, and so they are like friendly faces, recognizable,
every one.
Perhaps the coast of France is the best lighted in the world.
Certainly it would be difficult to imagine one with a more perfect
system. I have sailed the coast of Brittany at night, fearful of the
currents and the storms that often blow on the stormy Bay of Biscay.
But always, to minimize the dangers of the rocky coast and hidden
reefs, the lighthouses blinked, and the task is simple to determine
one’s position any time, except in fogs. For the French have placed
their lighthouses so that as a ship sails along the coast there are
always at least two lights in sight at once. From these, cross
bearings can be taken at almost any moment, and the careful
navigator, in clear weather, need never feel uneasy as to his
position. Ushant Island, that rocky islet just off the coast of Finisterre,
was long a graveyard of ships—and still, from time to time, some
ship is caught on its rocks—but now bold lights stand high above the
smother of foam and the roar of breakers, marking the spot in order
that ships may carefully give it a wide berth.
Formerly every lighthouse had to have attendants, as the most
important still have, but modern improvements are making
unattended lights more and more common. One finds them
everywhere. The rocky coast of Sweden, the firths of Scotland, the
mountains of the Strait of Magellan, the gorgeous coast of Indo-
China all have many of these new beacons.
They flash accurately at regular intervals. They light their lights at
dusk and turn them out at dawn. Some roar through the fog with their
great warning voices, and all of this is automatic or semi-automatic.
So far as the lights themselves are concerned they require no
attention for months at a time. The sun turns them off as it rises in
the morning, and as it sets, the delicate apparatus that its light
expands contracts once more and the light is turned on. From time to
time a tender visits each of these. The apparatus is overhauled, the
supply of fuel renewed, and again for months the light performs its
task.
Nor are all lights placed in lighthouses. Many spots require other
means, and lightships have been designed and built to perform the
duties of lighthouses where lighthouses cannot be built.
BISHOP ROCK LIGHTHOUSE

On a cluster of rocks off the Scilly Islands near
the entrance to the English Channel where
converge the most important of all the world’s
shipping lanes.
To transatlantic travellers perhaps the most familiar of these is the

Ambrose Channel Lightship, that rolls and pitches at its anchor
outside the entrance to New York Harbour. But the most famous
lightship on the American coast is the one that marks Diamond
Shoal, that infamous spot just off Cape Hatteras. Several times the
Government has attempted to build a lighthouse on this shoal, but
the attempts have invariably been frustrated by the sea. A lighthouse
does mark the Cape, but Diamond Shoal runs out beneath the
stormy water for about nine miles from the Cape, and it is this
dangerous sand bank that the lightship guards. Four and a half miles
out from the bank the lightship is anchored in a stretch of water that
has hardly a peer on earth for the frequency and suddenness of
storms. Here this little ship jerks at her anchor, pounded by great
seas, tugged at by swift currents, swept by fierce winds. She rolls
and pitches, shipping seas over this side and then that, and jerking—
always jerking at her cable. There is no easy smoothness to her roll
as there is with a free ship at sea. There is no exhilaration to her
pitch as she rises over the seas and plunges to the troughs, for
always the jerk of the cable interferes, and from one month’s end to
the next the little crew endures the discomfort and the hard work, in
order that ships may be warned away from the treacherous sand of
Diamond Shoal.
These sturdy little ships do mark other things than dangers. In
many cases they are the modern counterparts of the beach fires of
those early peoples which lighted belated boats in to shore. To-day,
however, those lightships which perform this task swing at their
anchors outside the entrances to harbours, marking the channel
through which the ships must pass on their way in from sea.
In this duty they are similar to the lighted buoys which, in recent
years, have been put to so many uses, the lightships being,
however, greatly more conspicuous and generally marking a spot
well outside the entrance to the channel.
Buoys are of many uses and of many shapes and sizes, marking
danger spots, submarine cables, sunken wrecks, channels, as well
as temporary obstructions. Some are used for mooring ships in
harbours, some carry bells or whistles for sounding warnings, some
carry lights. Attempts have been made to standardize the shapes
and markings of buoys in all countries, but many lands still maintain
their own designs, and the officers of a ship visiting strange waters
must acquaint themselves with the particular designs there in use.
FIRE ISLAND LIGHTSHIP

This lightship is anchored off Fire Island, near the
southern coast of Long Island, U. S. A. Lightships
sometimes mark shoals, and sometimes mark the
entrances to harbours. They are always kept anchored in
given spots and are merely floating lighthouses, although,
of course, they are sometimes relieved by other lightships
so that they may undergo repairs.
Buoys are of scores of different sizes and designs. They may be

nothing more than tall painted poles of wood anchored to the bottom
in shallow water and standing more or less vertically. These are
called “spar” buoys, and are useful if ice is floating in the waters that
they mark, for as the ice floats against them they give way, the ice
passes over them and they serenely reappear, none the worse.
On the other hand buoys may be huge structures of steel many
tons in weight, forty feet from top to bottom, ten feet in diameter, and
complex in their equipment of lights or whistles or bells. Or they may
be great barrel-like steel floats, or conical ones, or great turnip-
shaped floats. Some are spherical, some are of stranger shapes.
They may be red or black or green. Some are striped, with weird
decorations gracing their tops. Some support small triangles or
spheres, some crosses, some paint-brush-like affairs. But each one
has its particular uses, and one should hesitate to pass a buoy
unless the thing it stands for is understood.
In United States waters, for instance, one needs to know that in
coming in from sea a ship should pass with the red buoys, which are
conical in shape and are called “nun” buoys, on the starboard, or
right side. These buoys are further distinguished by being numbered
with even numbers. At the same time all “can” buoys, which are
black and cylindrical, with odd numbers painted on them, should be
kept to the port or left side. Sometimes “spar” buoys replace these,
but the buoys to starboard will always be red, the buoys to port
black, as the ship comes in from sea.
Buoys painted with red and black horizontal lines mark
obstructions with channels on both sides. Buoys with white and black
perpendicular stripes sometimes mark the middle of a channel and a
ship should pass close to them. Buoys marking quarantine are
yellow, while buoys marking the limits of anchorages are usually
white.
AUTOMATIC BUOYS
The whistle buoy at the left utilizes the motion of the
waves to blow a whistle. The light buoy in the centre has
an automatic light that burns gas stored in the body of the
buoy. The bell buoy at the right carries a bell, against
which four clappers are pounded by the action of the
waves.
The whistling buoys and lighted buoys are, perhaps, the most
interesting of the lot. Imagine a huge steel top, with a whistle placed
at its point, and a large steel tube running through it from top to
bottom, extending more than the height of the top above it. Imagine
this top ten or twelve feet in diameter, and, with the tube, forty feet in
height. Imagine this, then, floating in the water, point up, and with the
tube below the surface. The end of the tube below the water is open.
The end on which the whistle is mounted contains two openings. In
one of these the whistle is placed. The other opening is closed by a
valve which permits air to enter, but closes when the air tries to
escape. This buoy is anchored in the water, and as the waves toss it
up and down they rise and fall in the lower part of the tube. As they
rise the air inside is compressed and is blown through the whistle
causing it to sound. As the water in the tube falls, air is drawn
through the valve, and again the waves force it through the whistle.
This ponderous but simple “whistling” buoy requires no supplies and
almost no attention. Periodically it is visited by a tender and is
temporarily relieved of work while it is taken to the repair shop to be
examined, repaired, and painted. Aside from that it needs no
attention, yet constantly it moans as the waves sweep under it, and
the greater the waves the greater is the volume of its sound.
Bell buoys are equally simple and effective. These buoys are
surmounted by a framework of steel from which a large bell is rigidly
suspended. Several “clappers” are hinged about it so that, no matter
how a wave may move the buoy, a clapper strikes the bell.
The light buoys are more complicated and more diverse. There
are more than a dozen different sizes and shapes, and the fuel is
usually compressed oil gas or compressed acetylene gas. The
buoys themselves—that is, the floats—may be of almost any shape.
Some are spherical, some cylindrical. Some are long and thin, and
others short and fat, but each one has a framework or a shaft of
steel extending from ten to twenty feet above it. At the top of this the
light is fixed, while the body of the buoy holds the gas. These lights
flash intermittently, the gas, which is under pressure, operating a
valve while a tiny “pilot light” in the burner remains always burning in
order to ignite the gas when it is turned on to cause each flash.
Some of these buoys carry a supply of fuel great enough to last for
three months, and during that time they flash their lights every few
seconds without fail, marking a danger or a channel, and are visible,
sometimes, from distances of several miles.
Thus the dangers of the sea are marked by lighthouses, lightships,
and buoys, while harbour entrances and channels are marked as
well. This has been done in order to save life and property and in
order to expedite the passages of ships. No more do captains have
to depend on guess and luck. Their accurate sextants and
chronometers tell them where they are on the trackless sea. Their
barometers tell them of approaching storms. Their compasses tell
them their directions.
And men ashore have built great lights on wave-washed rocks and
surf-pounded beaches, on mighty headlands and shoals of sand.
Lightships mark the treacherous spots where lighthouses cannot be
erected, and mark, as well, the entrances to many harbours around
the world. And once past these the mariner is led into the shelter of
the harbour between long lines of buoys, each telling him its
message, each aiding him on his way. He rounds a rock in mid-
channel unscathed, because a buoy anchored there tells him how to
turn. He finds his anchorage because of other buoys, and perhaps
he makes his ship fast to still another, and knows that once more the
ocean has been crossed in safety and his voyage is ended.
Almost the whole of the surfaces of all the lands of earth bear the
marks of man. Most people live their lives ashore amid nature that
has been radically changed by man. Cities have been built, railroads
flung across the land. Farms flourish and ploughs have turned up
every inch of all their acres. A hundred years ago America was wild
from the Alleghanies to the Pacific. Now one cannot cross it and be
for more than a few minutes out of sight of signs of men.
But the ocean rolls ever on just as it rolled in prehistoric times. No
mark that man has made has changed the sea. Yet, while man is
unable to change one single thing about its solitary waste, he has
marked its greater perils and has conquered it. The perils of the sea
are growing ever less, and ships owe much of this to the lights that
mark its danger spots.
CHAPTER XII
SHIP DESIGN, CONSTRUCTION, AND REPAIR
S HIP design, prior to the opening of the 19th Century, was based
very largely on rule-of-thumb methods. In ancient times, before
Greece became a sea power, this was particularly true. Shipwrights
and sailors came to know from experience what qualities were good
and what were bad, and after many years at their work were able to
construct ships with some understanding of what the ship could be
expected to do.
It took only a little while for them to learn that narrow ships were
easier to propel than broad ones but that broad ships possessed
carrying power superior to that of narrow ones. Thus the merchant
ships were “tubby” while warships were narrow. If a ship proved to
be unseaworthy in heavy weather shipwrights naturally did not build
other ships like her if they were looking particularly for
seaworthiness. If a ship was able, it was only natural that her
characteristics should be incorporated in other ships. If a ship
otherwise satisfactory permitted seas to come aboard over bow or
sides or stern, the sailors and shipwrights tried to correct the
difficulty without losing her good qualities. Thus from generation to
generation ships improved, although the process was slow.
When Greece was at her zenith there seems to have been a more
thorough study made of structural design, and many things about
ships were more or less standardized. Just how far the Greeks
carried their study of ships it is impossible to say, but crude methods
gave way to finer ones, and Greece passed its understanding of
ships on to Carthage, and from the Carthaginians it went to Rome.
But the Middle Ages lost this information, as it seems to have lost
almost everything else, and a new beginning had to be made.
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