Part III: The Rationing System and the American Embargo (cont'd.)
Chapter 22: Negotiations for Securing a Better Share of Domestic Exports of the Border Neutrals
Negotiations opened with Denmark. – The advantages and disadvantages of coercion considered. – The Foreign Office decide against coercion and continue the negotiation. – Some readjustment of the Danish trade was effected during the year. – Negotiations with the Netherlands authorities. – The first agreement, and why it was difficult to operate. – The anxieties of the Netherlands government, and the final agreement.
It is difficult to determine at what date the regulation of neutral agriculture became an object of policy; but it seems probable that the great movement of neutral produce towards Germany was only known and understood, after it had set in and gained momentum; and that the need for some regulation of it was impressed upon our authorities slowly and gradually. Writing a year later, at all events, Sir Francis Openheimer [sic] stated that only a very expert statistician, with the weekly figures of export before him, could have detected the origins of the movement. Moreover, the authorities in Great Britain were not able to observe the movement directly, and could only infer that it had set in, by the fall in British imports from the border countries. If, however, the British imports from Denmark are a good indication of the inverse movement of trade towards Germany, then it may be assumed that this second movement began in about June and July, and that, by November and December, about half the agricultural produce ordinarily sent to Great Britain was being deflected to the German market. Now during the summer and autumn months of 1915, the Foreign Office were negotiating the great rationing agreements with the Netherlands and Switzerland, and, as our imports of neutral produce were then declining very gradually, and as the decline was not attended by any inconvenience, no clause by which we were empowered to negotiate for a better distribution of agricultural produce was inserted in the Dutch or the Swiss agreement. When the Danish agreement was negotiated, however, the movement of Danish produce towards Germany was running at great strength, and the Foreign Office received several representations about it from the Board of Agriculture and the Board of Trade; the agreement with the Danish guilds was, therefore, so drafted that the Foreign Office were empowered by it to introduce a further negotiation for the redistribution of exports, as soon as the agreement was in full operation. The contraband department of the Foreign Office were thus charged with the duty of conducting the negotiation with the Danes; but this was exceptional. In a general way, the contraband department's duty was to enforce and administer the March order in council, and this deflecting the produce of the border neutrals, from the German, to the British, market, did not arise out of the March order, nor could it be attached to any legal doctrine: it was a matter of pure business. When, therefore, the great flow of neutral produce to the German market was first observed, it was decided, that the deflecting of it could best be done by a special branch of the administration, charged with that sole duty. The department created for the purpose was called the restriction of enemy supplies department, and Mr. Leverton Harris was placed in charge of it. This new department was a branch of the blockade ministry; but it was lodged in a separate building, at Waterloo place. All telegrams and instructions from the department were sent to our ministers abroad; but the department appointed its own agents, who were experts in agricultural matters, and, in practice, it was very closely connected to the board of agriculture and fisheries, upon whose experts Mr. Leverton Harris depended for his information about the agriculture and fisheries of the border neutrals.
As has been said, our negotiations for deflecting the movement of Danish produce from Germany were provided for in the general agreement with the guilds. The agreed ration for cereals and forages was for the year 1915 only, and, in a letter accompanying the agreement, Sir Eyre Crowe informed M. Foss, that the government intended, at once, to enter into negotiations with the Danish authorities:
With a view to secure that Germany gets as little butter, eggs and bacon as possible, or, at any rate, not more than her proportion before the war.
The British minister at Copenhagen started the negotiations on 15th March, when he informed the Danish authorities in a written paper: That the British government were much disturbed that no ration had yet been fixed for corn and forages, the more so, in that, during the past two months, while these commodities had been going freely into Denmark, Danish agricultural exports to Great Britain had continued to fall; that, as we could not be indifferent to this great deflection of Danish exports from their natural courses, so, we could not be expected to assist the deflection still further, by allowing Indian rice to be sent to Denmark, where it could be used as a cattle food and a substitute of Danish corn; and that we intended, in consequence, to restrict Danish imports of feeding stuffs to the quantities normally consumed. In conclusion, the minister urged the Danish government to arrange that corn and foodstuffs should be consigned to some central representative body, with which the British government could settle a general ration. It will be proper to examine the circumstances in which this note was presented.
Soon after the agreement with the associations was concluded, the Danish government assembled the upper and lower houses of the Riksdag, in secret session, to discuss the political and military dangers to which the country was exposed. During the discussion, it transpired that Count Molke, the Danish ambassador in Berlin, had warned his government, that the Anglo-Danish agreement was much disliked in Germany, and that the German government would not hesitate to order an invasion of Denmark, if they thought a military occupation of the country would be a good answer to it. The Danish cabinet must have realised that the German authorities would not order an invasion of Jutland, merely because the re-export trade had been stopped by our agreement with the guilds (an invasion would be no remedy): a deflection of Danish produce from the German to the British market was, however, another matter. To effect this by agreement was, in the German view, to enlarge an agreement already disliked. More than this, the Germans were very proud of having turned so large a part of Danish produce towards their own markets, and proportionately disinclined to allow their advantage to be wrested from them. Helfferich speaks of this deflection as one of the successes of the exchange system.
While our total imports, he writes, fell from 10.8 milliards of marks - the 1913 figure - to 7.1 milliards - the figure for 1915 - our imports from border neutrals rose from 1.1 to 3.5 milliards....... Our imports of pork rose from 21,600 tons (1913) to 98,000 tons (1913). In the same period our butter imports rose from 54,200 tons to 68,500 tons notwithstanding that Russian and Siberian butter which was ordinarily half our imports, was lost.......
It is therefore not surprising that the Danish authorities were extremely anxious, when they learned, by the note presented to them, that we should not allow the Germans to draw these extra supplies from Denmark, if we could prevent it; for, however reasonable it might be to claim that Germany and Great Britain should receive exactly that proportion of Danish produce which they had always received, the Danes well knew that this equitable contention would be fiercely resisted by the Germans, of whose resentment they had just received a solemn warning. Nor did the Danes leave us in doubt about their anxieties. A confidential memorandum, warning certain high Danish officials against the dangers of the agreement, was  shown to our minister; and M. Andersen, the king's friend and intimate counsellor, presented a paper at the Foreign Office, begging our authorities, in the most earnest language, to consider the Danish government's difficulties and not to add to them. M. Andersen was careful to let it be known that Dr. Federspiel had been summoned before the ministry, to explain why he had undertaken that Danish agricultural exports to Great Britain should be increased.
As was to be expected, the Danish government's reply was extremely evasive. They answered that they were most anxious to distribute their exports to the countries at war on pre-war lines, as far as this was materially and politically possible; that decrees published by them in the autumn of the year had arrested the movement of Danish bacon towards Germany; and that these decrees, which were still operating, would certainly raise Danish exports to Great Britain in the course of the year. They argued, however, that some deflection towards the German market was inevitable, for so long as the prices obtainable for Danish butter and meat in England were so much below the prices given in Germany. As for the rationing of feeding stuffs, they quoted statistics to show that no ration could be fixed, until the yield of the Danish harvest was better known, and claimed that their guarantees against the re-export of all imported feeding stuffs should be sufficient. With regard to the political reasons which made it so difficult to comply with our request, the Danish government reminded us that all Danish exports to Great Britain could be stopped by the German naval forces; if, then, we persisted in our endeavour to reduce Danish exports to Germany, and to increase them to Great Britain, this violent stoppage would probably be the outcome.
When this reply was digested, the Foreign Office authorities at once enquired into the advantages and disadvantages of embarking upon some plan of coercion. The organ of pressure most easily used was coal control: British coal was used on the Danish state railways and in the Danish creameries; and it was not doubtful that if British exports of coal to Denmark were stopped, or severely curtailed, the loss of these supplies would be felt throughout the country. Could we, however, hope that the pressure thus exerted would force the Danes to comply with our wishes? Hardly; we had been much deceived, when we had made this calculation in respect to Sweden, where British coal had been largely replaced by German. What the Germans had done for Swedish coal importers, they could presumably do for the Danish; for it was far easier to transport German coal to Denmark than it was to transport it to Sweden; indeed, there were already indications that the German coal exporters were tendering for large contracts in Denmark. Secondly, it was obvious that we could stop cargoes of foodstuffs and forage; but as these cargoes were not produced in the British empire, it was an open question for how long the stoppage could be continued: letters of assurance, bunker regulations, and the delays and difficulties which Lord Robert Cecil had instructed the contraband committee to impose, were better instruments for exerting quick, sharp, bursts of pressure, than for subjecting a country to long coercion. Moreover, it was obvious, that, whatever the distant and final consequences of cutting down Danish imports of corns and forages might be, the immediate outcome would be that the Danish farmers would slaughter a great number of pigs and cattle, and would sell the meat in Germany. If it were assumed that the war would be very much protracted, this might be an advantage; but the experiment was risky. Finally, we could stop materials for making margarine from being exported to Denmark: this would, presumably, bring quantities of Danish butter on to the home market, and so cut down the exports to Germany; but it would also stop Danish margarine exports to Great Britain, of which we were in great need. There remained the Danish contention  that the Germans could stop all Danish exports to Great Britain, and would probably do so, if the British government persistently tried to reduce Danish exports to Germany. This was a matter upon which the Foreign Office often asked for enlightenment, without receiving much; for a rambling minute from Admiral de Chair was the only answer they were ever given. They were therefore left in some doubt on the matter; and it is, in consequence, of some interest and instruction to enquire whether the danger was real or imaginary.
It must be remembered, that naval control over a zone of water, or, as it is popularly termed, command of the sea, varies according to circumstances. In actual practice, a theatre of war is generally divided into zones where the rival fleets predominate. The course of the war in the North sea had shown, that the British fleet predominated north of the Dogger bank, and in the Flanders bight; and the German fleet to the south east of the bank. Large British forces had often penetrated into the German zone; but they had gone there rather as raiders, or visitors, than as masters, and we had never attempted to maintain a permanent patrol of surface vessels in the south-eastern corner. Later in the war, the attempt was made and failed. Now Esbjerg, whence ninety per cent. of the Danish cargoes were shipped, was quite clearly in the German zone; it is eighty miles from Heligoland, and nearly four hundred from Rosyth. The traffic running from it was therefore exposed to interruption by the Germans, and we could do little or nothing to protect it. This, however, does not answer the question whether the Germans could have stopped the traffic outright; for experience has shown that commercial traffic is rather like an army in the field: it may sustain great losses, and yet hold a position successfully. Sinkings of individual vessels do not, in themselves, stop a flow of trade, and a great volume of commerce may be maintained, notwithstanding that many ships on the route are sunk or captured. There is, however, a general stoppage, when the magnates of a trade become timid, and order their ships to remain in port. It is for this reason, that von Spee's victory in the southern Pacific, and the Emden's insignificant destructions, stopped a large volume of trade, for a long time, whereas the wholesale destruction of shipping, during the year 1916, never once caused a stoppage. It is certainly an open question whether the Germans could, or could not, have stopped the Esbjerg trade: a submarine patrol would not have been sufficient, for the Danish captains would soon have learned how to keep the traffic running by sailing after dark and, so on; but the thing would assuredly have been done, if the Germans had stationed a mixed patrol of cruisers and destroyers off the port. There was nothing impossible in this, for the German minefields farther south would have given the German patrol good shelter against any British forces sent out against them. On the other hand, it must be remembered, that, for some reason which the German historians have never explained, the German naval commanders were always very reluctant to detach these mixed patrols from their main forces; and that they never stationed outpost patrols outside their minefields. On the whole matter, therefore, it can be said that the Danish fear that the Germans might stop the Esbjerg traffic was well founded; the thing was in itself possible, and the Danish cabinet had been warned that the German government were contemplating every severity.
The Foreign Office were given little guidance upon this question; but the minutes upon the papers show that they thought this new Danish warning, combined with others previously given, was serious. Sir Eyre Crowe therefore advised against pressing the Danes further for the time being. It is true he did not believe that Denmark was likely to be invaded; but he was satisfied, that the Danish authorities honestly and genuinely believed, that Jutland might, at any moment, be over-run,  or Esbjerg blockaded. It followed therefore that we should gain nothing by putting them in terror of a food shortage, when they were already dreading an invasion. In addition, M. Foss had assured Sir Eyre Crowe, and the Danish government now repeated the assurance, that Danish exports to Great Britain would rise in the course of the year. It was thus thought better to continue the negotiation, until the motions of Danish trade could be better observed. The immediate outcome was, therefore, that the Danes were invited to send representatives to London, and that the Danish authorities, who were responsible for importing grains and fodder into the country, sharply reduced their orders during April and May; for the fall in the importations of corn during those months (see Appendix) is not explainable by the detentions that were ordered by the contraband committee: the cargoes that were severely treated during the second quarter of the year were, for the most part, cargoes of coffee, fruits, and miscellaneous stores; only a few insignificant cargoes of flour were detained.
The Danish representatives: M. Andersen, M. Sonne, M. Madsen-Mygdal, M. Fabre and M. Clausen reached England in the last week in May; the negotiations with them were entrusted to Mr. Rew and Mr. Thompson of the Board of Agriculture, who negotiated in chief, with Mr. Forbes Adam, of the Foreign Office, assisting. The British representatives had before them a long report from the commercial adviser at Copenhagen, to whom the Danish authorities had given some interesting figures of their export trade. These statistics showed how dangerous it would be to decide hastily; for, although the Danes declined to give us a full account of their exports to Germany and to Great Britain, they yet gave us figures to show that many branches of their export trade had fallen. For the rest, the Danes were under strict instructions to be sparing in the matter of promises, and they pressed a contention which Mr. Rew admitted to be well grounded, that the Danish farmers had exported as much butter to Great Britain as the British market could absorb; in support of this the Danes exhibited budgets of letters from English buyers, reducing their orders. The great achievement of the Danes was, that, notwithstanding they promised so little (their only undertaking was that they would assemble a meat committee on their return), they yet persuaded the British representatives, that they would increase Danish exports to Great Britain as far as they were able to do so; and that, if they promised little, it was because they were strictly honourable men, who were determined not to undertake more than they could perform. They refused stoutly to leave any written document in our hands; but they did their country good service by convincing our authorities that they would do their best, and that they were to be trusted. The Foreign Office, therefore, informed Sir H. Lowther, that they would not attempt any extraordinary pressure for the time being; that they would keep Danish imports of fodder and corn to the pre-war average by navicerts (to which the Danes had no objection); and that they would at once fix a ration for artificial fertilizers.
It so happened, that, during the summer months, when we were waiting to see what the Danes could do to make good the undertakings they had given, the Danish fear of an invasion was again brought to our notice and enquired into. At some time in the early summer, the Danish staff became aware that the Germans were making military preparations upon the Schleswig frontier, and did not disguise that they were extremely anxious. The French military attaché went in person to the frontier to investigate; and, although he found that the Germans were digging trenches and spreading barbed wire entanglements, he was satisfied that this was because the Germans feared an attack upon northern Schleswig, and not because they were preparing to invade Jutland themselves. It is strange that the German general staff should have believed that we contemplated despatching an expeditionary force to Schleswig at the very moment when we were preparing to attack their armies in France; the explanation is that the news department of the Foreign Office  deliberately spread rumours that we were about to embark upon this adventure, and that the German staff, notwithstanding their high competence in military affairs, believed the rumours.1
Our authorities were satisfied with the French military attaché's report, but the Danes were so anxious, that they actually communicated their whole defence plan to us, and asked for assistance in completing it. They informed us that they only intended to make a stand for the capital, on a line that starts at Roskild fjord and ends at Kjöge bay, and let us know that they had not the guns or ammunition necessary for doing even this. The implication was therefore, that, if the danger of a German invasion was as great as the Danes believed, then, we might at some time be called upon to feed the population of Copenhagen, and to assist a Danish army, clinging precariously to a position just outside it. The Admiralty and War Office staffs reported we should be able to do little or nothing.
Seeing, therefore, that the naval and military high commands advised the government, in the gravest language, to promise no assistance whatever, the Foreign Office was naturally reluctant to insist upon a formal regulation of Danish exports (similar to that obtained from the Hollanders); for the Danes insisted, that, if they followed the Dutchmen's example, they would expose themselves to reprisals, against which we could not protect them. It is true we thought it not very likely that Denmark would be invaded; but the Danes, who were as good authorities as we, thought it quite probable, and, if they were right, then, we should lose all.
For these reasons, we were inclined to be satisfied with the readjustment, which the Danes did actually enforce during the course of the year. The proportions of butter and bacon sent to Great Britain rose steadily (see table LIV); some sections of the export trade remained unsatisfactory, but, with regard to them, there were indications that economic laws were coming to our assistance, and were arresting the movement towards Germany. There was a shortage in Copenhagen during the late autumn, and the Danish ministers were fiercely criticised by the leaders of the poor people for allowing so much food and meat to leave the country. The Danish government were thus forced to issue regulations, which, as far as we could see, would keep a good deal of Danish produce on the home market, and away from the Germans.2 With this we decided to be content for the time being.
Concurrently with these long negotiations, the Board of Trade succeeded in deflecting everything that the Icelanders export, from the German market.3 The Icelanders acknowledge the Danish crown; but they are virtually independent, and their  connection with Denmark is more commercial than political; for, as the Copenhagen market is an open market for all Scandinavia, so, the Icelanders find it a good selling place for their produce. The Iceland ministers were, however, very anxious that their country should not lose its supplies of British coal, food and salt, and so agreed, almost as soon as they were approached, that they would give us an option to buy all exportable produce; and that they would only give licences to export, after we had declined to exercise the option. By this agreement we ensured that no Iceland wool, which is of very good quality, and no Iceland mutton, which is detestable, should reach the German market. The quantities were not great.
Negotiations for similar arrangement with the Dutch exporters were despatched more rapidly, because political influences, though appreciable, were never so strong as to obstruct a settlement. The cabinet at the Hague were, indeed, less fearful of German resentment than the Danish, because the Dutch army was better able to defend the country. If invaded, the Dutch authorities intended to flood a large tract of country south of the Zuider Zee, and the Dutch staff hoped that the armies would hold the invaders along the line of floods. This meant that the provinces of Friesland, Overijssel, Drente, and part of Gelderland would be lost, if the country were invaded; but the Dutch calculated, that, even if the Germans seized these provinces and exploited them at will, they would not receive as much meat and dairy produce from them as they received in the ordinary course of trade, while the Netherlands were free and neutral. Presumably, therefore, the Netherlands government considered that a German invasion  was a danger more connected to politics and military strategy than to trade agreements; and when Lord Crewe and Lord Robert Cecil drew their minister's attention to the movement of Dutch meat and dairy produce towards Germany, the Netherlands minister gave an answer that was a variant of the statements that the Netherlands government habitually made, when such matters were brought to their notice: That exports to Germany could only be limited by decrees, which the ministry could not order, without exciting much resentment both at home and abroad, and exposing themselves to the charge of favouring one belligerent at the expense of another. On the other hand, the Netherlands minister admitted, in a guarded way, that some regulation was much to be desired. This meant, in plain language, that the Netherlands government would watch any negotiations that we might undertake with private persons, and would only interfere, if they thought that our arrangements would involve them in political controversy. But if the case of the Netherlands was different from that of Denmark, the two had one point in common, which was that immediate coercion seemed unwise. It was not contested, that, as about six-tenths of Dutch produce were placed on the home market, and as the remaining four-tenths were exported, so, it would be logical and consistent to reduce all imports that stimulated this export by four-tenths, and thus leave the Dutch farmers with enough forage to raise the stock, and to produce the eggs and butter that are required for the home market. The experts who made this calculation were, however, too experienced to imagine that the Dutch exports would automatically adjust themselves to this new state of affairs: the final outcome might be that all Dutch exports would cease; but there would be an intervening period, during which an even larger volume of produce would move towards the German market, and prices on the domestic market would rise very high. The first consequences would, moreover, be the more violent, in that the Dutch farmers were growing less grain and forage than they did in normal times, and were allotting more land to vegetables, chicory, and flax. Severe restrictions of those imported forages, upon which the Netherlands farmers were progressively depending, would thus produce commotions which a scientific calculation did not indicate even faintly. Our authorities were the more inclined to proceed cautiously, in that M. van Vollenhoven was convinced that the matter could be arranged by private treaty, and was anxious to promote the arrangement. It will here be convenient to explain why the Netherlands trust, which was ostensibly only concerned with overseas trade, was so anxious to promote a settlement, and why their good offices were valuable.
As has been said, our negotiations for turning the domestic exports of the border neutrals from the German to the British markets was supported by no legal doctrine; for we claimed, only, that the total exports should be more equally distributed between ourselves and Germany, which was a matter that fell to be regulated by a special treaty of trade and commerce. On the other hand, these negotiations were connected to a doctrine that we had asserted on several occasions without defining it too closely: That we could not allow unlimited imports of a commodity, that stimulated the exports of something similar, notwithstanding that the imported goods could be proved to have been consumed in the country. As the agreements for enforcing the March order had to be adjusted to the economic systems upon which they operated, it was impossible to insert the doctrine uniformly in them. The Swiss national trades, which were technically re-exports, had been allowed to run free, so that only a circumscribed clause had been inserted in the Swiss agreement.4  In the first Danish agreement there was a clause prohibiting the export of alloys and half finished products, manufactured from raw materials allowed to be imported. In the agreement with the guilds the corresponding clause was rather more embracing. In the Swedish agreement of December 1914, there was a clause prohibiting the re-export of half finished products made from raw materials. As the word alloys was used in the Danish agreement, it seems probable, that, when these agreements were drafted, the contraband department were thinking more of metals than ordinary goods. In the consolidating agreement with the Netherlands trust, however, the doctrine was asserted in its most abstract and embracing form, for by the fifth article, it was stipulated that the trust's guarantee of home consumption should apply: Not only to the goods imported, but to all articles manufactured or produced therefrom. By virtue of this article, we were entitled to argue that exceptional exports of cattle, butter, meat, eggs and vegetables were goods producd [sic] from the forages, and fertilisers imported into the country, and that the quantities hitherto allowed would have to be recalculated. It was precisely this drastic revision of arrangements for which they were responsible that the Netherlands trust were anxious to avoid. We, on our part, were anxious that the trust should assist us.
As coercion had been considered and found inadvisable, it followed that we could best secure what we desired, by setting up some purchasing agency in the country. Now setting up any financial establishment in the Netherlands was an intricate matter, because no financial corporation could be established in the country, unless the directors of it affiliated themselves entirely to the Rotterdam, or to the Amsterdam, group of magnates; or else, (which was more difficult to arrange) unless they allowed both groups an interest in their concern. These two commercial factions dominated Dutch trade and industries, and the great difficulty of setting up the trust had been the difficulty of forming a board, in which the Amsterdam group was most powerful - as being the group most concerned with overseas trade - but a board on which the Rotterdam party should be represented. This had been effected by persuading M. van Aalst, an Amsterdam man, to be chairman, with an executive committee of Amsterdam men assisting him; and by appointing M. van Vollenhoven and M. Kroeller to the board, who were magnates of the Rotterdam faction. From this it will be understood, that it was far better that the Netherlands trust should appoint our purchasing agency, and should secure it the necessary powers, than that our minister and his expert advisers should attempt to do so; as no foreigner could hope to make such good provision for the balance of commercial power as would be made by a native Netherlander. It was thus a great assistance to us that the Netherlands trust did actually appoint a purchasing agency, and took matters into their hands.
Mr. Rew arrived at the Hague on 16th May, and was told that M. van Vollenhoven, M. Kroeller, M. Linthorst Homan, the president of the Netherlands agricultural society, and M. Reitsma, the secretary of the Dutch milk products association, would treat with him. In order that the influence of the Netherlands trust should not be paraded too much, it was decided that M. Linthorst Homan and his assistants should be officially styled the Landhouw [sic] Export Bureau, to which all payments were to be made. It is a singular testimony to the enormous power of the Netherlands trust, that, although the gentlemen with whom M. Rew treated made long stipulations about prices and quantities, they were never doubtful that they could redirect Dutch exports as they wished, and send us an agreed proportion of them.
The price to be given, and how payments were to be made, were, however, matters very difficult to settle, and a further visit from Mr. Leverton Harris was necessary, before the first settlement was made. An agreement was signed on 16th June: by it, we secured certain stipulated quantities of Dutch produce, but the end proposed was that the export trade should be readjusted as follows (see Table LV).
This agreement was never satisfactorily executed for a number of reasons, of which the most important was that the flow of Netherlands produce towards Germany was not so easily deflected as the negotiators had imagined. It has been shown that the Netherlands government and their officials were operating a number of decrees, which were intended to keep a certain proportion of home-grown produce on the home market, before the exportable surplus was released for sale. This meant, in practice, that a number of government officials were taking and reporting stocks, recommending that export licences should be granted, and so on. Our agreement was, therefore, a new complication, added to a system of trade that was already complicated, in that it was neither wholly free, nor wholly controlled. It is, indeed, difficult to conceive that the Landbouw export bureau could have executed the agreement without the co-operation of the Netherlands ministry of agriculture, and the Netherlands government still held aloof from all these agreements, and refused to be active partners in them. It is thus not surprising that our imports from Holland, during July and August, were well below the quantities secured to us by the agreement. There was certainly a sharp rise in September, but not enough to make good the deficit of the previous months. It was, moreover, during these summer months that our relations with the Netherlands government deteriorated, in that we were obliged to let them know we could no longer respect the fiction that they had no concern with these trading agreements: they were then importing great quantities of forage on their own account, which brought them into the compass of the rationing system, and they were despatching German goods to the Netherlands East Indies, which made them co-operative parties, if not signatories, to the agreement with the Hague trading committee. Moreover, a long and unsatisfactory controversy on a matter to which we attached great importance had then continued for many months, and was still unsettled. The Netherlands  government were allowing the Germans to send large quantities of road-making materials to Belgium through Netherlands territory; and would never agree to impose any proper restraints upon the traffic. As it was plain sense that the Germans only repaired roads in Belgium to facilitate the movements of their armies and of their military supplies, this was a matter upon which we could not compromise; and the studied evasions of the Netherlands government, the elaborate evidence they collected to show that German road making in Belgium was a sort of benevolent enterprise, hardened the temper of our authorities when other matters were in dispute.5 When, therefore, it was decided that a new agricultural agreement would have to be negotiated, the Netherlands government were warned, that, unless a better regulation of trade could be arranged - which could hardly be done unless the Netherlands government in some manner superintended and protected the new agreement - we should be compelled to reconsider all the favours granted in respect to bunker coal, jute and lubricants, which, if withdrawn, would bring Netherlands trade to a standstill.
The Netherlands ministers were so enigmatic and guarded, when these representations were made to them, that it is difficult to decide what their intentions and purposes really were; but it is not difficult to understand that their anxieties were considerable. Their regulations with regard to trade were then irritating the population of the towns and the farmers, and so making the electorate unsteady. The farmers claimed, that the produce detained for the home market, and there sold at a price fixed by governmental decree, was, by them, sold at a loss; and were for ever pressing that a greater quantity should be released to the open market. The townsmen were dissatisfied both at the amounts reserved for the home market, and at the regulated price; there had, indeed, been food riots in three towns, when the first agreement was signed. From this it can be understood that the Netherlands ministers were not easy at agreements, which made it even more difficult to strike a balance between what the townsmen and the farmers demanded; for, although  we claimed that we only desired to secure a proportion of the Dutch exports, it was patent that all agreements that disturbed the actual movement of trade would force the ministry of agriculture to recalculate what quantities could be exported, and what quantities must be retained; and that these calculations impinged upon domestic politics.
The great anxiety of the Netherlands ministers was, however, that, after long hesitations and mismanagement, the German naval staff had so ordered their campaign against commerce, that it was then being used as a regular instrument of retaliation upon those branches of neutral commerce that were in the allied service. The German severities against Norwegian shipping, which were executed in retaliation for our fishing agreements, were being paraded as an example of what could henceforward be done. It is doubtful whether the German government ever threatened the Netherlands ministers with similar retaliation for the first agricultural agreement; but the Netherlands authorities feared (and not unreasonably), that, if any considerable proportion of their exports to Germany were deflected to Great Britain, then, the Germans would retaliate upon their shipping, as they had done upon the Norwegian.
Being thus presented, on the one side, with an intimation that we were contemplating measures calculated to ruin their commerce, and, on the other, with a danger, not so great perhaps, but still considerable, the Netherlands government steered a middle course by informing Mr. Kroeller (who was then the overlord of the Landbouw export bureau) that they would assist the administration of any agreement with Great Britain, provided that a similar agreement could be made with Germany. On being informed of this, our authorities decided to negotiate for a proportion of Dutch exports, instead of the stipulated quantities secured by the first agreement. The negotiations were conducted in London with Mr. Leverton Harris conducting them on our behalf: the agreement was signed on 1st November; it was far more explicit and embracing than the first, and its main provisions were:
Though not parties to the agreement, the Netherlands government were involved
in its administration, in that it was stipulated that no exports of cream, live pigs,
straw, hay, forage and fertilizers should be allowed.
1According to information received from a secret agent, the Germans instructed their naval attaché to investigate the rumour; the attaché then called upon the commander-in-chief of the Danish navy, and a truly extraordinary conversation took place between them. The German naval attaché opened in a formal manner, by saying that he had been instructed to give a solemn assurance that the Germans did not contemplate an invasion of Jutland. The Danish admiral then said, But what about when you get desperate; we have an idea you might over-run us then. The German answered, No; not even then; we are satisfied that it would do no good; but can you give me any news about the British invasion of Jutland with 250,000 men? The Danish admiral: Yes, we have just been told it's off. War Office report from Copenhagen. 8th June, 1916. ...back...
2During November, 2,000 carcasses of cattle slaughtered in the country were being sold, weekly, to Danish customers: for the early months of the year, the figure was 400. ...back...
3The negotiations were carried on in London between M. Svein Bjornssen, representing the Iceland ministry, and the Board of Trade. The preliminaries, of which there is not much written record were apparently carried out by the British Consul at Reykjavik, who must be given the credit of persuading the Iceland Government that a satisfactory agreement could be negotiated. See F.O. 321.I. Icelandic Agreement. ...back...
4Article 10a. Est laissée a la S.S.S. la faculte d'autoriser l'exportation a destination ennemie d'articles fabriques en Suisse qui ne contiendraient des matieres importees sous sa garantie (toutefois a l'exception du cuivre qui fait l'object de l'article 12) qu'en quantites insignifiantes et comme partie essentielle. Ces quantites ne devront pas exceder 2 pour cent de la valeur totale de la valeur de l'objet manufacture sauf dans certains cas qui seront decides d'un commun accord entre la S.S.S. et des representants des trois gouvernements. Les alliages demeurent formellement interdits ainsi que toute matiere pouvant entrer dans un alliage de fer. [All transcription errors sic.] ...back...
5See Netherlands government white paper: Doorvoer door Nederland uit Duitschland naar Belgie en omgekeerde Richtung. Professor Garner sums up against the Netherlands authorities, see International law and the World War, Vol. II, p. 446 et seq. ...back...