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Part II: The Rationing System   (cont'd.)

Chapter 11: Negotiations for a General Agreement with the Netherlands Overseas Trust

How German exports were regarded during the investigations undertaken before the war. – German exports during the first months of the war. – Why the German exports ran mainly by way of Holland. – German export trade and the Dutch East Indies. – The Netherlands government and the March order in council. – The Netherlands Overseas Trust make provisional arrangements for operating the order in council. – The movements of German trade observed during April and May. – The difficulties of stopping German exports. – Two vessels bearing trust certificates are detained. – M. van Vollenhoven in conference with the Foreign Office.

If it were possible to make a quantitative, or even a comparative, estimate of the German commerce that was stopped by each agreement with neutral firms, traders, and associations, then, it is hardly doubtful that our agreements with the Netherlands trust would be entitled to a high place on the table; for whereas most of our agreements were intended to restrict German imports only, those with the trust constituted an immense barrier against the German export and import trade, and so blocked up two commercial movements. It will, therefore, be proper to make a brief survey of what is known about the German export trade, in order to appreciate the importance of the agreements concluded.

i) How German exports were regarded during the investigations undertaken before the war

It has already been shown, that the Committee of Imperial Defence examined certain branches of economic warfare, during the decade before the war, but that no general plan was ever prepared or considered by them. Their investigations upon trading with the enemy, or upon the consequences of seizing enemy vessels when war was declared, had, so to speak, served as avenues of approach to large territory, which they had never been able to explore and survey. It must be remembered, moreover, that German sea-borne supplies had always been the subject matter of such investigations as the committee had been allowed to undertake: it is true, that German trade as a whole had been reviewed in the state papers drafted by the Board of Trade, but the committee's terms of reference had, in every case, been too precise, and the labour of investigating the questions submitted to them too heavy, to allow them to enlarge their survey. It followed, as a consequence of this, that, although the damage that might be done to Germany's economic system by restricting imports had twice been estimated, no calculation had ever been made of the damage that might be done by severing German export and import trade with overseas countries, at one and the same time, in order to choke and dislocate the economic machinery of the empire by a single operation. There is thus no state paper in the government archives, about Germany's power to purchase goods from neutrals by exporting to them, nor any plan for weakening it. Nevertheless, it is impossible to read the reports prepared by the committees which did investigate economic warfare, and the state papers annexed to those reports, without being persuaded, that many persons in authority assumed, that German export trade would automatically dwindle to nothing when the grand fleet took up its war station, and the cruiser squadrons in the Atlantic drove the enemy's merchant fleet from the seas. No document can be quoted to prove that this was assumed, and yet many documents suggest it: the economic advantages of what was then known as [278] a command of the seas were so much overestimated. To give an example: in a paper presented to the committee on the military needs of the empire, the Admiralty's experts reported:

      Germany's credit must, it seems, depend on her capability to continue her trade, and provided our navy does what is expected of it, the prospect of Germany in this respect does not appear bright...... What both nations have to fear, however, is the stoppage, or rise in price of foodstuffs and raw materials. In the case of either country these two eventualities must tend to produce a position which might become intolerable. Both nations must keep their foreign markets, but if the goods they have manufactured cannot successfully hold their own in the markets of the world, stagnation in their industrial concerns must result. This must end in unemployment, distress, etc., and eventually, bankruptcy...... It seems, then that we must do all in our power to check the German industrial output, or if possible, to stop it at its source, i.e., prevent the import of raw material......

This is not explicit, but the words at least suggest that the Admiralty assumed, that German exports would automatically dwindle after the fleet had blocked up the avenues of import.

This is not the only example: in the first paragraphs of the final war orders to the fleet, the Admiralty stated:

      The continual movement in the North sea of a fleet superior in all classes of vessels to that of the enemy will cut off German shipping from oceanic trade, and will as time passes, inflict a steadily increasing degree of injury upon German interests, and credit, sufficient to cause serious economic and social consequences.

Certainly this is not an explicit statement that the naval war plan, when executed, would stop German exports, yet this confidence in: Serious economic and social consequences and in: The steadily increasing injury to German interests, seems to imply a confidence in high places, that German commerce of all kinds would avoid the majestic presence of the British fleet, and that it would abandon the ocean highways. Also, it must be remembered, that if we had been able to exert no more economic pressure upon the enemy than was predicted in the war plan, then, the injury done to Germany would have decreased, until it was no injury at all, and its economic and social consequences would have been trivial, instead of serious. If the general consequences of possessing a more numerous fleet than the enemy's were so much overestimated, it is not very extravagant to assume, that particular consequences were imagined to be greater than they actually proved to be.

ii) German exports during the first months of the war

This conjecture is strengthened, when it is remembered that our first measures of economic warfare were directed solely against German imports: the August order in council gave us rights of intercepting indirect imports; the October order reasserted those rights, and the committees that were assembled for administering these proclamations were concerned only with German supplies. More than this, our system of demanding guarantees against re-export from neutral countries was a practice established solely for restricting German imports. The March order in council was, therefore, a declaration for which preparation had only been made in part: the machinery for intercepting German imports was already assembled, and it remained only to perfect and enlarge it; nothing, however, had been done to stop the produce of the German soil, and the output of the German factories, from passing freely into overseas markets, if neutral ships were willing to carry them; for which reason it is of some interest to discover what export trade the Germans had maintained during the first eight months of the war.

If, as seems probable, it was generally assumed, that German export trade would fall away to nothing, when the German merchant fleet was driven into harbour, then, those who imagined this were very much deceived. In a normal year, about 33,000 foreign vessels entered and cleared from German harbours with cargoes; so that, even if a large deduction is made for the allied ships, which could not at once be put into service, it is certain that a considerable fleet of neutral vessels was in [279] German harbours, awaiting cargoes, when war began. Also, as a neutral vessel was not detained at all on an outward journey from Rotterdam or Hamburg, and very liable to be held when carrying a cargo from America to Copenhagen or Göteborg, neutral shipmasters were inclined to tender for German cargoes, when it became apparent, that the declaration of Paris was being respected, and that German exports were protected by it. This is probably the explanation why the German export trade was so well maintained during the first convulsions of the war; for although it is not possible to make a complete and satisfactory review of German exports, during the autumn of 1914, the known facts all indicate, that German export trade suffered hardly more than the British during the great commercial upheaval between August and December. German exports to the United States for the year 1913 were valued at about 189 million dollars: during the year 1914 their total value was nearly 190 million dollars, a slight, but perceptible, rise. Our own exports to the United States also showed a rise when the year 1914 was ended, and our re-exports remained steady, so that, in this great market, both countries roughly maintained their sales. German exports to the Argentine fell from 496 to 322 million dollars, a decrease of more than a third: our own had, however, fared no better, as the year's figures showed a fall of about eight million pounds sterling from a normal total of twenty-two millions. For some reason, which is difficult to explain, European exports to Brazil were very much cut down during the first months of the war; but the curtailment of German exports was in about the same proportion as our own: the German figures showed a reduction of about a half: 5.7 million pounds as against 11.7 million pounds for 1913. Our exports to Brazil were also halved: 6.2 as against 12.4 million pounds sterling. As far as can be judged, Germany's exports were tolerably well maintained in European markets: the country's exports to Spain fell from 185 to 108 million pesetas, a decrease of forty per cent. The fall in British exports to the same country was about twenty per cent. The figures of German exports to northern neutrals have never been published, so that it is impossible to complete the survey. Such figures as are available, and as have been here reviewed, seem, however, to indicate, that, during the first months of the war, the German export trade suffered hardly more than our own, notwithstanding that the enemy's merchant fleet was driven into harbour, that their cruisers became hunted fugitives in three oceans, and that our own squadrons dominated the ocean highways. It would be unjust to withhold admiration for the diligence and public spirit of those German officials and commercial magnates, who achieved what was generally deemed to be impossible.

iii) Why the German exports ran mainly by way of Holland

Even though German export trade suffered more severely than the available figures suggest, it is at least certain, that a very large trade was being maintained in March, 1915, when we declared our intention of stopping it; and, for reasons that will be given hereafter, it is equally certain, that everybody concerned very much underestimated the strength and volume of the trade current that we had determined to block up. One thing only can have been evident from the beginning, which was, that the bulk of this trade was running by way of Rotterdam and Holland: in the month of April the enemy cargoes reported to be coming out of Holland were five times more numerous than those reported out of Scandinavian ports; the proportion seems to have been maintained, until our measures forced the trade stream into another channel. There were, of course, natural reasons for this. The agricultural exports of Germany having ceased, there remained the export trade in manufactures, textiles, chemicals, dyes, and coal, which came principally from the industrial parts of the Rhineland; this mass of goods moved naturally by way of the Rhine and Rotterdam. Also, although our agreements with the Scandinavian shipping companies were by no means complete in the spring of 1915, Captain Cold had, by then, taken his great fleet of tramp steamers out of the German service [280] altogether, and the German export agents presumably knew, that the time was fast approaching, when nine-tenths of the Scandinavian holds would be closed against all German cargoes. This knowledge of what was coming, which must certainly be assumed, strengthened the flow of German exports towards the only gate left open.

iv) German export trade and the Dutch East Indies

It so happened, moreover, that a certain proportion of this export trade, that which ran to the Dutch East Indies, was of an importance far in excess of its commercial value; and it is only equitable to show, that the representations made to us on this head were fair and reasonable. The four great Dutch colonies, Sumatra, Java, Borneo and the Celebes are at very different standards of civilisation; but the Dutch have endeavoured, in every colony, to keep the native population attached to the soil, and the native aristocracy to their countries and peoples, by giving the peasants and farmers an assured hold over their land, and by vesting the nobles and sultans with a show of political power. On the other hand, the Dutch have contrived that the native magnates shall not enjoy that wealth, nor make those displays, which secure position and influence in European society. The staple exports of the islands, copra, tea, tin and sugar, are controlled by Europeans, and, as a consequence, the great dwelling houses in Batavia, Sumatra and the other centres are owned almost entirely by Dutchmen, Englishmen, and Americans, who are alone empowered to make those ostentations of wealth, which are proper to the heads of a commercial oligarchy. The native aristocracy live more or less in the native manner, in the country parts, and direct local affairs under the supervision of the Dutch officials: the courts of the native princes are poor and shabby. By good management and careful planning, the Dutch governors have, therefore, succeeded in maintaining a distinction, which is visible to every casual visitor, between the dominant, and subject, races of their colonies.

Principal trade of the Dutch East Indies in 1913.

[281] As a result of all this, the native population of the islands are not great buyers of European goods: cheap textiles are certainly bought by the natives in the batik or dyeing trade; but the bulk of the purchases made in Europe are made either by the government, or by the European magnates of the sugar and copra trades; and these purchases are the struts and supports of their political power. First, the government have cut a number of magnificent highways through the main islands, and these roads, which are far bigger than what would be necessary if commercial traffic alone were considered, are regarded by the Dutch governors as monuments of their power and authority - reminders to every native prince, and to every village headman, that the Dutch garrison can be moved to the most remote and inaccessible parts of their territories. These great highways are, however, carried across high mountains, which are washed by tropical rains, so that the labour of maintaining them is enormous, and for this reason, the Dutch make heavy purchases of cements, surface hardening materials, and road-making machinery, in the German Rhineland. Secondly, as the import and export trade of the islands trebled itself between the years 1880 and 1914, and as the navigation of the Dutch East Indies is difficult by reason of the intricacy of the channels, the Dutch have repeatedly been obliged to embark upon great schemes of harbour improvement: buoyage, beaconing and lighthouse building. Their engineers have found it cheapest to buy the machinery and materials from the German market.

Finally, as to the Dutch coffee trade. In the middle of the nineteenth century, most of the coffee consumed in Europe was grown in Java, and, as a consequence, the Amsterdam market was to the coffee trade what London is now to the tea trade, the distribution centre for all Europe. In the last half of the century, however, the South American coffee growers in Venezuela and Brazil outstripped the Javanese producers, and the sales of East India coffee fell away steadily; but the Dutch, who are great contrivers in a difficulty, at once put their ships into the Brazilian coffee trade, and carried the South American coffee to Holland. Amsterdam coffee brokers thus suffered no loss of business, and Dutch shipping earned revenue in the rival trade. The Dutch were lifting a large proportion of the South American coffee in March, 1915, and this explains why they made such strong representations for lenient treatment of coffee with a German destination, for, to do them justice, they never disguised that it would be sold in Germany. This, therefore, was the complex of interests and commercial connexions that were threatened by the March order in council.

v) The Netherlands government and the March order in council

When the order was published, the Dutch government presented a note, which was little but an elaboration of the note presented, when our first contraband agreement was negotiated. Professing themselves to be concerned solely with the rights of neutrals, and the rules of international law, the Netherlands government informed us:

      That they could not judge whether the acts of war by which the belligerent powers were injuring one another were justifiable or not; but that it was incumbent upon the Netherlands, a neutral power, to protest against any measure that was in conflict with the established rights of neutrals. Since the outbreak of war, the royal government have protested against any encroachment by belligerent powers upon neutral rights...... Their attitude to the present measure cannot be different, in that it ignores the great principle of the declaration of Paris, signed in 1856, that all property, enemy and neutral, shall be inviolable if it is in a neutral carrier, provided it is not contraband......

This, of course, was a protest purely formal; but the Netherlands government were as determined as they had been in November to be party to no arrangement for administering the order. In November, they refused to give us any official undertaking that their export prohibitions would be permanent, and it was only with [282] great difficulty, that Sir Alan Johnstone discovered that the authorities did actually intend to make them so: in March, apprehending that they might be asked to give an assurance about Dutch shipping, the Netherlands government informed us:

      Article 8 suggests that the order in council will be more leniently applied against the vessels of a country which declares that no goods of enemy destination or origin shall be carried under its flag. I [the minister for foreign affairs] think it proper to make it quite clear that the Netherlands government will make no such declaration; in their opinion the obligations of a neutral power are such that they cannot give any engagement of the kind.

The note was therefore an intimation, that the government would continue to take no official cognizance of the trust, nor of the arrangement made with them.

If the best organs of the Netherlands press were representing the national sentiments accurately, then, it seems tolerably certain, that the government were acting as the nation required; for the leading articles in the best Netherlands papers were all, or nearly all, to the effect that the adjusting of Dutch trade to the orders in council must be made a matter of business. The editor of the Nieuwe Rotterdamsche Courant, which has always been an authoritative organ, was probably expressing the considered judgement of the Dutch people when he wrote it was useless to expect, that any diplomatic negotiation would induce the British government: To renounce the use of the most important weapon of attack that it has chosen in the economic war against Germany; the stoppage of foodstuffs. The editor added it was equally absurd to expect, that the German authorities would ever be persuaded to relax their attack upon British sea-borne trade. This leading article, which was supposed to have been written under official influence, was, in fact, an intimation that the Netherlands government were bound, by their duty to the nation, to risk no charge of being partial to either side, and to be quite impassive to the appeals that both belligerents were making for neutral favour; for it must be remembered, that, at this time, our own state papers, and the German, contained many reproaches that neutrals were so easy about the submarine campaign, or the orders in council, and an almost equal number of exhortations, that they should defend themselves against coercion and violence.

vi) The Netherlands trust make provisional arrangements for operating the order in council

Our authorities were thus assured simultaneously by the Netherlands government and by the Netherlands press, that the March order could only be administered, if the Netherlands trust, and the business community, agreed to assist us. On this point, the indications were hopeful; for during the first quarter of the year, when the original agreement was in operation, the Netherlands Overseas Trust had certainly shown themselves willing to carry more responsibility than could have been laid upon them by the bare letter of the December agreement, as they agreed, successively, to be the consignees of all goods exported under licence from England, and to relieve the Netherlands government of their undertakings with regard to petroleum and copper. Nevertheless, the order in council, which announced to the directors of the trust, that trade currents that had been running freely for months were about to be severed, made a great commotion; for M. van Vollenhoven and M. van Aalst had to ascertain how many contracts for receiving, or for carrying, German goods, could be enforced against Dutch traders, and what German goods were needed in the colonies. On 3rd March, there was a joint meeting of the Hague trading committee (which advised the government on export prohibitions) and the Netherlands overseas trust; later in the day, the shipping directors held a meeting. The outcome of these two consultations, was that M. van Vollenhoven and M. van Aalst warned our ministers, that we must grant a respite, unless we desired to do reckless damage; they added, however:

      In the same way that the committee have succeeded in solving satisfactorily the question of contraband goods...... they believe they are able to find a solution satisfactory to all parties.

[283] The shipping companies determined to order all their agents in Germany to refuse German cargoes, and instructed van Vollenhoven and van Aalst to negotiate for permission to carry all German goods paid for, or delivered in Holland, before 1st March; the order in council only granted free passage to goods actually paid for before that date. This was agreed to, and M. van Vollenhoven, who had had no time to estimate the volume of the commerce that would thus be licensed, stated, rather unwarily as it appeared later, that he did not believe it would be great. Simultaneously, the Hague trading committee appointed a committee of overseas interests. This committee undertook to examine all the manifests of vessels carrying German goods to the colonies, and promised that general trade between Germany and the colonies would not be allowed. They claimed, however, to have the right to license German goods essential to the welfare of the colonies, and gave us a provisional list of cargoes that they intended to license: engineering goods for harbour works; goods required for executing government contracts; building materials; aniline dyes; medicines and mineral waters. Our authorities agreed to accept the licences granted by the overseas committee, and, as a result of these preliminaries, the Dutch secured for themselves a free, licensed, traffic in essentials, a week after the order had been published.

This agreement was merely provisional, and much remained to be settled. The point most important to the Dutch was, that there should be a better, and closer, definition of goods that were to pass freely, without certificates of any kind; for, although we had never claimed any right of intercepting the domestic exports of a neutral country, a strong suspicion of German origin attached itself naturally to goods that were being exported from a country, which was at once a transit route, and a harbour, to all western Germany. Also, the general memorandum of November, 1914, which was referred to in the agreement reached in December, contained a clause about derivative contraband, and the Dutch, foreseeing that this doctrine might be variously interpreted, and so introduce endless controversy, were anxious to give it a good definition. In addition, the Dutch desired to lift as much South American coffee, and as much dried fruit from the Mediterranean, as their ships would carry; finally, they were determined to get an absolute security, that traffic between Holland and the colonies should not be impeded. These points were substantially agreed to in a letter that was deposited with the trust on 11th April. In this document, our authorities agreed to recognise the committee for Dutch overseas interests, and to accept certificates of Dutch origin if they were issued by the Netherlands customs officials; and they granted the Dutch contention, that bulbs, dairy produce, candles, and gin, when shipped from the Netherlands, should be assumed to be Dutch domestic produce, and that no certificates of origin should be demanded for them. The licensed trade in enemy goods for the colonies was specified as the Dutch had first stipulated; and it was agreed, that colonial shipments of coffee, cinchona, and tobacco were not to be consigned, either to the trust, or the committee. The Dutch were granted the permission they desired to carry Mediterranean fruits to Holland. This agreement gave the Dutch the breathing space they desired, and enabled both them and us to watch the movements of traffic to northern Europe during the months following the first issue of the order, and so, to make the observations necessary for concluding a general agreement.

vii) The movements of German trade observed during April and May

What appeared most plainly, from such observations as we were able to make, was that the flow of German exports was unexpectedly great. We had agreed that German goods should go free, if they had been paid for and delivered before 1st March, without being very precise about the proof of payment that we should consider satisfactory: provisionally, we felt obliged to accept certificates given by the consuls of the countries to which the German goods were to be carried. Now, if the list of commodities [284] that the Germans shipped to the United States is inspected, it will at once be seen, that a large number of American traders and shopmen must have been very much concerned in the safe delivery of these German goods, among which were included a considerable number of half worked textiles, leather goods, glass wares, cutlery, and aniline dyes. Indeed, it will be shown later, that the fountain waters of the Anglo-American controversy were changed during the summer; and that, whereas the exporters of contraband had pressed the state department during the first months, the associations that receive and distribute German goods became the instigators of controversy, during the summer and autumn. Presumably, these German goods were even more important to the shopkeepers and retail dealers of the South American cities; for pressing requests that German goods should be leniently treated were handed in by a number of American governments during the course of the summer. It was, therefore, natural that the consuls of these receiving countries, knowing what interests were threatened, should have been very easy about the certificates demanded of them, and should have been anything but inquisitorial, when German manufacturers assured them, that the goods they were sending to Holland had been paid for, before the date stipulated. As for the German export agents, they were exhorted to regard plausible misstatements as a patriotic endeavour, for we obtained a copy of a circular issued by the Hamburg chamber of commerce, in which the German experts drew attention to all those frauds and disguises that would be difficult to detect. Here are some of the recommendations:

      All papers are to be completed by persons residing in neutral countries. All marks showing that the articles were made in Germany are to be effaced. If possible certificates proving that these articles are neutral property should accompany them.

The document was entitled: How German export trade may be continued without impediment.

viii) The difficulties of stopping German exports

It can easily be understood, that the first obstructions raised against a trade current that was running in such strength were soon swept away. Early in May, we estimated that between thirty and forty thousand tons of enemy goods had passed out of Rotterdam, and Amsterdam, since 18th March. When his attention was called to this, M. van Vollenhoven could only answer, that the cargoes had been certified under the agreement in force. The truth of the matter was, that neither party had had time to estimate the volume of these German exports, when the agreement was made. M. van Vollenhoven admitted freely, that his first calculation had been quite wrong, as he now discovered that the Dutch warehouse masters normally allotted 30,000 cubic metres of space to German goods awaiting shipment. The mass of waiting goods had been increased by the enormous purchases that American agents made in Germany, when the provisions of the March order became known. Our authorities were also apprehensive about the heavy imports of oils into the Netherlands, and the contraband department were anxious to secure an agreed interpretation of the undertakings given by ourselves and the trust. The written agreement of 11th April, had been supplemented by undertakings with regard to the import of cotton linters, and of goods on the British prohibition list; and the general and particular engagements in respect of coffee were numerous and confusing. More important than these doubtful points, however, was the recent detention of two Dutch ships; for those detentions raised the question which was the starting point of all the controversies in which we were engaged: If we had good grounds for suspecting consignments that were guaranteed and in good order, then, were our suspicions, or the guarantees, to determine the treatment given? Even though it involves a certain amount of repetition, it will be as well to describe these detentions in detail; for it cannot be too often illustrated, that the issue between ourselves and neutrals was not a controversy upon doubtful points of law, but a [285] challenge whether we had a right to impede trade and traffic, upon a bare suspicion. If this could have been regulated sooner, then, in all probability the history of the blockade would have been recorded in a small volume of diplomatic notes written in language that would have been as insipid, and as colourless, as the language of the last note from the Netherlands government. The two test cases were these:

ix) Two vessels bearing trust certificates are detained

The steamer Salland was carrying a cargo from Amsterdam to Montevideo, and the enemy exports committee were notified, before she sailed, that the entire cargo was of German goods; and that the shipowners had been granted a certificate from the trust. The only question at issue was, therefore, whether the evidence that the goods had been paid for before 1st March was satisfactory. The committee selected three consignments, and asked that the trust should obtain additional and collateral evidence of payment; as the only evidence forthcoming was a declaration by the Argentine minister at the Hague. The trust protested, that they could not obtain further evidence; and that it was quite unfair to ask that they should do so, in that they themselves had warned our minister how unsatisfactory these consular declarations were likely to be. The committee, on the other hand, considered that the trust was bound to produce further evidence by virtue of the clause in the April agreement which ran:

      His Majesty's government feel confident that, in cases of doubt as to the propriety of a shipment being made, the committee will supply to His Majesty's commercial attaché at the Hague, or some other British representative, on his request, with a full explanation of the circumstances of the case at issue, such explanation to be supported by the production of any documentary evidence which may bear upon the subject.

To this the trust could answer, and indeed did answer, very hotly, that they had given their explanation, and had produced the relevant documentary evidence, the declaration of the Argentine consul; and that, inasmuch as we had never intimated that we should not accept these declarations, so, we were discrediting the trust, by ordering that a cargo guaranteed by them should be discharged. This was ordered nevertheless.

The case of the Rotterdam was more involved. This vessel was on a voyage from Rotterdam to New York, and the committee thought that four consignments were suspicious. The suspected goods were: gelatine, and photographic paper, which were being sent to Paul Zuhlke, Broadway, New York; artificial silks, cotton ware, and glassware, which were being consigned to Albert Eckstein, to Rosenthal and Grotta, and to Graham and Zenger. About these gentlemen we knew: (i) that Herr Krebser, of Vaals in Holland, who was an agent for Herr Krebser of Aachen, in Germany, had recently told Herr Zuhlke, of New York, that he was sending four wagons by the Nieuw Amsterdam, three by the Potsdam, one by the Oosterdyk and four by the Noordam; and that he would ship six wagons on 8th May; (ii) that Herr Albert Eckstein, of Berlin, had recently telegraphed to Herr Eckstein, of New York (the consignee of the artificial silk): That he would continue to ship Austrian silks; and (iii) that Rosenthal and Grotta had recently received the following telegram from Herr Wulffratt of Rotterdam: Two Swiss cases Noordam, further fifty-six cannot be shipped unless special permit obtained your side.

The committee decided, that the vessel should be ordered to discharge her cargo, unless a satisfactory explanation was given; and the trust at once produced what they considered a perfectly satisfactory explanation; the Swiss chambers of commerce had given them a certificate that the consignments to Zuhlke and to Eckstein were Swiss goods, and the French and British consuls had endorsed the [286] certificate; the Dutch customs had certified that the other consignment was Dutch. Our minister at the Hague considered that the vessel ought to be allowed to go on. The exports committee's final minute should be quoted in full:

      It cannot be doubted that there is still a considerable export from Holland of goods of enemy origin, and the committee have regretfully come to the conclusion that this trade will not cease until strong measures are taken to bring the shipowners to a proper sense of the risks they incur in carrying on this prohibited trade.

The Rotterdam was therefore ordered to discharge the suspicious consignments at Avonmouth, and this was done, not to assert a legal right, but as an act of power, ordered in terrorem.1

x) M. van Vollenhoven in conference with the Foreign Office

These decisions were still pending when M. van Vollenhoven visited London; but he then knew that vessels with the certificates of the trust were being detained, and he did not disguise, that, unless some agreement could be reached, he would be badly compromised with the Dutch traders. Leaving these particular questions to be settled later, however, M. van Vollenhoven, endeavoured to satisfy us on matters about which we were apprehensive, and by so doing, to remove all obstacles to a general agreement. On the general question of German exports, M. van Vollenhoven closed the controversy by agreeing, that no certificates should be granted after 1st June. Thereafter, the conference turned mainly round the abnormal importations of oils into Holland, and the guarantees given by the trust. The importation statistics were certainly of a kind to cause anxiety:

Mineral oils imported between April and June 95,160 tons.
            Normal for three months 50,757 "
Vegetable oils imported between April and June     54,048 "
            Normal for three months 29,568 "

We knew, moreover, that Dutch dealers in oils had recently been placing large orders in England, and there was a strong suspicion that these imported oils were being re-exported to Germany, notwithstanding that they had been consigned to the trust. Nevertheless, M. van Vollenhoven's explanation, which everybody accepted, showed how easily inferences made from evidence purely statistical could be rebutted. M. van Vollenhoven explained, that most of these oils had only been declared contraband in March; before that date, therefore, there had been no need to consign them to the trust, and heavy orders had been placed in America. Tonnage had, however, been scarce, and a large number of consignments were waiting shipment when the last contraband list was published; soon after this the trust was requested to take consignment. The trust had done so; and those Dutch firms who required oil for their plant and machinery, knowing that oils consigned to the N.O.T. would never be re-exported, had then placed orders on the English market, hoping that the Dutch dealers, for whom the trust were holding the oils, would thereby be terrified at the prospect of having a great, unsaleable, stock on their hands, and would make panic sales at a ruinously cheap price. M. van Vollenhoven assured us, that the trust would hold the oils until the fight between the buyers of oil and the dealers was finished. The other matters discussed were: Dutch exports and prohibition lists, cotton, Anglo-Dutch trade, and black lists; on the whole question at issue M. van Vollenhoven gave a general undertaking, that, as the [287] trust already took consignment of so many things, they might as well take the rest, meaning, thereby, that the trust would accept the additional responsibility of becoming the consignees, not only for contraband, but also for articles of general trade. This was the assurance needed for preparing an agreement to supplement the March order.

There is no indication of any dispute over the major articles in the final agreement, which was concluded very rapidly. The trust undertook that all cargoes consigned to them, whether contraband or not, should be consumed in Holland; if goods were re-exported to a neutral country, guarantees of local consumption would be obtained beforehand. Agricultural products and meats were, however, controlled more severely than in the agreements that were concluded, later on, with the Swiss and the Danes; for it was stipulated, in the ninth article, that imported rye, barley, oats, maize, tinned fish, lard, vegetables forage, hides and leather should not be re-exported to any destination. The safeguards for the colonial trade, secured by the previous, temporary agreement, were confirmed (Articles 17 to 19). It was, moreover agreed, and the agreement was placed on record, that this instrument was to be used for introducing and enforcing a general system of rationing:

      In conformity with the tendency of the new rules, wrote the directors, the N.O.T. will endeavour to restrict the import from all sources into Holland of any article required for home consumption, as defined in that agreement. Acceptance of consignment of goods will, so far as possible, be limited to that amount, and where goods in excess of it have been consigned to the Trust, without their consent, the goods will be warehoused by the trust, and it will not be allowed into circulation, until the normal level has again been reached.

1M. van Vollenhoven paid a special visit to London in July to get these cases settled. It was agreed that the Rotterdam should be allowed to proceed - she had not then discharged - that the Salland should be allowed to reload and proceed. The companies to which the ships belonged (the Holland America and the Royal Holland Lloyd) agreed not to bring any claim for detention or demurrage against the government, and to pay unloading, reloading and wharfage. (See 89768/F, 27127/15.) ...back...

A History of the Blockade of Germany
and of the countries associated with her in the Great War:
Austria-Hungary, Bulgaria and Turkey.

by A. C. Bell (Historical Section, Committee of Imperial Defence).