Part II: The Rationing System (cont'd.)
Chapter 18: Contraband Agreements in the Mediterranean
How the naval commands in the Mediterranean were distributed, and what measures were taken for controlling commercial traffic. – The Austrian economic system. – The exits from the Mediterranean were largely under British control. – In what degree the Turkish empire was sensitive to economic coercion. – All projects of economic coercion subordinated to the naval and military plans of campaign. – Movements of enemy trade in the Mediterranean. – Why the politics of the border states obstructed an ordered regulation of enemy trade. – The peculiarities of Spanish commerce and the negotiations for a Spanish contraband agreement. – The restrictions placed upon enemy supplies during the summer of 1915. – The difficulty of regulating the contraband traffic in the eastern basin. – What opinions were held by the naval authorities about submarine operations in the Mediterranean. – How the Mediterranean commerce in oils and lubricants was conducted. – The misconception was not dissipated and many oil cargoes were in consequence detained. – More regular pressure is also applied. – Why Greece was sensitive to economic pressure when exerted by Great Britain. – A general agreement is concluded with the Greek government and the Standard Oil Company. – Montenegrin policy and the agreement with the Vacuum Oil Company.
At a comparatively early date it became apparent, that although the direct trade to our enemies in the Mediterranean had been stopped by the allied squadrons, naval control would not, in itself, suffice to stop the contraband cargoes that passed to the enemy through border neutrals. The measures taken for suppressing this indirect trade were, in consequence, similar to those taken in northern Europe: neutral governments were pressed to prohibit the export and re-export of contraband, and measures were devised for watching the operation of their decrees. Nevertheless, the peculiarities of the Mediterranean theatre made the business of stopping enemy trade particularly difficult. In northern Europe, the naval squadrons that controlled commercial traffic in the North sea and the Channel had, from an early date, been supplemented by a powerful bureaucratic organisation, and by a vast system of commercial intelligence; for the contraband department of the Foreign Office, the contraband committee, and its agent, the tenth cruiser squadron, had soon welded themselves into an organ of control, which resembled a headquarters staff, in that it could watch the fortunes of the economic campaign, and plan and execute whatever circumstances demanded. In the Mediterranean, there was no central organ of the kind, for, in this theatre, naval control was exercised, partly by the French, partly by the Italians, and partly by ourselves. Each naval authority was responsible to his own government; and, inasmuch as the executive power was divided, it was impossible to supplement naval control by a central bureaucracy, as was done in home waters. The naval and military authorities of each government took such measures as they thought appropriate, and executed them independently.
This was not the only peculiarity of the Mediterranean theatre. The states bordering upon Turkey and Bulgaria were not comparable to the neutral states of northern Europe. Denmark, the Netherlands, and Sweden were highly organised countries, with highly organised commercial systems and powerful executives: Greece, the most important border neutral in the Mediterranean, was a state with provinces that are ordinarily supplied by a petty coastal traffic; the Greek province of Salonika was a province newly annexed to the country; in consequence of which, Greek law and Greek administration had been only recently imposed upon the inhabitants, and were not always effective. Secondly, naval operations against submarines influenced both our diplomacy and our measures for stopping contraband, which they never did elsewhere. Finally, our apprehensions that the Greek government might join our enemies, or the hope that they would ally themselves to us; the alternating predominance of Greek ministers, who were very friendly to us, and of others very distrustful of our policy and intentions, inclined us first to leniency, and then to severity, and so, made a uniform course of conduct difficult to devise.
By virtue of a convention signed on 6th August, 1914, the French commander-in-chief, Admiral Boué de Lapeyrère, was made responsible for all operations in the Mediterranean, and all British commanders in the theatre were subordinated to him. From the outset, therefore, the stopping of contraband was a duty that fell to be performed by the French navy. We have very little information about the measures taken by the French, for Monsieur Guichard, the French historian of the blockade, hardly mentions them. Admiral Boué de Lapeyrère did, however, place squadrons across the great streams of commercial traffic in the Mediterranean: one force was stationed between northern Corsica and the Italian frontier, where it traversed the route to Genoa; another was placed between southern Sicily and Tunis. In addition, the French commander-in-chief maintained strong forces in the straits of Otranto. These squadrons occasionally acted vigorously. They detained a large number of ships bound to Italy during the last months of 1914; later, ships on the Barcelona–Genoa route were treated with great severity; but, beyond this, we know little or nothing about their operations. It would appear, also, as though the French added certain executive duties to the judicial work that was ordinarily performed by the conseil des prises. Strictly speaking, the conseil is the French prize court; by a special order, however, the French government instructed their boarding officers to inform the conseil, in writing, why they had detained a ship, and to forward such documents as would enable the conseil to decide how the ship and cargo were to be dealt with. The conseil were thus performing the judicial duties of a court, and those executive duties, which, in England, were performed by the contraband committee. The judicial decisions of the conseil have been fully reported, but we know nothing about their procedure in the matter of detentions and releases.1 Also, it may be doubted whether the French force at the entrance to the Adriatic interfered seriously with commercial traffic, as its duty was purely military: to watch the Austrian fleet, and to bring it to action.
We have, therefore, no means of estimating by how much Austrian overseas commerce was reduced, after the entrances and exits to the Mediterranean had thus been closed; but even the most accurate statistics would be of little significance. The Austro-Hungarian economic system was, perhaps, the most continental in Europe, as only eleven per cent, of the country's total imports, and thirteen per cent. of its total exports, were seaborne. (See tables XXXI, XXXII and XXXIII.) Rather less than a third of the cereal imports were, it is true, brought in from overseas; but so great a proportion of the country's essential grains came from Roumania, that it was highly improbable the national diet would be reduced by the loss of the supplies that were normally carried from the Argentine and Russia. The Austrian textile industries were more sensitive to stoppage of sea-borne imports; but it was quite certain that the Austrian economic system, as a whole, would only be damaged by damaging the German; for Germany was Austria-Hungary's great market and [continued on page 366] [363-365=Tables]
 her source of supply. The yearly total of Austrian imports was 22.6 million tons, of which Germany supplied 16.5 millions, that is, two and a half times as much as was received from all other countries put together, and fourteen times as much as was taken from the British empire. In the matter of exports, the German market outstripped all others proportionately. From this it will be seen, that the economic campaign against Austria was not to be distinguished from the economic campaign against Germany; and that, when Admiral Boué de Lapeyrère stopped a great proportion of the overseas trade of Pola, he merely made a small contribution to an operation that was being executed by other instruments, in another theatre.
Although the French navy were responsible, under the convention, for watching the exits of the Suez canal and the straits of Gibraltar, British authority was for a long time predominant at these two extremities of the Mediterranean. The French acknowledged that the defence of Egypt was a British concern, so that all traffic entering the Mediterranean from the east was, throughout, under the control of the naval commander of the East Indies station. At Gibraltar the position was peculiar: the Gibraltar zone was not acknowledged to be under British control, until a much later date; yet, from the beginning of the war, the flotilla at the disposal of the admiral superintendent received all its orders from him, or from home. Admiral Boué de Lapeyrère never concerned himself with its operations, after he had assured himself that the flotilla was in sufficient strength to observe and report any raiding cruiser that might enter the Mediterranean from the west.
This Gibraltar flotilla was thus a force allotted by convention to the French Commander-in-chief, but acting solely under British authority. The Mediterranean war orders contain no instruction about controlling commercial traffic, or about detaining and examining ships; the Gibraltar force is therein referred to as a local defence flotilla. The senior naval officer was, however, specifically ordered to keep the approaches to Gibraltar patrolled, by day and by night, and although this patrol was instituted for a purpose purely military, it was so employed that commercial traffic was, from an early date, diverted to Gibraltar, and there examined. Though instituted as a floating outpost of the fortress, the Gibraltar flotilla thus became, in fact, the nearest equivalent in the Mediterranean to the tenth cruiser squadron in home waters.
The records of the flotilla have not been kept, so that comparatively little is known about its operations. In August, 1915, Admiral Brock reported, that every ship passing through the straits had, up to then, been examined. The officer in charge, Captain Harvey, did not act independently of the contraband committee; for he occasionally reported doubtful cargoes, and enquired what should be done with them; in addition, orders with regard to particular ships and consignments were sometimes sent to Gibraltar from Whitehall. On the other hand, the connection between the Gibraltar force and the contraband committee was not so intimate as that between the tenth cruiser squadron, the downs boarding flotilla and the authorities  at Whitehall, which were almost a single body, or organ of control. There was no daily exchange of reported manifests, or orders for detentions or release, between Gibraltar and London. The naval authorities at Gibraltar would appear, moreover, to have been very jealous of their independence. In August, 1915, the French consul criticised their system of inspection: they answered that the navy had been insulted. As there are no statistics of the detentions ordered by the authorities at Gibraltar, it is impossible to estimate what restraints they placed upon neutral trade. When the March order was issued, no special instructions were sent to the Gibraltar force, which was bound only by the general instructions in the first paragraph.2
When the allies declared war on Turkey (November, 1914) the allied naval predominance in the Mediterranean was overwhelming. A British squadron under Admiral Garden was stationed off the Dardanelles, watching for the Goeben and Breslau; the French fleet was based at Malta, with a double line of patrols to the west; the straits of Otranto were strongly guarded, and the two extremities were controlled. If the Austrian fleet had attempted to leave the Adriatic, it would, assuredly, have been defeated. Ostensibly therefore, this predominance seemed likely to be more useful for exerting economic pressure upon Turkey than for any military purpose. It was, however, rather conjectural whether the Turkish empire would be sensitive to economic duress. The Turkish empire is an agricultural state; for a traveller may traverse many thousands of miles of Turkish roads and paths, without meeting anybody but landowners, farmers, and herdsmen. The looms on which Turkish textiles are woven are not comparable to the looms of an industrial state; and the coal mines in the northern part of Asia Minor are worked on a rude, unscientific system. On a first inspection therefore it seems improbable, that a people occupied almost exclusively in working the land will never be seriously distressed, if they were deprived of foreign foodstuffs. If the matter is looked into more closely, however, it does appear that some sections of the Turkish people are less independent than others. The people [continued on page 371] [368-370=Table]
 in the distant inland provinces are more or less protected against a blockade; for some provinces are virtually independent of foreign trade, and their populations traffic only in goods that are exchanged between adjacent districts. The difficulty is not to produce a sufficient, supply of food, but to distribute it; for statistics show that some sections of the Turkish population are nourished by foreign cereals. The yearly imports of grains and meals are a quarter of the country's total imports (see table XXXIV), and, every year, large quantities of wheat, wheat meal, and rice are carried into the Turkish empire; rice is, moreover, a very important article of the national diet. In addition, some 200,000 tons of beet sugar are carried yearly to Constantinople. Quite obviously, therefore, the Turks are not entirely independent of foreign foodstuffs; and, as the towns of a country are generally the greatest consumers of imported foods, it can be assumed, in a general way, that a strict blockade of Turkey will always cause suffering in the capital. This circumstance would make any country sensitive to economic warfare, for revolutionary movements generally start in the towns, and no government, however independent, can maintain its authority indefinitely, if the capital becomes a centre of distress.
The blockade of Turkey was, moreover, easy to impose, as the Turkish import trade was very concentrated; nearly seventy per cent. of the imported cargoes entered the country through ports that could be closed by the allied navies: Stamboul and Haidar Pasha, Smyrna, Beyrout and Alexandretta; Trebizond was the port of entry for the Russian, and Baghdad for the Indian, trade, which could both be controlled from their sources (see table XXXV). On the other hand, nobody could say with certainty, that this naval blockade would exert decisive, crushing, pressure; for, even if it were granted that an important section of the Turkish population was fed from foreign foodstuffs, and that the country had not the equipment for distributing the empire's produce scientifically, it had yet to be admitted that the Turks, who are a resolute, enduring people, could at least improve their system of distribution; and that the Bulgarian and Rumanian supplies could not be severed by the allied navies. But if it was doubtful whether any section of the Turkish population could be severely distressed by a stopping of foreign corn, it was at least certain, that such industries as were established in the country were entirely dependent upon foreign supplies of propellants (see table XXXVII). In normal times, all these supplies were seaborne, for heavy cargoes could be more easily transported to Turkey by sea than over the Balkan railways. It was obvious, however, that the central empires would endeavour to send metals to the Turkish arsenals by railway. This channel could only be closed by political agreement; for although the Servian route was closed, the route through Austria-Hungary and Rumania was open. Also, our experts reported that these metal supplies, although small in weight and volume, would be very important: the Vickers agents at the Constantinople dockyard were satisfied that there was little copper in the arsenal; and it was notorious that the ammunition factories had only very small metal reserves.
 If, therefore, an economic campaign against Turkey had been conceived as other war plans are conceived, and recommended as other war plans are recommended, the report upon the matter would have been that a strict and rigorous blockade of Turkey was an operation of rather doubtful consequences, yet sufficiently promising to be worth while. There is, however, no indication that the matter was ever presented to the allied authorities in this light. The expert reviews of shortages in enemy countries contained little or nothing about Turkey; the restriction of enemy supplies committee did occasionally make recommendations about Turkish supplies; but those recommendations were not strong, or consistent, enough to give the economic campaign against Turkey the status of a major operation. Moreover, Turkey's entry into the war aroused apprehensions purely military and political: danger to the Suez canal; and sedition among the vast Mohammedan populations in the British islands. From the outset, therefore, all projects of economic coercion were subordinated to our plans for reducing Turkey by force of arms, and to the naval and military preoccupations consequent upon them.
Early in December, the Foreign Office authorities and the French Ministry of Marine drew the Admiralty's attention to the transit trade that was then being observed at Dedeagatch; and Admiral Webb, the director of the trade division, suggested that a regular contraband squadron be constituted as soon as possible. The chief of the staff's answer may be quoted in full, for it is illustrative of the preoccupations that compelled the naval authorities to subordinate everything to their military plans:
We have very much reduced the Dardanelles squadron, and they should be left to their proper work of attending to the German-Turkish fleet. The French should be pressed to undertake the coast blockade; but there is no objection to the senior naval officer, Egypt, using some of his vessels on the Syrian coast to intercept merchantmen when attack on the Suez canal is not imminent.
The Admiralty were, indeed, so fearful lest the Goeben might strike a sudden blow at a weak detachment stationed off the Dardanelles, that they instructed Admiral Garden not to intercept neutral traffic to Constantinople, unless it were in coal.
As a consequence of this, the French commander-in-chief detached a vessel to Dedeagatch and gave the commanding officer the following instructions: La mission que je vous confie est de surveiller tout particulièrement les abords de Dédéagatch de façon à établir, avec votre seul bâtiment, un blocus aussi effectif que possible, dans le but d'intercepter le matériel de guerre que les neutres y debarquent. Admiral Boué de Lapeyrère also informed the officer, that he was not detached from his command, and that he must report direct to the flagship, in consequence of which, we have no records of the interceptions and detentions made by him. From reports made subsequently by Mr. Heathcote Smith, our consul at Dedeagatch, it may be taken as certain, that the French officer did not consider himself empowered to stop any cargo that was regularly consigned to a neutral. His instructions were, in any case, extremely vague.
A few weeks after the French cruiser had been stationed off Dedeagatch, twenty ships carrying contraband were lying in the roadstead, discharging, or waiting to discharge, their cargoes; normally, two ships entered and cleared during the course of a month. This first endeavour to stop transit trade in contraband therefore failed. It was, indeed, bound to fail, as the naval ship or squadron detailed for the operation was not supplemented by that bureaucratic machinery, which alone can discriminate between cargoes so suspect that they may be detained, and cargoes that may be allowed to pass. Also, the ships on the Syrian coast never interfered with  commercial traffic, as they were always employed on operations of another kind: bombarding any line of railway that was visible from the sea; and watching the coast roads, in order to detect any unusual movements of troops.
But when the enormous growth of the Dedeagatch traffic was again brought to the Admiralty's notice, they were less than ever inclined to undertake any additional task. In the first days of January, the Grand Duke Nicholas asked that special naval pressure be exerted against Turkey, and from the date on which this telegram was first examined by the war council, it was virtually certain that some great operation would be attempted at the Dardanelles. When, therefore, the Foreign Office suggested that a stricter watch to be kept on the Dedeagatch traffic, the naval authorities decided they could not be responsible for contraband trade, while existing operations were difficult to execute, and while an even greater operation was contemplated. Their minutes should be quoted in full, as they show how difficult it was to adjust the economic to the military campaign in the Mediterranean theatre.
(i) No objection to telegraphing to Gibraltar, Suez and Malta; but the vice-admiral eastern Mediterranean has no ships to spare, and much more important things to attend to, and should not be troubled about comparatively trifling matters like this, when he is engaged in active military operations (minute of the chief of staff, 17th April, 1915).
The measures taken had, thus, this peculiarity that they were solely the outcome of diplomatic action; the Foreign Office were compelled throughout to act alone, to make representations, and to conclude agreements, about movements of trade that could not be checked or controlled by the naval forces.
It was, moreover, soon patent, that the transit trade through Dedeagatch was a mere tributary of a great movement; and that cargoes in which the enemy had an interest were moving in all directions through the Mediterranean. More than this, our consuls soon proved, that not only Dedeagatch, but Salonica, and the Piraeus were becoming bases of enemy supply. Cargoes of rice and foodstuffs, and of petroleum, sugar, and machinery, were collected at the Piraeus, and from there distributed between the two Macedonian harbours. Not all these cargoes passed to the enemy, for Salonica was a port of entry for Serbian, Rumanian and even Russian supplies; but neither the Greek nor the Bulgarian governments were prohibiting exports. In addition, the Piraeus was a great entrepôt for fruit and tobacco cargoes, which were collected from Greece, from other Balkan states, and from Turkey, and then carried up the Adriatic to Venice, whence they passed to Trieste. On their return journeys, the Greek vessels brought back cargoes of Austrian beet sugar. Crete was also a starting point for enemy trade, and cargoes of fruit, currants, olives, and olive oils were shipped weekly from Canea to the northern Adriatic. This particular movement was free of all naval control; for Admiral Boué de Lapeyrère, finding that his ships in the straits of Otranto were being harassed by Austrian submarines, withdrew his outposts from the entrance to the Adriatic, at the end of the year. These movements were not all detected at the same time, and some of the facts were reported before the March order was published; it was not therefore deemed advisable to act precipitately.
These movements in the eastern and central Mediterranean were, moreover, corollary to an even more important movement in the western basin. During the first months of the year, we discovered that Barcelona was becoming a great base of enemy supplies. Cargoes of skins, wool, wool waste, cotton, cotton waste, tin, and rubber were moving, almost daily, from Barcelona to Genoa; and there was a very strong presumption that the enemy was interested in these cargoes; for the normal  trade between Spain and Italy, or between Spain and Switzerland, was in other commodities.3 The most important Spanish exports to these countries are olive oil, agricultural produce, and iron. The bulk of Spanish textiles are sent ordinarily to the old colonies, Cuba, the Philippines and the Argentine, where the customs of a population that lives in the Spanish manner make a demand for the produce of the mother country. Apart from this, our consuls reported that numbers of German commercial agents arrived in Barcelona during the early months of the year, and that the new commerce was being organised by them.
When the reports upon these various movements had been thoroughly digested - and it would appear that they were only ascertained with certainty during the first quarter of the year 1915 - it must have been clear, that the stopping and diverting of all this contraband trade was not a task that could be discharged by following a uniform course of conduct. Even if it had been possible to act in that theatre as we were acting at home, that is, to detain all ships entering or leaving the Mediterranean at Gibraltar; to report their manifests to an executive committee, which was empowered to compare declarations of cargoes with confidential information about the consignees; to make enquiries through our minister; to demand guarantees; and to release or detain as seemed best in each particular case, this procedure would not have checked the internal trade in contraband. Moreover, if such rigours had ever been exercised, the Serbian army and the Serbian people would probably have been the first to suffer. The Spanish trade only might have been checked at Gibraltar, as it was certain that a large proportion of the contraband trade with Genoa passed through the straits, before it reached Barcelona; but the naval authorities at the fortress were reluctant to do anything that might irritate the Spanish authorities. Gibraltar is supplied almost entirely from Andalusia; and the governor of Algeciras was allowing supplies to pass over the Spanish frontier, notwithstanding that recent Spanish decrees forbade the export of corn, meat, and forage, the very articles that the garrison most needed.
Early in February, Mr. Sargent, of the contraband department, presented a review that may be regarded as the starting point of all measures subsequently taken. After describing the movements, and the character, of the contraband trade, as far as they had then been ascertained, he urged that Sir Francis Elliott should press the Greek government to issue a list of prohibited exports, and that all supplies to Serbia, Rumania and Russia should be consigned on through bills of lading. These proposals were considered with a number of others - the consul at Dedeagatch was, at the time, making various suggestions for controlling the trade of the port - and they provoked a long discussion, which need not here be followed. The immediate outcome was that effect was at once given to one part of Mr. Sargent's proposals, and that the reception given to the other was testimony to the difficulties that were still to be overcome. It will at this point be proper to give a brief explanation of the policies and military projects to which Mr. Sargent's proposals had to be adjusted. (Early February, 1915.)
The Russian armies were still occupying large districts of Austria-Hungary, and had then given symptoms of weaknesses that were observable only to military experts. The Serbian army had driven back the Austrians, and stood upon the Danube. The Turkish attack on the Suez canal had just been defeated; and our own attack on the Dardanelles forts had just begun. At home, it was assumed that the initial successes in Egypt, and at the straits, would give us great authority in the middle east and the Balkans; but it is now known that military experts in Greece and Bulgaria were never deceived: they thought our campaign ill-conceived, and  were always sceptical of its success. Certainly, this good opening gave but little strength to the British project for forming a general Balkan league. In the first months of 1915, the matter stood thus. We were then freed of our first apprehension, that the Rumanian and Turkish governments would combine against us, for the Russian government had made a preliminary compact with Rumania; more important still, the Rumanian government had agreed to act with the Italians in neutrality, peace or war. Neither agreement obliged the Rumanian authorities to declare war, but the two together brought them under allied influence. Preliminary conversations for a general Balkan league had, however, only served to show how many obstacles were still to be overcome. The Greek government were anxious that the league should be formed; for they were, at the time, on very ill terms with the Turkish empire. M. Venizelos, the head of the Greek government, was inclined to an immediate declaration, but was held back, as he was apprehensive of Bulgaria. Early in December, the allied governments therefore assured him, that they would secure Greece against Bulgarian attack, if the Greek army supported Serbia. This promise was not, however, deemed sufficient, for the Greek government answered, that they could not declare unless Rumania did so, and this the Rumanians refused to do, as their army was not then equipped for a campaign against the central empires. As it seemed, at this date, more important to secure Bulgarian neutrality than Bulgarian assistance, Sir Edward Grey now promised, in conversation, to secure eastern Thrace, and a certain, not very well defined, portion of Macedonia, to Bulgaria, if the government at Sofia undertook to remain neutral. Sir Edward felt the better able to make this promise, in that M. Pashitch, the Serbian premier, intimated, that his government might be willing to cede that part of Macedonia, which lies east of the Vardar. But the Bulgarian government received these proposals with the greatest reserve; M. Radoslavoff, the premier, answered that his government intended to remain neutral, but he showed no inclination whatever to negotiate for that permanent, unchangeable, neutrality for which the allies then desired to treat. Just after this evasive answer was given, it was known that the Bulgarian government had contracted a loan with the central empires.
From this brief review, it will be understood that it was very much to the interest of the Greek and Rumanian governments to check the flow of contraband into Turkey, but that the Bulgarian interest in the matter was doubtful. Each government now issued regulations that were in harmony with their policy. M. Bratianu undertook that no contraband should be allowed to pass through Rumanian soil to Turkey; and M. Venizelos issued a decree, which was the most satisfactory law that any neutral government had promulgated: the export or re-export of any article on the allied lists of contraband was forbidden under heavy penalties; the transit traffic to Serbia and Rumania was protected by an arrangement, which made the Serbian and Rumanian consuls the consignees of all Serbian and Russian goods that were landed at Salonika. The Bulgarian decree was very different: the Bulgarian authorities refused to enlarge their list of prohibited exports, which was small, but ordered the port authorities at Dedeagatch to oblige the captain or agents of a ship discharging there to declare, in writing, to what country the goods were to go. This declaration was of no use to the naval officer in charge of the Dedeagatch patrol, as the captain and agent were only obliged to make it after the goods had been landed.
Seeing, therefore, that neither the Rumanian nor the Greek laws would be of any use, unless the channel through Bulgaria were stopped up, the Foreign Office invited the Admiralty to consider what special measures could be taken against the traffic through Dedeagatch; and a joint conference was held on 4th March. When the conference assembled, the operations against the outer forts of the Dardanelles had been successfully concluded, and it was confidently expected that the straits would  be forced during the month. These anticipations influenced the conference considerably, for it was thought this victory would soon vest us with such authority and reputation, that a severe procedure would be easily enforced. It was therefore decided, that Dedeagatch should be declared a base of enemy supplies on 15th March, by which time the operations in the straits would have had political effect; and that, thereafter, all cargoes of contraband to Dedeagatch should be seized and condemned.
As the French were still maintaining the Dedeagatch patrol, and would, in consequence, be responsible for executing a large part of this programme, these recommendations were at once transmitted to Paris, and while they were being considered by the French authorities, our attack upon the narrows was severely defeated. The French authorities may, or may not, have been influenced by the reverse, but they refused firmly to endorse the findings of the conference, saying that it would be unwise to irritate the Bulgarian authorities at such a moment. Our influence in the Balkans was certainly waning when the French declined to act as we suggested. M. Venizelos had just previously offered us an immediate alliance and an expeditionary corps; and the king, disliking the project, had compelled him to resign. In this he was supported by the army leaders, who were very disinclined to be party to projects that they considered unsound. M. Venizelos was succeeded by M. Gounaris. Nothing more was attempted for several months, when new anxieties, which will be described later, compelled the Foreign Office to devise a new plan.
From all this it may be concluded, that negotiations for stopping contraband trade in the eastern basin would have been more successful, if it had been possible to combine the proposals presented with concerted naval pressure. An agreement for stopping the Spanish trade was easier to conclude, because no naval pressure was needed to make our representations emphatic. A brief review of Spanish trade and commerce will be necessary to explain why this was so.
Spain is an agricultural country, and her most important exports are wines and fruits; in addition to this, however, the exports of iron ore, lead, copper, zinc and sulphur bring in a fair income. The country imports a certain quantity of grain, which might be dispensed with in an emergency, and a considerable quantity of American cotton, upon which the textile industries of Catalonia largely depend. The peculiarity of Spanish trade is that whereas most countries with a similar standard of agriculture and industry are great customers of the central empires, Spain traffics more with France and Great Britain, than with the other great industrial states of Europe. In 1914, the British and French goods that were bought in Spain were forty per cent. of the country's total imports. Spanish goods bought in Great Britain, British dependencies, and France were just half of the country's total exports. Coal, cotton piece goods, and woollens were the most important articles of British export: oranges, wine, and metals were bought in exchange. The British and French markets were, therefore, the most important struts in the economic system of Spain. For the rest, notwithstanding that Spanish agriculture and the Spanish industries were rude and unscientific, and that the Spanish tariff laws were a severe obstacle to foreign trade, Spanish commerce was distributed over a great number of countries, which each absorbed five per cent., or less, of the country's trade. Spanish trade had this additional peculiarity, that the old colonies are important markets: in the year 1913, Cuba bought more Spanish goods than Germany and Austria-Hungary combined; the Cuban and Argentine markets, taken together, were more valuable than the American, the reason being, presumably, that the population of the old colonies still follow the Spanish way of living, and, in  consequence, need considerable quantities of Spanish produce. More than half of the Spanish trade with these numerous and scattered markets was carried under foreign flags: (see table XXXVIII) it would be difficult to ascertain how great a proportion of this shipping was British, but it is safe to assume that it was large; and that the Spaniards had a great interest in maintaining British freighters in their country's service.
The British authorities had, therefore, no need of any naval force to strengthen the economic pressure that they could, at any moment, have exerted against the country, and this explains why the original proposals for a contraband agreement were made by Mr. Vansittart, the Foreign Office representative on the board of regulating exports, and why the Foreign Office did not need naval assistance throughout the negotiations. Their proposals were occasionally made emphatic by refusing export licences; but never by issuing orders for detaining ships in the Spanish trade.
In a memorandum that may be taken as the starting point of the negotiation, Mr. Vansittart suggested, that the Spanish government should be invited to issue a list of prohibited exports, which our authorities should prepare; and that, until this request had been presented, applications for licences should be refused. The commodities then being demanded by Spanish importers were comparatively small quantities of whale oil and ferro-manganese, and were not particularly important. Spain was, moreover, on the list of those nations to which export licences were most freely granted; nations on List A were most restricted, on List B less so, and on List C least of all. Spain was on the third list.4
Early in April, Sir Arthur Hardinge presented the Spanish authorities with a list of the exports that we desired them to prohibit. The list had been drawn up by the committee for restricting the enemy's supplies and was very comprehensive. The negotiation was very rapidly concluded, for the Marques de Lema agreed that the request was reasonable, and the Spanish authorities at once issued a decree.5 A few articles on the list proposed were omitted temporarily, as they were principally sold in France. There were, however, few differences of importance, and the commercial attache reported in May that the contraband traffic from Barcelona had then  ceased.6 It was suggested that export licences should be refused, until the Spanish authorities had complied on every point, but Sir Eyre Crowe ruled that the negotiation was then terminated; and that the Spaniards ought not to be harassed further, unless we knew for certain that the contraband traffic from Spain was being re-started. [380-381=note 6: Tables]
The Spanish agreement only regulated trade in the western basin. In the eastern basin, contraband trade was certainly restricted, in that two channels to Turkey, the Greek and the Rumanian, were made difficult to pass; the third channel, however, the Bulgarian, remained open. It is not easy to assess the consequences of this partial stoppage. At the time, our expert observers and the officers of the contraband department were so impressed by the commodities that still passed unimpeded, that they were reluctant to believe that anything useful had been accomplished. It would, however, be far too hasty to conclude that supplies passed in to Turkey unimpeded, merely because the Bulgarian port of Dedeagatch remained open. First, the most natural line of Turkish supply, through Rumania, was closed; and the complicated evasions that were practised, or attempted to be practised, are proof that the Rumanian decrees were well enforced. In the month of June, for instance, the Rumanian customs and railway officials discovered, that a number of waggons with concealed partitions and false floors had been passed on to the Rumanian railway system, in order that a few shell might be carried over the frontier. A second testimony that Turkey was straitened in her supplies is that this stopping up of the Rumanian channel gave the German government great anxiety during the summer; and that their minister repeatedly protested, in language that was always menacing and angry.
The consequences of the Greek law are difficult to estimate. Our consuls were satisfied that the law was not enforced; and it does seem fairly well established, that the Piraeus and Salonika were distributing centres for a number of very doubtful cargoes, after the Greek decree had been issued. Also, trade between Greece and Austria-Hungary continued, until the Italian government declared war: cargoes of Greek currents [sic], olives and valonea7 were sent out, and cargoes of Bohemian glass-ware, and Hungarian beet sugar were brought back. It must be added, however, that, during this time, the Greek authorities and the Greek people were very unjustly suspected of assisting the enemy in other ways; and that accusations were levelled against them which are now known to be quite unfounded. In such circumstances, reports that the Greek laws were being evaded carried more weight than assurances from Greek ministers whom we distrusted. The truth is, probably, that some Greek merchants at Salonika and the Piraeus sent a certain quantity of sugar, sulphur, and rice into Turkey, in contravention of Greek laws; but that the quantities passed through were very much diminished by the Greek regulations. Also, it is only fair to add, that, if it was reprehensible for Greek merchants to evade the laws of their country, and for the Greek authorities to connive at it, those Greek officials and traders, (about whom we were often very censorious), less deserved our contempt and censure than those British merchants who passed their goods into Turkey, in defiance of the most elementary rules of honour. Statistics published later prove that some sections of the city made substantial profits, by engaging in the transit trade through Dedeagatch and Salonika.8
As for the Bulgarian traffic, it would be very hasty to say that goods passed freely, and without impediment, through Bulgaria to Turkey. The number of vessels that entered and cleared at Dedeagatch during the summer was certainly about ten to  fifteen times the normal number, and it is not in doubt that a proportion of the cargoes landed went to Turkey. On the other hand, the amount that passed into enemy countries may have been exaggerated, simply because it was not possible to estimate it. The railway from Dedeagatch traversed a strip of Turkish territory and then re-entered Bulgaria; and the Bulgarian authorities maintained that many consignments - which we had rather hastily concluded to be for Turkish consumption, because our consul knew that they had passed the frontier - had merely passed through Turkish territory, on their way to Sofia and the northern districts. Again, the Bulgarian export decrees cannot have been issued as a mere parade; and although those decrees were less comprehensive than the prohibition laws of Scandinavian countries, they were yet a considerable obstruction to trade and commerce.9 Furthermore, it cannot any longer be thought certain that the Bulgarian authorities determined, from an early date, to make war upon the entente powers. An impartial survey of the documents leaves little doubt that the Bulgarian government hesitated; and that they only decided to make war upon us, when they were convinced that we should never be able to grant them what they demanded. It may be safely assumed, that, during the period of hesitation, the Bulgarian government at least impeded the passage of Turkish contraband. Also the barrier erected - though judged crazy and incomplete by the contraband department - did so straiten Turkish supplies, that both German and Turkish high commands were exceedingly anxious: Liman von Sanders expressly states, that, throughout the summer, he was unable to undertake operations that he thought essential because his munitions supplies were short. He forbad a great counter attack upon the British positions, and our supply beaches at Helles were never systematically bombarded, because the Turkish lacked ammunition, and because the Balkan governments then neutral made it impossible to replenish. Finally, it must be remembered, that, early in July, the German minister at Bucharest pressed the Rumanian authorities to relax their restraints, and, finding them obdurate, warned M. Bratianu, that, if Constantinople fell, his government would be held responsible for the disaster. On the following day, the German minister again saw the Rumanian premier, and made the grave admission that the next three weeks would be most critical. If it had been true that a large current of supply was then flowing through Bulgaria, it would not have been necessary to make such grave admissions, or to use such language.
Nevertheless, as it was not to be denied that some contraband traffic was still running in the Mediterranean, the Foreign Office renewed their endeavour to stop it altogether; and, during the last months of the year, they successfully devised a workable system of discrimination. The operation was, however, long and arduous; for, although it cannot be said that the negotiations for establishing a proper system were ever brought to a standstill by being subordinated to major policy or to military strategy, it yet remains true, that our attempts to regulate the contraband trade were always influenced by the political repercussions of our naval operations, and by our policy with the Balkan neutrals. The three repeatedly impinged, and the negotiation undertaken may, without extravagance, be likened to the march of an army through a country that has been incompletely surveyed: the advancing columns encounter obstacles not on the map; march by roads that are found to be field paths; and are checked by forests, which were supposed to be mere woods and thickets.
When Admiral de Robeck's squadron was defeated at the narrows (17th March) the allied governments at once decided to persevere and to send an army to the peninsula. The burdens of the high naval command were not therefore alleviated, but rather added to; for the allied squadrons were henceforward responsible for the communications of a large army, and this was a far more exacting task than bombarding forts, and securing the passage of ordinary commercial traffic over a commanded sea. The naval authorities were thus more reluctant than ever to detach forces to watch for contraband; for which reason, they sent a second warning to the Foreign Office, that contraband traffic would have to be regulated by diplomatic action.
These new and heavy duties were, however, somewhat alleviated by the Italian declaration of war; for, on 30th May, the Italian government declared the coasts of the Adriatic to be blockaded, with the exception of Montenegro. This blockade was enforced by a patrol that was established in the straits of Otranto; and the commanding officer was ordered to send all vessels entering or leaving the Adriatic into Brindisi for examination. We know nothing about the Italian procedure in the matter of detentions and condemnations; nor have we any statistics of the vessels and cargoes that were stopped. It may, however, be taken as tolerably certain that this Italian blockade stopped the Greeks from trading with Trieste in tobacco, valonea, and glass-ware, as they had hitherto been doing; for our consuls became silent about this traffic, after having previously reported upon it with great particularity. From such indications as we obtained, it would seem, moreover, as though the Italian authorities took very elaborate measures for collecting information about blockade runners on the eastern coasts. Shortly after the blockade was declared, some Greek coastguardsmen reported that a ramshackle caique flying Greek colours was hovering about the coast of the Epirus, and that it was engaged in some doubtful operation. The Greek authorities brought her into Corfu, and were much embarrassed when her commander hoisted the Italian colours, and declared himself a naval officer, engaged on a voyage of enquiry. From this it may be assumed that the Italian blockade was as rigorous as the Italian authorities could make it; and here it will be proper to remark, that although Genoa and Venice were conduit pipes for a trickle of enemy trade, until the Italian declaration of war, the Italian government loyally enforced the decree issued in November 1914, and severely punished any person who could be proved to have evaded it. Our consuls reported a small movement of Austro-Hungarian exports, and of Greek goods, through Italian ports, during the spring; but they also reported very severe decisions by the Italian courts. In the matter of trading with the enemy, the record of the Italian authorities was certainly better than our own.
On the other hand, it is doubtful whether this blockade substantially diminished Austrian supplies; for everything seemed to show, that such commerce as our enemies in the Mediterranean were maintaining was moving through indirect channels;  and that a strict and rigorous blocking of the direct route was little but the closing of a passage that had been abandoned. The stopping of the Smyrna traffic is a fair example. During May, Admiral de Robeck decided, that, as he was compelled to keep large forces permanently in the Aegean, he could station a blockading force off Smyrna. A blockade of Smyrna was therefore proclaimed on 2nd June, and was subsequently enforced by Captain Heathcote Grant; but although a great proportion of Turkish commerce normally passes through Smyrna, Captain Grant never reported that he had intercepted a large cargo. The commerce had obviously taken other directions.
It will now be proper to explain a circumstance that very much influenced our politics, our conduct of operations, and our negotiations upon contraband. On May, 1915, Captain Hersing reached Cattaro in U.21 after long and perilous voyage, so that, in the early summer, the Mediterranean became a theatre of submarine operations: Hersing was, indeed, immediately followed by a number of submarine commanders, and at the end of the year, a flotilla of German submarines was stationed in the Adriatic. From this date, therefore, the military communications of the allied army in the peninsula were continuously attacked, and a great additional burden was placed upon the naval forces. The diplomats, who were devising plans for stopping the contraband trade, were not concerned with the operations that were at once undertaken to meet the menace; but they were subsequently very much concerned with the political repercussions of the new campaign, about which a rather long preliminary explanation will be necessary.
It must be said, at the beginning of this explanation, that the U-boat commanders, who went to the Mediterranean during the summer and autumn of 1915, operated in that theatre exactly as they had previously operated at home; that is, after filling up with oil, repairing their machinery, and refreshing their crews at Pola, they cruised on the main traffic routes, and returned to their base, when fuel was exhausted. Only in a few exceptional cases did a U-boat commander communicate with the shore, and, when he did so, he was careful to communicate only with Turkish or Austrian officials.10 There was, indeed, no reason why submarine operations in the Mediterranean should have been conducted on a system different from the system in home waters; for the distances between the bases and the great traffic routes were roughly the same in both theatres.
For reasons that have never been satisfactorily explained, however, the high naval command were convinced, that submarines in the Mediterranean worked from bases established in the creeks and bays of lonely coastlines, where stores of petroleum had previously been landed; and that an illicit traffic in benzine, lubricating oil, and foodstuffs was creeping surreptitiously through all parts of the Mediterranean. This was asserted, not as an inference that might have been drawn from such observations as the naval staff had made upon the local traffic in oils and lubricants, but as a fact upon which no doubts could be entertained.
The fact that German submarines have been allowed to come into the Mediterranean (wrote Admiral Limpus, the admiral superintendent at Malta) has created a very great sense of insecurity...... Prompt and drastic action should be taken to search for and destroy them. Money must be used to discover their fuel and supply depôts and destroyers must be detailed to relentlessly hunt them down...... I now offer some remarks on the localities at which it is believed that hostile submarines are drawing their supplies...... Depôts are believed to exist at or near: Vigo, Almeria, Balearic islands, especially at Cabrera, Alcudia bay and Polenza bay; Corfu, Gythion (near cape Matapan), Crete (eastern extremity), Budrum and the islands near  it such as Kalymnos and Samos; gulf of Makri and neighbourhood, Smyrna, Tchesme...... These depôts must have been provided by agents with money. If they can be abolished the submarines can be run to a standstill. They should, therefore, be dealt with immediately: those at Almeria, Vigo, the Balearic islands, Syracuse, Corfu and Gythion by means of secret agents with money - say £1,000 to £5,000 each place according to actual needs. This can best be done through our ministers and ambassadors, and should be put in hand immediately......
The remainder of the report was a long description of the arrangements that were supposed to have been made for supplying submarines from the Achilleion, and of the assistance that the Greek authorities were supposed to be giving, with no explanation why submarine commanders should refuel at Corfu, instead of at Pola dockyard. This extraordinary superstition about the Achilleion may be explained at once. The palace was not then being used, and the German consul was in charge of the care and maintenance party that had been left behind. The tanks were to store the benzine consumed in the motor dynamos of a large electric plant; they were concealed, as much as they could be, because the architect thought them unsightly.
Officials in the civilian departments were, naturally, reluctant to doubt statements that the naval authorities were making upon a matter entirely within their own competence, and, as a consequence, this legendary belief in secret submarine bases was unquestioned by any branch of the administration. A few examples may be given to show how firmly the superstition established itself.
(i) In their sixty-first report, the committee for the restriction of enemy supplies stated:
We are informed that there are four different groups of enemy traders in Greece...... The first are mainly engaged in supplying fuel for submarines. The second is chiefly occupied in the supply of foodstuffs and copper. The third is engaged in supplying oil to submarines...... The port of Chalcis, situated on the east coast of Greece, is reported to be shipping supplies to enemy submarines, the same applies to Laurium and the island of Zea.
In the report immediately following, the committee stated that a submarine had taken in fuel at Salonika.
(ii) One of the first papers presented, during the negotiations for a contraband agreement with Greece, contained the statement: Il est également hors de doute que des sousmarins arrivent à se procurer des approvisionnements de toute nature dans la mer Egee. A few days later, Sir Francis Elliott stated that naval interference with Greek coasters might be relaxed:
Provided that proper course is being kept and that no oils or lubricants suitable for submarines are being carried without special licence from me.
 (iii) In a return of vessels detained at Mudros there are the following entries:
Agios Georgias. Greek sailing vessel 26 tons. Captured 21st June on a journey from Piraeus to Volo....... After removal of oil, the vessel will be liberated. [She was carrying casks of red engine lubricating oil.]
On the next page, the entry against the Greek brig Eleni runs:
This vessel was detained owing to the report of the Alexandria police that this steamer was carrying benzine and oil for a submarine base in the Greek islands, probably Chios.
A casual inspection of the relevant documents thus shows, at a glance, that a powerful and well-informed committee, our Minister at Athens, and the chief of police at Alexandria were all satisfied that these secret bases, and the traffic that radiated from them, were matters of common knowledge. As the misconception influenced our policy with neutrals, and was thought to justify extraordinary rigours against their commerce, it will be of some interest to investigate its causes and origins.
It should be explained, at the outset, that the reports from high naval officers in the Mediterranean, which established the superstition so firmly, cannot be dismissed as the statements of inventive and credulous persons. The facts that they had ascertained were quite correct: there was a brisk traffic in paraffin, and oil, between the Piraeus and the small harbours of the Adriatic; stores of oil were awaiting further distribution, at all the places mentioned, and at the Spanish coastal villages mentioned by Admiral Limpus; the oil barrels were being carried from place to place in caiques and small vessels, exactly as was stated in the report. Finally, America was the source of all these supplies, and the Standard and Vacuum Oil Companies were the first distributors.
The inferences drawn from these careful observations were, however, very far from accurate; for the oil cargoes, whose movements had been so well ascertained, were not being carried to the German submarine commanders, but to the villagers, the farmers and the inhabitants of the small towns. How is the misconception to be explained? First, it must be remembered we had no expert commercial agents in the eastern Mediterranean, when these reports about submarine bases were first circulated. The special agents who were then stationed in the eastern Mediterranean had been sent there to collect military information; and, although they did often report upon contraband cargoes, they had not that knowledge of commercial transactions, which would have enabled them to follow the local traffic in oils, from its first sources to its final destinations, and by so doing, to have discovered what purposes it served. Secondly, it must not be forgotten, that all these reports were being prepared during moments of grave anxiety. Thirdly, few people know anything about the habits, and the ways of life, of the peasant populations of eastern Europe; and persons who live in the greater countries cannot be expected to understand, that cheap lamp oil, and cheap lamps from which to burn it, have been a sort of Promethean fire to the poorer peasants of eastern and central Europe, where these articles have been the handmaids of education, knowledge and social intercourse; for it is no exaggeration to say, that, until the middle eighties of last century, when paraffin and lamps were first bought by the peasant farmers of eastern Europe, millions of farmsteads were never lighted after dark, except by the fire on the kitchen hearth. Persons familiar with the peasants in the remoter parts of Scotland and Ireland would, possibly, understand how much the farmers of central and eastern Europe would be likely to depend upon lamps and lamp oil; but ordinary English persons may be excused, if they failed to grasp it.
In conclusion, a word of explanation should be given about the hovering caiques that excited so much suspicion. There is certainly a large coastal traffic round Greece, which is of two kinds: that conducted by small steamers, which ply between the  Piraeus and the larger coastal towns, Patras, Volo, and so on; and that which is conducted by the small caiques and sailing craft, which are used for carrying supplies from the larger towns to the remoter villages. This secondary trade is thus conducted. The captain of a caique loads up with goods that he knows will be wanted in the villages that he intends to visit; the goods most purchased are oil, cheap cotton clothing, boots, cheap watches, coloured handkerchiefs, cheap broadcloth, groceries, and such foodstuffs as are known not to be produced locally. The caique then sails, and is anchored when it reaches a bay adjacent to the villages to be served; the captain, or his partner, then lands, loads up his goods on mules and asses hired locally (sometimes a mule is carried in the fore part of the caique), and carries his goods inland to the villages and towns where he hopes to sell them. The caique may be at anchor for several weeks before the salesman returns. It is not to be doubted that these caiques captains often carried Turkish tobacco and Turkish goods; and that they sold them when and where they could find a market: the traffic on which they were engaged was, nevertheless, the petty traffic of a community of coasting hawkers.
These, then, were the true facts; but the superstition about secret bases was so quickly established, and so universally held, that no person in authority ever suggested that a dispassionate enquiry should be undertaken. It should be added, however, that the misconception was no mere error of judgement by the British naval authorities; for it was entertained by all the allies, and, during the summer months, the following places were reported and believed to be centres of submarine supply: Corfu, Parga, Thaso island, Symi in the Dodecanese, Patras, Cerigo island, Calymno, Zante, and cape Sidero. The monks of mount Athos were also suspected, and the Russian government insisted that the Greek authorities should inspect all the monasteries in the Chalcidic peninsula. It would be interesting to know whether the monks were allowed to keep their oil, of which they presumably burned large quantities, or whether they were compelled to sing their primes and complines in total darkness.
If our authorities had disclosed all their suspicions to the Greeks, the superstition might have been dissipated by enquiry; unfortunately, we did not trust the Gounaris cabinet, and M. Stratos, the minister of marine, was under suspicion. The Admiralty therefore deprecated communicating our suspicions to the Greek government, as they were convinced M. Stratos would at once warn the German submarine commanders that their bases had been discovered. A general warning was certainly given to the Greek foreign minister, who was told that the Achilleion was assuredly a base. This, however, was an exception: we repeatedly informed the Greeks that Greek bays and islands were serving as bases to German submarines; but, when they asked for details, none were given.
It would be a nice enquiry to discover in what degree these suspicions deteriorated our relations with the Greek authorities; but we are here concerned with only one consequence, the resulting confusion between the genuine and imaginary trade in contraband. Henceforward, the naval authorities applied the words contraband trade to the transit traffic through Salonika, and to this fancied trade with the enemy submarine bases; and it is often very difficult to discover which they meant. It may be assumed, however, that these suspicions, which had infected every branch of the administration by midsummer, 1915, were considered to be excuse for the extraordinary rigours that were subsequently practised. It must, however, be added, in fairness, that the Foreign Office authorities were often extremely sceptical, when the evidence supporting these accusations was communicated to them, as for instance, when it was found that the legend of a base on Thaso island had been composed on the report of the skipper of a patrol trawler, who had sighted a submarine off the island; and had sworn that she was exchanging morse signals with the shore. The whole  question was, however, technical, and as the vice-admiral in the Mediterranean shared these beliefs, the Foreign Office authorities would only have provoked friction with the Admiralty, if they had communicated their doubts, and expressed reluctance to make representations at Athens.
In any case, the clamour for extraordinary pressure came from so many quarters that it was almost irresistible. The French Foreign Office instructed their minister at Athens to:
Call the Greek government's attention to the manoeuvres and intrigues of the German agents at Corfu and in the Ionian islands; to invite them to stop the refuelling and re-provisioning of German submarines in those islands; and to warn them that if this is not stopped the allied fleets will themselves be obliged to police Greek waters.
The Italian government repeated these accusations, and asked that our minister should be associated in a joint remonstrance. From Whitehall, the director of naval intelligence sent out a general instruction that every oil cargo was to be hunted relentlessly. This official tally-ho was addressed to all British consuls in the Mediterranean; it ran thus:
In deciding whether any place is likely to be used as a base of supply for German submarines apart altogether from the geographical question, the following points should be borne in mind:
Being thus exhorted from high places, officers on the station exerted themselves strenuously. The vice-admiral published a manifesto in the Greek press, in which he accused the contraband traders, and the contractors for the submarine bases, of disgracing merchants of the better sort; after this, he stationed a vessel off the Piraeus. In the Aegean, the naval authorities did literally hunt down every barrel of oil that could be found; for the list of vessels and cargoes detained at Mudros shows that no oil cargo was safe from confiscation, if it was being carried through any part of the archipelago.
These seizures of cargoes that belonged to petty traders, who were quite unable to seek redress, may have kept down a clandestine traffic in Turkish fruits and tobacco, but beyond this they regulated nothing; and, when it became at least probable that the Bulgarian government would declare war against us, there was an urgent need for some general regulation.11 The position then stood thus: We had a double interest in stopping cargoes from entering Dedeagatch; all supplies consigned to that place were entering a country that seemed likely to become an enemy; and the government at Sofia were no longer concerned in keeping down the transit traffic to Turkey, who was then their prospective ally. Over and above this, nearly every cargo bound to Salonika, and a large proportion of those bound for the Piraeus, were suspect, as our authorities were satisfied, that goods were being re-exported to enemy countries from Salonika; and that the regulations first issued by the Venizelos government were not being vigorously enforced by their successors. In order to check this flow of enemy trade, the government ordered, that all contraband to Balkan States was to be held up; that export licences for goods to the Balkans were to be granted sparingly; and that our commerce with Greece was to be very much cut down.
It is not easy to express the consequences of this in exact statistics; the outcome can, however, be reviewed in a general way. First, as to the order about conditional contraband. This order was issued to the fleet, after there had been an exchange [continued on page 393] [390-392=Table]
 of letters between the Admiralty and the Foreign Office, in which the Admiralty repeated, that they could do little to suppress the contraband trade; and that severe pressure ought to be exerted against the countries concerned in it. But before the necessary instructions were sent to Gibraltar, the contraband committee were already giving orders that conditional contraband to all Balkan states should be placed in the prize court. Thereafter, a number of cargoes were detained; (see table XLII) but the pressure thus exerted was probably more felt by the American oil companies than by the Greek and Bulgarian nations, and may be reckoned among those influences that inclined them to come to an agreement.
Secondly, as to our restraints upon British exports. Our export trade to Balkan neutrals was certainly reduced during the summer of 1915; but the reduction is not to be attributed solely to these various measures of restraint. Our Rumanian trade was already so diminished, by the closing of the sea and land routes, that the refusing of licences to Balkan neutrals can hardly have diminished it further: presumably, few applications were made. It is, moreover, very difficult to decide by how much our trade with Bulgaria was reduced by the restraints upon exports. The value of our normal exports to Bulgaria varied between one million and half a million pounds: during the whole year 1915 only £85,000 worth of British goods were sold, the re-exports fell off from about £47,000 to £2,500. Such large reductions are not to be explained merely by the three months of war and non-intercourse, yet, for reasons which will now be given, it may be doubted whether the reduction is to be explained only by restraints upon export licences. The reason is that a mere order that exports to a particular country were to be severely scrutinised did not, at this time, reduce our exports to the country indicated. Let our export trade to Greece serve as an example. It is clear from the records, that although all Balkan countries were included in the order about contraband and export licences, Greece was the country against which the policy was particularly directed, as the legends about submarine bases, the distrust of Greek ministers, and the known facts about the enemy's trade through Salonika, all inclined us to severity. But although an order was thus issued to straiten the Greeks in their supplies, the restraints imposed (whatever they may have been) did not check British trade with Greece. Quite the contrary, our Greek trade multiplied itself many times, in obedience to that general law of British commerce, that it will move to any neutral country that borders upon an enemy, and is, in consequence, an enemy's base of supply. Here are the relevant figures:
As British exports to Greece thus rose to several times their normal volume, notwithstanding that they were ordered to be cut down, it is safe to assume that British trade with Bulgaria would have flourished also, unless some influence that was quite independent of government orders had been reducing it. The trade probably declined, because the British merchants who were supplying Bulgaria began to fear, from midsummer onwards, that they would not be paid for their goods, and so abandoned the market.
This general regulation of trade with Balkan neutrals was supplemented by a special order, that all cargoes of Indian rice and corn, and of colonial wheat, should be stopped at Port Said, if they were bound for Greece. The consequences of this can only be properly understood by making a brief survey of Greek trade and commerce. (See Table XLIV).
Greek tobacco leaf, Greek raisins, and Greek shipping are the country's three great sources of income. The tobacco leaf and the raisins are principally sold to the wealthier countries of Europe and America. Greek shipping is to be found all over the world; for the Greeks, the British, and the Norwegians are practically the only nations which carry the commerce of all countries: a great part of the Greek carrying trade is, however, inside the Mediterranean. Greek wines and olives are a secondary source of income: the wines have a very ill taste, but their alcoholic content is high, and they are used for blending; the better sort of Greek olive is, perhaps, the best in the Mediterranean. From the sale of these exports, the Greeks purchase cereals, coal, metals and textiles; and, in the summer of 1915, the two first were of great importance to the country. Ordinarily, the Greeks purchase most of their corn from Russia; and, when the Russian supply became unobtainable, heavy orders were placed in America. On finding that the allies were making enormous purchases in the American wheat market, however, the Greek merchants placed large orders for Indian and Australian wheat, and increased their orders for Indian rice; so that the general convulsion forced them to depend more upon British supplies than they did ordinarily. The coal, upon which their merchant service largely depended, was imported almost entirely from Great Britain. Finally, although the Greek imports of jute were only a small proportion of their total purchases of textiles, such jute as was purchased was of great importance to the country, as the raisin crop was packed with it: this jute was all obtained from India. For three essential imports, therefore, Greece was either wholly, or largely, dependent upon Great Britain and the British empire.
The cargoes of corn and rice that were ordered to be held up were only a small part of Greece's total imports; but the detentions thoroughly alarmed the Greek government, who begged for a general arrangement, and, for the time being, set up a government control of corn, by making the bank of Greece the consignee of all cereal cargoes. This invitation to negotiate an agreement was well received, both locally and in Whitehall. In Athens, Sir Francis Elliot was alarmed at the distress that even these temporary measures of duress were likely to occasion; for the maize and rice cargoes that were being held were all intended for the villagers in the Epirus, a poor, but turbulent and restless people. The Foreign Office authorities were anxious to reach an agreement, as they were satisfied that the Greek contraband trade would only be regulated by establishing an ordered system of discrimination, and by making it independent of the politics of a particular ministry. In addition, the fortunes of an ally, Serbia, were much involved; for it was only by subjecting the transit trade at Salonika to known, agreed, regulations that the Serbian supplies could be properly secured.
In June, therefore, the Foreign Office instructed Mr. Waugh to go to Athens, and, while he was on his way, Sir Francis Elliott negotiated a temporary accommodation. The Greek government agreed that every waggon crossing the frontier, and every vessel leaving a Greek harbour, might be inspected and reported upon by British agents; and that their own customs authorities should assist them. In return for this, they demanded that they should be allowed to export two staples, currants and  tobacco leaf, to all markets. To this we raised no objection. After this preliminary arrangement was made, several cargoes were allowed to go forward, and licences for exporting British goods to Greece were not much withheld.
The more comprehensive plan, prepared by Mr. Waugh, was only signed a month later. It was a sort of first parent to another system of control, which became very embracing and powerful in the following year, for it contains many similarities.12 The substance of the plan was that Mr. Waugh and his advisers should receive, in advance, telegraphic notification of all ships and cargoes that were bound for Greece, with the names of the consignees. By this means, they would be able to make what enquiries they thought proper, and to decide what consignments were suspect, and what were innocent. The steamship companies in the Greek trade were therefore to make a binding declaration, that they would refuse delivery of all consignments declared suspect by Mr. Waugh and his staff, and that they would carry them back to Gibraltar or Malta. The consignees who obtained delivery were to sign declarations that the goods would be consumed in Greece. Vessels whose companies complied with these conditions were to be passed as rapidly as possible by the naval patrols. Exports from Great Britain to Greece were to be regulated on a similar system. The Greek importer was first to lodge his application with Mr. Waugh's board of control; after the board had made any enquiries they thought proper, they were to give the importer an official recommendation to the licensing committee in Whitehall. The Greek government undertook to supplement this plan by strictly enforcing their export prohibitions; indeed they went so far as to restrict their own native exports, for they promised that contraband of Greek growth or manufacture should only be exported to neutral countries, in quantities required for actual consumption in the neutral countries of destination. For the rest, the Greek government promised: (i) that the export, re-export, or transit, of contraband would be prohibited, and that any permits granted would be communicated to the legation and (ii) that inspectors of traffic should be appointed to all frontier stations, and to any railway, or harbour, that the legation designated. These inspectors were to collaborate with the agents appointed by the British government. This agreement was the more easily negotiated, in that M. Venizelos had been recalled to office after the project had first been presented.13 It should, however, be added that the Gounaris ministers, to whom the first proposals were made, had not been stiff or exacting; for they could have stipulated, and did not, that wines, olives, and the valuable lead which is raised from the Greek mines should be freely exported, in addition to tobacco leaf and currants.
The Greek agreement was supplemented by two others with the great companies that carried oil to the eastern Mediterranean. The first of these companies, the Standard, had contracts which made it the first supplier to Greece, Bulgaria and Serbia, and, according to an estimate made by Sir Francis Elliott, in the latter part of July, the consignments to Salonika, on Greek account, were then far exceeding the normal. If his calculation was correct, there was, at the time, a six months' supply in Greece, and the cargoes then afloat represented an additional twelve months' consumption. Two of the company's vessels, the Powhattan and the Oneka were then being held at Malta. The company were, however, anxious to come to an agreement; and we, though determined to check abnormal deliveries of oils to Balkan neutrals, were conscious that it was to our interest to do nothing that would displace the Standard Oil from the position they held; as their great rival in the Balkans was a German banking concern with financial control over one of the Rumanian companies, the Iteana Romana. Sir Richard Crawford at Washington found the company's manager extremely reasonable, and a general agreement was negotiated without much difficulty. The Standard Oil company undertook to notify  all petroleum shipments to the Mediterranean, and to consult our consuls at the ports of destination, before delivering consignments. In addition, the company engaged themselves to prepare an estimate of the amount of petroleum required by Greece and Bulgaria; to submit it to the legations at Athens and Sofia; and to ship nothing in excess of the agreed figure. In return for these undertakings, the company was allowed to keep a large stock at Salonika, or the Piraeus, ready for delivery into Turkey, when military operations were concluded; and the vessels then being detained were released.
An agreement with the other great company, the Vacuum, was less easily negotiated, because the markets of this company were not so concentrated. The Vacuum and the Standard directors appear to have divided the Mediterranean into spheres of interest; and to have agreed, that the Standard should be predominant east of cape Matapan, and the Vacuum in southern Italy, the Adriatic, north Africa and Spain. As the Vacuum's principal markets were in allied countries, and as the Italian blockade of the Adriatic closed the Dalmatian coast, an agreement would not have been difficult to devise but a peculiar circumstance, which was that we were, at the time, very suspicious of Montenegrin policy.
When mobilised, the Montenegrin army was about 50,000 strong; and, since the first days of the war, the king had managed to maintain his troops on his enemy's territory. In the south, the Montenegrins were containing the Austro-Hungarian forces in Cattaro; in Herzegovina, they held a line between Trebinje and Gazko; further north, they blocked the Drin valley and the passes on either side of it: the Montenegrin and Serbian armies joined at the river Lim. The king had refused to place his army under a Serbian general, as had been suggested, but he consented that Colonel Jankovitch, a Serbian officer, should be his chief of staff. It is a little difficult to judge of the Montenegrin achievement in thus implanting themselves upon Austrian soil, and it would seem as though they held their line, more because the Austrians had never attempted to drive them from it, than because they themselves had secured it. No first line troops had been sent against the Montenegrin front since the outbreak of war, and the whole front had been quiet for eight months.
If a map is consulted, it will at once be seen that the Montenegrin army's communications were bad. The coastal towns to the south of Cattaro are open roadsteads, and the best line of communication is from the mouth of the Bojana to the lake of Skutari, and thence to Cettinje. This line runs through Albanian territory; and it was, in any case, a line that could only be used effectively by a country with a large stock of river cargo boats and motor lorries: the Montenegrins possessed few or none. When, therefore, the sources of our resentment against the Montenegrin government are reviewed, it must be remembered that their difficulties and anxieties were considerable: their army was ill-equipped, badly clothed, and badly fed; and their supplies were carried through the country of an unsteady neighbour.
In the early spring of the year, the Montenegrin authorities reported that the Albanians were interrupting their supplies, and that the matter was urgent. It would be difficult to decide where right lay: the allied consuls could discover only one thing for certain, which was that neither party had the least regard for truth. Our minister, however, the Count de Salis, was convinced, from the outset, that the Montenegrins were inflaming the controversy, in order to make it an excuse for their other designs; and this seems probable, as King Nicolas soon commenced military operations against Albania, which were far in excess of anything needed to secure communications between the Bojana and Cettinje. Early in June, a Montenegrin column occupied points on the right bank of the Bojana, and then, crossing it rapidly at several places, entered Skutari, and hauled down the Albanian flags.  Count de Salis reported, that the assurances and explanations he had received on the whole matter were an unbroken series of falsehoods. The Serbian officers on the Montenegrin staff were equally distrustful. Colonel Jankovitch resigned, saying that the king had deliberately weakened the front in order to occupy Albanian territory, and that the whole operation had, in his opinion, been undertaken with Austrian connivance; the Austrian official history says nothing about any agreement with the king, so that the worst suspicions entertained against him may have been exaggerated. Count de Salis's suspicions were, however, shared by his Russian colleague, who, several months previously, had doubted whether financial assistance should be given to the king; and had then stated, that any money advanced to him would probably be spent on operations in Albania. In any case, if King Nicolas was unjustly suspected he had only himself to blame, for double dealing was his masterpiece.
This invasion of Albania was particularly disturbing to us, in that it was done in breach of the most solemn promises, and was exciting great distrust in Italy. Late in August, therefore, the government decided to give no more assistance to the Montenegrin authorities, either with munitions or money: they gave, as their reason, that such assistance would probably be of more assistance to Austria than the allies. In negotiating with the Vacuum oil company it was therefore necessary to get the directors to stop their deliveries to an allied state, as well as to all enemy countries. An agreement of this kind was less easily negotiated than the agreement with the Standard company; but it should be said, to the credit of the American directors, that although they expressed great surprise at our conditions, they raised no insuperable difficulties. In the end, therefore, the company undertook not to trade with any country at war with Great Britain, or with Bulgaria, Rumania, Albania, Greece, or Montenegro; and to consult with British consuls and agents before selling their oils in north Africa and Egypt.
The Rumanian Government protested that all these agreements would place restraints upon the Rumanian transit trade through Salonika, which they had done nothing to deserve. There was some force in this, and a temporary accommodation was allowed, whereby the Rumanian minister gave notice at Athens of the consignments that were to be imported through Salonika. The Foreign Office intended to make the Greek agreement the preliminary to negotiations with all Balkan neutrals; but this soon proved unnecessary. On 6th October the Austro-Hungarian armies began their invasion of Serbia; and, on the same day, the first echelon of an allied reinforcement for Serbia landed at Salonika, under General Bailloud. On 13th October the Bulgarian government declared war, and their armies advanced rapidly into Macedonia; on the 19th they captured Kumanovo, and thus took possession of the railway between Rumania and the Aegean. Meanwhile a blockade of all the Bulgarian coasts was formally declared. A few words should be added about the resulting position.
It will have been clear, from what has been written, that the economic campaign
in the Mediterranean theatre might conceivably have so reduced the military
resistance of the Turkish empire, that some great operation, undertaken in the
spring of 1916, by armies equipped from the arsenals of western Europe, would
have been successful. This reduction of the Turkish empire was, however, only
possible for so long as Turkey remained isolated. After the invasion of Serbia, and
the intervention of Bulgaria, the Turkish and the central empires were connected
by unbroken lines of road and railway; and, although the communication was
poor, it was yet sufficient to supply Turkey with the heavy, but not bulky,
consignments of metal that were needed in her arsenals. Henceforward, therefore,
the economic campaign in the Mediterranean was a campaign with no great
strategic objectives; and the agreements concluded may be compared to a
detachment that contains and holds an enemy in a secondary theatre.
1The conseil des prises is empowered by French law to condemn prizes; if judged by British standards, however, it is more a branch of the executive than a court of law. In 1916 it was composed of: A member of the conseil d'etat (Chairman), another member of the conseil d'etat; a representative from the civil staff of the French Admiralty, a third member of the conseil d'etat; a representative of the French Consular Service; the legal adviser to the Foreign Office; the government commissary to the conseil d'etat, a sécrétaire greffier, and a sécrétaire adjoint. The conseil d'etat is a branch of the French civil service with an appellate jurisdiction in civil suits. It is empowered to consider and if necessary to revise the decisions of the conseil des prises. ...back...
2The instructions ran thus:
5The Portuguese government issued a decree almost identical with the Spanish. See Tel. 144 Commercial to Madrid, 12th May, 1915. ...back...
7The acorns and cups of a dwarf oak, which grows in Greece and Asia Minor. Valonea is a valuable tanning substance and is much used in leather factories. ...back...
8See Annual Statement of the trade of the United Kingdom, 1915, Vol. II, p. 23. The entries are: Exports of British produce to European Turkey, £282,189 (principally in articles wholly or mainly manufactured). To Asiatic Turkey, £139,467. Exports of Foreign and Colonial merchandise to European Turkey, £31,020. Exports of Foreign and Colonial merchandise to Asiatic Turkey, £19,723. There is a footnote to each of these entries which runs thus: Exported to ports and places formerly Turkish, but now occupied by other powers, i.e., Crete, Dedeagatch, Salonika, etc. Our statisticians are to be congratulated on their strict regard for truth. ...back...
10When Hersing was operating against the allied squadrons at the Dardanelles he communicated regularly with a Turkish outpost at Bulair, to get information about our movements. Also, it seems certain that the Germans sent out a supply ship to meet Hersing during his voyage, and to allow him to refuel before he entered the straits. ...back...
11Midsummer, 1915. ...back...
13Agreement signed 30th August, 1915. ...back...