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Part III: The Rationing System and the American Embargo
Chapter 21: The Beginning of the Year 1916.
Public opinion and the economic campaign. – The ministry of blockade created: its departments. – What general questions of policy were in agitation at the beginning of the year. – Letters of assurance of navicerts. – The first operations of the blockade ministry. – The control of European meat imports and the importance of an agreement with the Chicago packers. – The new orders in council.
Before reviewing the progress of the economic campaign during the year 1916, it will be necessary to make a brief retrospect of an influence that had been exerting itself spasmodically during the summer and autumn of the previous year, and which gained in strength as the year advanced. This influence was pressure from the public, angry at the failures of the year, and inflamed by editors, and leader writers, who were fretting under the truce from party strife, which they had bound themselves to observe.
It is patent, on a first inspection, that the muddy torrent of invective which these men loosed upon the executive, flowed from very impure sources, but it has to be admitted, also, that criticism of some kind was inevitable. No government has ever escaped criticism during a period of national anxiety, and the criticism directed against the Foreign Office for their conduct of economic warfare had a long, though possibly not a very honourable, genealogy: Sheridan's sarcasms about sugar island strategy; the public outcry at the convention of Cintra; the slander directed against Sir John Moore during his life; the abuse with which he was bespattered when dead; and the attacks upon Lord Raglan, are evidence enough of what inevitably occurs, when a nation is disappointed in war.
It was, moreover, natural that the patriot press should have made the government's conduct of economic war their principal point of attack. The successes of economic warfare are not comparable to the successes gained by forces in the field: nothing dramatic or striking can be reported about them, with the result that a good pressman can always state, that the whole operation has failed, and persuade others that nothing has been done. The control established over German imports during the year 1915 was, assuredly, a far greater victory than anything achieved by the armies on the western front, but it was impossible to describe it in a manner that would strike the popular fancy; and, for so long as Germans were not actually starving, or going naked for lack of clothing, patriot editors could always produce what they called proof, that the enemy populations were suffering no inconvenience whatever. Finally, the circumstance that most facilitated the attack upon the government was that the blockade of Germany was not being operated by captures of shipping, the only impressive consequence of an old-fashioned blockade. Throughout the campaign a regular trade stream was flowing between America and northern Europe. This was known, and it was known, also, that ships were being held and examined and released. These known facts served as materials for a popular superstition: that the naval forces were attempting to impose a blockade (the ships brought in were said to be proof of the attempt); and that the Foreign Office were thwarting them for some sinister purpose of their own (the ships released were called evidence of the sinister purpose). As some explanation had to be given why the diplomatic corps so disliked the navy's patriotic endeavour, it was stated they were all under the influence of Sir Eyre Crowe, who had relations in Germany. It should be added, that the managers of this uproar never once drew attention to our swollen export trade with border neutrals, and that, when they were, later, summoned to the Foreign Office for a conference, they used high language about their duty to the  public. By a natural sequence of cause and effect, therefore, the only successful operation of the year was universally represented as an ignoble failure; and Sir Eyre Crowe, the officer conducting it, whose courage and devotion to the public service had been the driving force of the whole campaign, was often represented as a German agent.
The house of commons were, at first, more inclined to take note of this clamour than to endorse it The government's conduct of the economic campaign was not alluded to during the early part of the year, and was only discussed during May, June, and July when the questions that were asked by members who were interested in the agitation about cotton gave Lord Robert Cecil an opportunity of explaining how the operation was being conducted, of showing that no contraband proclamation would, in itself, make the operation easier, and of expressing his contempt for the slanders directed against Sir Eyre Crowe. The house seems to have been satisfied with these explanations, for no speaker attempted to attack the government during the discussions consequent upon Lord Robert Cecil's statements on 20th and 25th July; so that the newpapers [sic], which so inflamed the country when the cotton question was in agitation, were not then supported in the house. Whether anything was to be gained by declaring cotton to be contraband was, however, a specific question, upon which the lawyers in the house could exert a moderating influence: the popular superstition that some baneful political compromise was debarring the navy from exerting itself properly was not easily combated, and even the written record shews, that the house was infected with this belief, during the autumn session. It will be of some interest to shew, that this superstition turned criticism that might have been useful into criticism that was either futile or mischievous.
It has already been explained, that the great reproach against our administration was that the government had allowed our exports and re-exports to border neutrals to swell to three and four times their normal quantities, while the Foreign Office were striving to make the principle of normal imports an accepted rule of law. This was a matter that the Foreign Office had repeatedly striven to remedy by remonstrance and argument; and the statistics of these abnormal exports were on sale for a few shillings, and available to every member of both houses. No reference was made to this in the press, nor was the matter alluded to during the summer session: several members asked questions about trading with the enemy legislation, and could, had they wished, have forced a discussion on these statistics of indirect trade with Germany; but all carefully avoided the subject.
During the recess, the papers continued to agitate the question: Why was Germany not properly blockaded, and in the first part of the autumn session, Lord Charles Beresford made himself an echo plate for the popular clamour. It would be idle to suggest that the house, as a whole, was impressed by Lord Charles's criticism; it yet remains true, that all criticism subsequently directed against the government was of the same pattern. Lord Charles's remarks are so representative of the beliefs then current, and apparently still held in some quarters,1 that they should be quoted verbatim:
Why on earth do we not let the fleet act? We have the command of the sea, and why do we not stick to the old usages and customs of the sea? Whenever the fleet takes three or four ships, the Foreign Office orders them to be let go, and the confusion is extraordinary.... What is the objection to making an effective blockade? We have got the mastery of the sea, why do we not use it?
It should be added in justice, that, when taxed, Lord Charles hotly denied, that he was impugning the honour and patriotism of the diplomatic staff; he was a magnanimous and chivalrous gentleman, but a most irresponsible speaker. There-  after, members of both houses sought only to discover what was this baneful moderating influence, and from what quarters it radiated. In the upper house, Lord Portsmouth gave as an explanation that the Declaration of London was: A conspiracy of land power to destroy sea power; a conspiracy entered upon by Germany to destroy the free exercise of our naval supremacy; that the pundits of the Foreign Office were still endeavouring to make the declaration operative; and that their superstitious reverence for the instrument was the cause of the trouble. This was easily answered by Lord Lansdowne; but, soon afterwards, this search for the bad influence at work was much encouraged by a peculiar succession of events.
The agreement that Mr. Sargent had negotiated with the Danish guilds was now drafted. It had been circulated to all the departments concerned, and the Board of Trade had criticized it severely, saying (which came strangely from them) that the permission to put certain goods of British manufacture into the exchange traffic between Denmark and Germany need never have been granted. Mr. Sargent remarked, and Sir Eyre Crowe agreed, that this criticism was not in harmony with the policy that the Board of Trade had consistently pursued. As the agreement was to be kept secret, and as the matter was pressing, the Foreign Office did not feel inclined to argue the matter to a conclusion, by shewing how carefully the liberty to re-export British goods had been circumscribed; and by shewing, also, that the British goods which the Board of Trade had allowed to be exported from the border neutrals to the enemy were many thousand times greater, in bulk and value than the small trickle that Mr. Sargent had felt obliged to sanction.
It so happened, however, that a document that the pressmen alleged to be a copy of this agreement was printed in the Morning Post and a few evening papers, but it was no copy at all, but the goods that the Danes were allowed to exchange for German imports were correctly enumerated in it. When known, these disconnected facts made a great stir, and a number of members in both houses took them to be a discovery of that mysterious influence, which they were striving to expose and discredit. In the commons, Sir Henry Dalziel criticized the agreement in a speech that was highly misleading, it is true, but persuasive to the audience that he was addressing - an audience ignorant of the real facts, and easily excited by partisan rancour. In the upper house, Lord Strachie moved that the agreement be communicated, in which he was supported by Lord Portsmouth and Lord Sydenham. This last gentleman digressed very far from the matter under discussion, in order to show that the fleet would have reduced the enemy to terms, if the diplomatic corps had not interfered:
What is happening at the present time is this. Our officers board a ship bound for a Dutch port, they find her full of iron ore, and the captain says it is perfectly correct. They put a prize crew on board and take the ship to a Scottish port, and the captain, finding himself captured, admits that the whole of the ore is for Krupps, and says there are some other articles of the same kind coming on behind. All this is duly reported. But after a few days a telegram is received ordering the release of the ship. My lords, this is heartbreaking for our gallant officers and seamen, who often had to risk their lives to board these ships in bad weather......
Meanwhile, even more inflammatory remarks were being made in the lower house. The new trading with the enemy act, in which the old, geographical, definition of enemy trade was abandoned, was presented to the house of commons on 13th December. As the bill was deemed to be in harmony with the popular clamour for strenuous exertion it was well received. Unfortunately, more than one member urged that the Netherlands trust was a firm so infected with enemy associations that it ought to be put on the statutory black list, for which the new bill provided. In addition to all this, the press was being choked with articles about effective blockades, naval supremacy, the Napoleonic wars, and the good old times when sea power was allowed to be powerful. It is, therefore, small wonder that rumours  were then circulating in northern Europe, that some violent measures were in contemplation, that a blockade would shortly be declared, and that neutral states would be included in it.
In order that the matter might be properly discussed, the Foreign Office published a statement of the measures adopted to intercept the sea-borne supplies of Germany. This paper was issued early in January, 1916, and it was discussed in a general debate on 26th January. The paper and the statements made in the debate by Mr. Leverton Harris, Sir Ernest Pollock, and finally, by Sir Edward Grey, showed that the improvements so recklessly suggested (of which the effective blockade improvement was then thought to be best) would in no way relieve the difficulty inherent in the operation: the difficulty of discriminating between genuinely neutral trade, and neutral imports which were directly, or indirectly, assisting the enemy. The baneful, moderating influence, which all were seeking to discover, was, in fact, neither more nor less than the system of discrimination, which the contraband department of the Foreign Office and the contraband committee, were striving to make perfect. It may be doubted whether the explanations given finally discredited the popular superstition - there are many indications that it has survived - but at least Sir Edward Grey's statement relieved neutrals of their anxiety that their agreements with us were shortly to be denounced and disregarded; for the foreign secretary was careful to state exactly what conduct we intended to adhere to:
I have said, just now, that we have no right to make neutrals suffer. By that I mean that you have no right to deprive neutrals of goods which are genuinely intended for their own use. Inconvenience it is impossible to avoid, and you cannot help it. What I say to neutrals is this: We cannot give up this right to interfere with enemy trade, that we must maintain, and that we must press. We know, and it has always been admitted that you cannot exercise that right without, in some cases, causing considerable inconvenience to neutrals - delay to their trade and in some cases, mistakes which it is impossible to avoid. What I say to neutrals is this: there is one main question to be answered by them: do they admit our right to apply the principles which were applied by the American government in the war between the north and south? Do they admit our right to apply those principles to modern conditions, and to do our best to prevent enemy trade through neutral countries? If they say yes, as they are bound in fairness to say, then I would say to them: Do let chambers of commerce, or other similar bodies in your countries, do their best to make it easy for us to distinguish......
This statement was very well received in Sweden, the country where the preceding clamour had done most mischief.
It would be unjust to suggest that any person in authority, least of all Sir Eyre Crowe and the officers of the contraband department, were in the slightest degree intimidated by an outcry that they had every reason to treat with contempt. It can, however, be assumed that this uproar did indicate to them, that the time had arrived for remedying imperfections of which they had long been aware, by measures that would have been strongly resisted, if they had been attempted earlier. The first and most necessary measure was that of creating a ministry of blockade, and of cementing as good a union as possible between the new ministry and those branches of the administration that could not be incorporated into it. The new ministry was brought into existence on 23rd February, at Sir Eyre Crowe's instance, and its structure was this.
The central executive, or general staff, of the new ministry was the contraband department, which was now divided into eight sections, with Sir Eyre Crowe, the superintending under-secretary to the new ministry, in charge of it. Immediately under him were Mr. Alwyn Parker, the head of the department, and Mr. G. S. Spicer, who had represented the Foreign Office on the contraband committee during the year. This branch of the ministry was more a political department than its name implies. According to its constitution, the duty of the department was to watch  over the operation of the contraband agreements with neutral powers, and to transact all daily business arising out of them: actually, these duties were neither more nor less than directing and advising on all matters relating to neutral policy; for practically all despatches and telegrams from our ministers in neutral Europe, and all despatches upon American politics, and the debates in congress, were examined and minuted by them.
It will be shewn, later, with more particularity than would be convenient at this point, that the task that the contraband department thought most pressing, at the beginning of the year, was the task of enlarging the rationing system, until not only the textiles, foodstuffs and metals provided for in the first agreements, but articles of general trade, were brought within the compass of the system. It was realised, however, that the system could only be made more comprehensive if weekly and monthly statistics of neutral trade were available; indeed Lord Robert Cecil stated that this was the one necessary prerequisite. Mr. Harwood, who had prepared the statistics of neutral trade during the year, was therefore brought into the new ministry as head of the war trade statistical department, and the statistics prepared by him, during the following year, were more detailed than those prepared previously.2 In addition to this, a department called the war trade intelligence department prepared weekly bulletins on the movements of neutral trade, upon the operation of the agreements, detentions of ships and cargoes, and so on. These bulletins served as a sort of commentary upon the statistics prepared by Mr. Harwood. These three departments were, therefore, conjointly responsible for that general rationing, which was made the cardinal point in our policy throughout the year.
As has been explained, the new trading with the enemy act forbad transactions with any person or persons, who, by reason of their enemy nationality, or association, might be proclaimed enemy traders. These persons, with whom all trade was forbidden, were enumerated on what was known as the statutory black list, which was published from time to time. A few words should be added as to the sources of this black list and the difficulties of compiling it. During the early months of the war, Lieutenant Clayton Calthrop, who was then serving at the Admiralty, collected all the information then passing through his hands into a sort of intelligence manual about neutral traders; at the same time, but independently of him, Major Phillips, an officer in the censor's department, compiled an enemy's traders list. When Colonel Hankey pressed for a department of commercial intelligence, which should collect all the available information, and circulate it to all the committees concerned with the interception of contraband, these two compilations, Lieutenant Clayton Calthrop's and Major Phillips', were digested into a volume called: Who's Who in relation to war trade. This volume contained an alphabetical list of every firm that we could identify, of everything that was known about them, with the sources of our information added in each case. Supplements compiled from information subsequently transmitted were issued quarterly. It was by this compilation that the contraband committee were generaly [sic] guided, when they held ships and cargoes, until their suspicions of them were purged.
 The information in this manual of intelligence was, of course, very unequal; in some cases, a firm was identified as having been an agent of a German firm before the war, but little or nothing had been discovered about the business the firm had transacted since war began. Such entries as: Reported to be sending military boots, preserves, and candles to Germany, were numerous. In many cases, however, the information was specific, for on opening the book at random I find the following entry:
Formerly partner in Blydestein and Neugebauer of Zittau, which was converted into a Dutch firm for getting Indian and Egyptian cotton into Germany. Hague Committee gives bad character. Blydestein wires to Epstein cotton co. Savannah to ship Rotterdam for Stengel, Mülhausen.
It was realised from the outset, that, although no neutral government could question our right to debar firms with enemy associations and affinities from using our coal, or our ships, or from transacting business with our banks and our insurance companies, the posting of them on a black list was, nevertheless, a delicate matter, in that most of these firms were neutral trading associations, who could represent to their governments that injury was being done both to them, and to their country's trade, and ask for redress. Indeed, it will be shown, later, that this new act, which impinged upon no rule of international comity, provoked more commotion in America than measures far more questionable. From this, it can be understood, that the preparing of this statutory black list was a business demanding a nice discrimination. It was entrusted to the Foreign Trade Department of the new ministry; actually three lists were kept: the statutory black list of firms about whom the evidence was irrefutable; a secret black list of firms whom the contraband committee might safely treat as suspicious consignees, and to whom no export licences were to be issued; and the general lists or directories of neutral and enemy traders. An additional department on financial transactions was also incorporated into the ministry. The enemy exports committee continued as a special department. Its work had been so thoroughly performed, that no alteration was thought necessary, either in its composition, or in the powers granted to it. The war trade department, which was still virtually a branch of the Board of Trade and the contraband committee, was not incorporated into the new ministry, but a very strong committee was formed out of the chairmen of all committees concerned with the restriction of enemy supplies. It was termed the war trade advisory committee, and was presided over by Lord Crewe. Its duties were to co-ordinate measures taken by the various departments of state, and to advise the cabinet on questions of policy. This committee superseded the restriction of enemy supplies committee, which had observed the course of neutral trade during the first eighteen months of the war. The reports and surveys which this older committee had prepared were now replaced by the more rapidly issued bulletins of the war trade intelligence department.
It has already been explained, that all persons directing the economic campaign were convinced, that the operation to be most pressed was the operation of rationing. It will be convenient, briefly, to recapitulate matters described in previous chapters, in order to explain what still remained to be done, in order to make rationing a comprehensive and satisfactory system.
At the date with which we are here concerned, rationing was a principle agreed to formally by the Société de Surveillance Suisse (second paragraph of the confidential letter annexed to the agreement); by the Danish guilds (second article of their agreements and letter annexed to the agreement); and by the Netherlands trust. These three countries were, however, not being rationed in the same commodities, and it will be as well to review the restraints then being imposed.
 I. The Netherlands. The operative rationing agreement was the agreement of 23rd September; so that, for the last quarter of the year, cargoes of the following commodities were being held and released upon statistical evidence:
Maize, rye, linseed, oil cake, meal, animal and vegetable oils and fats, oil nuts, oil seeds, lard, mineral oils, petroleum, raw wool and cotton.
It could, therefore, be said, in a general way, that the Netherlands were rationed in all substances that were essential to their agriculture, and their textile industries.
II. Switzerland was not being rationed through any agreement comparable to the agreement with the Netherlands trust. The allied blockade committee, which were operating the Swiss agreement were, however, holding up and releasing consignments of forage, textiles and metals on statistical evidence.
III. Denmark. Cotton cargoes and cargoes of petroleum and its products were being held on statistical evidence; but the general rationing agreement was not ratified at the beginning of the year. The agreement was, however, made operative shortly after the new ministry was created, so that, from then onwards, we were rationing Denmark in respect to:
Cocoa, animal and vegetable oils and fats, oil seeds and oil nuts, rubber, hides, leather, tanning materials, tin, nickel, antimony, copper, ferro alloys, malt, coffee, dried and fresh fruits, jute, hemp, graphite and nitrate of soda.
IV. Norway was specifically rationed in cotton only, but a great number of business men, and Norwegian government officials, had agreed to rationing as a principle of discrimination.
V. Sweden was rationed in respect to cotton; but the government had objected to any system of discrimination operated by statistical evidence.
The gaps in the system were, thus, still considerable; and the plan uppermost in the minds of such persons as Sir Eyre Crowe, Mr. Leverton Harris, and those who had directed the operation during the previous year, was to make the procedure uniform and comprehensive. It was recognised, however, that, whatever might subsequently be settled by negotiation, the time for negotiating was now past; and that what was needed was a regular, administrative process for stopping or releasing neutral trade on statistical evidence. This process was called forcible rationing: its adoption is of great importance in the history of the blockade and the preliminaries to it appear to have been these.
Late in January, Lord Crewe informed the Foreign Office that the cabinet had not made any specific objection to the system, when the relevant papers were laid before them, and that the Foreign Office: Might safely assume that the policy was one which the government intended to introduce. The words are curious, they suggest, without saying so explicitly, that the cabinet did not discuss the matter closely. It is clear, at all events, that Sir Edward Grey's sanction was still doubtful; for, five days later, Mr. Hurst had a long interview with him, and pressed him to consent. Mr. Hurst argued, that no more rationing agreements could be expected, unless neutral merchants were reminded, day by day, week by week, and month by month, that such agreements as were being operated were a mere beginning to that general regulation, which we desired to impose. The practice of holding all shipments in excess of normal was, thus, the only practicable method of issuing this succession of warnings and reminders. Secondly, Mr. Hurst urged that unless some such practice were adopted, neutral merchants would soon be aware, that a greater quantity of commodities was being allowed to pass than the quantities allowed by the agreements; and that this would soon put everything concluded in jeopardy. Thirdly, Mr. Hurst argued, that no time was to be lost, in that neutral exporters and consignees had recently very much improved their disguises of ultimate destination, with the result that the system of detection, upon which we had hitherto relied, was for the time  being not so reliable. Sir Edward admitted, in writing, that these arguments had persuaded him, but that he doubted whether it would be wise to speak openly of rationing; nevertheless he stated specifically: I think we must attempt the policy (3rd February).
Mr. Hurst now circulated a paper to all government departments concerned, in order to ascertain that everybody meant the same thing, when they spoke of rationing. The system that he proposed was this: that the contraband department should issue a notification that some commodity was to be rationed; that the licensing authorities should, thereafter, only issue licences in respect to that commodity, until the normal export figure had been reached; and that the contraband committee should hold all overseas cargoes of the commodity, after they had been notified that the country had received the amount normally imported from all sources of supply. The objection that lawyers had pressed so strongly when the project had been discussed, that general statistics of trade would not be accepted as proof that any particular consignments were destined to the enemy, was still the great obstacle to enforcing the system rigorously. Mr. Hurst considered, however, and the procurator general agreed, that cargoes could at least be held, and the onus of proving an innocent destination left to the consignee, when statistics justified a general suspicion. When this paper had been assented to by the departments of state and the committees concerned, Lord Robert Cecil circulated two more papers in which he stated: The whole basis of our blockade must henceforward depend upon statistics of imports into neutral countries; he also ordered the authorities to impose every legitimate delay and difficulty, upon the shipping of countries with which we had no agreement.
When this becomes known (Lord Robert Cecil continued) it is to be hoped, that shipowners will begin to enquire whether any particular goods are likely to lead to delay, as indeed they do in many cases now, and we shall secure something in the nature of rationing.
As Lord Robert Cecil was now minister for blockade these two papers may be regarded as the executive order, which was acted upon for the rest of the year. The history of the blockade during the twelve months following is, indeed, the history of the economic and political consequences of this order.
It so happened, that, when this decision was taken, and the order for forcible rationing issued, a project that subsequently very much strengthened the rationing system was being examined. Those who urged that forcible rationing should be attempted realised, vaguely, that this new plan would supplement it; but it may be doubted whether anybody realised how powerful an instrument for restricting neutral trade was then being forged. The tremendous restraining force of the system called navicerting is, indeed, very difficult to describe adequately; for the restraints imposed by virtue of it cannot be converted into statistics. Those who operated the system will always be better able to assess its efficacy than a historian; for they only remember the restraints that were imposed daily, in the ordinary course of business, and this memory of how the system was operated, day by day, is the only accurate assessment of its success and power.3 But even when it is recognised that the actual working of the system was an administrative process which cannot be described in detail, the origins of the project are so curious and unexpected that they deserve to be placed on record.
The system of navicerting was, in substance, a system whereby particular consignments of goods were given what may be called a commercial passport before they were shipped: this passport, called a navicert, ensured the consignment an  undisturbed passage. It will readily be understood how much this system must have benefited neutral shipowners, who had always been seeking for settled regulations, which, when obeyed, would protect their shipping against interference, and it is, on that account, rather curious that something of the kind should not have been proposed long before, by some Scandinavian magnate. In point of fact, Captain Cold's first agreement with the contraband committee had included an undertaking by him, that our commercial attaché at Copenhagen should be kept: Au courant with all cargoes shipped by his company. This appears to have been the first attempt that was ever made to secure the safe passage of a ship or cargo, by giving notice of it beforehand. Subsequently to this, however, the Scandinavian shipowners protected their shipping by giving undertakings that suspected goods would not be delivered, and this guarantee, which was elaborated by many precautions, superseded the experiment made rather tentatively by Captain Cold.
The next step was made during the agitations consequent upon the March order, when Sir Cecil Spring-Rice and Sir R. Crawford suggested, that some means be found of giving shippers a rough assurance that their consignments were not objected to. A system of consular certification was then devised, and it has been shewn that a great deal of business was transacted under that system during the summer.4 Nevertheless, although information about cargoes about to be shipped was frequently transmitted, this system of consular certification did not go to the root of the matter. Our method of discriminating between innocent and doubtful cargoes was not then understood in the United States, where gossiping stories about concealed copper, disguised indiarubber, and the rest were still believed. The American shippers therefore thought that detentions were being ordered, because these disguises had made our authorities watchful, and hoped, that we should be easier when we received declarations from our consuls, that the cargoes in the holds of ships loaded under their supervision corresponded with the cargoes declared in the manifests. The system devised did, certainly, much facilitate business between the United States and Scandinavia, during the summer of 1915, but it did not give either the American shippers, or the Scandinavian importers, that security against detentions for which they were seeking.
The next, and decisive, step was taken by the American Consul-General in London, Mr. Skinner, but it was a long time incubating. Throughout the summer of 1915, Mr. Skinner sent home despatches in which he criticised our procedure very severely. At the time, our authorities regarded Mr. Skinner as a mischievous and quarrelsome person; but now that all his despatches and reports have been published, it is difficult to think of him as anything but a conscientious servant of his country; for everything that he reported was substantially true, and his criticism, though highly unpalatable to us at the time, was justifiable. First, and this was very important, Mr. Skinner reported that detentions were not being ordered, because a cargo was contraband, but because we had long lists of suspected consignees, and a mass of confidential information; and what he protested against most strongly was that heavy dock and wharf charges were being imposed upon neutral shipowners, even when the suspicions entertained against their cargoes proved groundless. Mr. Skinner did, indeed, do everything in his power to dissuade American shipowners from signing the undertaking that was often obtained from neutral owners when their ships were released, that they would make no claim for indemnity later. It is patent, however, that Mr. Skinner's indignation was excited only because he considered our administration to be disorderly and haphazard. While urging his government to stand firm in the matter of detentions, he was striving to discover some practical way out; for he twice proposed to Admiral Slade that manifests  should be cabled before cargoes were shipped, and added, that, if his department could accept this without derogation to the American standpoint, he believed he could make a working agreement.
If our British friends (he wrote) would only put their administrative machinery in order, and deal with neutral cargoes and ships in a spirit of fairness, and also with some efficiency, they could probably carry out their programme, while at the same time reducing complaints to a very low figure indeed...... I have the impression that if we insisted upon the application of fair principles in the attempts to enforce the order in council, the British government assuming its own burdens and paying its own costs, we might get something helpful......
This was the substance of the consul-general's complaints, from which it is clear that he was in no alliance or confederacy with the political managers of the American opposition. He was contending for a better, and more regular, administration of the economic campaign, without attacking the bare principle, and also, without properly appreciating how much administrative confusion is inevitable in war, when departments of state are performing new duties of which they have no experience. The state department appears to have thought little of the consul-general's proposals, for he was not empowered to negotiate further.
Mr. Skinner's subsequent reports made something of a stir, but they were upon another subject. Having secured figures of our exports and re-exports to neutrals bordering upon Germany, he first communicated them, in a private letter, to Mr. Lansing, and subsequently elaborated this in a report that was published in the official bulletin of American trade. Mr. Skinner's figures were quite accurate, and what he drew attention to was substantially true: commerce between America and border neutrals was being far more severely scrutinised and policed than commerce between Great Britain and those same border countries. Unfortunately for himself, Mr. Skinner drew an inference from these figures which was not quite justifiable.
The British explanation of these singular facts is that the exports are in some degree controlled by the various committees, which authorise the granting of licences to export, and that only importers of known standing are favoured...... The explanation would have some force if the quantities exported were normal, but inasmuch as they are wholly abnormal, and as the ease with which the exports from Great Britain are made is a matter of common knowledge, it is quite evident that measures designed to protect the military situation are being utilised to extend and protect British foreign trade at the expense of foreign countries.
Everything in this report was true, with the exception of the last sentence which exposed the consul-general to what may be called a tactical counter attack. The Board of Trade prepared statistics, which proved that, large as our gains in this suspect trade had been, the American gains had been even larger, from which it followed that our profits had not been secured at the expense of America, as the consul-general suggested. It was not a good defence of our policy, though possibly better than none at all; Mr. Craigie of the contraband department considered it: Very depressing reading. Shortly afterwards, Mr. Skinner was recalled to America. Our authorities hoped that he was to be reprimanded for making mischief; it is far more likely, however, that the state department appreciated their consul-general's services, and desired to consult with him about the note of protest then being prepared; for a large section of the note was little but a repetition of the contentions that Mr. Skinner had been pressing throughout the summer.
Mr. Skinner's visit to the United States gave him an opportunity of explaining and elaborating a project that he seems to have been turning over in his mind, since his first conversations with Admiral Slade. He had said, repeatedly, that the British government would never relax their economic campaign; it seemed to him, therefore, that a great deal of the political agitation on the subject was misdirected; and that, if British and American exports to Scandinavia could be placed on the  same footing, the unsettled issues between the two countries would be far less dangerous than they actually were. The British shipper applied for a licence to the war trade department, who either granted it outright, or asked him for further particulars, or refused it. The worst that could happen to the shipper was that he was compelled to sell his goods in another market. Why, then, could not the British authorities in America receive similar applications from American shippers, subject them to the same tests as those applied by the war trade department in London, and grant or refuse them accordingly? Mr. Skinner dicussed [sic] his plan with Sir Richard Crawford, and explained it at length to Mr. Polk. The state department were enigmatic about it; but they were quite cognisant that the project was submitted to the British government by their consul-general; for it was by them known as the Skinner scheme.
Meanwhile, the managing authorities of two Scandinavian lines anticipated the plan by introducing a rather cumbrous system of advanced bookings. On 16th February, the Norwegian-America line telegraphed particulars of some cargoes that they proposed to ship, and continued to do so throughout the month; the answer given was: That the shipment might lead to difficulties or, That it was not likely to do so. The war trade advisory committee, by whom Mr. Skinner's suggestions were examined, were thus aware that a rudimentary and experimental project of the same character was working satisfactorily. They reported favourably, and on 16th March, the first navicert was operated. The administrative process was this. The embassy at Washington were supplied with the digests of commercial intelligence from which our black lists were compiled, and were empowered to grant letters of assurance for goods not on the British list of prohibited exports. Applications to export other kinds of goods were telegraphed in a code so arranged that the expenses of telegraphing were reduced as much as possible, and a serial number was given to every application. The request was examined, simultaneously, by the foreign trade department of the Foreign Office, where the consignees record was looked into; by the contraband and the statistical departments, where the quantities of the same goods already imported, and the agreements in force were considered; and by the contraband committee. The replies sent were: nolo, accipe, or pendens: the last reply meant that further enquiries were being made and that no immediate answer was to be expected. The war trade advisory committee realised, dimly, that the system could be used to supplement and enforce the forcible rationing that the ministry intended to impose; but from its first inception, to its final adoption, the scheme was treated as a plan for easing political friction with the United States. Until the plan was in operation, nobody grasped that the consul-general of the United States had designed a coercive engine of enormous power, and had persuaded our authorities to use it.
If the tables and diagrams which illustrate the daily administration of the blockade are consulted, it will be seen that the machinery was only exerting all the pressure that it could exert in about April; for it was from then onwards that embargoes, forcible rationing, and punitive detentions were all being ordered in harmony, on every pretext that seemed to justify the severity. The first consequence of concentrating the executive power in the ministry of blockade, and of constituting a powerful co-ordinating committee was not, therefore, that greater severities were at once practised, but only that certain matters were regulated, which had been left unsettled for lack of an authority capable of reconciling the conflicting policy of the Board of Trade and the Foreign Office. The first of these general settlements was a better regulation of neutral importations of cocoa, tea, coffee and tobacco. The war trade advisory committee, who examined the question, reported nothing that had not been reported by their predecessors in  the restriction of enemy supplies committee: cocoa was a foodstuff, and was a most valuable supplement to a daily diet when supplies of meat and grains were short; there was thus no justification for allowing the enemy to receive a teaspoonful of it, if it could be prevented; also there were no political consequences foreseeable if the supplies were stopped, save only a certain amount of grumbling from colonial governors on behalf of the negro cocoa growers on the Gold coast, who had been allowed, in fact almost encouraged, to increase their production. Tea, coffee, and tobacco were comforts only, and good reasons could be shown why the enemy should be allowed to purchase them: the value of the mark had fallen steadily on all foreign exchanges during the year 1915, and was not likely to recover so long as our stoppage of German exports was strict and rigorous; heavy purchases of pure luxuries and comforts could, therefore, be counted upon to accentuate the downward movement of the German mark still further. The French, on the other hand, gave equally good reasons why the enemy should receive none of these goods if we had the power to stop them. They argued: that our control of German exports was doing as much damage to the German exchange as could be done; that we were waging economic warfare with our full strength; that any relaxation of it encouraged neutral criticism; and that, if we permitted the enemy to secure a good supply of any comfort, we thereby allowed them to mitigate the sufferings consequent upon a shortage of essentials. Inasmuch as the most valuable consequences of economic warfare are the anger, depression, and suspicions that it occasions, there was much to be said in support of the French view, and it prevailed. During the year 1916 all these substances were forcibly rationed: we had, possibly, nothing to reproach ourselves with in respect to tea and coffee; for our policy in regard to them had been consistent with the general good. The same cannot be said about our cocoa exports, which look very peculiar, when it is remembered that cocoa had been on the list of prohibited exports since January 1915:
More important that this, perhaps, was an agreement which was a necessary supplement to forcible rationing, letters of assurance and the rest, in that, without some agreement of the kind, it would have been extremely difficult to keep neutral supplies of imported meats to their normal quantities. This was the agreement with the Chicago meat packers. If the Foreign Office authorities had been free to act as their pride dictated, they would certainly have refused to treat with a body of men, who had shown themselves so unscrupulous and deceitful, and yet so truculent, when their cheats were discovered. Indeed, treating with these Chicago bosses must have been highly repugnant to honourable men. Some agreement was, however, necessary in the public interest. It was then patent, that agreements for controlling supplies from the source were the most powerful of all agreements -  our control over oils, lubricants and cotton was proof of it - and it was, consequently, an inference not to be rebutted, that if we could regulate the supply of meat to northern Europe by an agreement similar to our agreements with the Vacuum and Standard oil companies, then, our whole system of control would be very much strengthened. The meat packers were, moreover, inclined to an agreement, in that the prospect ahead of them, at the beginning of the year 1916, was by no means good. They had broken with us six months before, threatening an agitation in congress. We have no information as to the reception given to the meat packers, when they approached congress; we can be certain, nevertheless, that they were less successful than they hoped to be; for in November 1915, when the packers were agitating most violently, Mr. Lansing stated outright, to the owner of a great newspaper, that he had a low opinion of them. The meat packers had therefore reason to know, that we were not likely to be intimidated; and that we would reduce their shipments to northern Europe, by ordering those sudden, unexpected, stoppages and detentions, which bring business into such confusion. We on our side, though determined to persist, could not be anything but apprehensive at the prospect of an agitation that would be pursued in a new congress of a less friendly temper than the last.
The agreement was therefore concluded because policy demanded that it should be. The meat packers were paid the sum of £1,772,245 by way of compensation for the cargoes that had been stopped during the previous year; the subsidiary firm of Cudahy was paid £24,871. These large sums being accepted as a settlement of all outstanding questions, the meat packers agreed: not to send their products, directly or indirectly, to countries at war with Great Britain; to send their goods only to consignees approved by the British government; and to secure guarantees against re-export from all buyers. We undertook that normal quantities of packers goods should be allowed to pass, and insisted that we should calculate the normal quantities, and should declare them to the packers. This very important agreement was signed on 13th April, 1916. Its consequences are, perhaps, best appreciated by inspecting the diagrams of neutral imports for the years 1915 and 1916.5 From these diagrams it will be seen, that, at the beginning of the year, the meat packers had succeeded in raising their monthly exports to Sweden and Denmark (their two best bases); but that their sales fell off after March, and remained well below normal for the rest of the year. The same reduction might have been effected by forcible rationing, and by refusing letters of assurance, but it was assuredly best to settle with the packers: they may have had less power for damage than we imagined; but they would, nevertheless, have been a strong reinforcement to an agitatory party, which was already strong enough to cause dangerous commotions; for it will be shown later that the agitations in the American congress were more heated and envenomed during the summer of 1916, than they had ever been before.
In addition to these last measures for perfecting the administrative system, the ministry of blockade undertook a general revision of the legal doctrines under which we were acting. The orders in council that were still in force, at the beginning of the year were, indeed, by no means coherent or well adapted to the practice of interception. The order of October, 1914, was still valid, notwithstanding that, in actual practice, this order had been superseded by the March order, which proclaimed that goods of all kinds were to be stopped and dealt with as the court might direct, if they were being carried to the enemy direct, or through a neutral; more than this, the October order had been overlaid, in that the treatment of nearly all cargoes considered by the contraband committee was regulated by our agreements with the neutral associations. The order was therefore superseded by the declaration of  London order in council (30th March, 1916), which laid down, that the provisions of the old order should not be deemed to have limited our right to capture goods in accordance with the law of nations on the ground that they were conditional contraband; the order also adopted the American rule, that conditional contraband was liable to capture, no matter whether the carriage of the goods was direct, or whether it entailed trans-shipment and subsequent transportation overland. This virtually reasserted the rule in the order of August, 1914, but the new order went further. Since the March order had been issued the government had, by implication, been contending for the most comprehensive interpretation of the law of continuous voyage; it was therefore deemed expedient to assert the doctrine more explicitly, and to abrogate one of the circumscribing rules of the declaration of London. The nineteenth article of the declaration, which laid down that no vessel could be condemned for breach of blockade, if her immediate destination was a non-blockaded port, was therefore formally abrogated and set aside. This new order gave more coherence to the doctrines that were being asserted and practised; it was, however, a preliminary to a general revision.
Five maritime orders in council had been issued since the beginning of the war; and four of them had modified the declaration of London in several important particulars. The reprisals order of March, 1915, by virtue of which the allies were cutting off all German supplies, rested upon the ancient, consuetudinary law of nations, and did not specifically cancel or supersede any part of the declaration. This March order was, however, the most important wing in the legal edifice of the blockade; and, whenever the British government were confronted with problems arising out of its application, the declaration of London gave little or no guidance; and they or their advisers were always driven to decide by reference to the body of customary law known as: The course of admiralty and the law of nations. In these circumstances was it not better to declare frankly, that the declaration of London no longer directed either the policy or the procedure of the British government? Lord Robert Cecil was persuaded that the policy of keeping the declaration alive, and of modifying it from time to time by orders in council, was largely responsible for the feeling of insecurity which was the starting point of so much neutral opposition. Late in March, therefore, the Foreign Office sent a draft order in council to the Admiralty for criticism.
The draft order began with a preamble, which stated that it was no longer convenient to keep the declaration in force; and that it was now withdrawn; it then continued that the British government intended to exercise their belligerent rights in accordance with the course of admiralty and the law of nations. After this, the draft order elaborated the preamble, and stated what rules we should henceforward observe in determining hostile destination and breach of blockade; how we should deal with vessels that carried cargo to an enemy port after passing our patrols, when ostensibly bound for a neutral harbour with their papers in order; and what proportion of contraband cargo would condemn the vessel carrying it. The Admiralty subjected Lord Robert Cecil's proposals to a searching examination; and whilst it was being carried out, the courts gave a legal ruling that had a very important bearing upon the points at issue.
For many weeks past, the case of the Zamora had been before the judicial committee of the privy council on appeal.6 The matter in discussion affected British prize court procedure, and left our measures at sea untouched; but on the point to be decided there turned matters of great moment. Order XXIX of the prize court rules which had been put into force by an order in council dated 29th April, conferred a right to requisition ships and cargoes in respect of which no final decree of  condemnation had been made. In May, 1915, the procurator-general took out a summons for requisitioning four hundred tons of copper carried in the Zamora; the fate of the ship herself was to be decided later, under the retaliatory order of March, 1915. The president of the prize court gave permission to requisition the copper, and, at the same time, granted leave to appeal against his judgment. The appeal court had thus to consider whether orders in council are binding upon the justiciary officers of a prize court. The case was learnedly and elaborately argued in the privy council, and, on 7th April, 1916, judgment was given. It was held, in the most emphatic terms, that a British prize court was not bound by the executive orders of the crown:
The power of an order in council (ran the judgment) does not extend to prescribing or altering the law to be administered by the court.... If the court is to decide, judicially, in accordance with what it conceives to be the law of nations, it cannot, even in doubtful cases, take its directions from the crown, which is party to the proceedings.
This judgment, which will probably be considered one of the most important decisions ever made by a British prize court, affected the question now before the Admiralty in more ways than one. In the first place, it gave great weight to Lord Robert Cecil's original proposals. If, in the last resort, the British prize court could administer no order in council which conflicted with the established rules of international law, it was obviously advisable to make the position clear to the whole world, and this was precisely what Lord Robert Cecil proposed to do. But the judgment affected the question in other ways than this. The fleet was still acting upon the instructions that had been issued to it before the war began. These instructions had stood the test of actual practice, in that no prize or boarding officer had yet been judged to have acted illegally. Since the essence of the Zamora judgment was that orders in council had no authority if they were contrary to international law, it was highly important that the fleet should not be involved in any illegality to which the government might be committed by a wrongly conceived order.
Several weeks went by before the Admiralty could collect the opinions of its advisers, and frame their considered reply to Lord Robert Cecil's proposals. They were not prepared to oppose them in principle; but they drew up a long and highly critical reply on points of detail. If the declaration were repudiated, the government would gain greater freedom on questions connected with declarations of blockade, issuing of contraband lists, unneutral service, enemy character, searching of ships in neutral convoy, and penalties for resistance to visit and search; but the Admiralty doubted whether liberty which the government would gain would be of any practical use. In the matter of blockade, British practice gave a belligerent fairly wide powers with regard to the area within which blockade breakers were liable to capture; and, in addition, recognised as legal a de facto blockade, even though it had not been notified to neutrals. These additional rights would not affect the position in the North sea, where no blockade had ever been proclaimed. On the question of contraband, the consuetudinary law of nations had always allowed that a belligerent could declare any article which was of peculiar use in war to be contraband; but, as the British government had already issued contraband lists of the most embracing kind, they had followed established practice, and nothing was to be gained by repudiating the declaration. British practice also admitted that vessels in convoy, and under neutral escort, could be stopped and searched. The Admiralty did not, at the time, contemplate placing merchant vessels under convoy, and were but little inclined to believe that neutral governments would do so; for this reason they considered that the fleet was not likely to get any advantage from being free to treat neutral convoys according to the old rules. The remaining advantages seemed, upon investigation, to be equally theoretical; but as revoking the declaration was more a question of foreign, than domestic, policy the Admiralty agreed to Lord Robert Cecil's proposals, on condition that the repeal of the orders in council  should not modify existing instructions to the fleet, or cause them to be rescinded, and that the allies should agree to a common code of fleet instructions, before this new order were issued.
Whilst the Admiralty was examining Lord Robert Cecil's proposals, the French government declared themselves very much opposed to them. Rightly or wrongly, the declaration of London had been looked upon in some quarters as a victory for the Hague, or continental, school of law, and French lawyers and seamen were alike anxious that it should not be formally withdrawn. The French government argued how bad the effect would be upon neutrals, if the declaration were publicly repudiated, and insisted that the customary maritime law, to which the British government proposed to revert, was not the same in France as it was in England, in that it differed in such essential points as notification of blockade, destruction of neutral prizes, transfer of the flag, and convoy.
In general (ran the memorandum) we may say that all the controversies and discussions caused during past centuries by the different practices of Great Britain and France will be raised again, to the detriment of allied unity.
Lord Robert Cecil could not agree that the French objections were final, and when he had received the Admiralty's considered judgment upon his proposals, he crossed to France with Sir Cecil Hurst, Admiral Slade, and Mr. Craigie. The French representatives, under the presidency of Monsieur Denys Cochin, were, at first, unconvinced, but they yielded, in the end, to Lord Robert Cecil's arguments; and Admiral Lacaze must have the credit of devising a statement of general principles which satisfied both parties. It took the form of a covering declaration to be communicated to neutral governments; but not to be printed as part of the order itself. The English translation ran as follows:
The allied governments, earnestly desirous of acting in conformity with the principles of international law, were of the opinion, at the beginning of the present war, that they would find in the declaration of London a practicable code of doctrine and working rules. They consequently decided to adopt its stipulations, not because the declaration possessed, in itself, the force of law for them, but because it seemed to present, in its main lines, a statement of rights and duties of belligerents, based on the experience of maritime wars of the past. The development of the present struggle, the extent and character of which was unforeseen, has proved that the attempt made in London to formulate in times of peace not only the principles of law, but also the manner of their application, has not produced a result which is entirely satisfactory.
 The order in council was issued on 7th July. It repealed, though with certain reservations, all previous orders which had put the declaration of London into force, and then specifically indicated the manner in which the government should apply old and recognised principles of consuetudinary law to modern warfare. The first paragraph related to the system of commercial intelligence which our blockade departments had elaborated. The hostile destination required for the condemnation of contraband articles would be presumed (until the contrary was shewn) if it was found that the goods were:
Consigned to or for an enemy authority or an agent of the enemy state, or to or for a person in territory belonging to, or occupied by, the enemy, or to or for a person, who during the present hostilities, has forwarded contraband goods to an enemy authority, or an agent of the enemy State, or to or for a person in territory belonging to, or occupied by, the enemy, or if the goods are consigned to order, or if the ship's papers do not show who is the real consignee of the goods.
This meant, of course, that contraband goods handled by black listed firms would be treated as suspect, but not necessarily condemned; and shows how essential it was that the new system of collecting evidence and testing innocent destination should be recognised as a belligerent right.
The next paragraph provided that the principle of continuous voyage, or ultimate destination: Should be applicable both in cases of contraband and of blockade. This clause incorporated an important point in American practice into the legal structure of the blockade.7
The third clause ran as follows:
A neutral vessel carrying contraband, with papers indicating a neutral destination, which, notwithstanding the destination shown on the papers, proceeds to an enemy port, shall be liable to capture and condemnation if she is encountered before the end of her next voyage.
This repeated the rule which had first appeared in October, 1914; but restricted its operation to ships carrying contraband.
The fourth clause laid down that a vessel would be liable to condemnation if more than half of her cargo was contraband. This stated what the allied practice would be on a point which had been very differently interpreted by various nations.8
This general revision of the legal doctrines upon which we were acting did not
produce any of the commotions anticipated. The maritime rights order in council,
as it was called, was very little commented upon in neutral countries; and neutral
governments were content to inform us that they would claim compensation, if
their citizens were injured by practices that conflicted with the recognised rules
of international law. Actually, the new order but little affected the practice of
stopping enemy cargoes; for this was being done almost entirely by using the
coercive powers with which the executive was now vested. The first and most
important use to which these coercive powers were applied was to reduce the
movement of neutral produce towards Germany, a movement which had been
observed during the last quarter of the year, but whose strength and magnitude
were only patent during the winter.
1Mr. Bowles's book is little but an elaboration of Lord Charles's remarks. ...back...
6British and Colonial Prize Cases, Vol. II, p. 3. ...back...
8The Russian government issued an imperial ukase dated 21st November, 1916, similar in its provisions to the British Order in Council. ...back...