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AT LOS angeles •■12 I B R A R TABLE OF CONTENTS No. Name. Date. bU EJECT. Page 1 Mr. Page 2 To Mr. Page 3 I Ml-. Page 4 To Mr. Page Mcmoraiulum oommuniciiten by Mr. Page Mr. Page Memorandum communicated to Mr. Patie Mr. Page 10 I Declaration 1 ' Mr. Page 12 : To Mr. Page 13 Dec. 28, 1911 Galls attention of His Majesty's Government to growins' concern of United States Government at interference by His Majesty's Government with United States vessels proceeding to neutral ports with American goods . . , . i i Jan. 7. 11)15 Refers to No. 1. Preliminary reply of His i Majesty's Government to representations of United States Government. . 14, Acknowledges receipt of No. 2 . . . .' Feb. 10. Considered reply of His Majest3''s Government to representations of United States Govern- ment contained in No. 1 . . 1 ] , Use of the United States flag by British vessels in order to escape from enemy submarines. Views of United States Government on the subject . . 16, Views of United States Government respecting the seizure of the steamship "' Wilhelmina" . . 19, Steamship "Wilhelmina." Refers to No. (!. Ob- servations wiih regard to United States repre- sentations and explanation uf views of His Majesty's Government on the subject Jii, Use of the United States flag by British vessels. Refers to No. 5. Explains views of His Ma- jesty's Government on question of right to u.se neutral flag 22, Communicates text of identic note addressed to British and German Governments suggesting lines of possible compromise in regard to submarine warfare and measures of reprisals . . I Mar. 1, I Declaration of retaliatory measures to be adopted by British and French Governments against Germany . . . . . . . . 8, Anglo-French reprisals. Refers to No. 1(1. Ob- servations of United States respecting restraints placed upon commerce with Germany by British and French Governments 15, i Refers to No. 9. Reviews whole position, and contrasts course of action pursued by British and German Governments . . 15, ] Anglo-French reprisals. Refers to No. 11. Ex- plains more fully intentions of British and French Governments. Every effort will be made to minimise inconvenience to neutral commerce. Encloses cojjy of Order in Council of March 11 IG 17 18 20 21 22 23 24 26 Correspondence between His Majesty's Government and the United States Government respecting the Rights of Belligerents. No. 1. Mr. Page tu Sir Edward G'rt'/y. Sir, American Emhassy, London, December 2S, lUI J. UNDER telegTupliIc instructions from mj^ Government, I have the honour to acquaint you that the present cimdltiou of American foreign trade resulting ft-om the frequent seizures and detentions of American cargoes destined to neutral European ports has become so serious as to require a candid statement of my Government's views, in order that His Majesty's Government may be fully informed as to the attitude of the United States towards the policy which has been pursued by His Majesty's authorities during tlie present war. I am, therefore, directed to communicate to you the following statement and, at the same time, to assure you that it is made in the most friendly spirit and in the belief that frankness will better serve the continuance of cordial relations between the two countries than a silence which might be misconstiued into acquiescence in a course which my Government cannot but consider to be an infringement upon the rights of American citizens : — " The Government of the United States have viewed with growing concern the large number of vessels with American goods destined to neutral ports in Europe which have been seized upon the high seas and taken into British* ports. During the early days of the war this Government assumed that tiie policy adopted by the British Government was due to the unexpected outbreak uf hostilities and the necessity of immediate action to prevent; contraband goods from reaching the enemy. For this reason it was not disposed to judge this policy harshly or protest against it vigorously, although it was manifestly very injurious to American tratie with the neutral countries of Europe. This Government, relying confidently upon the high regard which Great Britain has so often exhibited in the past for the rights of other nations, confidently awaited amendment of a coarse of action which denied to neutral commerce tiie freedom to which it was entitled by law of nations. " This expectation seemed to be rendered the mure assured by the statement uf the Foreign Olfice early in November that the British Govermnent were satisfied with guarantees offered by the Norwegian, Swedish, and Danish Governments as to the non- exportation of contraband gdods when consigned to named persons in the territories of those Governments, and that orders liad been given to the British fleet and customs authorities to restrict interference with neutral v(3ssels carrying such cargoes so consigned to neutrals after verification of ships' papers and cargoes. "It is therefore a matter of deep regret that, though nearly five montiis have passed since the war began, the British Government have not materially changed their policy and do not treat less injuriously ships and cargoes passing lietween neutral ports in the peaceful pursuit of lawful commerce, which belligerents should protect rather than interrupt. The greater freedom from detention and seizure which was confidently expected to result from consigning shipments to definite consignees rather than ' to order ' is still awaited. " It is needless to point out to His Majesty's Government, usually the champion of the freedom of the seas and the rights of trade, that peace, not war, is the normal relation between nations, and that the commei'ce between countries which are not [371] B 2 belligerents should uut be interfered with by those at war unless such interference is manifestly an imperative necessity to protect their national safety, and then only to the extent that it is a necessity. '■ It is with no lack of appreciation of the momentous nature of the present struggle in which Great Britain is engaged, and with no selfish desires to gain luidue connnercial advantages, that this Government is reluctantly forced to the conclusion tliat the present policy of His Majesty's Government toward neutral ships and cargoes exceeds the manifest necessity of a belligerent, and constitutes restrictions upon the rights of American citizens on the high seas which are not justified l)y the rules of international law or required under the principle of self-preservation. "The Government of the United States do not intend at this time to discuss the propriety of including certain articles in its lists of absolute and conditional contraband which have been proclaimed by His Majesty. Open to objection as some of these seem to this Government, the chief ground of present complaint is the treatment of cargoes of both classes of articles when bound to neutral ports. " Articles listed as absolute contraband, shipped from the United States of America and consigned to neutral countries, have been seized and detained on the ground that the countries to which they were destined have not prt)hibited the exportation of such articles. Unwarranted as such detentions are, in the opinion of this Government, the American exporters of copper are further perplexed by the apparent indecision of the British authorities in applying their own rules for neutral cargoes. For example, a shipment of copper from this country to a specified consignee in Sweden was detained because, as was stated by Great Britain, Sweden had placed no embargo on copper. On the other hand, Italy not only prohibited the export of copper, but, as this Govern- ment is informed, put in force a decree that shipments to Italian consignees or ' to order ' which ari-ive in ports of Italy cannot be exported or transhipped. The only exception Italy makes is of copper which passes through that country in transit to another country. In spite of these decrees, however, the British Foreign Office has tlius far declined to affirm that copper shipments consigned to Italy will not be molested on the high seas. Seizures are so numei'ous and delays so prolonged that exporters are afraid to send their copper to Italy. Steamship lines decline to accept it, and insurers refuse to issue policies upon it. In a word, a legitimate trade is being greatly impaired through the uncertainty as to the treatment it may expect at the liands of British authorities. " The Government of the United States feel that they are abundantly justified in asking for information as to the manner in which the British Government propose to carry out the policy which they have adopted in order that the American Government ma}" determine the steps necessary to protect our citizens engaged in foreign trade in their rights and from the serious losses to which they are liable through ignorance of the hazards to which their cargoes are exposed. " In tlie case of conditional contraband, the policy of Great Britain appears to this Government to be of equal international concern. As evidence, their attention is directed to the f ict that a number of American cargoes seized consist of foodstuffs and other articles of common use in all countries which are admittedlv relative contraband. In spite of the presumption of innocent use because destined to neutral territory, the British authorities made these seizures and detentions without, so far as the Govern- ment of the United States are informed, being in possession of facts whlcli warranted a reasonable belief that the shipments had in reality a belligerent destination as that term is used in International law. Mere suspicion is not evidence, and doubts should be resolved in favour of neutral commerce, not against it. The effect of trade in these articles between neutral nations resulting from interrupted voyages and detained cargoes is not entirely cured by reimbursement of the owneis for the damages which the}' have suffered after investigation has failed to establish an enemy destination. The injury is to American commerce with neutral countries as a whole through the hazard of the enterprise and the repeated diversion of goods from established markets. " It also appears that cargoes of this character liave been seized by the British authorities because of a belief that, though not originally so intended by the shippers, they will ultimately reach the territory of the enemies of Great Britain. Yet this belief is frequently reduced to a mere fear in view of the regulations (?) which have been decreed by the neutral countries to which they are destined on the articles composing tlie cargoes. " That a consignment of articles listed as conditional contraband and shipped to a neutral poi't raises a legal presumption of enemy destination appears to be directly contrary to the doctrine previouslv lield by Great Britain and thus stated by Lord Salisbury during the South Africau war : ' Foodstuffs, though liaviiig hostile destination, can be considered as contraband of war only if they are for the enemy forces. It is not sufficient that they are capable of being so used. It must be shown that was in fact their destination at the time of their seizure.' " In this statement of conditional contraband the views of this Government are in entire accord, and upon this historic doctrine, consistently maintained by Great Britain when a belligerent, as well as a neutral, American shippers were entitled to rely. " The Government of the United States readily admit full responsibility of the belligerent to visit and search on the high seas the vessels of American citizens or neutral vessels of American citizens or neutral vessels carrying American goods, to detain them ivhen there is sufficient evidei^ce to justify belief that contrahaml articles are in their cargoes, but His Majesty's Government, judging by their own experience in the past, must realise that this Government cannot without protest permit American ships or American cargoes to be taken into British ports and there detained for the purpose of searching generally for contraband, or upon presumptions created by special municipal enactment which are clearly at variance with international law and practice. " This Government believes and earnestly hopes His Majesty's Government will come to the same belief, that a course of conduct more in conformity with the rules of international usage, which Great Britain has strongly sanctioned for many years, will in the end better serve the interests of belligerents as well as those of neutrals. " Not only is the situation a pitiful one to the commercial interests of the United States but many of the great industries of this country are suffering because their products are denied long-established markets in European countries which, though neutral, are contiguous to the nations at war. The producers and exporters steamship and insurance companies are pressing, and not without reason, for relief from the menace to trans- Atlantic trade which is gradually but surely destroying their business and threatening them with financial disaster. " The Government of the United States, still relying upon the deep sense of justice of the British nation, which has been so often manifested in the intercourse between the two countries during so many years of uninterrupted friendship, expresses confidently the hope that His Majesty's Government will realise the obstacles and difficulties which their present policy has placed in the way of commerce between the United States and the neutral countries of Europe, and will instruct its officials to refrain from all unnecessary interference with freedom of trade between nations which are sufterers though not participants in the present conflict, and will in their treatment of neutral ships and cargoes conform more closely to those rules governing the maritime relations between belligerents and neutrals, which have received the sanction of the civilised world and which Great Britain has in other wars so strongly and successfully advocated. " In conclusion, it should be impres.sed upon His Majesty's Government that the present condition of American trade with the neutral European countries is such that if it does not impiove it may arouse a feeling contrary to that which has so long existed between the American and British peoples. Already it is becoming more and more the subject of public criticism and complaint. There is an increasing belief, doubtless not entirely unjustified, that the present British policy towards American trade is responsible for the depression in certain industries which depend upon European markets. The attention of tlie British Government is called to this possible result of their present policy to show how widespread is the effect upon the industrial life of the United States, and to emphasize the importance of removing the cause of complaint." I have, &c. WALTER HINES PAGE. No. 2. Sir Edward Orey to Mr. Page. Your Excellency, Foreign Office, January 7, 1915. I HAVE the honour to acknowledge the receipt of your note of the 28th December. It is being carefully examined and the points raised in it are receiving con- sideration, as the result of which a reply shall he addressed to your Excellency, dealing [371] B 3 in detail with the issues raised and the points to which the United States Government have drawn attention. Tliis consideration and the preparation of the reply will necessarily require some time, and I therefore desire to send without further delay some preliminary ohservations which will, I trust, help to clear the ground and remove some misconceptions that seem to exist. Let me say at once that we entirely i-ecognise the most friendly spirit referred to by your Excellency, and that we desire to reply in the same spirit and in the belief that, as your Excellency states, frankness will best serve the continuance of cordial relations between the two countries. His Majesty's Government cordiallv concur in the principle enunciated by the Government of the United States, that a belligerent, in dealing with trade between neutrals, should not interfere unless such interference is necessary to protect the belligerent's national safety, and then only to the extent to which this is necessary. We shall endeavoiu* to keep our action within the limits of this principle, on the understanding that it admits our right to interfere when such interference is, not with hand fide trade between the United States and another neutral country, but with trade in contraband destined for the enemy's country, and we are ready, whenever our action may unintentionnlly exceed this principle, to moke redress. We think that much misconception exists as to the extent to which we have, in practice, interfered with trade. Your Excellencv's note seems to hold His Majesty's Government responsible for the present condition of trade with neutral countries, and it is stated that, through the action of His Majesty's Government, the products of the great industries of the United States have been denied long-established markets in European countries which, though neutrab are contiguous to the seat of war. Such a result is far from being the intention of His Majesty's Government, and they would exceedinglv regret that it siiould be due to their action. I have been unable to obtain complete or conclusive figures showing what the state of trade with these neutral countries has been recently, and I can therefore only ask that some further consideration should be p-iven to the question whether United States trade with these neutral coimtries has been .so seriously affected. Tne only figures as to the total volume of trade that I have seen are those for the exports from New York for the month of November 1914, and they are as f)l]ows, compared with the month of November 1913:— November 1913. November 1914. Dollars. Dollars. Exports from New York for — Denmark .^58,000 7,101,000 Sweden 377.00U L'.s.58.000 Norway 477,000 2.318,000 Italy 2.971,000 4,781.000 Holland 4,389,000 3,960,000 It is true that there may liave been a falling off in cotton exports, as to which New York figures would be no guide, but His Majesty's Government have been most careful not to interfere with cotton, and its place on the free list has been scrupulously maintained. We do not wnsb to lay too much stress upon incomplete statistics ; the figures above are not put forward as conclusive, and we are prepared to examine any further evidence with regard to the state of trade with these neutral countries, which may point to a different conclusion or show that it is the action of His Majesty's Govern- ment in particular, and not the existence of a state of war and consequent diminution of purchasing power and shrinkage of trade, which is responsible for adverse effects upon trade with neutral countries. That the existence of a state of war on such a scale has had a very adverse effect upon certain great industries, such as cotton, is obvious, but it is submitted that this is due to the general cause of diminished purchasing power of such countries as France, Germany, and the United Kingdom, rather than to interference with trade with neutral countries. In the matter of cotton, it may be recalled that the British Government gave special assistance through the Liverpool Cotton Exchange to the renewal of transactions in the cotton trade of not only the United Kingdom but of many neutral countries. Your Excellency's note refers iu particular to the detention of copper. The figures taken from official returns for the export of copper from the United States for Italy for the months during whicli the war lias been in progress up to the end of the first three weeks of December are as follows : — 1913 : 15,202,000 lbs. 1914 : 36,285,000 lbs. Norway, Sweden, Denmark, and Switzerland are not shown separately for the whole period in the United States returns, but are included in the heading " Other Europe" (that is, Europe other tlian the United Kingdom, Russia, France, Belgium, Austria, Germany, Holland, and Italy). The corresponding figures under this heading are as follows : — 1913: 7,271,000 lbs. 1914: 35,347,000 lbs. With such figures the presumption is very strong that the bulk of the copper consigned to these countries has recently been intended, not for their own use, but for that of a belligerent who cannot import it direct. It is therefore an imperative necessity for the safety of this country while it is at war that His Majesty's Governmeat should do all in their power to stop such part of this import of copper as is not genuinely destined for neutral countries. Your Excellency does not quote any particular shipment of copper to Sweden which has been detained. There are, however, four consignments to Sweden at the present time of copper and aluminum which, though definitely consigned to Sweden, are, according to positive evidence in the possession of His Majesty's Government, definitely destined for Germany. I cannot believe that, with such figures befox'e them, and in such cases as those just mentioned, the Government of the United States would question the pro|)riety of the action of His Majesty's Government in taking suspected cargoes to a Prize Court, and we are convinced that it cannot be in accoi'd with the wish either of the Govern- ment or of the people of the United States to strain the international code in favour of private interests so as to prevent Great Britain from taking such legitimate means for this purpose as are in her power. With regard to the seizure of foodstuffs to which your Excellency refers, His Majesty's Government are prepared to admit that foodstuffs should not be detained and put into a Prize Court without presumption that they are intended for the armed forces of the enemy or the enemy Government. We believe that this rule has been adhered to in practice hitherto ; but, if the United States Government have Instances to the contrary, we are prepared to examine them, and it is our present intention to adhere to the rule, though we cannot give an unlimited and unconditional undertaking in view of the departure by those against whom we are fighting from hitherto accepted rules of civilisation and humanity, and the uncertainty as to the extent to which such rules may be violated by them in future. From the 4th August last to the 3rd January the number of steamships proceeding from the United States for Holland, Denmark, Norway, Sweden, and Italy has been 773. Of these there are torty-five which have had consignments or cargoes placed in the Prize Court, while of the ships themselves only eight have been placed in the Prize Coui-t, and one of these has since been released. It is, howevei', essential under modern conditions that, wliere there is real ground for suspecting the presence of contraband, the vessels should be brought into port for examination ; in no other way can the right of search be exercised, and but for this practice it would have to be completely abandoned. Information was received by us that special instructions had been given to ship rubber from the United States under another designation to escape notice, and such cases have occurred in several instances. Only by search in a port can such cases, when suspected, be discovered and proved. The necessity for examination in a port may also be illustrated by a hypotheticnl instance, connected with cotton, which has not yet occurred. Cotton is not specifically mentioned in your Excellency's note, but I have seen public state- ments made in the United States that the attitude of His Majesty's Government with regard to cotton has been ambiguous, and thereby responsible for depression in the cotton trade. There has never been any foundation lor this allegation. His Majesty's Government have never put cotton on the list of contraband ; they have throughuut the war kept it on tlie free list ; and, on every occasion when questioned on the point, they have stated their intention of adhering to this practice. But information has reached us that, precisely because we have declared our intention of not interfering [371] B 4 with cotton, ships carrying cotton will be specially selected to carry concealed contraband ; and we have been warned thai copper will be concealed in bales of cotton. Whatever suspicions we have entertained we have not so far made these a ground for detaining any ship carrying cotton ; but, should we have information giving us real reason to believe in the case of a particular ship that the bales of cotton concealed copper or other contraband, the only way to prove our case would be to examine and weigh the bales ; a process that could be carried out only by bringing the vessel into a port. In such a case, or in any other, if examination justified the action of His Majesty's Government, the case shall be brought before a Prize Cotirt and dealt with in the ordinary way. That the decisions of British Prize Courts hitherto have not been unfavourable to neutrals is evidenced by the decision in the " Miramichi ' case. This case, which was decided against the Crown, laid down that the American shipper was to be paid, even when he had sold a cargo c.i.f., and when the risk of loss after the cargo had been shipped did not apply to him at all. It has further been represented to His Majesty's Government, though this subject is not dealt with in your Excellency's note, that our embargoes on the export of some articles, more especially rtibber, have interfi-red with commercial interests in the United States. It is, of course, difficult for His Majesty's Government to permit the export of rubber from British dominions to tlie United States at a time when rubber is essential to belligerent countries for carrying on the war, and when a new trade In exporting rubber from the United States in suspiciously large quantities to neutral co'.mtries has actually sprung up since the war. It would be impossible to permit the export of rubber from Great Britain unless the right of His Majesty's Government were admitted to submit to a Prize Court cargoes of rubber exported from the United States, which they believed to be destined for an enemy country, and reasonable latitude of action for this purpose were conceded. But His Majesty's Government have now provisionally come to an arrangement with the rubber exporters in Great Britain which will permit of licences being given undei- proper guarantees for the export of rubber to the United States. We are confronted with the growing danger that neutral countries contiguous to the enemy will become, on a scale hitherto unprecedented, a base of supplies for the armed forces of our enennes and for materials for manufacturing armament. The trade figures of imports show how strong this tendency is, but we have no complaint to make of the attitude of the Governments of those countries, which, so far as we are aware, have not departed from proper lules of neutrality. We endeavour, in the interest of our own national safety, to prevent this danger by intercepting goods leally destined for the enemy, without interfering with those which are bond fide neutral. Since the outbreak of the war the Government of the United States have changed their previous practice, and have prohibited the publication of manifests till thirty days after the departure of vessels from the United States ports. We iiad no locus standi- for complaining of this change, and did not complain. But the etiect of it must be to increase the difficulty of ascertaining the presence of contraband, and to render necessary, in the interest of oiu' national safety, the examination and detention of more ships than would have been the case if the former practice had continued. Pending a more detailed reply, I would conclude by saying that His Majesty's Government do not desire to contest the general principles of international law on which they understand the note of the United States to be based, and desire to restrict their action solely to interference with contraband destined for the enemy. His Majesty's Government are prepared, whenever a cargo coming from the United States is detained, to explain the case on which such detention has taken place, and would gladly enter into any arrangement by which mistakes can be avoided and reparation secured promptly when any injury to the neutral owners of a ship or cargo has been improperly caused, for they are most desirous, in the interest both of the United States and of other neutral countries, that British action should not interfere with the normal importation and use by the neutral countries of goods from the United States. I have, &c. E. GREY. No. 3. Mr. Page to Sir Edward Grey.— {Received January 14.) Sir, American Embas.sy, London, January 14, 1915. PURSUANT to instructions which I have just received by telegraph from the Secretarv of State at Washington, I have the honour to advert to the note you were good enough to address to ine on the 7th instant, and to assure you that my Government appreciate the friendly spirit in which the note I had the honour to address to you on the 28th ultimo was received by His Majesty's Government. 'J'hey have no doubt whatever that the same cordial relations between the two Governments will contmue throughout the pending diplomatic discussion. I am to add that the Government of the United States observe with much satisfaction that His Majesty's Government are in agreement with the principles of international law as set forth in the communication of the 28th December, and that, since the note in question is now under consideration by His Majesty's Government with a view to making a further reply in detail, the Secretary of State is disposed to abstain for the present from replying to the remarks you have been so good as to make, with the intention of considering the points you have already raised in connection with the more detailed answer which you have informed me His Majesty's Government are now preparing. ' WALTER HINES PAGE. No. 4. Sir Edward Grey to Mr. Page. Sir, Foreign Office, February 10, 1915. YOUR Excellency has already received the preliminary answer, which 1 lianded to you on the 7th January, in reply to your n(jte of the 28 th December on the subject of the seizures and detentions of American cargoes destined for neutral European ports. Since that date I have had further opportunity ot examining into the trade statistics of the United States as embodied in the Customs returns, in order to see whether the belligerent action of Great Britain has been in any way the cause of the trade depression which your Excellency describes as existing in the United States, and also whether the seizures of vessels or cargoes which have been made by the British Navv have indicted any loss on American owners for wliich our existing machinery provides no means of redress. In setting oat the results of my investigation I think it well to take the opportunity of giving a general review of the methods employed by His IMajesty's Government to intercept contraband trade with the enemy, of their consistency with the admitted right of a belligerent to intercept such trade, and also of the extent to which they have endeavoured to meet the representations and complaints from time to time addressed to them on behalf of the United States Government. Towards the close of your note of the 28th December your Excellency described tlie situation produced by the action of Great Britain as a pitiful one to the commercial interests of the United States, and said that many of the great industries of the country were suifering because their products were denied long-established markets in neutral European countries contiguous to the nations at war. It is unfortunately true that in these days, when trade and finance are cosmopolitan, any war — ^particularly a war of any magnitude— must result in a grievous dislocation of commerce including that of the nations which take no part in the war. Your Excellency will realise that in this tremendous struggle, for the outbreak of which Great Britain "is in no way responsible, it is impossible for the trade of any country to escape all injury and loss, but for such His Majesty's Government are not to blame. I do not understand the paragraph which I have quoted from your Excellency's note as referring to these indirect consequences of the state of war, but to the more proximate and direct efi'ect of our belligerent action in dealing with neutral ships and cargoes on the high seas. Such action has been limited to vessels on their way to enemy ports or ports in neutral countries adjacent to the theatre of war, because it is 8 only through such ports that the enemy introduces the supplies which he requires for carrying on the war. In my earlier note I set out the number of ships whicli bad sailed from the United States for Holland, Denmark, Norway, Sweden, and Italy, and I there stated that only 8 of the 773 had been placed in the Prize Court, and that only 45 had been temporarily detained to enable particular consignments of cargo to be discharged for the purpose of Prize Court proceedings. To measure the effect of such naval action it is necessary to take into consideration the general statistics of the e.xport trade of the United States during the months preceding the outbreak of war and those since the outbreak. Taking the figures in millions of dollars, the exports of merchandise from the United States for the seven months of January to July 1914 inclusive, were 1,201, as compared with 1,.327 in the corresponding months of 19i;i, a drop of 126 millions of dollars. For the months of August, September, October, and November, that is to say, for the four months of the war preceding tlie delivery of your Excellencj^'s note, the figures of the exports of merchandise were (again in millions of dollars) 667 as compared with 923 in the corresponding months of 1 913, a diop of 256 millions of dollars. If, however, the single article of cotton be eliminated from the comparison, the figures show a very different result. 1 bus the exports of all articles of merchandise other than cotton from the United States durino; the first seven months of 1914 were 966 millions of dollars as against 1,127 millions in 1913, a drop of 161 millions of dollars, or I4h per cent. On the other hand, the exports of the same articles during the months August to November amounted to 608 millions of dollars as compared with 630 millions in 1913, a drop of only 22 millions, or less than 4 per cent. It is therefore clear that, if cotton be excluded, the effect of the war has been not to increase but practically to arrest the decline of American exports which was in progress earlier in the year. In fact, any decrease in American exports which is attributable to the war is essentially due to cotton. Cotton is an article which cannot possibly have been afiected b}' the exercise of our belligerent rights, for, as your Excellency is aware, it has not been declared by His Majesty's Government to be contraband of war, and the rules under which we are at present conducting our belligerent operations give us no power in the absence of a blockade to seize or interfere with it when on its way to a belligerent country in neutral ships. Consequently no cotton has been touched. Into the causes of the decrease in the exports of cotton I do not feel tliat there is any need for me to enter, because, whatever may have been the cause, it is not to be found in the exercise of the belligerent rights of visit, search, and captuie, or in our general right when at war to intercept the contraband trade of our enemy. Imports of cotton to the United Kingdom fell as heavily as those to other countries. No place felt the outbreak of war more acutely than the cotton districts of Lancashire, where for a time an immense number of spindles were idle. Though this condition has now to a Jai'ge extent passed away, the consumption of the raw material in Great Britain was temporarily much diminished. The same is no doubt true of France. The general result is to show convincingly that the naval operations of Great Britain are not the cause of any diminution in the volume of American exports, and that if the commerce of the United States is in the unfavourable condition which your Excellency describes, the cause ought in fairness to be sought elsewhere than in the activities of His Majesty's naval forces. I may add that the circular issued by the Department of Commerce at Washington on the 23rd January, admits a marked improvement in the foreign trade of the United States, wdiich we have noted with great satisfaction. The first paragraph of the circular is worth quoting verbatim : — " A marked improvement in our foreign trade is indicated by the latest reports " issued by the Department of Commerce through its Bureau of Foreign and Domestic " Commerce, sales of foodstuffs and certain lines of manufactures having been unusually " large in November, the latest period for which detailed information is at hand. In " that month exports aggregated 206,000,000 dollars, or double the total for Aiigust " last, when, by reason of the outbreak of war, our foreign trade fell to the lowest " level reached in many years. In December tiiere \^'as further improvement, the " month's exports being valued at 246,000,000 dollars, comp.ired with 2;:!3, 000,000 " in December 1913, and within 4,00(t,000 of the high record established in December 1912. a A better view of the situation is obtained by looking at the figures mouth by month. The exports of merchandise for the last five months have been (in millions of dollars) : — August . . . . . . ..110 September . . . . . . . . ISP October .. .. .. ..194 November . . . . . . . . 205 December . . . . . . . . 24G The outbreak of war produced in the United States, as it did in all neutral countries, an acute but temporary disturbance^ of trade. Since that time thei-e seems to have been a steady recovery, for to-day the exports from the United States stand r.t a higher figure than on the same date last year. Before passing away from the statistics ot trade, and in order to demonstrate still more clearly if necessarv that the naval operations of Great Britain and her Allies have had no detrimental eftect on the volume of trade between the United States and neutral countries, it is worth while to analyse the figures of the exports to Europe since the outbreak of hostilities. For this purpose the European countries ought to be grouped under three heads : Great Britain and those fighting with her, neutral countries, and enemy countries. It is, however, impo.ssible for me to group the countries in this way satisfactorily, as the figures relating to the export trade of the United States with each c'umtry have not yet been published. In the preliminary statement of the export trade of the United States with foreign countries only principal countries are shown, and various countries which are tabulated separately in the more detailed monthly smnmary of commerce and finance are omitted. Those omitted include not only the Scandinavian countries, the exports to which are of peculiar importance in dealing with this question, but also Austria. So far as it is possible to distribute the figures under the headings which I have indicated above (all the figures being given in thousands of dollars), the lesidts are as follows : — Total exports to Europe from the 1st August to the 30th November, 413,995, as against 597,342 in 1913. Of these. Great Britain and her Allies took 288,312, as against 316,803 in 1913. Germany and Belgium took 1,881, as against 177,136 in 1913; whereas neutral countries (among which Austria-Hungary is unavoidably included) took 123,802, as against 103,401 in 1913. The general complaint in your Excellency's note was that the action of Great Britain was affecting adversely the trade of the United States with neutral countries. The naval operations of Great Britain certainly do not interfere with commerce from the United States on its way to the United Kingdom and the allied countries, and yet the exports of Great Britain and her Allies during those four months diminished to the extent of over 28,000,000 dollars, whereas those to neutral countries and Austria increased by over 20,000,000 dollars. The inference may fairly be drawn from these figures, all of which are taken from the ofiicial returns published by the United States Government, that not only has the trade of the United States with the neutral countries in Europe been maintained as compared with previous years, but also that a substantial part of this trade was, in fact, trade intended for the enemy countries going throuch neutral ports by routes to which it was previously unaccustomed. One of the many inconveniences to which this great war is exposing the commerce of all neutial countries is undoubtedly the serious shortage in shipping available for ocean transport, and the consequential result of excessive freights. It cannot fiiirly be said that this shortage is caused by Great Britain's interference with neutral ships. At the present time there are only seven neutral vessels awaiting adjudication in the Prize Courts in this country, and three in those in the British Dominions. As your Excellency is aware, I have already instructed our Ambassador at Washington to remind the parties who are interested in these vessels that it is open to them to apply to the Court lor the lelease of these ships on bail, and if an application oF this sort is made by them it is not likely to be opposed by the Crown. There is therefore no reason why such an application should not be favourably entertained by the Coui't, and, if acceded to, all these vessels will again be available for the carriage of commerce. Only one neutral vessel is now detained in this country in addition to those awaiting adjudication in the Prize Court. 10 Every effort has been made in cases in which it has been found necessary to institute proceedings against portions of the cargo to secure the speedy discharge of the cargo and the release of the ship, so as to enable it to resume work. Great Britain is suffering from the shortage of shipping and the rise in freights as acutely as, if not more than, other nations, and His Majestv'u Government have taken every step that they could consistently with their belligerent interests to increase the tonnage available for the tiansport of sea-borne commerce. The enemy ships which have been condemned in the Prize Courts in this country are being sold as rapidly as possible in order that they may become available for use ; and those which have been condemned in the Prize Courts oversea are being brought to this country in order that they may be disposed of here, and again placed in active employment. The difficulties have been accentuated by the unforeseen consequences of the con- vention which was signed at The Hague in 1907 relative to the status of enemy merchant vessels at the outbreak of war. This convention was a well-intentioned effort to diminish tlie losses which war must impose upon innocent persons, and pro- vided that enemy merchant ships seized by a belligerent in whose ports they lay at the outbreak of war should not be condemned, but should merely be detained for the period of the war, unless they were liberated in the da3's of grace. We could come to no arrangement with the German Government for the reciprocal grant of clays of grace, and the German merchant vessels lying in British ports when the war broke out have therefore been sentenced to detention in lieu of condemnation. Tlie normal result would have been still further to reduce the volume of shipping available for the commerce of the world. To ease the situation, however. His Majesty's Government are resorting to the power of requisitioning which is given by the convention, .so that these ships may again be placed in active service. Your Excellency will see therefore that His Majesty's Government are doing all in their power to increase the volume ol' shipping available. I hope it will be realised that the detention of neutral ships by His Majesty's Government with a view to the capture of contraband trade on its way to the enemy has not contributed nearly so much to the shortage of shipping as has the destruction of neutral vessels by submarine mines indiscriminately laid by the enemy on the high seas, many miles from the coast, in the track of merchant vessels. Up till now twenty-five neutral vessels have been reported as destroyed by mines on the high seas ; quite apart from all questions of the breach of treaties and the destruction of life, there is far more reason for protest on the score of belligerent interference with innocent neutral trade through the mines scattered by the enemy than througli the British exercise of the right of seizing contraband. I trust that what I have said above will be sufficient to convince your Excellency's Government that the complaints that the naval policy of Great Britain has interfered with the shipments of American products to long-established markets in neutral European countries is founded on a misconception. In justice to the peoples of both countries, I feel that this opportunity should be taken to explain the lines on w-hich His Majesty's Government have been acting hitherto, so as to show that the line they have followed is in no way inconsistent with the general fundamental principle of international law, and to indicate the care with whicli they have endeavoin-ed to meet the representations which have been made by the United States Government from time to time during the war on these questions. No one in these da}s will dispute the general proposition that a belligeient is entitled to capture contraband goods on their way to the enemy ; that right has now l)ecome consecrated by long usage and general acquiescence. Though the right is ancient, the means of exercising it alter and develop with the changes in the methods and machinery of commerce. A century ago the difficulties of land transport rendered it impracticalile for the belligerent to obtain supplies of sea-borne goods through a neighbouring neutral country. Consequently the belligerent actions of his opponents neither required nor justified any interference with shipments on their way to a neutral port. This principle w'as i-ecognised and acted on in the decisions in which Lord Stowell laid down the lines on which captures of such goods should be dealt with. The advent of steam power has rendered it as easy for a belligerent to supply himself through the ports of a neutral contiguous country as through his own, and has therefore rendered it impossible for his opponent to refrain from interfering with commerce intended for the enemy merely because it is on its way to a neutral port. No better instance of the necessity of countering new devices for despatching contraband goods to an enemy by new methods of applying the fundamental principle 11 of the right to capture such contraband can be given than the steps which the Govennnent of the United States found it necessary to take during the American Civil W;ir. It was at that time that the doctrine of continuous voyage was first apphed to the capture of contraband, that is to say, it was then for the first time that a belligereut found himself obliged to capture contraband goods on their way to the enemy, even though at the time of capture they were eu route for a neutral port from which they were intended subsequently to continue their journey. The policy then followed by the United States Government was not inconsistent with the general principles already sanctioned by international law, and met w ith no protest from His Majesty's Government, though it was upon British cargoes and upon British ships that the losses and the inconvenience due to this new development of the application of the old rule of international law principally fell. The criticisms which have been directed against the steps then taken by the United States came, and come, from those who saw in the methods employed in Napoleonic times for the prevention of contraband a limitation upon the right itself, and failed to see that in Napoleonic times goods on their way to a neutral port were immune from capture, not because the immediate destination conferred a privilege, but because capture under such circumstances was unnecessary. The facilities which the introduction of steamers and railways have given to a belligerent to introduce contraband goods through neutral ports have imposed upon his opponent the additional difticulty, M'hen endeavouring to intercept such trade, of dis- tinguishing between the goods \\-hich are really destined for the commerce of that neutral country and the goods which are on their way to the enemy. It is one of the many difficulties with which the United States Government found themselves confronted in tlie days of the Civil War, and I cannot do better than quote the words which Mr. Seward, who was then Secretary of State, used in the course of the diplomatic discussion arising out of the capture of some goods on their vvav to Matamoros which were believed to be for the insurgents : — "Neutrals engaged in honest trade with Matamoros must expect to experience "inconvenience from the existing blockade of Brownsville and the adjacent coast of " Texas. While this Government unfeignedly regrets this inconvenience, it cannot " relinquish any ot its belligerent riglits to favour contraband trade with insurgent " territory. By insisting upon those rights, however, it is sure that that necessity " for their exercise at all, which must be deplored bv every friendly commercial " Power, will the more speedily be terminated." The opportunities now enjoyed by a belligerent for obtaining supplies through neutral ports are far greater than they were fifty yeais ago, and the geographical conditions of the present struggle lend additional assistance to the enemy in carrying- out such importation. We are faced with the problem of intercepting such supplies when arranoed with all the advantages that flow from elaborate oro-anisation and unstinted expenditau'e. If our belligerent rights are to be maintained, it is of the first importance for us to distinguish between what is really bond fdc trade intended for the neutral countr}- concerned and the trade intended for the enemy country. Every effort is made by organisers of this trade to conceal the true destination, and if the innocent neutral trade is to be distinguished from the enemy trade it is e.ssenti:d that His Majesty's Government should be entitled to make, and should make, careful enquiry with regard to the destination ot particular shipments of goods even at the risk of some slight delay to the parties interested. If such enquiries were not made, either the exercise of our belligerent rights would have to be abandoned, tending to the jjrolongation of this war and the increase of the loss and suffering which it is entailing upon the whole world, or else it would be necessary to indulge in indiscriminate captiu'es of neutral goods and their detention throughout all the period of the resulting Prize Court proceedings. Under the system now adopted it has been found possible to release without delay, and consequentl}' without appreciable loss to the parties interested, all the goods of which the destination is shown as the result of the enquiries to be innocent. It may well be that the system of making such enquiries is to a certain extent a new introduction, in that it has been practised to a far greater e.vtent than in previous wars ; but if it is correctly described as a new departure, it is a departure which is wholly to the advantage of neutrals, and which has been made for the i^urpose of relieving them so far as possible from loss and inconvenience. There was a passage in a note which the State Depai'tment addressed to the 12 British Ambassador at Washington on the 7th Novembei- to which T think it may be well to refer : — " In the ojjinion of this Government, the belligerent right of visit and search '• requires that the search should be made on the high seas at the time of the visit, and " that the conclusion of the search should rest upon the evidence found on the ship " under investigation, and not upon circumstances ascertained from external sources." The principle here enunciated appears to me to be inconsistent with the practice in these matters of the United States. Government, as well as of the British Government. It certainlv was not the rule upon which the United States Government acted either during the Civil War or during the Spanish-American War, nor has it ever been the practice of the British Government, nor so far as I am aware, of any other Government which has had to carry on a great naval war; as a principle I think it is impossible in modern times. The necessity for giving the Ijelhgerent captor full liberty to establish by all the evidence at his disposal the enemy destination with which the goods were shipped Avas recognised in all the leading decisions in the Prize Courts of the United States during the Civil War. ISo clearer instance could be given than the reporter's statement of the case of the ••Bermuda" (3 Wallace, 514): " The final destination of the cargo in this particular ■• voyage was left so skilfully open .... that it was not quite easy to prove, with ■■ tliat certainty which American Courts require, the intention, whicli it seemed ■' plain must have really existed. Thus to prove it requii^ed that truth should be " collated from a variety of sources, darkened and disguised; from others opened as the ■' cause advanced, and by accident only ; from coincidences undesigned, and facts that •• were circumstantial. Collocations and comjiarisons, in short, brought largely tlieir •• collective force in aid of evidence that was more direct." It is not impossible that the course of the present struggle will show the necessity for belligerent action to be taken in various ways which may at first sight be regarded as a departure from old practice. In my note of the 7th January, I dealt at some length with the question of the necessity of taking vessels into port for the purposes of carrying out an eftective search, where search was necessary ; to that subject I feel that I need not again recur. The growth in the size of steamships necessitates in many cases that the vessel should go into calm water, in order that even the right of visit, as apart from the right of search, should be exercised. In modern times a steamer is capable of pursuing her voyage irrespective of the conditions of the weather. Many of the neutral merchantmen which our naval ofiicers are called upon to visit at sea are encountered by our cruisers: in places and under conditions which render the launching of a boat impossible. The conditions during winter in the North Atlantic frequently render it impracticable for days together for a naval officer to board a vessel on her way to Scandinavian countries. If a belligerent is to be denied the right of taking a neutral merchantman, met with under such conditions, into calm water in order that the visiting officer may go aboard, the right of visit and of search would become a nullity. The present conflict is not the first in which this necessity has arisen : as long ago as the Civil War the United States found it necess iry to take vessels to United States ports in order to determine whether the circumstances justified their detention. The same need arose during the Russo-Japanese War and also during the second Balkan War, when it sometimes happened that British vessels were made to deviate from their course and follow the cruisers to some spot where the right of visit and of search could l)e more conveniently carried out. In both c;ises this exercise of belligerent rights, although questioned at first by His Majesty's Government, was ultimately acquiesced in. No Power in these days can aflbrd during a great wai to forgo the exercise of the right of visit and search. Vessels which are apparently harmless merchantmen can be used for carrying and laying mines, and even fitted to discharge torpedoes. Supplies for submarines can without difficulty be concealed under other cargo. The only protection against these risks is to visit and search thoroughly every vessel appearing in the zone of operations, and if the circumstances are such as to render it impossible to carry it out at the spot where the vessel was met with, the only practicable course is to take the ship to some more convenient locality for the purpose. To do so is not to be looked upon as a new belligerent right, but as an adaptation of the existing right to the modern conditions of commerce. Like all belligerent rights it must be exercised with due regard for neutral interests, and it would be luireasonable 13 to expect a ueutral vessel to make long deviatious from her course for tliis purpose. It is for this reason that we have done all we can to encourage neutral mercliantmen on their way to ports contiguous to the enemy country to visit some British port lying on their line of route in order that the necessary examination of the ship's papers, and, if required of the cargo, can be made under conditions of convenience to the ship herself. The alternative would be to keep a vessel which the naval officers desired to board waiting, it might be for days together, until the weather conditions enabled the visit to be carried out at sea. No war has yet been waged in which neutral individuals have not occasionally suffered from unjustified belligerent action ; no neutral nation has experienced this fact more frequently in the past than Great Britain. The only method by which it is possible to harmonise belligerent action with the rights of neutrals is for the belligerent nation to provide some adequate machinery by which in any such case the facts can be investigated and appropriate redress can be obtained by the neutral individual. In this country such machinery is provided by the powers which are given to the Prize Court to deal not only with captures, but also with claims for compensation. Order V, Rule 2, of the British Prize Court Rules provides that where a ship has been captured as prize, but has been subsequently released by the captors, or has by loss, destruction, or otherwise ceased to be detained by them, without proceedings for condemnation having been taken, any person interested in the ship (which by Order I, Rule 2, includes goods) wishing to make a claim for costs and damages in respect thereof, shall issue a writ as provided by Order II. A writ so issued will initiate a proceediutr, which will follow its ordinary course in the Pi'ize Court. This rule gives the Prize Court ample jurisdiction to deal with any claim for compensation by a neutral arising from the interference with a ship or goods by our naval forces. The best evidence that can be given of the discrimination and the moderation with which our naval officers have carried out their duties is to be found in the fact that up to this time no jaroceedings for the recovery of compensation have been initiated under the rule which I have quoted. It is the common experience of every war that neutrals whose attempts to engage in suspicious trading are frustrated by a belligerent are wont to liave recourse to their Government to urge that diplomatic remonstrances shoidd be made on their behalf, and that redress should be obtained for them in this way. When an effective mode of redress is open to them in the courts of a civilised country by which they can obtain adequate satisfaction for any invasion of their rights which is contrary to the law of nations, the only coiuse which is consistent with sound principle is that they should be referred to that mode of redress, and that no diplomatic action should be taken until their legal remedies have been exhausted, and they are in a position to show l)rniut faci' denial of justice. The course adopted by His Majesty's Government during the American Civil War was in strict accordance with this principle. In spite of remonstrances from many quarters, they placed full reliance on the American Prize Courts to grant redress to the parties interested in cases of alleged wrongful capture by American ships of war, and put forward no claims until the opportunities for redress in those Courts had iieen exhausted. The same course was adopted in the Spanish-American War, when all British subjects who complained of captures or detentions of their ships were referred to the Prize Courts for relief. Before leaving this subject may I remind your Excellency of the fact that at your request you are now supplied immediately by this Department with particulars of every ship under American colours which is detained, and of every shipment of cargo in which an American citizen appears to be the party interested. Not only is the fact of detention notified to your Excellency, but so far as is practicable the grounds upon which the vessel or cargo has been detained are also communicated to you ; a concession which enables any United States citizen to take steps at once to protect his interests. His Majesty's Government have also done all that lies in their power to ensure' rapid action when ships are reported in British ports. They realise that the ship and cargo-owners may reasonably expect an immediate decision to be taken as to whether the ship may be allowed to proceed, and whether her cargo or any part of it must be discharged and put into the Prize Court. Realising that the ordinary methods of iiiter-Departmental correspondence might cause delays which could be obviated by another method of procedure, they established several months ago a special Committee, on which all the Departments concerned are represented. This Committee sits daily, and is provided with a special clerical staff. As soon as a ship reaches port full 14 particulars are telegraphed to London, and the case is dealt with at the next meeting of the Committee, immediate steps being taken to carry out the action decided upon. By the adoption of this procedure it has been found possible to reduce to a minimum the delays to which neutral shipping is exposed by the exercise of belligerent rights, and by the necessity, imposed by modern conditions, of examining with care the destination of contraband articles. Particular attention is directed in your Excellency's note to the policy we are j)ursuiug with regard to conditional contraband, especially food-stufis, and it is there stated that a number of American cargoes liave been seized without, so far as your Excellency's Government are informed, our being in possession of facts which warranted a reasonable belief that the shipments had in reality a belligerent destination, and in spite of the presumption of innocent use due to their being destined to neutral territory. The note does not specify any particular seizures as those which formed the basis ot this complaint, and I am therefore not aware whether the passage refers to cargoes which w^ere detained before or since the Order in Council of the 29th October was issued. Your Excellency will no doubt remember that soon after the outbreak of war an Order of His Majesty in Council was issued under which no distinction was diawn in the application of the doctrine of continuous voyage between absolute contraband and conditional contraband, and which also imposed upon the neutral owner of contraband somewhat drastic conditions as to the burden of proof of the guilt or innocence of the shipment. The principle that the burden of proof should always be imposed upon the captor has usually been admitted as a theory. In practice, however, it has almost always been otherwise, and any student of the Prize Courts decisions of the past or even of modern wars will find that goods seldom escape condemnation unless their owner was in a position to prove that their destination was innocent. An attempt was made some few years ago, in the unratified Declaration of London, to formulate some definite rules upon this subject, but time alone can show whether the rules there laid down will stand the test of modern warfare. The rules which His Majesty's Goveriuneut published in the Order in Council of the 20th August, 1914, were criticised by the United States Government as contrary to the generally recognised principles of international law, and as inflicting unnecessary hardship upon neutral commerce, and your Excellency will remember the prolonged discussions which took place between us throughout the month of October with a view to finding some new foi'mulse which should enable us to restrict supplies to the enemy forces, and to prevent the supply to the enemy of materials essential for the making of munitions of war, while inflicting the minimum of injury and interference with neutral commerce. It was with this object that the Order in Council of the 29th October was issued, under the provisions of which a far greater measure of immunity is conferred upon neutral commerce. In that Order the principle of non-interference with conditional contraband on its way to a neutral port is in large measure admitted : only in three cases is the rigiit to seize maintained, and in all those cases the opportunity is given to the claimant of the goods to establish their innocence. Two of those cases are where the ship's |)apers aflbrd no infoimation as to the person for whom the goods are intended. It is only reasonable that a belligerent should be entitled to regard as suspicious cases where the shippers of the goods do not choose to disclose the name of the individual who is to receive them. The third case is that of goods addressed to a person in the enemy territory. In the peculiar circumstances of the present struggle, where the forces of the enemy comprise so large a proportion of the population, and where there is so little evidence of shipments on private as distinguished from Government account, it is most reasonable that the buiden of proof should rest upon the claimant. Tlie most difficult questions in connection with conditional contraband ari,se with reference to the shipment of food-stufts. ISio country has maintained more stoutly than ■Great Britain in modern times the principle that a belligerent should abstain from interference with the food-stuffs intended for the civil population. The circumstances of the present .■-truggle are causing His JMajesty's Government some anxiety as to whether the existing rules with regard to conditional contraband, framed as they were with the object of protecting so far as possible the supphes which were intended for the civil population, are eftective for the purpose, or suitable to the conditions present. The principle which I have indicated above is one which His Majesty's Government have constantly had to uphold against the opposition of continental Po^^■e^s. In the absence of some certainty that the rule would be respected by both parties to this conflict, 15 we feel great doubt whether it should be regarded as au established principle of international law. Your Excellency will, no doubt, remember that in 1885, at the time when His Majesty's Government were discussing with the French Government this question of the right to declare food-stuffs not intended for the military forces to be contraband, and when public attention had been drawn to the matter, the Kiel Chamber of Commerce applied to the German Government for a statement of the latter's views on the subject. Prince Bismarck's answer was as follows : — " In answer to their representation of the 1st instant, I reply to the Chamber of " Commerce that any disadvantage our commercial and carrying interests may suffer '■ by the treatment of rice as contraband of war does not justify our opposing a measure " which it has been thought fit to take in carrying on a foreign war. Every war is a " calamity, which entails evil consequences not only on the combatants, but also on " neutrals. These evils may easily be increased by the interference of a neutral Power " with the way in which a third carries on the war, to the disadvantage of the subjects " of the interfering Power, and by this means German commerce might be weighted " with far heavier losses than a transitory prohibition of the rice trade in Chinese " waters. Tlie measure in question has for its object the shortening of the war by " increasing the difficidties of the enemy, and is a justifiable step in icar if impartially " enforced against all neutral ship>s." His Majesty's Government are disposed to think that the same view is still maintained by the German Government. Another circumstance which is now coming to light is that an elaborate machinery has been organised by the enemy for the supply of food-stuffs for the use of the German army from overseas. Under these circumstances it would be absurd to give any definite pledge that in cases where the supplies can be proved to be for the use of the enemy forces they should be given complete immunity by the simple expedient of despatching them to an agent in a neutral port. The reason for drawing a distinction between food-stufis intended for the civil population and those for the armed forces or enemy Government disappears when the distinction between the civil population and the armed forces itself disappears. lu any country in which there exists such a tremendous organisation for war as now obtains in Germany, there is no clear division between those whom the Government is responsible for feeding and those whom it is not. Experience shows that the power to requisition will be used to the fullest extent in order to make sure that the wants of the military are supplied, and however much goods may be imported for civil use it is by the military that they will be consumed if military exigencies require it, especially now that the German Government have taken control of all the food-stuffs in the country. I do not wish to overburden this note with statistics, but in proof of my statement as to the unprecedented extent to which supplies are reaching neutral ports, I should like to instance the figures of the exports of certain meat products to Denmark during the months of September and October. Denmark is a country which in normal times imports a certain quantity of such products, but exports still more. In 1913, during the above two months, the United States exports of lard to Denmark were nil, as compared with 22,652,598 lb. in the same two months of 1914. The corresponding figures with regard to bacon were : 1913, nii; 1914, 1,022,195 lb. ; canned beef, 1913, nil; 1914, 151,200 lb. ; pickled and cured beef, 1913, 42,901 lb. ; 1914, 156,143 lb. ; pickled pork, 1913 nil; 1914, 812,872 lb. In the same two months the United States exported to Denmark 280,176 gallons of mineral lubricating oil in 1914, as compared with 179,252 in 1913; to Norway, 335,468 gallons in 1914, as against 151,179 gallons in 1913 ; to Sweden, 896,193 gallons in 1914, as against 385,476 gallons in 1913. I have already mentioned the framing of the Order in Council of the 29th October, and the transmission to your Excellency of particulars of ships and cargoes seized as instances of the efforts which we have made throughout the course of this war to meet all reasonable complaints made on behalf of American citizens, and in my note of the 7th January I alluded to the decision of our Prize Court in the case of the " Miramichi," as evidencing the liberal principles adopted towards neutral commerce. I should also like to refer to the steps which we took at the beginning of the war to ensure the speedy release of cargo claimed by neutrals on board enemy ships which were captured or detained at the outbreak of war. Under our Prize Court rules [371] 16 release of such goods can be obtained without the necessity of entering a claim in the Pi'ize Court if the documents of title are produced to the officer representing His Majesty's Governn^.ent, and the title to the goods is established to liis satisfaction. It was shortly found, however, that this procedure did not provide for the case where the available evidence M'as so scanty that the officer representing the Crown was not justified in consenting to a release. In order, therefore, to amehorate the situation we established a special Committee, with full powers to authorise the release of goods without insisting on full evidence of title being produced. This Committee dealt with the utmost expedition with a large number of claims. In the great majority of cases the goods claimed were i^eleased at once. In addition to the cases dealt with by this Committee a very lai-ge amount of cargo was released at once by the Procurator-General on production of documents. Claimants therefore obtained their goods without the necessity of applying to the Prize Court and of incurring the expense involved in retaining lawyers, and Avithout the risk, which vvas in some cases a consideral )le one, of the goods being eventually held to be enemy property and condemned. We have reason to know that our action in this matter was highly appreciated by many American citizens. Another instance of the efforts which His Majesty's Government have made to deal as leniently as possible with neutral interests may be found in the policy which we have followed with regard to the transfer to a neutral flag of enemy ships belonging to companies which were incorporated in the enemy country, but all of whose share- holders were neutral. The rules applied by the British and by the American Prize Courts have always treated the flag as conclusive in favour of the captors in spite of neutral proprietary interests (see the case of the " Pedro," 175 U.S. 354). In several cases, however, we have consented to waive our belligerent right to treat as enemy vessels ships belonging to companies incorporated in Germany which were subsidiary to and owned by American corporations. The only condition which we have imposed is that these vessels should take no further part in trade with the enemy country. I have given these indications of the policy which we have followed, because I cannot help feeling that if the facts were more fully known as to the efforts which we have made to avoid inflicting any avoidable injury on neutral interests, many of the complaints which have been received by the Administration in Washington, and which led to the protest which your Excellency handed to me on the 29th December would never have been made. My hope is that when the facts which I have set out above are realised, and when it is seen that our naval operations have not diminished American trade with neutral countries, and that the lines on which we have acted are consistent witli the fundamental principles of international law, it will be apparent to the Government and people of the United States that His Majesty's Government have hitherto endeavoured to exercise their belligerent rights Avith every possible consideration for the interests of neutrals. ItAvill still be our endeavour to avoid injury and loss to neutrals, but theannoimce- ment by the German Government of their intention to sink merchant vessels and their cargoes without verification of their nationality or character, and without making any provision for the safety of non-combatant crews or giving them a chance of saving their lives, has made it necessary for His Majesty's Government to consider what measures they should adopt to protect their interests. It is impossible for one belligerent to depart from rules and precedents and for the other to remain bound by them. I have, &c. E. GREY. No. 5. Memorandum. THE American Ambassador called on Sir Edward iSrey on the lltli February in consequence of the receipt from his Government of telegraphic instructions which Avero made public in Washington on the 12th February, and Avhich appeared in the Loudon press on the following day, and, after discussing the points raised liy the Government of the United States, left the following memorandum : — " The attention of the Secretary of State at Washington has been directed to " certain statements A\-liich haA^e appeared in the newspaper press regarding the reported " action of the cax:)tain of the British steamship ' Lusitania ' in raising the flag of the 17 ' United States as the vessel recently approached British waters in order to escape ' ])ossible attacks by enemy suliniarines, and, in view of the announced purpose of the ' German Admiralty to engage in active naval operations in certain delimited sea areas ' adjacent to the coasts of Great Britain and Ireland, the Government of the United ' States feel a certain anxiety in considering the possibilitj' of any general iise of the ' flag of the United States by British vessels traversing tliose waters, since the effect of ' such a policy might be to bring about a menace to the lives and vessels of American ' citizens. " The Government of the United States therefore confidently trust that His ' Majesty's Government will do all in their power to check the use by British vessels of ' the American flag in the sea area defined in the German declaration, since it appears ' to them that such a practice might endanger the - vessels of a friendly Power ' navigating those waters. " The American Government are making earnest representations to that of ' Germany touching the danger to American vessels and citizens which might residt ' should the German Admiralty succeed in making their declaration effective." American Embassy, London, February 11, 1915. No. 6. Mr. Page to Sir Edioard Ch'ey. Sir, American Embassy, London, February 16, 1915. PURSUANT to instructions from my Government I have the honour to make to you the following communication which I have just received by telegraph : — " The Department notes that you have been informed by the British Government that the cargo of the American steamer ' Wilhelmina ' has been sent to Pi'ize Court, but is not yet unloaded. The Government of the United States, of course, has no intention of interfering with the proper course of judicial procedure in the British Prize Courts, but deems it proper to bring to the attention of the British Government information which has been received in relation to the character and destination of the cargo, and to point out certain considerations prompting the supposition that the seizure may not be justified. " This Government is informed that the W. L. Green Commission Company, an American corporation organised in 1891 which in the past has made extensive shipments of goods to Germany is the sole owner of the cargo, which consists entirely of foodstuffs consigned to the W. L. Green Commission Company, Hamburg, and that the company's manager now in Europe has instructions to sell the cargo solely to the civilian population of Hamburg. A copy of the ship's manifest has been submitted to this Government accompanied by a sworn statement from the company's manager, in which he represents that he was instructed to proceed to Germany to dispose of the cargo to private purchasers in that country, and not to any belligerent Government, nor to armed forces of such GoA'ernment, nor to any agent of a belligerent Government or of its armed forces. " According to well-established practice among nations, admitted as this Govern- ment understands by the Government of Great Britain, the articles of which the ' Wilhelmina's ' cargo is said to consist are subject to seizure as contraband only in case they are destined for the use of a belligerent Government or its armed forces. " The Government of the United States understands that the British authorities consider the seizure of the cargo justified on the ground that a recent order of the Federal Council of Germany promulgated after the vessel sailed, requires the delivery of imported articles to the German Government. The owners of the cargo have represented to this Govei'nment that such a position is untenable ; they point out that by a proposition of the order in question as originally announced, the regulations in relation to the seizure of food products are made inapplicable to such products imported after the 31&t January, 1915. Tiiey further represent that the only articles shipped on the ' Wilhelmina' which are embraced within the terms of these regulations are wheat and bran, which constitutes about 15 per centum of the cargo, as compared with 85 per centum consisting of meat, vegetables, and fruits. The owners also assert that the regulations contemplated the disposition of foodstuffs to individuals through [371] C 2 municipalities, that municipalities are not agents of the Government, and that the purpose of the regulations is to conserve the supply of food products, and to prevent speculation and inflation of prices to non-combatants. "The German Government has addressed a formal communication to the Govern- ment of the United States in relation to the effect of the Decree issued by the German Federal Council, and this Government deems it pertinent to call to the attention of the British GJovernment a material portion of this communication which is as follows : — u c 1. The Federal Council's decision concerning the seizure of food products, which England alleges to be the cause of food products shipped to Germany being treated as contraband, bears exclusively on wheat, rye, both unmixed and mixed with other products, and also wheat, rye, oats, and barley flour. " ' 2. The Federal Council makes an express exception in section 45 of the Order ; section 45 provides as follows : — " ' " The stipulations of this regulation do not apply to grain or flour imported from abroad after the 31st January." " ' 3, Conjunctively with that saving clause, the Federal Council's Order contains a provision under which imported cereals and flours would be sold exclusively to the municipalities or certain special designated organisations by the importers, although that provision had for its object simply to throw imported grain and flours into such channels as supply the private consumption of civilians, and in consequence of that provision, the intent and purpose of the Federal Council's Order, which was to protect the civilian population from speculators and engrossers, were fullv met, it was nevertheless rescinded so as to leave no room for doubt. " ' 4.'^ My Government is amenable to any proposition looking to control by a special American organisation under the supervision of the American Consular oflacers, and if necessary will itself make a proposition in that direction. " ' 5. The Geimau Government further calls attention to the fact that municipalities do not form part of or belong to the Government, but are self- administrative bodies, which are elected by the inhabitants of the Commune in accordance with fixed rules, and therefore exclusively represent the private part of the population, and act as it directs. Although those principles are generally known, and obtain in the United States as well as in England itself, the German Government desired to point out the fact so as to avoid any further unnecessary delay. " ' 6. Hence it is absolutely assured that imported food products will be consumed by the civilian population in Germany exclusively.' " " It will be observed that it is stated in this communication, which appears to confirm the contentions of the cargo owners, that a part of the Order of the German Federal Council relating to imported food products has now been rescinded. " This Government has received another communication from the German Government giving formal assurance to the Government of the United States that all goods Imported into Germany from the United States directly or indirectly which belong to the class of relative contraband, such as foodstuffs, will not be used by the German army or navy or by Government authorities, but will be left to the free consumption of the German civilian population, excluding all Government purveyors. " If the British authorities have not in their possession evidence other than that presented to this Government as to the chai-acter and destination of the cargo of the ' Wilhelmina ' sufficient to warrant the seizure of this cargo, the Government of the United States hopes that the British Government will release the vessel together with her cargo and allow her to proceed to her port of destination." I have, &c. WALTER HINES PAGE. 19 No. 7. Memorandum handed to the United States Ambassador, Fehruarij 19, 1915. THE communication made by the L'nited States Ambassador iu his note to Sir Edward Grey of the 16th instant has been carefully considered, and the following observations are offered in reply : — 2. At the time when His Majesty's Government gave directions for the seizure of the cargo of the steamship " Wilhelmina " as contraband they had before them the text of the decree made by the German Federal Council on the 25th January, under article 45 of which all grain and flour imported into Germany after the 31st Janiiary was declared deliverable only to certain organisations under direct Government control or to municipal authorities. The vessel was bound for Hamburg, one of the Free Cities of the German Empire, the government of which is vested iu the municipality. This was one of the reasons actuating His Majesty's Government in deciding to bring the cargo of the " Wilhelmina " before the Prize Court. o. Information has only now reached them that by a subsequent decree, dated the Cth February, the above provision iu article 45 of the previous decree was re^jealed, it would appear for the express purpose of rendering difficult the anticiDated proceedings against the " Wilhelmina." The repeal was not known to His Majesty's Government at the time of detention of the cargo, or, indeed, until now. 4. How far the ostensible exception of imported supplies from the general Govern- ment monopoly of all grain and flour set up by the German Government may affect the question of the contraband nature of the shipment seized is a matter which will most suitably be investigated by the Prize Court. 5. It is however necessary to state that the German decree is ruot the oulj^ ground on which the submission of the cargo of the " Wilhelmina " to a Prize Court is justified. The German Government have in public announcements claimed to treat practically every town or port on the English east coast as a fortified place and base of operations. On the strength of this contention they have subjected to bombardment the open towns of Yarmouth, Scarborough and Whitby, among others. On the same ground, a number of neutral vessels sailing for English ports on the east coast with cargoes of goods on the German list of conditional contraband have been seized by German cruisers and brought before the German Prize Court. Again, the Dutch vessel " Maria," having sailed from California with a cargo of grain consigned to Dublin and Belfast, was sunk in September last by the German cruiser " Karlsruhe." This could only have been justified if, among other things, the cargo could have been proved to be destined for the British Government or armed forces and if a presumption to this effect had been established owing to Dublin or Belfast being considered a fortified place or a base for the armed forces. 6. The German Government cannot have it both ways. If they consider themselves justified in destroying by bombardment the lives and property of peaceful civil inhabitants of English open towns and watering-places, and in seizing and sinking ships and cargoes of conditional contraband on the way thither, on the ground that they were consigned to a fortified place or base, d fortiori His Majesty's Government must be at liberty to treat Hamburg, which is in part protected by the fortifications at the mouth of the Elbe, as a fortified town, and a base of operations and supply for the purposes of article 34 of the Declaration of London. If the owners of the cargo of the " Wilhelmina " desire to question the validity in international law of the action taken by order of His Majesty's Government, they will have every opportunity of establishing their case in due course before the Prize Court, and His Majesty's Government would, in this connection, recall the attention of the United States Government to the considerations put forward iu Sir E. Grey's note to Mr. Page of the 10th instant as to the propriety of awaiting the result of Prize Court proceedings before diplomatic action is initiated. It will be remembered that they have from the outset given a definite assurance that the owners of the " Wilhehnina " as well as the owners of her cargo, if found to be contraband, would be equitably indemnified. 7. There is one further observation to which His Majesty's Government think it right, and appropriate in the present connection, to give expression. They have not, so far, declared foodstuffs to be absolute contraband. They have not interfered with any neutral vessels on account of their carrying foodstuffs, except on the basis of such foodstuffs being liable to capture if destined for the enemy forces or Governments. In so acting, they have been guided by the general principle, of late universally [371] C 3 '20 upheld by civilised nations, and observed in practice, that the civil populations of countries at war are not to be exposed to the treatment rightly reserved for combatants. This distinction has to all intents and purposes been swept away by the novel doctrines proclaimed and acted upon by the German Government. 8. It is unnecessarj" here to dwell upon the treatment that has been meted out to the civil population of Belgium and those parts of France which are in German occttpation. When Germany, long before any mines had been laid by British authorities, proceeded to sow mines iipon the high seas, and, by this means, sunk a considerable number not oirly of British but also of neutral merchantmen with their unoffending crews, it was, so His Majesty's Government hold, open to them to take retaliatory measures, even if such measures were of a kind to involve pressure on the civil population — not indeed of neutral States — but of their enemies. They refrained from doing so. 9. When, subsequently, English towns and defenceless British subjects including women and children were deliberately and systematically fi)-ed upon and killed by ships flying the flag of the Imperial German navy, when quiet country towns and villages, void of defences, and possessing no militarj'' or naval importance, were bombarded by German airships. His Majesty's Government still abstained from drawing the logical consequences from this form of attack on defenceless citizens. Further steps in the same direction are now announced, and in fact have already been taken, by German}'. British merchant vessels have been torpedoed at sight without any attempt being made to give warning to the crew, or any opportunity being given to save their lives ; a torpedo has been lired against a British hospital ship in daylight ; and similar treatment is threatened to all British merchant vessels in future as well as to any neutral ships that may happen to be found in the neighbourhood of the British Isles. 10. Faced with this situation. His Majesty's Government consider it would 'be altogether unreasonable that Great Britain and her Allies should be expected to remain iudefiniteh' l)ouud, to their grave detriment, by rules and principles of which they recognise the justice if impartially observed as between belligerents, but which are at the present moment openly set at defiance by their enemy. 11. If therefore His Majesty's Government should hereafter feel constrained to declare foodstuffs absolute contraband, or to take other measures for interfering with German trade, by way of reprisals, they confidently expect that such action will not be challenged on the part of neutral States by appeals to laws and usages of war whoso validity rests on their fonning an integral part of that system of international doctrine which as a whole their enemy frankly boasts the liberty and intention to disregard, so long as such neutral States cannot compel the Gennan Government to abandon methods of warfare which have not in recent history been regarded as having the sanction of either law or humanity. Foreign Office, Fchn(arij 19, 1915. No. 8, Memorandum communicated by Sir Fdward Gret). to the United States Ambassador, February 19, 1915, THE memorandum communicated on the 11th February calls attention in courteous and friendly terms to the action of the captain of the British steamship "Lusitania" in raising the flag of the United States of America when approaching British waters, and says that the Government of the United States feel a certain anxiety in considering the possibility of any general use of the flag of the United States by British vessels traversing those waters, since the effect of such a policy might be to bring about a menace to the lives and vessels of United States citizens. It was understood that the German Government had annoimced their intention of sinking British merchant vessels at sight by torpedoes, without giving any opportunity of making any provision for saving the lives of non-combatant crews and passengers. It was in consequence of this threat that the "Lusitania" raised the United States flag on her inward voyage. On her subsequent outward voyage, a request was made by the United States passengers who were embarking on board her, that the United States flag should be hoisted, presumably to ensure their safety. Meanwhile, the memorandum from your Excellency had been received ; His Majesty's Government, did 21 not give auy advice to the company as to how to meet this request ; and it is iinderstood that the " Lnsitania " left Liverpool nnder the British flag. It seems unnecessary to say more as regards the " Lusitania " in particular. In regard to the use of foreign flags by merchant vessels, the British Merchant Shipping Act makes it clear that the use of the British flag by foreign merchant vessels is permitted in time of war for the purpose of escaping capture. It is believed that, in the case of some other nations, there is a similar recognition of the same practice with regard to their flags, and that none have forbidden it. It would, thei'efore, be unreasonable to expect His Majesty's Government to pass legislation forbidding the use of foreign flags by British merchant vessels to avoid capture by the enemy. Now that the German Government have announced their intention to sink merchant vessels at siglit, with their non-combatant crews, cargoes, and papers, a proceeding hitherto regarded by the opinion of the world not as war, but as piracy, it is felt that the United States Government coidd not fairly ask the British Government to order British merchant vessels to forego the means — always hitherto permitted — of escaping not only capture, but the much worse fate of sinking and destruction. Great Britain has always, when neutral, accorded to the vessels of other States at war liberty to use the British flag as a means of protection against capture, and instances are on record when United States vessels availed themselves of this facility during the American civil war. It would be contrary to fair expectation if now, when the conditions are reversed, the United States and neutral nations were to grudge to British ships liberty to take similar action. The British Government have no intention of advising their merchant shipping to use foreign flags as a general practice, or to resort to them otherwise than for escaping capture or destruction. The obligations upon a belligerent warship to ascertain definitely for itself the nationality and character of a merchant vessel before capturing it, and a fortiori before sinking and destroying it, has been universally recognised. If that obligation is fulfilled, hoisting a neutral flag on board a British vessel cannot possibly endanger neutral shipping ; and the British Government hold that, if loss to neutrals is caused by disregard of this obligation, it is upon the enemy vessel disregarding it and upon the Government giving orders that it should be disregarded that the sole responsibility for injury to neutrals ought to rest. Foreign Office, February 19, 1915. Ko. 9. Mr. Page to Sir Fclicard Grey.— {Received February 22.) Sir, American Embassy, London, February 22, 1915. PURSUANT to instructions from my Government, I have the honour to submit, for your consideration, the following communication which I have just received by telegraph from the Secretary of State, dated at Washington on the 20th instant, with the information that it forms the text of an identic note to the Government of His Britannic Majesty and that of Germany: — " In view of the correspondence which has passed between this Government and Great Britain and Germany respectively relative to the declaration of a war zone by the German Admiralty, and the use of neutral flags by British merchant vessels, this Government ventures to express the hope that the two belligerent Governments may, through reciprocal concessions, find a basis for agreement which will relieve neutral vessels engaged in peaceful commerce from the great dangers which they will incur on the high seas adjacent to the coasts of the belligerents. " The Government of the United States respectfully suggests that an agreement in terms like the following might be entered into. This suggestion is not to be regarded as in any sense a proposal made by this Government, for it of course fully recognises that it is not its privilege to propose terms of agreement between Great Britain and Germany, even though the matter be one in which it and the people of the United States are directly and deeply interested. It is merely venturing to take the liberty which it hopes may be accorded a sincere friend desirous of embarrassing neither nation involved, and of serving, if it may, the common interests of humanity. The course outlined is offered in the [371] C 4 22 hope that it may draw forth the views and elicit the suggestions of the British and German Governments on a matter of capital interest to the whole world. " Germany and Great Britain to asfree : — " First. That neither will sow any floating mines, whether upon the high seas or in territorial waters ; that neither will plant on the high seas anchored mines excejit within canon range of harbours for defensive purposes only ; and that all mines shall bear the stamp of the Government planting them, and be so constructed as to become harmless if separated from their moorings. " Second. That neither will use submarines to attack merchant vessels of any nationality except to enforce the right of visit and search. " Third. That each will require their respective merchant vessels not to use neutral flags for the purpose of disguise or msc de guerre. " Germany to agree : — " That all importations of food or foodstuffs from the United States (and from such other neutral countries as may ask it) into Germany shall be consigned to agencies to be designated by the United States Government ; that these American agencies shall have entire charge and control, without interference on the part of the German Government, of the receipt and distribution of such importations, and shall distribute them solely to retail dealers bearing licences from the German Government entitling them to receive and furnish such food and foodstuffs to non- combatants only ; that any violation of the terms of the retailers' licences shall work a forfeiture of their rights to receive such food and foodstuffs for this purpose ; and that such food and foodstuffs will not be requisitioned by the German Government for any purpose whatsoever or to be diverted to the use of the armed forces of Germany. " Great Britain to awree :— - " That food and foodstuffs will not be placed upon the absolute contraband list, and that shipments of such commodities will not be interfered with or detained by British authorities if consigned to agencies desig.iated by the United States Government in Germany for the receipt and distribution of such cargoes to licensed German retailers for distribution solely to the non-combatant population. " In subnutting this proposed basis of agreement this Government does not wish to be understood as admitting or denying any belligerent or neutral right established by the principles of international law, but would consider the agreement, if acceptable to the interested Powers, a modus vlvcndi, based upon expediency rather than legal rigiit, and as not binding upon the United States either in its present form or in a modified form until accepted by this Governmeat." I have, &c. WALTER HINES PAGE. Xo. 10, Declaration presented to the Governments of Argentina, Brazil, Chile, Dcnmarh, Greece, Italy, tlte Netherlands, Norway, Portugal, Spain, Sioeden, Switzerland, United States, and Uruguay by the British and French representatives at the respective capitals. GERMANY has declared that the English Channel, the north and west coasts of France, and the waters round the British Isles are a " war area," and has officially notified that " all enemy ships found in that area will be destroyed, and that neutral vessels may be exposed to danger." This is in effect a claim to torpedo at sight, without regard to the safety of the crew or passengers, any merchant vessel under any flag. As it is not in the power of the German Admiralty to maintain any surface craft in these waters, this attack can only be delivered by sidjmarine agency. The law and custom of nations in regard to attacks on commerce have always presumed that the first duty of the captor of a merchant vessel is to bring it laefore a Prize Court, where it may be tried, where the regularity of the capture may be challenged, and where neutrals may recover their cargoes. The sinking of prizes is in itself a questionable act, to be resorted to only in extraordinary circumstances and after provision has been made for the safety of all the crew or passengers (if there are passengers on hoard). The responsibility for discriminating between neutral and enemy vessels, and between neutral and enemy cargo, obviously rests with the attacking 23 ship, whose duty it is to verify the status and character of the vessel and cargo, and to preserve all papers before sinking or even capturing it. So also is the humane duty of providing for the safety of the crews of merchant vessels, whether neutral or enemy, an obligation upon every belligerent. It is upon this l^asis that all previous discussions of the law for regulating warfare at sea have proceeded. A German submarine, however, fulfils none of these obligations. She enjoys no local^ command of the waters in wliich she operates. Slie does not take her captures within the jurisdiction of a Prize Court. She carries no prize crew which she can put on board a prize. She uses no effective means of discriminating between a neutral and an enemy vessel. She does not receive on board for safety the crew of the vessel she sinks. Her methods of warfare are therefore entirely outside the scope of any of the international instruments regulating operations against commerce in time of war. The German declaration substitutes indiscriminate destruction for regulated capture. Germany is adopting these methods against peaceful traders and non-combatant crews with the avowed object of preventing commodities of all kinds (including food for the civil population) from reaching or leaving the Iiritish Isles or Northern France. Her opponents are, tlierefore, driven to frame retaliatory^ measures in order in their turn to prevent commodities of any kind from reaching or leaving Gei'many. These measures will, however, be enforced by the British and French Governments without risk to neutral ships or to neutral or non-combatant life, and in strict observance of the dictates of humanity. The British and French Governments will therefore hold themselves free to detain and take into port ships carrjang goods of presumed enemy destination, ownership, or origin. It is not intended to confiscate such vessels or cargoes imless they would otherwise be liable to condemnation. The treatment of vessels and cargoes which have sailed before this date will not be affected. March I, 1915. No. 11. Mr. Page to Sir Echoard Grey. — (Received March 9.) Sir, American Embassy, London, March 8, 191ii. WITH regard to the recent communications received by my Government fiom His Britannic Majesty's Government and that of France concerning restraints upon connnerce with German}', I have received instructions to address to you certain enquiries Avith a view to a more complete elucidation of the situation which has arisen from the action contemplated by the Governments of the two allied countries. My Government finds itself in some difBculty in determining its attitude towards the British and French declarations of intended retaliation uj)on commerce with Germany by reason of the nature of the proposed measures in their relation to the commerce of neutral countries. While it appears that the intention is to interfere with and take into custody all ships, both outgoing and incoming, engaged in trade with Germany, which, in effect, seems to constitute a blockade of German ports, there is no assertion of the rule of blockade permitting the condemnation, regardless of the character of its cargo, of any ship which attempts to enter or leave a German port. In the language of the declaration — " The British and French Governments will therefore hold themselves free to detain and tal^e into port ships carrying goods of presumed enemy destination, ownership, or origin. It is not intended to confiscate such vessels or cargoes unless they would otherwise be liable to condenmation." The former sentence above quoted claims a right pertaining only to a state of blockade, while the latter sentence proposes a treatment of ships and cargoes as if no blockade existed. The two together present a proposed course of action previously unknown to international law, and neutrals have in consequence no standard by which to measure their rights or to avoid danger to their ships and cargoes. It seems to the Government of the United States that the paradoxical situation thus created should be altered, and that the declaring Powers ought to make a definite assertion as to whether they rely upon the rules governing a blockade, or the rules ajjplicable when no blockade exists. The declaration presents other perplexities. The latter of the two sentences above quoted indicates that the rules of contraband are to be applied to cargoes 24 detained. The existing rale covering non-contraband articles carried in neutral bottoms is that the cargoes be released and the ships allowed to proceed. This rule cannot, imder the other sentence quoted, be applied as to destination, and the question then arises as to what is to be done with a cargo of non-contraband goods which might be detained under the declaration. The same question may be asked as to cargoes of conditional contraband. The foregoing com'ments applj' to cargoes destined for German ports. Cargoes issuing from them present another problem under the terms of the declaration. Pursuant to the rules governing enemy exports, the only goods subject to seizure and condemnation are those owned by enemy subjects carried in enemy bottoms, and yet under the declaration it is proposed to seize and take into port all goods of enemy "ownership and origin." A particular significance attaches to the word "origin." The origin of goods in neutral ships destined to neutral territory is not and never has been a ground for forfeiture except in cases where a blockade is declared and not maintained. To what then would the seizure imder the present declaration amount except to delay the deliverj^ of the goods ? The declaration does not indicate what disposition would be made of such cargoes owned by a neutral ; and another question arises in the case of enemy ownership as to what rule should then come into play. If another rule is to be applied, upon what principles of international law would it rest, and upon what rule, if no blockade is declared and maintained, could the cargo of a neutral ship issuing from a German poi't be condemned ? If it is not to be condemned, ■what legal course exists but to release it ? My Government is fully alive to the possibility that the methods of modern naval warfare, particularly in the use of the submarine for both defensive and offensive operations, may make the former means of maintaining a blockade a i^hysical impossi- bility ; but it nevertheless feels that the point of the desirability of limiting " the radius of activity" can be urged with great force, especially so if this action by the belligerents can be construed to be a blockade. A very complicated situation would, rmdoubtedly be created if, for example, an American vessel laden with cargo of German origin should escape the British patrol in European waters only to be held up by a cruiser off New York and taken into Halifax. I have the honour to add, for your information, that a communication similar to the above has been addressed to the Government of the French Republic. I have, &c. WALTER HINES PAGE. No. 12. Memorandum handed hy Sir Edivar'd Grey to Mr. Page, March 15, 1915. ON the 22nd February last I received a communication from your Excellency of the identic note addressed to His Majesty's Government and to Germany respecting an agreement on certain points as to the conduct of the war at sea. The reply of the German Government to this note has been published, and it is not understood, from the reply that the German Government are prepared to abandon the practice of sinking British merchant vessels by submarines ; and it is evident from their reply that they will not abandon the use of mines for offensive purposes on the high seas, as contrasted with the use of mines for defensive purposes only, within cannon range of their own harbours, as suggested by the Government of the United States. This being so, it might appear unnecessary for the British Government to make any further reply than to take note of the German answer We desire, however, to take the opportunity of making a fuller statement of the whole position, and of our feeling with regard to it ^Ve recognise with sympathy the desire of the Government of the United States to see the European War conducted in accordance with the previously recognised, rules of international law and the dictates of humanity. It is thus that the British forces have conducted the war, and we are not aware that these forces, either naval or military, can have laid to their charge any improper proceedings, either in the conduct of hostilities or in the treatment of prisoners or wounded. On the German side it has been very different : — 1. The treatment of civilian inhabitants in Belgium and the north of France has been made pubhc by the Belgian and French Govermnents, and by those who have ■zo had experience o£ it at first baud. ]\Iodeni hitstory affords no precedent for the sufferings that have been inflicted on the defenceless and non-combatant popukition in the territory that has been in German military occupation. I'^ven the food of the population was confiscated, until, in Beloiiun, an International Commission, largely influenced by American generosity, and conducted under American auspices, came to the relief of the population, and secured from the German Government a promise to spare what food was still left in the country, though the Germans still continue to make levies in money upon the defenceless population for the support of the German army. 2. We have from time to time received most terrible accounts of the barbarous treatment to which British officers and soldiers have been exposed after they have been taken prisoner, while being conveyed to German prison camps. One or two instances have already been given to the United States Government, founded upon authentic and first-hand evidence, which is beyond doubt. Some evidence has been received of the hardships to which British prisoners of war are subjected in the prison camps, contrasting, we believe, most unfavourably with the treatment of German prisoners in this country. We have proposed, with the consent of the United States Government, that a commission of United States officers should be permitted in each country to inspect the treatment of prisoners of war. The United States Government have been unaljle to obtain any reply from the German Government to this proposal, and we remain in continuing anxiety and apprehension as to the treatment of British prisoners of war in Germany. 3. At the very outset of war a German minelayer was discovered laying a mine- field on the high seas. Further minefields have been laid from time to time without warning, and, so far as we know, are still being laid on the high seas, and many neutral as well as British vessels have been sunk by them. 4. At various times during the war German submarines have stopped and sunk British merchant vessels, thus making the sinking of merchant vessels a general practice, though it was admitted previously, if at all, only as an exception ; the general rule, to which the British Government have adhered being that merchant vessels, if captured, must be taken before a Prize Court. In one case, already quoted in a note to the United States Government, a neutral vessel carrying foodstuffs to an unfortified town in Great Britain has lieen sunk. Another case is now reported, in which a German armed cruiser has sunk an American vessel, the " William P. Frye," carrying a cargo of wheat from Seattle to Queenstown. In both cases the cargoes were presumably destined for the civil population. Even the cargoes, in such circumstances, should not have been condemned without the decision of a Prize Court, much less should the vessels have been sunk. It is to be noted that both these cases occurred before the detention by the British authorities of the " Wilhelmiua " and her cargo of foodstuffs, which the German Government allege is the justification for their own action. The Germans have announced their intention of sinking British merchant vessels by torpedo without notice and without any provision for the safety of the crew. They have already carried out this intention in the case of neutral, as well as of British vessels, and a number of nou-conibataut and innocent lives on British vessels, unarmed and defenceless, have been destro^'ed in this way. 5. Unfortified, open, and defenceless towns, such as Scarborough, Yarmoiith, and Whitby, have been deliberately and wantonly bombarded by German ships of war, causing in some cases considerable loss of civilian life, including women and children. 0. German aircraft have dropped bombs on the East Coast of England, where there were no military or strategic points to be attacked. On the other hand, I am aware of but two criticisms that have been made on British action in all these respects : — 1. It is said that the British naval authorities also have laid some anchored mines on the high seas. They have done so ; but the mines were anchored and so constructed that they would be harmless if they went adrift, and no mines whatever were laid by the British naval authorities till many weeks after the Gei-mans had made a regular practice of laying mines on the high seas. 2. It is said that the British Government have departed from the view of international law, which they had previously maintained, that foodstuffs destined for the civil population should never be interfered with ; this charge being founded on the submission to a Prize Court of the cargo of the " Wilhelmina." The special considerations affecting this cargo have already been presented in a Memorandum to the United States Government, and I need not repeat them here. Inasmuch 26 as tlie stoppage of all foodstuffs is an admitted consequence of blockade, it is obvious that there can be no universal rule, based on considerations of morality and humanity, which is contrary to this practice. The right to stop foodstuffs destined for the civdl population must, therefore, in any case be admitted if an effective " cordon " controlling intercourse with the enemy is drawn, announced, and maintained. Moreover, independently of rights, arising from belligerent action in the nature of blockade, some other nations, differing from the opinion of the Governments of the United States and Great Britain, have held that to stop the food of the civil population is a natural and legitimate method of bringing pressure to bear on an enemy country, as it is upon the defence of a besieged town. It is also upheld on the authority of both Prince Bismarck and Count Caprivi, and therefore presumably is not repugnant to German morality. The following are the quotations from Prince Bismarck and Count Caprivi on this point : — Prince Bismarck, in answering in 1