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      Part II: The Rationing System (cont'd.) Chapter 19: The End of the Year 1915 The whole system of economic coercion considered. – Trading with the enemy legislation reconsidered. – German export and import trade. – The consequences of the blockade to the German population. – In what degree the system was stable. – The American government's real intentions. – The open controversy between the United States and Great Britain.
From all that precedes it will be evident, that the great achievement of the year 1915 was that during a period of military set backs and disasters, which discredited the military reputation of the allies, and very much raised that of Germany, the diplomatic representatives of Great Britain set up a machinery for operating the March order in council, and for bringing the overseas trade of northern Europe under control. It would, however, be very misleading to suggest, that the rationing agreements, to which so much space has necessarily been devoted, were the most effective engines of coercion that were being operated during the year. The system in operation at the close of the year was already very complicated (see Table XLVI), and consisted of a group of agreements, which closed the holds of an enormous block of Atlantic shipping against German goods, and of two other groups of agreements by which textiles, metals and lubricants were controlled (see sections III and IV of Table XLVI). This diagram of the machinery gives some impression of its size and complication; for if it is inspected, and if the millions of tons of goods that must have been brought under control are remembered, it can be imagined how much economic duress, and what coercive forces, were applied through that mass of agreements. On the other hand, it is impossible to make a quantitative estimate of the contribution that each particular organ of the machinery made to the total effect. For the history of economic warfare differs from the history of a military operation, in that, whereas the fortunes of every contingent in the field can be followed and recorded in a narrative, the execution of an economic plan is an administrative process, which obliterates everything but the results obtained.
[403] Nevertheless, some of the most remarkable gains or advances may be estimated roughly. First, let the tabular diagram of the system then working be juxtaposed, in the imagination, to that initial system, which was elaborated during the first months of the war, and completed between December 1914 and February 1915. It will then be remembered, that the first system of control consisted only of undertakings by the governments of border neutrals, that their prohibitions of export would not be raised. As this system of control was necessarily influenced by the economic policy of particular governments, it could never have been made uniform and regular; and an instant's reflection suffices to show that the system would soon have been influenced by political calculations. If the law of neutrality were strictly interpreted, then, it could be argued, that the governments of the border states had breached no law by undertaking that their export prohibitions would be maintained. It yet remained true, that those prohibitions of exports were repeatedly enlarged, at our request, and to suit our convenience, so that, for so long as this initial system was in operation, neutral governments were in some degree parties to a plan of economic coercion. If challenged, they could have justified themselves; but it is inconceivable that they would not, sooner or later, have been compelled to adjust that part of the system which they operated to what policy demanded; nor can there be much doubt as to what neutral policy would have demanded. During the year 1915, the military reputation of the Germans was at its highest: in the spring and summer, they overwhelmed the Russians; in the autumn they defeated the French and British in northern France; in the late autumn they overran Serbia, joined hands with Bulgaria, relieved Turkey, and thus formed themselves and their allies into a military coalition, which was served and maintained by all the railways and industries of central Europe. The allies could exert no influence so powerful as the influence exerted by these great victories, for which reason it seems as certain as anything can be, that the political influences that so retarded the negotiations at Berne would have paralysed the first system, if it had been maintained unaltered. The great achievement of the year was, therefore, that the original agreements between government and government were transformed into a number of business agreements, which impinged upon no legal doctrine, or rule of policy. It will be shown, later, how much stability was thereby given to the structure. The weakness of the system was, however, still the original weakness: trade between neutral and neutral was more strictly controlled than trade between Great Britain and the border states. It had been recognised, from the outset, that a regular system of rationing would prove to be as great a restraint upon British, as upon American, trade with border neutrals. It has also been shown that the Board of Trade, while admitting that a regulation of British trade would be highly politic, had undertaken only to reduce that trade to its normal figure, when neutral imports from other sources had been effectually rationed. Now if the tabular digest of the rationing system is inspected, it will at once be seen, that the system could never be said to have been in operation at a particular date: it was indeed an organic growth, which was perpetually throwing out branches; and it is even now impossible to say when it reached its full vigour and development. This being so, it was possible for the Board of Trade to argue, that the condition to which they attached so much importance was unfulfilled during the last quarter of the year; and that they were still free to pursue their original policy of assisting a successful prosecution of the war by stimulating British exports. There was certainly very little diminution of British exports to border neutrals during the last two quarters of the year, and the figures made lamentable reading to those officials and diplomatic representatives, who had been negotiating the great rationing agreements of the year 1915. They had held, in every neutral chancery in Europe and America, that unusually heavy imports of a particular commodity raised a presumption that the commodity would [404] be re-exported; and that, even if it were proved that all the imports would be used and consumed within the country, it still remained true, that an abnormal import gave a stimulus to domestic exports of the same, or of a similar, commodity. The argument had never been rebutted, and the Board of Trade, though perfectly well aware that these two general presumptions were the rules which governed our treatment of neutral cargoes, and indeed our whole diplomacy, had still made no endeavour to reduce the enormous inflations in our export and re-export trade to border neutrals.
This swollen trade in commodities that were all, or nearly all, on our list of prohibited exports was the more damaging to our reputation, in that our legislation upon trading with the enemy had been progressively stiffened during the year. It has been shown, in a previous chapter, that our first proclamations and legislative enactments were drafted upon the assumption that public opinion in England would insist, that direct trade with the enemy should be stopped; but that those who conducted the investigations into the matter, and who calculated the commercial losses and military gains of stopping trade with the enemy, recommended nothing very positive about indirect trade; so that all our original legislation had been modelled upon the ancient British rule of law, which made residence (and not political allegiance) the decisive test of enemy trade. Since that date, a number of additional enactments had altered this first legislation, and brought it more into harmony with French practice. In the first place, our domestic legislation empowered the executive to wind up and liquidate certain concerns, which would nearly all have been British firms, if the old geographical test of residence had been strictly adhered to. Actually new tests were added: What proportion of the share capital was held by British and by German subjects; whether the concern had transacted business with an enemy; whether it was likely to do so if an opportunity offered, and so on. Secondly, much better definition was given to insurance contracts that might benefit an enemy, and, what was perhaps more important, the ancient, geographical test was not entirely adhered to in the proclamation of 7th January, 1915, which forbad all transactions with enemy banks outside the United Kingdom. The consequences of all this upon the overseas trade of Germany are not traceable, and do not therefore concern us: these enactments are referred to only as illustrations of a tendency. Meanwhile, the French authorities, who were disturbed about our economic policy, and anxious lest the rising tide of popular suspicions in France should have ugly consequences, invited us again to enquire whether the legislation of the two countries could not be better co-ordinated. The request was very tactfully made; for the French government did not criticise our policy, and stated only, that they would think an enquiry of great value. The Foreign Office instructed all our representatives in neutral countries to investigate the matter (10th September, 1915). Our ministers and consuls were fully apprised that our business communities might suffer loss, if all transactions between enemy and British firms were prohibited; and that the losses would probably be suffered by those British shipping companies, who had put their vessels into the trade of neutral countries. The danger is best explained by giving a typical example. German concerns abounded in South American countries; for German capital had been laid out in the Chilean nitrate trade, in the Peruvian guano trade, in the Brazilian coffee trade, and in the Plate trade in meats and cereals. British shipping, however, predominated over American and South American shipping throughout the continent. Our consuls were therefore instructed to determine whether any useful purpose would be served, if British shipping companies were forbidden to carry a cargo sold by Herr Hirsch of Montevideo, to the Süd Amerikänische [sic] Invoer Gesellschaft of Valparaiso (the names are imaginary), [405] and if all similar transactions were forbidden also. The replies given, and the report upon them are a significant beacon mark of the course along which official opinion had moved since the Committee of Imperial Defence conducted their first enquiries; for the great majority of our consuls were now persuaded that the losses which might be suffered by our shipping companies had been over-estimated; and that, even though losses would be suffered, it would still be the soundest policy to impose a general prohibition. Official opinion had, in fact, hardened and stiffened during a year of military set-backs and disasters: all these German concerns in foreign countries were now regarded as struts and supports to a vast structure, or as cog wheels and ratchets in an enormous mechanism; the destruction, not the mere strangulation or paralysis, of German trade and commerce was now conceived to be as much an object to be striven for, as the overthrow of the German military system. A few passages may be quoted as illustrations of the conceptions then circulating.
In considering [German export organisation] it is necessary to touch briefly upon the origin and nature of the German export organisation, and upon the apparent causes of its success. In the first place, it must be noted that the organisation was, and is, far more than a mere commercial organisation; it was deliberately conceived, planned and used, as a great engine for the furtherance of German political ambitions, both in peace and war. Every German house in a foreign country is not merely a centre for German trade but also a conscious centre for the dissemination of German political and social influence in peace, the local headquarters and paymaster of the whole German propaganda and espionage system in war, and at need a depôt from which they could draw money, supplies and intelligence...... Behind every German activity was a German official, promising government assistance, threatening government displeasure, hinting at decorations and subsidies if a certain enterprise were undertaken...... The Foreign Office reporter then explained how much it was to be desired that German recovery after the war should be delayed and impeded; and represented, that if crushing damage could only be done to German concerns in South America and Asia, then, the German commercial system would probably revive very much more slowly than the British, after peace had been declared. He summed up with a strong recommendation for more comprehensive legislation. This legislation was, in effect, passed in the closing days of the year; for the trading with the enemy (extension of powers) act empowered the king to prohibit trading with: All persons, or bodies of persons, wherever, by reason of the enemy nationality or enemy association of such persons or bodies of persons, it appears expedient to do so...... This act was far more sweeping than any yet passed, and was intended to make French and British legislation more uniform. It was, therefore, peculiarly damaging to our reputation that this severe legislation, and the returns of our trade with border neutrals, were published within a few weeks; for whatever explanations and excuses might be given, it was natural, that with such figures before them, French, Italian and Belgian statesmen should have distrusted our honesty, and should have believed that this draconian legislation was a mere parade. (See Table XLVII.) The Board of Trade's policy is the more remarkable, in that it was obstinately pursued by men, who were, perhaps, the most competent in all Whitehall to assess the success or failure of their plan. Statisticians and economists were then estimating, that each belligerent government was spending about a million and a half pounds a day on the war. At the highest, therefore, the gains in this suspect trade to border neutrals would have amounted to a revenue, sufficient to pay for three or four days of war, and the proportion of this revenue which actually came into the government's coffers, would hardly have paid for an afternoon's war. The overhead charges to be set off against this gain were loss of reputation for fair dealing, and a set back to the most successful operation that had been executed during the war.
[407] It has already been explained, that nothing was attempted against German export trade until the March order was issued. It is therefore somewhat remarkable, that this part of the system, for which no preparation had been made, gained what was perhaps the most remarkable success of the year; for the stream of German exports, which was flowing at full strength in March, was reduced to a trickle by December. The following figures show how thoroughly the work was done:
Until the German government decide to publish all their statistics of trade during the war (which they are not now likely to do), it will be impossible to estimate scientifically by how much Germany's and Austria's overseas supplies were reduced during 1915, the first year of unrestricted economic war. Our economic policy during the following year was, however, a policy based largely upon the inferences that were thought proper to be drawn from such statistics of neutral imports as our experts had compiled, and it is, on that account, interesting to review the implications of those tables and figures. The northern neutrals had imported more meat and meat products, more animal and vegetable oils, and more oil bearing nuts during the year, than they consumed in a normal twelvemonth. The excesses varied with each country; but, taken as a whole, they were considerable enough to justify a general presumption that the Scandinavian countries has re-exported a part of the total excess to Germany, where these commodities were much needed. It is not possible to be so certain with regard to grains and fodder. The northern neutrals had certainly imported more than what was normally required for home consumption; but the excesses were not so great as to make re-export a matter of certainty; for it must never be forgotten, that, during the war, the diet of all men and beasts in Europe was changing rapidly. The excess imports of grains and fodder may have been exported in part, and they may have stimulated domestic exports of meat and dairy produce; but nothing certain can be concluded about them. The same caveat must be entered about the Netherlands imports of animal and vegetable oils: they were heavy, it is true, but no country was more affected by the enormous growth of the margarine industry during the war. Also, all supplies for the Belgian relief commission were sent through the Netherlands, which made it hazardous to conclude anything from the statistics of Netherlands imports, without long enquiries into particulars. What the statistics do show, however, and in the most decisive manner, is that when control was exercised at the source of supply, it was far more regular and effective than control exercised through agreements with neutral importers. Scandinavian imports of mineral oils were controlled by our agreements with the great American export companies: the curve of imports shows a regular movement above and below the monthly average, and a total yearly import slightly below normal. The curve of cotton imports shows the same thing in another way: a sudden drop after our [408] arrangements were completed, and, thereafter, a steady movement along the normal line. (See Appendix IV.) Beyond these general presumptions little can be concluded with certainty from these statistics, save only one thing, which demands a certain amount of preliminary explanation. During the year, a group of newspapers fiercely attacked the government and the Foreign Office,1 and a certain Mr. Basil Clarke, whom the Daily Mail styled their commissioner, collected a few figures of neutral imports, and, by showing that they were abnormal, argued that Germany's overseas supplies had not been reduced during the year, and that our agreements with neutral importers were meaningless verbiage (his own words). Even now these arguments are thought good logic, for it is still a popular question, Why was not Germany blockaded sooner? Now although the writings and reasoning of this newspaper commissioner are beneath contempt, they do, nevertheless, introduce a question of some interest: Do such statistics as are available give any measure of the success of our attack upon the German economic system? It can certainly be said that they do, if they are treated as a guide and an indication only. The indication is this: That all the excesses of neutral imports over normal constituted a very small proportion of what Germany normally imported from overseas, or from countries with which she was at war. Even if it is assumed that Germany's imports from Rumania were normal, and that some of the deficit was made up through Switzerland and Greece, it is still certain, that the country's essential supplies were very much cut down during this first year of economic war; this means that our attack made substantial progress.
The damage done to the economic system of the central empires can, however, be more accurately assessed by reviewing such facts as are known and undisputed about the losses, restraints and sufferings inflicted upon their populations and soldiers. As in the case of overseas imports, figures and statistics must be used as indications and not made the material of dogmatic statements. There can be little question, however, that the prices to which ordinary articles of food have risen, at a given date, are a tolerably good measure of the results obtained from economic warfare. It has to be admitted that these rises in price cannot be entirely attributed to economic warfare; but it yet remains true, that they indicate better than any other statistics, whether supplies are falling, and whether the shortage is moderate or severe; also, these rises in price are the best measure that can be obtained of the anxieties, wants, and sufferings of a people that has been subjected to economic duress. Now the price levels in Germany and Austria during the year 1915 prove one thing very clearly, which is that the economic recovery in the early part of the year was not a permanent gain, in that it only checked the upward movement in price, and did not arrest it. The following table of meat and food prices is tolerably conclusive:
It follows from this, that, during the whole year, the British system of coercion gained upon the German defence against it in that theatre of economic warfare, which was, perhaps, the most important of all: the food supplies of the German people. [Emphasis added by Scriptorium.] It is also evident, that our measures of economic duress, combined with certain tendencies inevitable in war, shortened food supplies in the Austrian capital about as much as they did in the German; for the statistics available show a steady rise, which the regulations of the government never checked.
[410] The same test, movements in price, is an even better indication of the progress of our attack upon the German industrial system; for the prices in cotton yarns and cotton waste show how immediate and severe was the effect of our long negotiations upon cotton. From July to October the price of cotton yarns rose, but not sharply; in the two last months of the year, however, there was a quick upward movement, which is a good indication of the restrictions consequent upon the agreements that we so laboriously negotiated. The actual figures were these.
The immediate consequence of this was that a number of factories closed down. The textile factories supplying the armies were, however, still working at full time, and appear to have absorbed most of the labour released. Nevertheless, the damage done to the textile industries did most assuredly affect the daily life of German citizens [emphasis added by Scriptorium], for during the autumn of the year an enormous number of textile substitutes were being put on the market. Moreover, these textile substitutes did not appear alone: at an exhibition organised by the Berlin housewives societies, which the government promoted, the following articles were shown, lists of dealers from whom they could be bought were circulated, and everything possible was done to promote their sales: old gas pipes converted into curtain poles, iron pins, hooks, etc. (substitutes for brass), paper collars, cuffs, handkerchiefs and napkins (which people were much encouraged to buy as they would thereby economise soap); bedclothes made of woodpulp, which could not be washed; devices of all kinds for cooking and roasting meat without using fat. This exhibition, and the extraordinary encouragement given to it was proof that the daily habits of the ordinary German citizen were affected [ditto]; and that the nation was threatened with a general shortage, very severe in fats, meats and greases, and comparatively so in clothing and textiles. There is another indication of a prospective shortage, less precise, perhaps, than statistics, but equally good: the suspicions and hatreds, excited among a people, who are inconvenienced, and made anxious about the future, by a disturbance in their daily habits. Count Manzoni, a very sharp observer of human society, and who had [411] spent his boyhood in communities afflicted by recurrent food shortages, believed that these symptoms are independent of time or place, and writes thus about the beginnings of a food riot.
It was the second year of bad harvests...... and the people were now, not hungry and destitute it is true, but very ill provided...... Now when this reaches a certain point...... the mass of the people begin to believe that mere scarcity is not the cause of the trouble. It is denied that any shortage has been foreseen or feared; people believe that there is plenty of corn, and that the evil is that insufficient quantities are being sold. These explanations are unjustified by anything on earth or under heaven; but they are explanations which excite hope and anger. Grain dealers, real and imaginary; landowners who have not sold all their crops in a day; bakers, everybody, in fact, who is thought to have a little or enough; or everybody, who, by reputation, has plenty, is blamed for the poverty of the harvest, and becomes an object of hatred, or a target for the universal complaining. The positions of stores, and of bakeries, which are said to be overstocked, become matters of certainty; the very number of sacks is stated; and people talk of the quantities of grains that are being sent secretly to foreign countries...... The magistrates are begged to take those remedies which seem good to the people: measures which, in the popular fancy, will bring all this hidden, walled up, buried grain on to the market, and bring back plenty in a moment of time. The magistrates do something, such as fixing maximum prices, and threatening penalties for those who will not sell; but when all these regulations fail to abate the need for more food, and fail to bring in crops out of season........ the multitude explains this by saying that the remedies are ill applied, and clamours for something more drastic and decisive......2 Now if the German newspapers are inspected, it will be seen that these symptoms had begun to manifest themselves towards the close of the year; for a universal suspicion was then abroad that a handful of rich men were hoarding food; similar accusations were being bandied about with regard to the stocks of cheap clothing that were being held by unscrupulous dealers. It would seem, moreover, as though these suspicions are more dangerous to a modern society than to the rather simple populations whom Manzoni had observed so closely, in that they revive and embitter political divisions. It is certain, at all events, that, even in 1915, the fierce party hatreds which brought all government to a standstill in Germany three years later, were much stimulated by our economic campaign; for the discontented parties accused their political opponents of being the rich men who were causing the trouble. The socialist papers accused the landed aristocracy and the middlemen, and by so doing, gave strength to their electoral war cries, and persuasive force to their notions about property and the distribution of wealth; the conservative press, which represented the landed party, accused the tenant farmers, and the wealthy bourgeoisie of the towns, who were predominantly liberal. Also, these symptoms of discontent were already serious enough to cause the government anxiety; for committees were being established all over the country to proclaim maximum prices. According to Count Manzoni, this remedy, which is none at all, inevitably and fatally excites more serious discontent later on. This second stage had certainly not been reached; for although all the symptoms of a general shortage were observable in Germany during the winter of 1915, these symptoms were not then serious, as the deteriorating influences already at work were set off by the universal enthusiasm at the great victories of the year, which made the people confident, that their discomforts and inconveniences would not last much longer. At the time, these indications were treated solely as indications of Germany's strength or weakness. Germany's capacity to continue the war has long since been determined and no longer concerns us; but it is still interesting to enquire at what pace our onslaught upon Germany's economic system gained upon Germany's defence of it; for this gives a notion, rough and imperfect it is true, but a notion nevertheless, of how weak, or how powerful, were the coercive forces that we were then operating. It is, however, a necessary preliminary to this enquiry to be as precise as possible about the dates upon which the commercial avenues into Germany were blocked. As has already been said, German exports were more rapidly dealt with than the [412] import trade, and were completely stopped during the course of the year; experts consider that the work was done by September. As for the import trade, the agreements for operating the March order were signed on the following dates:
As the March order was, in effect, a declaration of a blockade, and as these instruments were our principal instruments for enforcing it, these dates prove how slowly and gradually the blockade was put into operation; for they show that one commercial avenue into Germany, possibly the biggest, was blocked for five months in the year, the second for about three months, and the third for five weeks only: a stringent, severe stoppage was thus only enforced for rather more than a month. If we review the measures taken for stopping up the Norwegian channel we come to a similar result; for the shipping agreements, which constituted the real barrier, were signed in the following order:
From this list of dates we can say that the Norwegian conduit pipe was only closed during the last two months of the year, although the supplies running through it were very much reduced from July onwards. Finally, the cotton agreements were signed: on 24th June (Sweden), 31st August (Norway), 23rd August (Denmark), 1st September (Holland); the textile imports of Germany were thus only controlled during the last four months of the year. From this it seems safe to say that considerable control was exerted from the end of July; that it was very much strengthened during August and October; but that the March order in council was not in full operation until the end of November; and that this is roughly the date on which the blockade of Germany began, as her exports were then cut down to very little, and her imports reduced as far as they could be by the instruments at our disposal. The German defence consisted of so many laws, regulations and proclamations that it is impossible to select a list of dates which are illustrative of its growth; roughly, however, it may be said that the German government completed their first defensive system by March, and that, thereafter, they added to it as need arose. It thus seems fairly well proved that during nine months of moderate, and three months of severe, economic war we made considerable advances into the German defence, and, to use a military analogy, secured points on its outer line, in that, during this short period of time, and with the imperfect instruments at our disposal, we so straightened [sic] German supplies that a great part of the nation was suffering discomfort and inconvenience.
Inasmuch as a long chapter of British maritime history is a history of active opposition by neutrals to British practices at sea, and to British doctrines of maritime capture, it is also interesting to enquire how far the system that was established in the year 1915 was secured against that opposition, which has more than once forced [413] British governments to mitigate their practice. Before this can be determined, however, it will be necessary to make a somewhat abstract enquiry into the original causes of neutral opposition to economic war. The three best examples of the political commotions that are caused by practices that neutrals dislike are perhaps: the Franco-Spanish alliance of 1761, which was precipitated by the controversy about the restraints imposed upon the Spanish colonial trade;3 the armed neutralities of 1780 and 1800; and the Anglo-American war of 1812. Now if anybody inspects the records of these commotions, he cannot fail to be impressed by the disproportion between the original complaints and their political consequences. There is no evidence worth calling evidence of any serious diminution in the overseas commerce of the neutrals who united against us; and the first sources of the controversy appear always to have been the complaints of obscure traders and shipowners: when these complaints became sufficiently numerous, the matter became a question of national honour, and it was then, and then only, that major accusations about breaches of the law of nations were bandied about and became dangerous. To give another illustration: it is impossible to read the actual incidents of the federal blockade, and the diplomatic complaints upon it, without smiling. On the one side, are records of free fights between the crews of British brigs, barques, and paddle steamers, and the crews of the American sloops, with supplementary reports from British mates and boatswains, who complain that they have been put in irons for the best of reasons: on the other side, are the majestic protests of the British foreign secretary.4 Yet it is impossible to deny, that these ridiculous incidents were the first causes, or atomic parts, of a controversy that caused the American secretary of state the greatest anxiety. If the American blockade had been so imposed and operated that very few individuals had complained of their treatment, the controversy between the two governments would unquestionably have been softened. It was the succession of complaints from individuals, which forced our authorities to raise the point of honour, and to question whether the blockade was legal. The impression left by studying all these records is, therefore, that a dangerous political controversy about legal doctrines is the product of antecedent friction; and that the stability or instability of any system of economic coercion is to be measured less by the novelty or the doctrines upon which it rests, than by the degree in which it causes this first friction: the motive force of all that follows. Also, the danger inherent in all our economic campaigns was that those who executed the campaign: the privateers in the Channel, and the frigate captains elsewhere, were not capable of estimating the political consequences of their interceptions and captures; and that the executive were unable to control those daily incidents at sea, which were so often productive of political disturbance. If these premises be admitted, it must be conceded that the system of interception operated during the year 1915 was a great improvement upon its predecessors. The tenth cruiser squadron's operations were productive of few complaints, for a great number of the vessels on the northern route called voluntarily. The complaints of individuals only began, when the contraband committee ordered vessels to be detained; and however surprising it may appear, and however dangerous it may look in retrospect, that the contraband committee should have ordered so many detentions upon a mere suspicion, and so many more in terrorem, it yet remains true, that the committee were better able to observe the political repercussions of what they were doing, than any naval officer or commander of a squadron could have done. For the first time in history, therefore, the maritime executive was joined to the political, and was strictly subordinate to it. Sir Eyre Crowe, or the secretary of state, could, at any moment, have ordered the system to be moderated, if he had [414] thought its political consequences dangerous. But while admitting this, and admitting that under any other arrangement complaints of ill usage would have been far more numerous, and their consequences more dangerous, it has also to be conceded that the opportunities of causing this first friction were very much enlarged: a trade stream consisting of the following currents was under inspection and control; and each ship in the trade stream was a possible point of friction.
To use an analogy from physics therefore: the frictional surfaces had been smoothed and polished, but the power of the instruments that caused heat and friction had been enormously increased, and the one roughly balanced the other. From all this it will be understood how much stability was acquired to the system by making neutral traders partners to it. They became partners to it, because the agreements they signed with us secured them against the anxieties and uncertainties from which they had suffered; and as soon as they discovered that these agreements did, in some measure, relieve them, it was their interest to perfect and improve them, which was the same as making them stable and regular. Also, these agreements, in their operation, tended to make merchants who were either outside the great trading associations, or who were suspected by them, bear a great part of the losses inflicted by the detentions; and it can be assumed, although there is no documentary evidence of it, that the heads of these associations were no great enemies to a system that damaged their trade rivals more than themselves. In any case, the total interference with neutral trade was far less severe than would have been anticipated if the magnitude of the operation only were considered.
It is only repeating what is self-evident to say, that, however stable the system might be made in Europe, that stability was only permanent, if the system was tolerated by the American government; and it will always be an exceedingly difficult matter to decide whether, at any particular moment, or during any particular period, the American authorities contemplated seriously interfering with the system. In all the documents published or available there is nothing equivalent to a writ of toleration by the American president: equally there is no evidence, or very poor evidence, that active interference was seriously contemplated. It is, however, certain that the temper of the American president and of his cabinet, of congress, and of the people at large, varied and fluctuated throughout the campaign; from which it follows, that, if there was ever any danger of American intervention, then, the danger was greater at some times than it was at others. A review of these fluctuations, and of their causes, is thus the closest enquiry that can be attempted. If the particular matters reported in the despatches sent from Washington during the year 1915 are temporarily forgotten, and if those despatches are considered as daily and weekly reports upon the temper of the American people, then, it becomes evident, that, throughout the year, Sir Cecil Spring-Rice was reporting dangers that seemed imminent, but which were nevertheless dissipated soon after. The excitement about the Dacia and the Wilhelmina; the anger at the stopping of German [415] exports; the reception of our order about cotton, each in turn seemed dangerous, but in every case the danger was overestimated. A second point is also evident, which is that although Sir Cecil and his advisers were generally able to trace each excitement to its source, and were often able to give the names of the congressmen and political managers who provoked it, they were never able to be so particular about the steadying influence that operated so continuously in our favour. What then was this deadening force, which acted so mysteriously, and yet so regularly? It was presumably the steadying influence that was exerted by the great volume of business then being transacted between America and Europe. This is a kind of ballast upon political controversy which cannot be weighed accurately; nor can it be balanced against those incitements to controversy, which are watched from day to day, by studying a country's daily papers and its pamphlet literature. The statistics of this great trade stream are, however, impressive, in that they indicate how many persons in America must have been aware, that commerce between the United States and Europe would be more seriously disturbed, if the Washington cabinet were forced into some retaliatory adventure, than if the controversy with the maritime powers continued as it had started, an intermittent exchange of complaints and polite rejoinders.
With such figures before him, no American statesman can have believed that his country was suffering injustice or injury: more than this, during the year 1915, the American cabinet received a number of reports upon the negotiations between the allied governments and the trading associations in Holland, Denmark and Switzerland; and although the secretary of state never sent specific instructions about these trading associations, or about the agreements that they were concluding with us, there are tolerably good indications that he was suspicious and watchful at first, but that he was subsequently much reassured, and proportionately disinclined to interfere. These indications should be examined closely. When the secretary of state first heard that the Netherlands trust and the British government were in friendly conference about the March order, he instructed the United States Minister at the Hague: To keep the department promptly informed in regard to the future operations of the Netherlands Overseas Trust, especially with reference to any activities of the trust that may be regarded as discriminating against the United States. The United States minister's reply, though long, must be quoted verbatim; for it proves that the advice given was that the Netherlands trust and other similar associations facilitated, rather than impeded, trade between Europe and America.
[416] This trust is a private corporation, composed of representatives of some of the most important and solid banks and shipping companies in the Netherlands. It is not a branch or department of the Dutch government. It was formed primarily for the purpose of facilitating the commerce of the Netherlands in contraband goods by giving guarantees that these goods would not be exported from the Netherlands to belligerent countries. These guarantees of the oversea trust the allied governments agreed to accept as valid and efficient. Owing to the practical abolition of a distinction between contraband, conditional contraband, and non-contraband, which was made by the British order in council of March 5, the oversea trust has extended its operations to goods of all kinds. The United States minister thus reported, without any reservation, that the Netherlands trust had facilitated trade between the United States and Europe. With such a report before him, no responsible minister can have felt inclined to interfere actively with the system then being established, or to recommend interference to the American cabinet. A month later, the United States Minister in Switzerland reported on the negotiations at Berne. His report was impersonal and accurate, but not altogether friendly to us; for in the opening parts of his despatch he laid particular emphasis upon the allied detentions of foodstuffs, knowing presumably, that the meat packers and other kindred bodies were much aggrieved at this interruption of their trade in contraband, and were making a great commotion about it at Washington. It is remarkable that this despatch was merely acknowledged, and that no instructions were sent upon it; [417] from which it may be inferred, that the advice given by the minister at the Hague made an impression. Later in the year, the United States minister at Copenhagen reported the agreement reached with, the Danish associations, and he received no instructions in reply. The third indication of American tolerance is even more impressive. It has been shown that the Swedish authorities virtually invited the United States government to support and assist their opposition to our proposals for a contraband agreement, and that the United States government declined. Now the Swedish government renewed their invitation later, and again it was refused. The fortunes of this second invitation were these. On 5th November, the United States lodged their second note of protest to Great Britain; and on 18th November, the Swedish Minister at Washington handed in a note, in which they congratulated the Washington government upon their protest, and then continued:
The royal government therefore confidently hopes that the present conditions, the illegal and disastrous character of which the note so well points out, will undergo a material change for the better, the royal government not being able to imagine that the note referred to above should have only academic interest, and be devoid of value as an expression of the policy decided upon by the United States. Especially to the following proposition the note undoubtedly gives undivided support [sic]. His Majesty's government has with some surprise received the information from New York that the transportation from the United States to Sweden of almost all kinds of provisions and of many other articles is refused by the steamship agents unless a special permission has been granted by the British government. That the exportation of a country's own products should be dependent upon the permission of a foreign government seems extraordinary from the Swedish point of view. But apart from this, the Swedish government cannot omit to draw the attention of the United States government to how far such an arrangement is from being in accord with what has been said in the note of 5th November...... In view of the above it is asked whether the Government of the United States would be willing with the point in view of removing these wrongs [sic]. To this invitation the Secretary of State replied only: Due note has been taken of the observations made by the Royal Swedish government. It would be idle to pretend that these documents prove outright that the United States government had determined definitely and finally not to obstruct the British plan of economic warfare. It can, however, be inferred from them, that the president and his advisers were determined to tolerate the whole system for the time being; for if, at this date, they had contemplated interfering with it, it is almost inconceivable that they should have received this succession of reports upon the British system of coercion so impassively, and should have refused the Swedish invitation so stiffly.
For the purposes of analysis it is best to divide the subject matter of the controversy into two heads: that which related to the bare legality of our order in council, and that which related to our execution of it. The best and clearest arguments on the first head are to be found in the American note of 2nd April, and in our rejoinder of 25th July. Our administration was criticised at length in the American note of 5th November.5 First, as to the legal issues: We argued, that if statements of the law that had been prepared at a particular time, and in particular circumstances, were laid aside, and if the bare principles of the law only were considered, then, it was beyond all question, that, at every time, and in every theatre of war, a belligerent had a right to stop contraband from reaching an enemy, and a right to blockade him. If this was admitted, then, it was to be admitted also, that a belligerent could as legitimately enforce these rights against an enemy who was supplying himself through neutral states, as against an enemy who could be surrounded and beleaguered. Contraband [418] for an enemy did not cease to be confiscable merely because its first destination was a neutral port. As for blockade, we argued, that, if an enemy's import and export trade were actually stopped, then, the great tests of a legal blockade were satisfied: that it was a matter of fact, and that it must be effective. We admitted that a great deal of these enemy imports and exports were directed to neutral ports, and that they started from them; but we claimed that this circumstance did not, in itself, cancel a belligerent's right to impose a blockade: if we admitted this, we should virtually be asserting that the ancient principles of the law were inapplicable against goods that are carried in modern ships, and across modern railways. More than this, we claimed that the American courts themselves, when confronted with circumstances similar to those which then confronted us, had ruled that contraband on its way to an enemy, and goods on their way to a blockaded port, were confiscable at all points of their journey thither, so long as the intention to land contraband, or to break blockade, was patent; and that transhipments in neutral ports did not free the goods from liability to seizure. In more technical language, it could be said that the American courts had applied a rule of continuous voyage against contraband; and might be said to have done so against blockade runners, no matter whether they were caught animis fraudandi or flagrante delicto. Supporting this argument on particular points was the very strong argument, that every system of law must be adapted to the circumstances, and to the society, in which it has to operate. In so far as a controversy upon a legal doctrine can ever be said to have been lost or won, we may claim to have secured some advantages in this exchange of contentions. The test of success is that arguments advanced in controversy shall subsequently be endorsed by those lawyers and learned bodies, who constitute a sort of appeal court. Now it is a matter of fact, that, before this controversy began, at least one American lawyer of great eminence and learning forestalled our arguments.6 Subsequently, Mr. Charles Burke Elliott, justice of the supreme court of Minnesota, and professor Garner admitted that our contentions were good law. Mr. Charles Cheney Hyde is rather more guarded, but he also admits, that, if the ancient principles of the law are to be applied against a commerce that flows with exceptional rapidity from neutral to neutral, and from neutral to belligerent, then, some rule of continuous transportation must be incorporated into the general body of the law. Finally, it should be added, that nobody maintained more stoutly than Lord Stowell that courts of prize were bound to adjust old principles to new circumstances if their law was to be good law; and that his judgements have been universally recognised by the American courts.
If the court took upon itself to assume principles in themselves novel, it might justly incur such an imputation; but to apply established principles to new cases cannot surely be so considered. All law is resolvable into general principles; the cases which may arise, under new combination of circumstances leading to an extended application of principles ancient and recognised, by just corollaries, may be infinite; but so long as the continuity of the original and established principles is preserved pure and unbroken the practice is not new, nor is it justly chargeable with being an innovation on the ancient law, when in fact, the court does nothing more than apply good principles to new circumstances.7 There was, however, another side in which our case was not so good. It could, perhaps, be granted as an abstract principle, that a country was legally and regularly blockaded, if the commerce that was being transitted to it through neutral countries were distinguished from commerce genuinely neutral; and if the one were stopped, [419] and the other were allowed to go free. Could we, however, claim that this discrimination was being regularly and scientifically made? The minutes of the contraband committee are the only evidence that is decisive on this point, and they prove, that, throughout the year detentions and unloadings were being ordered on suspicions that did not constitute a shred of evidence against the particular cargo stopped or unloaded. The complaints made on this head in the American note of 5th November seem substantially justified. The incidence of right and wrong is, however, of less historical interest than the intentions of the American government. We had hoped that our note of 23rd July would close the controversy; but Sir Cecil Spring-Rice was soon afterwards informed that the matter could not be allowed to rest, and that another note was in preparation. The note then sent was by far the sharpest yet received by us; can it be inferred from this that the American authorities made this last note more challenging, defiant and censorious than its predecessors because they then contemplated seriously interfering with our system? Hardly, for almost as this note was being delivered we received an intimation very similar to the intimation that was sent by President Wilson, when the controversy first opened. On this occasion it was not sent directly to our ambassador, but was made by Mr. Lansing to a journalist, who immediately repeated it to us, as Mr. Lansing well knew he would.
I saw Lansing the other day in Washington (wrote Mr. Dixon of the Boston Monitor to Lord Robert Cecil) and had a talk to him about the new note. He told me then it was on the point of going. I asked why, and he said perpetual demands over here made it imperative...... I then went on and talked about the blockade. He said quite plainly the powers were aware of the tricks of the gentlemen who go down to the sea in boats and would not be found standing behind them. Les honnêtes gens, who pack meat, he was not too complimentary about. Finally he informed me that the note was a political safety valve, and that not much was expected of it as it would certainly not be pressed. All the available evidence about the American government's intentions therefore supports the inference, that, at this date, the authorities were very inclined to tolerate the system. It should be added, that, if the president's intention to mediate was the influence that mitigated controversy, which appears highly probable, then that influence was still strongly exerting itself; for on 17th October, when the last note of protest was in its last edition, the president approved a far more comprehensive political plan than any he had previously agreed to, and even contemplated active intervention on the allied side.
To sum up, therefore, it can be said, that, during the year 1915, our plan of
economic warfare was perfected and made systematic, and that, during this period,
which was still virtually a period of preparation, we secured the toleration of the
United States. When inspected closely, some parts of the achievement seem more
attributable to the general course and nature of things than to the wisdom of
individuals: the whole achievement is, however, best estimated by comparing
what we accomplished with what the enemy effected in the same time. They, like
ourselves, were operating an economic war plan which could only give good
results, if certain rules of war were adjusted to circumstances; but their record of
achievement was very different from our own.
  
  1See also section III, chapter I. ...back... 2I Promessi Sposi, chapter XII. ...back... 3See Waddington: La Guerre de sept ans. Vol. 3, Chap. VIII. ...back... 4For these two groups of records see: Records of the Union and Confederate navies and Foreign Relations of the United States of America 1861-4. ...back... 5See Cmd. 8233, 8234-1916. (Miscellaneous 14, 15-1916.) ...back... 6Doctor J. Brown Scott. The literature of this subject is very large; the following brief bibliography may serve as a guide. S. E. Garner: International Law and the World War. C. C. Hyde: International Law, Volume II. Titles I, J, and L. American Journal of International Law, Volume I, Part I, p. 72; Volume VIII, p. 299. Atherley Jones (Commerce in War) gives a long summary of British precedents and what could be maintained from them (Chapter 3). Mr. Hyde's footnotes constitute as complete a bibliography as exists. ...back... 7C.R. 459. ...back...
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