Part II: The Rationing System (cont'd.)
Chapter 16: The Negotiations for a Swedish Agreement
The reasons why the controversy with Sweden became stiffer than that with other neutrals. – The detentions ordered by the contraband committee. – The Swedish government display their sympathies by allowing certain irregularities. – The Swedish government agree to negotiate. – The domestic politics of Sweden. – The negotiations are opened with the Swedish government. – The Swedish delegation reject the British proposals. – The importance of the Russian transit traffic through Sweden. – The negotiations renewed: new proposals submitted. – The Swedish government's reception of the new proposals. – A draft agreement is provisionally accepted. – The draft agreement was thought dangerous: but could not be rejected outright. – The Foreign Office decide that the agreement should not be ratified.
It has been explained, in a previous chapter, that the first controversy between our authorities and the Swedish government was a controversy uninfluenced by politics or political sympathies; and that it arose only, because the contraband committee ordered a large number of copper consignments to be detained. The matter was explained by Sir Eyre Crowe in a long despatch, the substance of which was that we could not allow cargoes of contraband to pass, unless the Swedish government so enlarged their list of export prohibitions that no variety of a contraband article could be re-exported. On receiving this note, the Swedish authorities did at once make very considerable additions to their decrees, so that, up to the end of January, the dispute with them had not differed, in form, or substance, from the disputes with other European neutrals. After this date, the Anglo-Swedish controversy differentiated itself from all others, for reasons that must now be briefly reviewed.
First and most important, the reports received from our commercial intelligence agents attested to a state of affairs in Sweden that differed radically from what obtained in other countries. Our authorities had reason to believe that goods were being smuggled across all neutral borders; but none at all to suspect the governments concerned of being lax about their export prohibitions. The reports from Sweden, during the weeks that preceded and followed the March order, were conclusive evidence of a very considerable re-export trade in lard and metals. More than this, our expert observer was satisfied that this re-export trade was being conducted with the connivance of the Swedish customs. It would, of course, be far too hasty to say that all his accusations could have been made good before a judicial body; the facts to which he attested were, however, so numerous, and so consistent with one another, that those administering the economic campaign had no choice but to take action. In order to show the quality of the evidence upon which we acted, it will possibly be as well to give a few carefully chosen selections from the mass of testimony that was laid before the contraband department, during the first months of the year.
Extracts from a report dated 20th February: The following goods were recently ordered for Germany by boats arriving here:
It will at once be granted, that the substance of these reports was no mere gossip and rumour; and that even if explanations could have been given with regard to some shipments, the general state of affairs could hardly have been satisfactorily explained. It is, moreover, important to remember, that what was happening in Sweden had occurred a few months before in Denmark, for Sweden was obviously being used as a base by the Chicago meat packers. This, if borne in mind, will show, that from a comparatively early date, the Anglo-Swedish controversy on contraband trade differentiated itself from all others. When the Chicago meat packers first flooded the Danish market, the Danish authorities quite freely admitted what was occurring, and took remedial measures; our complaint against them was that they seemed rather helpless, but never that they equivocated or withheld explanations. The Swedish attitude was different: from the outset the Swedish authorities refused to admit, that the administration of their laws and decrees could be discussed with the representatives of a foreign state; and they refused, consistently, to give us any figures of the quantities of contraband exported under licence from the country. This was the great point of difference between the conduct of the Swedes and the conduct of the other European neutrals.
It will be understood that the contraband committee felt bound to deal severely with cargoes that were part of a trade so suspect; indeed they could hardly have claimed to be doing their duty, if they had allowed these enormous shipments of lard and meat stuffs to pass unhindered. It must be added, however, that the general evidence of an illicit trade between Sweden and Germany was far stronger than the evidence as to the destination of particular cargoes. Having given examples of the quality of the first, it will be as well to do the same for the second. The  detentions that most exacerbated the rising controversy were the detentions of the ships Balto, Grekland, New Sweden and Nike, which were stopped and ordered to unload a large portion of their cargoes. The consignments thus stopped were mostly American meat products; the pretext being that an enemy destination was suspected. What, however, was the strength of the suspicion, apart from the common knowledge that there was a large re-export trade between Sweden and Germany? It has to be admitted that the evidence against the consignees was weak.1 In addition it seems certain, that in some cases, the contraband committee ordered consignments to be unloaded merely because they were absolute contraband. The customs authorities, for instance, were ordered very carefully to examine a case marked machinery, when they were unloading the lard, bacon, and meat that were ordered to be discharged from the Grekland. The customs reported that this machinery consisted of agricultural machinery, and of three high speed large lathes for turning steel. To this the customs added: They are made of cast iron and steel. A metal plate attached bears the name Greaves Klusman and Company, Cincinnatti [sic], United States of America. The committee ordered that these lathes should be prize courted, because as there was reason to suspect an enemy destination. One may be permitted to wonder what the reason was: nothing at all was known about Axel Christianssen, the consignee, or about Greaves Klusmann, the manufacturer. The machinery could certainly have been used in a munition factory; but this, in itself, proved nothing. An order almost exactly similar was given for discharging some antimony from the Japan; nothing incriminatory was known about the consignee, M. Kjellborg of Göteborg; in fact the committee's minutes read as though the discharge was ordered solely because antimony was absolute contraband.
If, then, the points at issue during the first part of the Anglo-Swedish controversy are reviewed impartially, the conclusions that seem proper to be drawn are: (i) that with such evidence before them of a large re-export trade between Sweden and Germany, the contraband committee were forced, by circumstances, to order detentions but: (ii) that many of the discharges ordered would not have been upheld by a judicial body. Also, it should be added that these orders for detentions in terrorem were ill adjusted to policy; for the Swedes had two powerful retaliatory weapons ready for use: their pit props, and high grade ores (both of which were essential to us), and their control of the transit traffic to Russia.
 These successive detentions were protested against, and justified, in a number of communications, which dealt more with particular circumstances than with the general principles involved; but while these communications were being exchanged, the Swedish authorities committed themselves to a course of action, which still further emphasised the difference between their policy, and the policy of the other northern neutrals. It has been shown that these detentions and discharges were, at first, inflicted fairly equally upon all the Scandinavian shipowners; but that several large Danish companies voluntarily gave us undertakings not to deliver suspected consignments; and that these agreements eased the restraints imposed upon neutral shipping. Now, comparatively early in the year, a great Swedish shipowner, M. Axel Johnson, expressed himself willing to give undertakings similar to those given by Captain Cold, M. Andersen and M. Mygdal: the negotiations for an agreement were almost concluded, when the Swedish government intervened, and forbad M. Johnson to proceed any further in the matter. This, then, was another very important difference between the attitude of the Swedish and the attitude of the Danish, Norwegian and Netherlands governments: these latter had actively encouraged all private agreements for relieving trade; the Swedish government positively forbad them.
In addition to this, and at about the same time, the Swedish government refused to make any more additions to their list of prohibited exports, and placed restraints upon the transit trade to Russia, by ordering that goods with a Russian destination should only be allowed to leave the country, if a licence to export them were applied for and granted; and by refusing to allow arms and ammunition to pass to Russia at all. The Swedish authorities intimated, that every licence granted for passing goods to Russia would be balanced by a licence to re-export an equivalent quantity of goods to Germany. When affairs were in this posture, the steamer Ernest Cassel, which was carrying a cargo of Swedish magnetic ore to Rotterdam, was brought in. As it was not disguised that the ore was intended for Germany, the cargo was ordered to be put in the prize court, and then dealt with under the March order. The two governments, British and Swedish, were now standing upon two sets of contentions that could only be resolved by further negotiations. The Swedish government refused to admit that any ship could be detained, or any cargo removed, by virtue of the March order, as the order was in itself illegal; they claimed, moreover, that as we had not declared magnetic iron ore to be contraband, and as we could not legally stop the domestic exports of Sweden, so, this detention was entirely ultra vires. We, on our side, could not admit one particle of these contentions. In addition to this, and giving force to the controversy, were the unresolved complaints that each party had been making against the other since the beginning of the year: the Swedes maintaining that if we suspected consignees we had no right, on that account, to detain cargoes, as the Swedish decrees were being so enforced that dishonest traders could not evade them: we replying that we had so many reasons for knowing the Swedish decrees were being evaded, that we could not allow suspected consignees to receive their goods. The only point upon which the two governments were agreed was that the December agreement had broken down.
Thus far, the Swedish authorities had not openly shown that their conduct was influenced by their political sympathies; soon afterwards, however, they became party to an irregularity that was only to be explained by their notorious inclination for the Germans. In March, Sir Cecil Spring-Rice reported rumours that the Swedish embassy at Washington were transmitting messages, in their own ciphers, for the German diplomatic service. The matter was investigated, and strong  indications were discovered that the Swedish minister at Mexico city was transmitting messages to Stockholm, for his German colleague. When a complaint was first made to Count Wrangel, he answered, airily, that there could be no truth in the rumour; our authorities were, however, so convinced that there was substance in the reports they had received, that they presented a note, and demanded a reply. When thus pressed, Count Wrangel assured us, on his government's behalf, that no cipher messages from a foreign representative would henceforward be sent by Swedish official agency, but he added that he was not authorised to discuss the facts. This was, virtually, an admission that there had been an irregularity: it gave us a considerable advantage in the discussions that followed; when our censorship of neutral mails and telegrams became involved in the controversy upon contraband cargoes. In addition, our assistant commercial attaché was, at about this time, involved in a troublesome affair with the Swedish police: the incident was rather trivial, but the Swedish authorities, by their method of conducting it, showed, clearly enough, that they resented Mr. Phillpott's enquiries into the state of trade between Sweden and Germany; and that they intended to thwart and obstruct him, if they could. This also was a disturbing symptom, that nearly every Swede in official employment had a strong inclination for Germany: the German minister and his advisers were notoriously performing duties similar to those performed by Mr. Phillpotts, without being so much as criticised.
It seems clear, however, that the Swedish government were watching this rising controversy with some alarm; for, when giving such explanations as he was allowed to offer, Count Wrangel engaged in a long and conciliatory conversation with Sir Eyre Crowe, and assured him that the Swedish government, the prime minister in particular, desired an accommodation. Sir Eyre Crowe replied, that we had repeatedly invited the Swedish government to come to a settlement; but that there could be none, unless the Swedish authorities admitted our right to stop contraband from passing through Sweden to the enemy. Count Wrangel was obviously acting on instructions; for, practically simultaneously, M. Wallenberg suggested, that the two governments should come to a temporary accommodation, on a few urgent matters, and, then open negotiations for a general settlement. The matters then chiefly in agitation were: that we had pre-empted a large number of cotton cargoes for Sweden, by virtue of the cotton agreement with the United States; and that we were so consistently refusing licences for shipments of rubber and rubber goods, that tennis balls were practically unobtainable in Sweden. Even the king had been compelled to abandon tennis playing, and this appears to have exasperated him against us. The outcome of these more conciliatory conversations was that we undertook to release a considerable amount of cotton and rubber; and that Swedish licences were granted for transmitting a list of goods prepared by the Russian military attaché. As for the general settlement, the Swedish government agreed to receive a special mission for negotiating it.2
This special mission, which was composed of Mr. Vansittart, Mr. Lancelot Smith, Mr. Cleminson, and Mr. Hambro reached Stockholm in the last days of June, and Mr. Vansittart at once became aware that the negotiations entrusted to him would be very much influenced by the political inclinations of the delegation  with which he was in treaty. It will therefore be necessary, at this point, to make a brief retrospective survey of what was then known for certain about Swedish policy, and what was still uncertain about it.
For several years before the war, the Swedes had watched the growing rivalry between the two groups of great powers with more partiality to the German group than the Danes, the Hollanders, or the Swiss, had ever shown. In his yearly report, issued just before the war, our minister stated that the party which desired to take up arms on the German side during a general war was strong enough to be a danger. After reviewing the balance of parties in the country, he concluded:
The possibility, therefore, must always be taken into consideration that any government in Sweden, however desirous it may be of maintaining Swedish neutrality, may either be swept from office on the outbreak of a Russo-German war, or else forced by public opinion to take sides with Germany. The reasons for this, which are not so easily understood before one has come into personal contact with the Swedish atmosphere and Stimmung, become more intelligible after one has been here even for a short time. It then becomes evident that the Swedes do not see as clearly as the Swiss, for instance, that their independence depends on that very neutrality, and that as a small state, if allied with a great empire like Germany, they would become merely hangers on, forced to follow the line taken by the larger power, which would be practically an overlord.
This forecast of a general excitement, in which the wilder party would exert great influence, proved to be very accurate; for, notwithstanding that M. Hammarskjöld and his ministers desired to keep the country neutral, they were yet obliged to make a very threatening statement about Swedish intervention, during the diplomatic crisis that preceded the war. We had therefore good reasons for knowing, from the outset, that the warlike party in Sweden could shake the government, and force it away from its chosen course, in moments of excitement, and this was exactly what our minister had foreseen. From the beginning of the war, therefore, Swedish intervention had been an acknowledged danger; and every indication that the danger was advancing, or receding, was most carefully scrutinised, both in Stockholm and in London. All despatches containing appreciations of Swedish politics were regularly circulated to the cabinet.
This first threat of intervention was, however, soon withdrawn; and it became clear the Hammarskjöld government had only made it, because they had not then accurately assessed the strength of those parties who desired intervention, and of those who desired neutrality, and had thought, quite wrongly as it proved, that they would only remain in office, if they rallied to the party that desired war. Since then, the state of Swedish sentiment had become clearer, and the government had been able to set their course accordingly. There was not the slightest doubt that the court, the high nobility, and the garrison at Stockholm were anxious to take up arms on behalf of Germany, for they detested the Russians, and were disgusted at the democratic clamour that resounded in almost every public utterance that was made by a statesman of the western allies. The queen of Sweden very candidly announced her preferences. The officers of the Stettin regiment collected a large number of shrapnel scraps, chips of iron, empty cartridge cases, broken bayonets, dead men's helmets, and other debris from the battlefields, made them up into a crown, and caused it to be presented to the queen by some ladies-in-waiting. The queen was so far from being disgusted at a symbol of royalty that had been cleaned of human blood, human brains, and human viscera before it was put together as a crown, that she announced, openly and without disguise, that she would wear it, when she greeted the regiment on its return to Stettin: Crowned with the laurels of victory. It is to the honour of the Swedish press, that at least one editor had the courage to say that a crown of such materials was a most repulsive present, which no woman should have accepted.
 Now the court party, being wealthy, and commanding a powerful press, could make a great clamour at any given moment. The party was weak, however, because its leaders in parliament were, for the most part, dull, bigoted men, and because the party's allies outside parliament, the army and navy, were little better endowed. The Swedish navy had, it is true, produced one man, Admiral Lindmann, who had presided over a conservative cabinet; but this was more because Admiral Lindmann was a very wealthy man, and the owner of a newspaper, than because he possessed the talents of a statesman. Another weakness was that the most gifted men in the court party, upon whom the king and queen relied for guidance, were persons of high standing and character, it is true, but men with little or no experience of political manoeuvre. Dr. Sven Hedin, traveller, archaeologist and writer, and M. Heidenstam, a very gifted poet, were the king and queen's most intimate councillors; both were emotional men, with a passionate affection for Germany, which they conceived to be a sort of radiating point for everything that was high or noble in Europe.
The greatest weakness of the party was, perhaps, that desiring war, they yet had no good pretext for declaring it. If what is called the Åland islands question was excepted, there was no outstanding, unsettled, issue between Sweden and Russia; and the Åland islands question was not one of those urgent controversies that precipitate war. The matter stood thus: The Åland islanders were a population of Swedish fishermen and dairy farmers, who had lived quite happily under Russian rule since 1809; for, after being ceded to Russia, the islands were made part of the duchy of Finland, and the population enjoyed the constitutional liberties granted to the duchy. The islanders were, in any case, too poor and hard working to be much concerned that they were under foreign rule, for their farms are deep in snow, and their harbours are blocked with thick ice, for several months in the year; and it is from this frozen soil, and from this ice bound sea, that they have to earn their living. The islands are, however, a sort of bridge between western Finland and Sweden, and the Russian government were bound by a convention (dated 1856) not to fortify them.
This old convention put the Russians into something of a difficulty; for if the German fleet had ever attempted to operate in the gulf of Finland, their fleet commanders would assuredly have done their utmost to seize these islands, and to use them as an advanced base. The Russians were, therefore, bound to take precautions, and the precautions they took might, on a very narrow interpretation, have been called a breach of the convention; for they built entrenchments, gun emplacements, and, in fact, did whatever was necessary for repelling an attack from the sea. While doing this, however, the Russian government undertook to remove all these field fortifications, when the war was over, and it may be taken as tolerably certain, that the Swedish general staff and the Swedish government knew the islands were not being turned into an arsenal, or a regular place of arms, which was the danger against which the convention provided. It was, thus, quite futile for the publicists of the court party to proclaim that the Russian garrison on these islands was: A pistol at Sweden's head (which some had the folly to do); and it was equally futile for Dr. Sven Hedin to say they were a Suecica irredenta, for the mass of the nation knew they were nothing of the kind.
Far stronger than this court party was that section of the Swedish people, which the Hammarskjöld government represented: the traders, the middle classes, and the educated farmers. This section of the nation shared some, but by no means all, the sympathies of the court and of the high nobility: being patriotic, and inclined to what were then called liberal opinions, they disliked the Russian government; having many affiliations with the German universities and with German commercial houses, they were friendly to Germany as a nation; but this general sympathy did not incline this section of the Swedish people to embark upon a military adventure  on the German side. They hoped, and the Hammarskjöld government hoped with them, that the war would end with no marked advantage to either side. This middle party was, however, a potential source of danger to us, because there was no strong line of cleavage between them and the court party; and because most of their leaders admitted it might be necessary to take up arms on the German side, though not for the reasons given by M. Sven Hedin and his emotional colleagues.3 They would probably have rallied to the court party, if the German empire had been seriously endangered by the Russian armies, for it is significant that the Hammarskjöld government became restive and anxious, whenever the coalition against Germany seemed to gain strength. When M. Wallenberg first threatened to intervene on the German side, he excused the threat by saying, that Great Britain seemed to be on the point of taking up arms against Germany; and that the Swedish government could not stand neutral, if Germany were to be crushed. When it seemed certain that the Italian government would join the entente powers, M. Hammarskjöld and his ministers again became very uneasy, and advised the King of Sweden to send a doubtful, ambiguous, message to the King of Italy: the message caused us some concern at the time. It is, therefore, one of the curiosities of political history that those disasters to the Russian armies, which were of such prejudice to the allied cause, confirmed this middle party in Sweden in their determination to keep the country neutral; in that they relieved the party of the only anxiety that might have determined them to make war.
In addition to the middle party, were the workmen and the socialists, who were divided between the two hatreds equally strong: hatred of their own army and nobility, and hatred of the Russian system of government. This party appears to have had a considerable inclination towards the allies; our minister often consulted the leader, M. Branting; and the party's representatives in the Riksdag severely criticised the Hammarskjöld government, for having allowed the controversy with Great Britain to become so heated, and to continue unsettled for so long.
Soon after the outbreak of war, the Hammarskjöld government grasped that the great mass of the Swedish people desired to remain neutral, and that a needless intervention would so divide the nation that the monarchy would be endangered. Having grasped this, they repeatedly assured the allied ministers that they intended to remain neutral, and the Norwegian minister at Stockholm, who was naturally a good judge of such matters, was satisfied the Swedish ministers meant what they said. But though convinced that the Hammarskjöld government had justly appreciated the wishes of the Swedish nation, and that they intended to bide by them, our minister was by no means certain that the ministry's ascendancy over the court party was an assured, permanent ascendancy; for while he reported: It may be stated, without fear of contradiction, that, for the moment at least, any serious fear among the Swedes that this country may be forced into the war has practically died away, he yet qualified this by adding: We cannot, even now, feel absolutely certain that this country may not eventually participate in the war (March 1915). Our minister therefore considered that every indication of political disturbance, and every rumour that the government were diverging from the course of strict neutrality needed careful scrutiny; and amongst the symptoms that most disturbed him was a rising anger against Great Britain, which was being expressed even in those newspapers that endorsed the government's policy.
This long digression has been necessary, in order to explain why the Anglo-Swedish controversy upon contraband slowly differentiated itself from all other controversies of the same kind. Ostensibly, the matters in dispute were always whether  this or that detention was justifiable, and whether the decrees for prohibiting the re-export of contraband were sufficiently embracing: actually, the government that conducted the dispute was influenced by preoccupations peculiar to itself. The Danish, Norwegian, Netherlands, and Swiss nations desired to remain neutral without reserve or qualification, and their governments were best obeying the national mandate, by standing aloof from controversies upon blockade and contraband, and by encouraging their traders and chambers of commerce to make such arrangements with the belligerent governments as would ensure a supply of raw materials for the national industries, and of food for the people at large. The Swedish government also desired to remain neutral, but the nation they represented did not desire neutrality as unequivocally as it was desired by the Danes, the Dutch, and the Swiss; for Sweden could participate in the war, without being immediately invaded. The Swedish people were therefore free to express their preferences without danger to themselves, and the Swedish government were under a mandate to respect the preferences and prejudices of an electorate that maintained them in power, during a time of peculiar anxiety. For reasons which they only were capable of appreciating, M. Hammarskjöld and his ministers decided that they would best secure the support of the nation at large, by treating the violent prejudices of the court party respectfully, by keeping on terms with them, and being prouder and stiffer than other northern neutrals, when disputed questions were in agitation.
This, then, was the position of affairs, when Mr. Vansittart opened the negotiation for a contraband agreement, and, as soon as he landed, he received news that showed that the Hammarskjöld government had determined to lean upon the court party during the negotiation; for the delegates appointed to treat with us were Admiral Lindmann, M. de Trolle, and M. Westmann, who were closely associated with it.
In his first statement to the Swedish delegates, Mr. Vansittart explained the instructions under which he was acting; they were: To ensure that commercial exchanges between Sweden and Great Britain should be as little impeded as possible; to secure guarantees that goods imported into Sweden should not be re-exported to Germany; to come to an arrangement whereby Swedish imports should be reduced to what was required for home consumption; and to secure a free passage for goods consigned to Russia.
It will, of course, be seen, that the third head of these instructions was the important matter; for this reducing of neutral imports to normal was the cardinal point of our whole policy, and the means whereby it was hoped to make the March order effective. Also, it was apparent to us, from the negotiations then being conducted at Berne, and from the readiness of the Netherlands trust to operate the system, that trading associations, trusts, and guilds would always be more ready to accept the system, and better able to enforce it, than governments and their departments of state. The policy of encouraging these associations had, it is true, been set back by the objections of the Norwegian and Danish magnates, and a temporary substitute had been found for it in the agreements with the shipping companies. The policy was, nevertheless, again in the ascendant, because no satisfactory alternative had been discovered. It was therefore on these two points: the reduction of imports to normal, and the establishing of an association for receiving and distributing these imports, that Mr. Vansittart laid most emphasis in his opening statement. After remarking that M. Wallenberg had himself agreed that the negotiation should be: For removing obstacles to the free import into Sweden of goods from neutral countries, required for home consumption, Mr. Vansittart explained that similar obstacles had been effectually removed in Holland by the Netherlands trust; and that the Swedish cotton spinners association had recently made an agreement with us,  whereby we were informed of the amount of raw cotton the association required, and were assured that the worked cotton would be consumed in Sweden. If, therefore, it was impossible, or inconvenient, to establish a central receiving and distributing trust in Sweden, would it not be possible to form separate associations of those trades and industries that imported food, textiles, metals, and propellants, and to conclude similar agreements with them? Knowing that many Swedish newspapers had represented these trading agreements as attainders upon the freedom of neutral commerce, Mr. Vansittart very carefully forestalled this objection:
The point I wish to make is this: under the present system we grant, for example, in the month of March licences to A, B, and C for various consignments of a commodity, and so on until it happens that the export reaches the stage of abnormality and we find ourselves unable to afford to part with any more. Now this does not seem to us satisfactory from the Swedish point of view, for it probably means that some Swedish traders do not get their share. Thus A, B and C were satisfied because they applied in March before any shortage or abnormality took place; while D, an equally worthy applicant, who applied on the 1st April, could not be satisfied. Now this means that in fact under the present system we do to some extent and almost involuntarily control the distribution of goods within Sweden as distinct from export to that country generally. The proposal that we now have to make you would, on the contrary, mean that the distribution of the goods that we send to Sweden would be entirely in Swedish hands. This seems to us both fairer and probably much more satisfactory to you. We hope that you will consider our proposal as regards the formation of associations in this light.
It seems certain that the Swedish authorities had anticipated these proposals, and had decided that they would not accept them; for, before they were actually presented, the leading newspapers in Stockholm were animating the public against them. The Stockholms Dagblad represented a Swedish import trust as: An instrument for giving England absolute control of Swedish trade; then, after giving an account of the Netherlands trust the leader writer continued: It is apparently England's wish to subject Sweden and other Scandinavian countries to this inquisitional control. It need hardly be pointed out that this would be unworthy; it would be surrender. The Svenska Dagblad and the Nya Daglight Allehanda issued similar articles. From the outset, therefore, the negotiations were conducted to a disturbing accompaniment of a clamour from outside that the matters in dispute were to be adjusted to what the national pride demanded, and that they could not be treated as mere matters of business or convenience. Two days later, the Swedish delegates refused to consider the British proposals: their refusal was so unqualified, and their counter-proposals so harsh and peremptory, that the whole negotiation seemed in danger. First, the Swedes refused to admit that any cargo could be detained under the March order, unless it were contraband in consequence of which they declared they could not allow that the undertakings given in the December agreement (which referred only to contraband) should be enlarged. Secondly, they stated that they could never give any guarantee against re-export other than the guarantee of their laws and decrees, and that no negotiation would be possible, unless we formally acknowledged that their decrees were being properly administered, and desisted from any further enquiry into the matter. On the question of transit, they declared that a strictly neutral conduct obliged them to grant no favour to one belligerent, unless it was balanced by an equal favour to another; in consequence of which, they informed us that the goods transmitted to Russia, and the goods re-exported to Germany, must be kept equal. They admitted our main contention, that imports should be reduced to what was necessary for home consumption; but they claimed that they alone would be responsible for defining home consumption, and for calculating figures of normal imports; they informed our envoys, with great emphasis, that neither the definition, nor the relevant statistics, could be discussed with a foreign representative. As this vague admission about normal imports was now the only joining point between the British  and Swedish proposals, Mr. Vansittart disregarded the proposals about the December agreement, and focussed the discussion upon this single point of union, by demonstrating that imports could not be reduced to normal, unless quantities were calculated beforehand, and monthly deliveries closely watched. Under any other system, abnormal imports only declared themselves to be so, long after the average figure had been exceeded. The Swedes, however, carefully disengaged themselves from any discussion of practical details; and maintained it was a matter of national pride that Swedish commerce should be regulated solely by the Swedish government. To this Admiral Lindmann added a curious warning, that any agreement concluded would have to be agreeable to the parliamentary party which he represented. This was presumably an intimation that M. Wallenberg's inclination for a business agreement, on the Swiss or Netherlands model, would exert no influence.
The British envoys were now satisfied that to persist in the first proposals would precipitate a breakdown, and were persuaded that it would be greatly to our prejudice, if the negotiation should fail so soon. First, and most important, was the damage that a breakdown would do to Russia. The German victory at Gorlice (1st May) had been accompanied by a subsidiary attack against the Russian-Baltic provinces, which was advancing rapidly. Early in July, when the negotiations with Sweden were in this posture, the Germans were holding Libau, and had driven the Russian forces from Courland. In the south, they had cleared Galicia, recaptured Przemysl and Lemberg, and were preparing a tremendous onslaught in Poland, on the line of the Narew and the Bobr, which the Russians had little or no hope of holding. Now the temporary arrangement, or modus vivendi, about Russian transit traffic, which was to operate while the negotiations were proceeding, was a substantial relief to the Russians, and was one of the few things we could do to mitigate their distresses. The longer the negotiations continued, the longer would the relief be assured. There was another danger to be apprehended from a breakdown: the Norwegian minister explained to us, that the negotiations were more entangled in political manoeuvres than we knew; and that, if they ended abruptly, the delegates would certainly represent that arrangement had been impossible, because they had refused to compromise the national honour: these statements would, in all probability, be accompanied by a manoeuvre to force M. Wallenberg to resign (who would be represented as less scrupulous of the national honour than the court party) and to replace him by a bigot of their own choosing. This caused the Norwegian minister much concern, and Mr. Howard, when reporting it, added: This is the first time that my Norwegian colleague has admitted the possibility of serious developments here. The British envoys, the minister and his French and Russian colleagues were thus unanimous that the negotiations must be kept alive at all costs.
Mr. Vansittart was now convinced no agreement would be possible, unless he abandoned his proposals for an import trust, and granted the Swedish contention, that their export prohibitions should be treated as a satisfactory guarantee against re-export. He and his colleagues therefore prepared a plan, which, while embodying these concessions, gave our authorities as good assurances as could be secured on the two most essential points: the reduction of Swedish imports to normal, and the security for the Russian transit trade. The draft agreement that the British envoys now prepared was quite different from any agreement concluded with a guild or trading association: and, as the peculiarities of the agreement are probably a  record of what a neutral government (in contrast to a trading corporation) were willing to undertake, they deserve examination; for it will be shown, later, that the Swedish authorities would have agreed to Mr. Vansittart's compromise.
First, as to the Russian transit traffic. During the long, wrangling, discussions that had preceded the negotiations, it had become apparent, that some articles which Sweden imported from Great Britain, though not very valuable or very bulky, were none the less of great importance to the Swedish industries. M. Wallenberg had expressed himself much concerned that licences were refused for hemp, jute, rubber and certain tanning materials, of which we controlled the supply, and had insisted that licences should be freely granted during the temporary arrangement that was to be in force while the negotiations lasted. In other words, coal was not our only instrument of pressure. Mr. Vansittart proposed, therefore, that the Russian transit trade should be secured by a system of proportional licences for British exports to Sweden, and for transits to Russia. The British delegates were conscious that the system would only be operated by incessant haggling and bargaining; but, since the negotiations had begun, the Norwegian minister had discovered, that the Swedes would yield as little as they possibly could in the matter of Russian transit, as they had given undertakings about it to the German government. Later, the Swedish delegates admitted this was so. Such transitting to Russia as could be secured could, therefore, only be secured by economic coercion.
Secondly, Mr. Vansittart and his colleagues were persuaded that there would be no agreement, or even negotiation, unless they admitted that the Swedish government were to be solely responsible for operating every clause and condition; for they received numerous hints, that the merchants would not be allowed to treat with them, even on minor matters. As this had to be recognised as inevitable, it followed that the Swedish export decrees, the Swedish calculations of normal importation, and the Swedish government's guarantees of home consumption would have to be accepted as full and sufficient security for the conditions to which we attached most importance. This, of course, was far from satisfactory, but the British envoys thought that the guarantee might be strengthened by a special arrangement. They therefore proposed: that the imports to be guaranteed by the Swedish government should be divided into two classes; that no licences whatever should be granted for the first class; and that goods of the second class should be imported in normal quantities only. In the first class of goods were placed arms, ammunition, military equipment, metals which were acknowledged to be of particular use in munition factories, leather, woollen yarn, and mineral oils: in the second class were goods, which, though contraband, were also articles of general trade.
The great disadvantage of the plan was that all goods on the first list would, henceforward, be sent to Russia by way of Archangel only. This was certainly of very great prejudice to our plans: the port of Archangel is closed by ice in the first days of November; so that, if this condition were accepted, the western allies would be obliged to pass the military stores, equipment, and metal necessary for the autumn and spring campaigns in Russia into an ill-equipped, overloaded, port, during the two months of open navigation that remained. Moreover, when these new proposals were being elaborated, the Austro-German armies opened their attack on the Narew and the Bobr, and were everywhere successful. According to all appearances, therefore, the re-equipping of the Russian armies was going to be an exceedingly heavy task; but it should be added that the Russian authorities were more anxious than our own that Mr. Vansittart's compromise agreement should be negotiated. The second disadvantage was, of course, palpable: all the friction and controversy antecedent to the negotiation had arisen, because the Swedish government had refused to allow us to know for certain how their decrees were being operated. By the agreement to be negotiated the Swedish government were to be recognised as the sole competent authority upon what  constituted normal imports and what did not, and this at a moment when their imports from America were above normal. For the ten months antecedent to April 1914, Swedish imports from the United States were valued at twelve million dollars; for the ten months antecedent to April 1915 the value was seventy-two million dollars. Finally, there was the disadvantage of which Mr. Findlay was so conscious, that the Swedish authorities, by being stiff, captious and unfriendly, would secure better conditions than those neutral governments who had been accommodating. Nobody was more conscious of these inconveniences than Mr. Vansittart, but his latest instructions were to keep the negotiations alive, and to present his plan on the understanding that it was presented ad referendum only. It was therefore a point scored, that on 13th July, the Swedish delegates undertook to examine these new proposals carefully.
When he communicated his plan in writing, Mr. Vansittart represented how important it was to us to know, if only in outline, what tests of normal importation and home consumption the Swedish authorities intended to apply. The Swedes answered, as stiffly as ever, that they would never allow us to discuss facts or figures with them, and that they would never agree that averages from the statistics of normal years could be made the basis of computation. They undertook that a state commission should judge what was home consumption and what was not, on the merits of each particular case. The truth seems to be that the Swedes, realising that the conditions about normal consumption would be the central point of the negotiation, were preparing for a stiff opposition to the bare principle; for it was at about this time that they instructed their minister in Washington to propose that the United States government should unite with them in resisting the British condition. In his first reply, the secretary of state answered that his government would have to consider whether Swedish trade would be limited by the consent of the Swedish government, or whether the limitation would be imposed upon them by the British; in the latter case he acknowledged, that the situation might be such as to require consideration by the United States government. The Swedish minister then re-stated the case in the abstract terms that the United States government generally employ in their notes of protest:
I do not doubt that the amounts proposed by England are equal to the normal, but as I see it, that is not the point at issue: Has a belligerent the right to limit commercial intercourse between two neutrals. The theory of such a course seems repulsive, even though the limitation is actually no limitation.
The secretary of state replied very guardedly to this, and the negotiation came to nothing: the correspondence is, however, interesting as evidence of the Swedish intentions.
By the middle of July, therefore, the British envoys had so far succeeded in their task of protracting the negotiations that two sets of draft articles, a Swedish and a British one, were being examined by the delegations: the two lists, and the guarantees to be given in respect to each were common to both projects. The Swedes, however, added a new condition, that ships were not to be detained for more than forty-eight hours, if their papers were in order; in addition they stated that they must have satisfaction in the matter of mails and telegrams. Our case on this point was strong. We were, it was true, censoring mails from neutral to neutral, but only when they passed through our territory. This in no way violated the convention that mails found on the high seas were to be inviolable, indeed it was a duty that no state at war could have neglected to see to it that no communication passing through the national territory should assist an enemy. The censorship of telegrams was necessary for the same reason, and it has been shown that protests against irregularity in the matter of telegrams came very ill from the Swedes. The  Swedes were, however, pressing their case so obstinately that our envoys were doubtful whether they were not intending that the negotiations should fail at once, and, just when matters were in this posture, the Swedish prime minister made a public utterance, which gave us great concern, in that it implied that the government were again contemplating intervention.
First, M. Hammarskjöld reviewed and criticised the opinions of those who maintained that neutrality should in no circumstances be abandoned, and stated that he and his ministers could not endorse this at all. M. Hammarskjöld then supplemented this by saying: That it would be inopportune to state the eventualities which might make it impossible to preserve peace; but that circumstances other than the extreme case of invasion would be thought as serious as invasion itself. This statement was made at a moment when the negotiation between the two delegations was extraordinarily difficult: every word was an obstacle (to quote Mr. Vansittart) and the Swedes were putting so high a meaning to the words national honour and national pride, that they positively objected to the words, reasonable quantities, as being an encroachment upon Swedish sovereignty. Moreover, it was impossible to separate the Swedish premier's curious and ambiguous statement from the measures of military preparation that the Riksdag had sanctioned before adjourning.4 Mr. Howard and Sir Eyre Crowe were both convinced that the speech was intended only to intimidate the mission: the Russian minister was, however, very anxious, which is not surprising, as the disasters to the Russian armies in Poland were continuing without abatement. When asked to explain this speech, however, M. Wallenberg assured us that it was for home consumption and not for export; in that it had been uttered only to placate the court party. M. Wallenberg added, with some generosity, that neither he nor the premier would ever try to intimidate the British envoys, as everybody knew they were not men who could be intimidated. The premier's speech, though less alarming than had at first appeared, was, therefore, fresh evidence that the government with which we were in treaty were so obliged to keep on terms with their rivals, that they were hardly masters in their own house.
Notwithstanding all these difficulties, the British envoys succeeded in preparing an agreed draft, by the first week in August. During the technical investigations that had been undertaken during the negotiation, it had been discovered that a year's imports of the goods that Sweden required from us, and of which we controlled the supply, were considerably more valuable than a year's imports of those Swedish goods that were essential to us: bar iron, pig iron, steel, and pit props. Thanks to this favourable balance of essential trade, the British representatives were able to secure Russian transitting, and a supply of Swedish goods, by a system of exchanges, which were to be settled by mutual agreement at the beginning of each month. (Articles 1 and 2.) On the question that had caused the envoys so much misgiving, whether transit licences to Russia were to be made equal to re-export licences for Germany, the envoys could get little satisfaction. Admiral Lindmann denied that his government intended to equate the two; and his denial was recorded in writing. The British envoys were, however, convinced, that the  admiral had made this statement with considerable mental reservations, and did not know what value could be attached to it. The essence of the agreement was in the third article, which contained Mr. Vansittart's first compromise: that goods not to be exported should be divided into two lists; that no export licences whatever should be granted in respect to goods on the first list; and that goods on the second list should be on the list of prohibited exports, and should be imported for Swedish home requirements only.5 The two great concessions to the Swedes were: that no provision was made for estimating, or for announcing, figures of normal consumption; and that the British government would rely on the Handels Kommission's certificate as sufficient evidence that the quantities necessary to Swedish home requirements were not being exceeded. The British envoys had, however, secured one point, which was that the goods for which the Handels Kommission's certificate was to be granted would be announced before the ship sailed. It is just possible that this condition would have secured us a right of remonstrating, if certificates had been improperly granted. The envoys never stated, unequivocally, what value they set upon these Swedish undertakings that imports would be reduced to normal; having realised for weeks past that no other guarantees would be obtained, they probably thought it fruitless to speculate on their value. The remaining articles were less important: a compromise was struck on the matter of detentions, by promising demurrage to ships that were detained for more than three days; the Swedes agreed to recognise our right to detain cargoes, if we had clear proof that the cargo was intended for an enemy; but no concessions were made to the Swedish contentions on the matter of mails and telegrams.
This draft agreement was so different from the agreements being negotiated at Berne and the Hague, and from the agreement then in contemplation with the Danish guild, that it might very properly have been called an exception to the general system of control that was being elaborated. As such the agreement would have announced to all neutral Europe that our policy had come to a check and this was not the only danger. Reducing neutral imports to normal was now recognised to be the only practicable way of giving effect to the March order in council; but even when the principle was recognised by neutrals, and when they communicated their own estimates of normal consumption, freely and without equivocation, agreement was only reached after laborious negotiation and discussion of details. It was, therefore, virtually certain that the Swedish authorities, having constituted themselves sole judges of this essential matter what was, and what was not, necessary for domestic consumption, would have made calculations and estimates, which, even if communicated to us, would have been thought doubtful by our experts. Under this agreement, our doubts and suspicions would thus have gathered strength in the worst possible circumstances. Being aware, from their general conduct of the negotiations, that the Swedes would not admit that their import and export trade  should be adjusted to the provisions of the March order, our authorities would have been suspicious from the start. Their suspicions would have been strengthened by reports from the contraband committee that exceptionally heavy shipments of this or that commodity were passing, and by further reports about doubtful exportations from our expert observers. These partial inspections, and isolated facts about great movements of trade had hitherto proved a singularly good propellant to controversy.
All this was well recognised by the Foreign Office authorities, but they did not feel at liberty to reject the agreement on that account. The issue before them was whether it was the best that could be secured from a country that was notoriously much elated at our enemy's successes in the field, at a time when our enemies were pressing on from victory to victory, and when our own armies were at a standstill. The Foreign Office's preoccupations are best expressed in one of their instructions to the envoys:
I agree that it is important for us to tide over the next few weeks or even months, during which we should avoid particularly affording Sweden any pretext for taking up arms. I am not convinced that the mere failure to arrive at an agreement would, in fact, afford such a pretext, or would drive Sweden into war or into an attitude even more unfriendly than she is displaying now. But if you and His Majesty's minister apprehend such a likelihood, it may be necessary to conclude some agreement. If, however, any agreement we can get is bound to be unsatisfactory, and if, as is possible, a change in the political situation in the Balkans and Dardanelles should before long improve our position, then the narrower the scope of the agreement, the fewer the points on which we make concessions, and the longer we continue the negotiations before signing the better. If we must have an agreement intrinsically bad merely because not to have one at all would be dangerous, it will be well to restrict our engagements as much as possible to general principles, and to avoid the difficulty of making definite and extensive concessions by resorting to the adoption of formulas sufficiently vague to slur over and leave unsettled the actual points on which agreement is found impossible. I accordingly suggest, for your consideration, as the course least objectionable in the circumstances, that you should continue to the best of your ability to discuss the Swedish proposals generally on the lines you are already following, pressing for such concessions as you can, and in case of a threatening deadlock, seeking refuge in a general formula. It will be desirable that you should make it clear that you are not definitely committing His Majesty's government, or that you have their specific authority for putting forward or provisionally accepting, any particular proposal. Your general attitude should in fact be such as to lead up to your initialling a draft agreement ad referendum for submission to His Majesty's government in the hope, as you may put it, that the fuller explanations and arguments which you will be able to lay before them verbally on bringing home the draft may induce them ultimately to accept it.
Warsaw had fallen a few days before this agreement was struck; and the German advance in the Baltic provinces was being continued without interruption. Mitau had been in German hands since the beginning of the month; Kovno was, it is true, resisting precariously, but nobody believed the resistance would be much protracted: there was thus no sign that the German advance could be checked. On the other hand, we had just opened a new assault on the Turkish positions at the Dardanelles, and it was not admitted that the operation had failed, hopelessly, until much later in the month; even the generals on the spot still hoped that the army would carry the Suvla position. It was therefore more urgent than ever to gain time, and the Foreign Office decided to recall the envoys to consult with them. They informed the Swedish authorities that they would not be able to pronounce upon the agreement, until the middle of September.
When the complete text of the agreement was received in the Foreign Office, Mr. Parker, of the contraband department, represented strongly that it should not be accepted. This was agreed to, for Sir Edward Grey countersigned Mr. Parker's minute, and ordered it to be circulated to the cabinet. Meanwhile, however, it was becoming evident that the system of reciprocal exchanges of essential goods, and of bargaining for Russian transit with licences for coal, rubber, tanning materials, tin and wool - a system which the envoys had tried so hard to elaborate - was being operated without the agreement. A succession of temporary arrangements were agreed to by M. Wallenberg and Mr. Howard; and M. Wallenberg, after saying that he would prefer no agreement at all to an agreement that both sides interpreted differently, intimated that he would be prepared to regulate commercial intercourse between the two countries by these periodic, renewable, bargains. These provisional accommodations, renewed from time to time, after hard bargaining it is true, but without serious difficulty, presumably strengthened Sir Eyre Crowe in the opinion that he had expressed during the first part of the negotiation, and to which he had subsequently adhered: That the Swedes did not intend to go to war, and that without any agreement, we had the means of preventing the accumulation of great stocks in the country:
The advantages of an agreement (he wrote) cease to be operative from the moment that the safeguards offered are, in practice found not reliable. This proved to be the case at an early stage as regards Sweden....... From this point of view we shall be better off without an agreement than with one. We are getting on quite well with Norway without an agreement. We shall also have to contemplate getting on, as hitherto, without an agreement with Switzerland....... I agree, therefore, with the Swedish minister for foreign affairs that it will on the whole, be preferable to have no agreement with Sweden. I do not anticipate that this will make relations with her more difficult than they are now. We shall have failed to improve them. That is all.
Both sides were therefore anticipating a state of affairs that would be unregulated
by any agreement, during the weeks that followed upon the recall of our envoys. It
was, moreover, during those same weeks that the military situation, which,
throughout, had been so doubtful, and which had influenced the Foreign Office so
much, became easier to appreciate. The allied armies did not, it is true, gain any of
the success that the Foreign Office had hoped for, when they sent their last
instruction to the envoys; for the British army was checked at Suvla, and held at
Helles: in the western theatre, the French and British armies attacked the German
lines, and were defeated. On the other hand, the great anxiety about the Russian
armies was slowly dissipated, for, by the end of September, they were standing on
a line which they held to the end of the year. Arrangements for
re-arming and equipping the Russians were, moreover, proceeding apace, and no
doubt was entertained that the Russian armies would still be in the field in the
coming spring. It was in these circumstances that the contraband department, with
Sir Eyre Crowe's full approval, determined to prepare a new agreement, on
the model of the agreements being negotiated elsewhere, and to present it to the
Swedes with the intimation that it contained everything we could possibly
concede, and that we should not allow it to be modified. The draft articles were
presented on 10th October, and M. Wallenberg, realising that all
hope of concluding a formal agreement was now gone, said that things might go
on as they were without much harm. The negotiation was soon after declared
ended in an exchange of notes.
1Précis of evidence against the suspected consignees of goods shipped to Sweden in the Balto, Grekland, New Sweden, Nike and Japan.
2The bases of discussion agreed to, which were subsequently the subject of controversy, were these: Removal of all obstacles to free commercial interchange between the United Kingdom and Sweden for their respective products; removal of obstacles to passage of letters and telegrams between Swedish and neutral countries; freedom of imports into Sweden of all goods from neutral countries in quantities necessary for home consumption in Sweden; security that goods imported into Sweden on basis of such an agreement will not be re-exported so long as their export is prohibited; transit trade across Sweden between Great Britain and Russia. See Telegram 521 from Stockholm, 19th June, 1915. ...back...
3See the appreciation of the Swedish Government published later in the Norwegian paper Tidens Tegn (149783/f.11538/15). The Norwegian editor showed that they were a government kept in power by the left and centre parties, but yet a government of the right in that they were in the closest possible intimacy with all the editors and owners of the conservative papers. ...back...
4The bills had a nasty look because they
all referred to mobilisation. They were:
5The lists as finally agreed were: