Part III: The Rationing System and the American Embargo (cont'd.)
Chapter 31: The American Declaration of War, and American Preparations for Assisting the Economic Campaign
How the American government and congress received the declaration of submarine war. – The economic campaign was only a small item in the general war plan. – Why the economic campaign against Germany was reduced to a defence of what had been gained. – The president's diplomacy and Anglo-American relations during the first weeks of the campaign. – The president's negotiations for a neutral league; and for detaching Austria-Hungary. – The president and congress are driven against their inclination to take measures against the German campaign. – American public opinion forces the issue. – The campaign at sea dominated everything when America declared war. – Allied proposals for American co-operation in the economic campaign. – The American government's deliberations and final determination. – What war plan was then being operated; and what was then expected from economic warfare.
When Count Bernstorff announced, that the German authorities had decided to wage submarine war, without any of the restraints that they had hitherto observed, President Wilson at once handed him his passports, and broke off diplomatic intercourse with the German government. This was done rapidly, and without parley; but the president's firmness was not taken by us to imply, that the United States government intended to declare war; for all the indications were to the contrary. In his public announcement, the president stated explicitly, that this rupture of relations had been ordered as a matter of honour and dignity only, and that he did not believe the German government would actually do what they claimed the liberty to do. The president's declaration was so moderate, and his intention to keep on terms with the Austro-Hungarian government was so notorious and significant, that the Swiss minister in Washington actually opened a negotiation for restoring diplomatic relations between Germany and the United States, without loss of dignity to either side. Count von Bernstorff seems to have thought, that the president had broken with his government so unwillingly, that the Swiss minister's manoeuvre might succeed.
Apart from all this, the temper of congress was very unwarlike. The president's announcement was debated in the senate on 7th February and, even from the written records, it is manifest, that the prevailing sentiment was still disgust at the European slaughter, and contempt for the governments who had involved their peoples in it. The principal speakers were Senators Lodge, Stone, Works, Vardaman and Borah, and, practically without exception, their utterances were delivered to warn the world at large, that, although the president would be loyally supported, the United States were still a neutral country, and that no European government should regard the rupture with Germany as an advantage to themselves. Senator Stone opened the discussion with a telling appeal to traditional prejudice: British newspapers reported that American citizens were being cheered in the streets; why should they be? Foreign powers should be reminded to attend to their own business. Senator Vardaman went further: after assuring the senate, that, if war were ever declared, the nation would have no more devoted public servant than himself, he went on:
I do not, in any sense, condone murder on the high seas - of which Germany may be guilty - nor do I in any way extenuate Great Britain's insolent, cruel, and persistent violations of international law, and her contemptuous disregard of the rights of neutrals on the high seas. Both these nations are culpable: their crimes differ only in degree. The motives behind their every act are identical. Cruel selfishness that would crucify truth and immolate justice for a personal end is the impelling purpose.
 Other senators were less outspoken, but equally emphatic as to the general principle; and Senator Borah, who was among the last speakers, gave forcible expression to the prevailing temper:
As I understand it, the president's sole object and purpose is to maintain and retain the position of a neutral in this controversy and to defend alone neutral rights..... If I supposed, for a moment, that the president was, in any instance, to be swerved from his attitude of conducting the nation on strictly neutral lines, I certainly should, in no circumstances, give my endorsement to the action which severed our diplomatic relations with Germany.
At the end of a rather long debate, the senate certainly passed a resolution approving the president's diplomacy by a large majority (78 to 5); but the American press, and every observer in Washington, considered it significant, that the only resolution for which a majority could be obtained was one containing a reservation about preserving peace with Germany; and another about the paramountcy of congress.1
It is not, therefore, surprising that Sir Cecil Spring-Rice appreciated the position as one in which the national anxiety to remain neutral was still the strongest influence in the country. On the other hand, he reported that public opinion was very unsteady, and that there might, at any moment, be a great revulsion of feeling. The congressmen voted heavy appropriations for the army and navy, without reservation or objection; and directors of large industrial concerns sent offers that their plant would be at the service of the government, if war was declared. Even the peaceful Mr. Ford was among those who offered assistance. These vague indications that a more warlike temper might soon manifest itself, did not, however, exert the slightest influence on the policy of the entente powers, whose governments had then decided upon a war plan for the coming year, and were anxious only to execute it with all possible energy.
It is somewhat curious, that, whereas the central empires, which might be called the continental group, had determined to seek a decision at sea, the entente powers had determined to seek it entirely on land. The circumstance that persuaded them to seek a decision with the armies only was that the general staffs of all countries were much encouraged by the operations undertaken during the latter part of the year. The great attack on the Somme had certainly failed; but, in the east, Generals Brusiloff and Lichnisky, commanding the worst equipped armies of all the entente powers, had driven the Austro-Hungarian armies before them from June, when the Russian generals opened their attack, until August, when they were compelled to stop it. In the Balkans, General Sarrail's army had forced the Bulgarians out of Monastir, which was taken as proof that the Bulgarian front might be broken. Also, the French armies made such rapid advances into the German positions  off Verdun, that their victory made a great impression, and encouraged professional soldiers to hope, that the German positions in France were not so secure as they seemed. Finally, the staffs estimated that the armies of the entente powers were at least half as strong again in men, as the armies opposed to them. For these reasons, the staffs of the western allies recommended, on 16th November, 1916: that the enemy should be attacked on all fronts during the coming year; that the Franco-British armies should open the attack in February; and that the armies of the other powers should, thereafter, attack with their full strength, as soon as circumstances allowed. The staffs hoped that this general attack would be decisive, if pressed without pause or respite. The naval plan2 was to hold the German submarine attack by concentrating commercial traffic upon closely defended inshore routes (which the German submarines would then be compelled to frequent), and to close the entire Heligoland bight by a quadrant of minefields. The allied governments were, therefore, engaged in making all arrangements necessary for operating this general plan, and for securing Russian co-operation in it, when the Germans started their campaign at sea, and the American government broke with them.
It was certainly not hoped that the economic campaign would be more than auxiliary to this general assault upon the central powers. In many quarters, it was thought that it would be a very feeble auxiliary, for Mr. Lloyd George specifically warned the conference of allied ministers, which assembled at Paris in November: That Germany was never less in danger of starving. The invasion of Rumania seemed to all but the most expert to have brought the whole operation to ruin. Persons competent to judge certainly estimated the Rumanian disaster as a set back, but not as a decisive breach, of the blockade; but the finely-drawn calculations of these high experts did not justify the government, or the allied staffs, in supposing that the economic campaign would reduce the enemy's resistance in the field.3 As for the economic campaign itself, it was then recognised, both by the blockade ministry and the cabinet, that the enemy's overseas trade was stopped; for, on 29th January, the war cabinet approved a memorandum submitted to them by Lord Cecil, of which the opening sentence ran:
All the available evidence tends to show, that, with some minor exceptions, no goods coming from overseas are getting through to Germany.
This was an official acknowledgment, issued by the highest authority, that the great objective of the campaign had then been reached.
With regard to the supplies that Germany was still drawing from northern neutrals, and from Switzerland, the general position was this. Sweden was sending great quantities of iron ore and wood pulp to Germany, across the Baltic, or by way of Rotterdam, and both routes were out of reach of our naval forces. This wood pulp was very important to Germany, as wood pulp had become a substitute for cotton in the German munition factories. The exports of Swedish agricultural produce had fallen during the last part of the year, and were believed to be small. Norwegian exports to Germany were fish, copper, pyrites, and nickel. Denmark  and Holland were Germany's largest store houses of agricultural produce: the total quantities of bacon, lard, meat, cheese, eggs, and butter sent into Germany were doubtful; the French experts believed them to be large enough to supply a sufficient daily ration for all German soldiers serving on the western front.
The contraband department admitted that these supplies were the one big gap in the blockade of Germany, but they could no longer recommend any general plan for stopping, or even for reducing them. The bold plans upon which Mr. Leverton Harris had embarked, when his department was still new, had been executed with the greatest energy throughout the year, and the results obtained from them had been far below anticipation: a fair proportion of Dutch and Danish produce, and a considerable quantity of Norwegian fish, had been deflected from the German to the British market; but these gains were set off by the extraordinary activity of those sections of the Danish fishing fleet, which were then receiving their propellants from Germany. Great schemes of coercion were still being ventilated; but in the official survey, issued on the 1st January, 1917, scepticism about these schemes had replaced the first confident expectations that they would give great results. In the case of Sweden, it had been suggested, that, by cutting off all supplies of imported sulphur (which we could easily do, as the Swedes bought their sulphur from Sicily), we should bring the wood pulp industries to a standstill. As soon as the experiment was begun, however, the Swedes at once realised that their supplies of imported sulphur were threatened, increased their orders for Norwegian pyrites, and extracted the necessary sulphur from it. British coal control had failed to stop, or even to curtail, Swedish exports of iron ore.
With regard to the agricultural exports of the northern neutrals, the first plan, of reducing them by severely reducing imported forages, was still entertained; but far less was expected from it than formerly. The case of Denmark was typical: it had at first been thought, that a sharp reduction in the forages and fertilisers that were imported into the country would necessarily check the flow of meat and horses from Denmark to Germany. Expert investigation, which always takes so long to complete, now made this inference more than doubtful. First, it was beyond all doubt, that the native Danish hay crop sufficed for the horses, and for a large part of the cattle, that were reared in the country: the winter feed was largely imported; but the Danes and Norwegians combined had establishments that could produce fertilisers for a native crop of winter food stuffs, and the only result that could be expected from a severe curtailment of imported forages and fertilisers would be, that the Dano-Norwegian trade would be considerably stimulated. The total reduction in exports of domestic produce would only be from five to ten per cent. during a whole year of extreme restrictions. On the whole matter, therefore, the only policy that the ministry of blockade could safely recommend was a policy of administering existing agreements, and of watching for opportunities to enlarge them. It was, however, thought advisable at the beginning of the year, that the draft agreement with Sweden should be ratified, as the difficulties of rationing the country without a rationing agreement were then becoming manifest.
This was the state of affairs when the German submarine campaign began, and it will be as well to show, with the greatest clearness attainable, how successfully the campaign was opened, and what were the consequences of the first success. In this first month of the struggle, the German submarine commanders destroyed half a million tons of shipping, of which about three hundred thousand tons were British; but these figures inadequately represent the success of the onslaught. In the first place, at least nine-tenths of the ships sunk were destroyed far away from  those defended routes, where the Admiralty staff hoped they would force the submarines to operate. In the very first days of the campaign, therefore, the Admiralty plan was exhibiting fatal defects; by no known system could incoming shipping be concentrated on the defended routes, and, in any case, it was in the approaches to the defended routes - the great expanse of water between the Irish coast, Land's End and Ushant, and the bay of Biscay - that ships were sunk with the greatest impunity. There was, thus, every reason to suppose, that the large number of ships sunk in the first weeks would be exceeded in the weeks following (as indeed it was); for no plan for protecting shipping in the outer approaches was then in contemplation.
More menacing even than this, however, was the bald announcement, made simultaneously from every port where vessels were preparing to sail, that the German campaign was in a fair way to achieve the great object of commerce warfare, which is to stop the flow of trade. Neutral vessels universally remained in harbour, not because their captains and crews feared to face the dangers ahead of them, but because their owners ordered them to remain where they were. The dislocation that this occasioned, and the paralysis that it threatened, are best described in figures. In February, 38 vessels reached the Netherlands from overseas; the normal figure was 108; the Danish figures were 60 (normal) and 23 actual; the Norwegian 46 and 28; and the Swedish 61 and 13. With the exception of Norway, therefore, every neutral country's overseas traffic was at once reduced by two-thirds. The paralysis was, moreover, peculiarly severe in the Anglo-Scandinavian trade:
During the two months, February and March (writes Mr. Fayle, the historian of sea-borne trade) the aggregate net tonnage of Scandinavian, Dutch, and Spanish shipping entered at British ports with cargoes from all countries was far less than in the single month of January and only about one-quarter of what it had been in the corresponding months of 1916. The clearances were almost as unsatisfactory. But for the enterprise and courage displayed by the Norwegian shipowners and seamen, the position would have been still more unsatisfactory.
For so long as this state of affairs continued, there was no thought of pursuing the policy recommended in the paper that was presented to the cabinet at the beginning of the year; for it was futile to hope, that our control over German supplies could be enlarged by a policy of waiting upon events, or of seizing exceptional opportunities, when shipping between Europe and America was coming to a standstill, and when the paralysis in Europe was threatening the supplies of coal, which we had promised to our allies, the French, and to the Danes and Norwegians. It is therefore necessary to understand clearly, that, during these first months of the year 1917, our economic campaign was purely defensive: for the first time in three years, our authorities were concerned only with holding what had been gained, against a counter-attack of extraordinary force and vigour. The defensive measures which were undertaken for the purpose of re-starting the flow of trade, were these:
(i) In answer to the neutral demand for a protected route, trade between Great Britain and Norway was put under convoy; a special system of defence was instituted for the Norwegian ships in the French coal trade, and a similar system was instituted for the Dutch trade.
(ii) In order to give that first impulse, which would set trade again in motion, what is known as the ship-for-ship policy was announced and executed. All neutral ships in British harbours (to the number of six hundred) were held, and were released one by one, on an assurance being given, that a ship flying the same flag had cleared for a British port. Neutral vessels on time charter to the allies were only released on an undertaking being given, that they would not be sent to a neutral port to be laid up. Incoming neutrals, which had released a detained vessel, were only released again on an undertaking being given that they would perform a duty voyage, before returning to their country.
 (iii) In order to reduce the danger of traversing the areas that were most infested by submarines, an examination service was set up at Halifax for the transatlantic trade; and at Gibraltar, Dakar and Alexandria for the eastern and south Atlantic trades. Vessels that cleared at these ports were exempted from examination at the Downs and Kirkwall; but the right to be examined outside the danger zones was granted only on condition, that the cargoes were covered by letters of assurance, or by approved advanced bookings.
(iv) In order to make these measures enforceable by the prize courts as well as by the executive, a special order in council was issued, whereby special penalties were ordered to be imposed upon all vessels that disobeyed these regulations. By the first article of this order it was laid down, that all vessels on their way to, or from, a country affording means of access to enemy territory, should be deemed to be carrying goods of enemy destination or origin, unless they called at a British or allied port to be examined. By the second article, a vessel carrying goods of enemy origin or destination was proclaimed liable to capture and condemnation, unless she called at an appointed British or allied port, for examination. By the third article, all goods that were found, upon examination, to have an enemy destination or origin were proclaimed liable to condemnation. (Order in Council, 16th February, 1917.)
So serious a paralysis as threatened in February, was not to be relieved at once, and, by the end of March, the recovery was still only partial. The Norwegian fleet was sailing, and the Danish produce boats were at last on the move. The entrances and clearances of Netherlands vessels were, however, very low, and the defended Dutch trade was carried principally in British bottoms. The dislocation in the Anglo-Swedish trade was still unremedied; in Mr. Fayle's words: Communication was almost cut off, and it was because it was so much more pressing and important to revive the flow of Anglo-Swedish trade, than to ratify a draft agreement that was no longer operable, that the Swedish agreement was virtually overlaid by an arrangement with regard to shipping. By this agreement, British ships in the Baltic were allowed to pass the Kogrunds rannan, and a proportionate quantity of Swedish cereal cargoes was released.
But if these initial successes of the submarine campaign forced us to abandon all thought of enlarging and completing our system of economic coercion, at least those successes administered our campaign for us in a most surprising manner. For so long as the neutrals bordering upon Germany imported no more than the rations of primary materials that had been allowed them, the great object of the campaign was secure; and the first consequence of the submarine campaign and of the dislocation it occasioned was, that neutral imports were reduced to a figure far below the rations that were allowed by the agreements in force. Figures and statistics show, better than any description, how severely neutral supplies were reduced.
 As was to be expected, imported supplies diminished in an equal proportion. The Norwegians, who maintained more of their shipping in service than any other neutrals, fared best; but even their imports of food and fodder fell below the normal, during the first quarter. Swedish imports of metals and ores practically ceased; a small quantity of mineral oils, and about half the cotton normally imported, were delivered during the first quarter; but, in respect to all the materials against which rationing had operated, oil-bearing nuts, animal and vegetable oils, and so on, the imports were reduced to a mere trickle. Denmark and the Netherlands were no better off: imports of meat products ceased altogether, and very little food and fodder were brought into the country. In no group of essential materials did the Netherlands imports even approach the normal. From this it will be seen, at once, that the policy of reducing neutral exports by severely curtailing their imports of forage, fertilizers and meats - a policy that had been so often considered - was executed by the Germans, at the very moment when we had become most sceptical of it. Also, it should be said, that, although there are no precise figures, such indications as are available show, that the flow of domestic exports from Denmark and Holland into Germany was not much checked by this sudden restriction upon imported meats, forages and fertilisers. Those who had been most doubtful about the policy were thus more in the right than those who were confident it would give good results.
During the weeks that followed the American breach with Germany,
therefore, the economic campaign, which, up to then, had been conducted
without respite, was temporarily overlaid by a bitter struggle to secure
supplies: a struggle in which all governments of Europe were engaged, and
which was executed in the daily administration of the
ship-for-ship policy, and the daily resistance to it. Every ship that sailed or
arrived became an object of bargaining and negotiation. It will be
convenient, at this point, to discover how this new economic struggle,
which was different in kind and in substance from the old, influenced
American policy and American opinion.
First, it cannot be stated too emphatically, that the breach between the United States and Germany, automatically and at once, eased tension between the United States and the entente powers, and relieved the entente diplomats of a load of anxieties. During the autumn and winter of 1916, every diplomat in the service of the entente was conscious of the steady deterioration in the relations between Washington and London. Anxiety increased when it was seen, that the president's plans for mediating were likely to stimulate all the friction and ill will that had been caused by the prolonged controversy upon contraband, by the blacklisting of American firms, and by the execution of Irish rebels. The dangers inherent in the president's plan, and the diplomatic conflict that the embassy at Washington was anticipating, are best explained by a short retrospective survey of the facts.
During the autumn of 1916, the president formally promised to the German and Austrian governments, that he would embark upon his mediatory plans as soon as he was re-elected; more than this (as has already been shown), he gave some assurances, either in his own person or through his representatives and agents, that he would not hesitate to coerce any group of powers whose conditions he thought unreasonable. When he undertook this, he probably considered, that the conditions of the central powers would be a greater obstacle to peace than those of the entente, and so thought he could promise coercion safely, without revoking a vague and guarded promise of help to the entente powers, which he had allowed Colonel House to make during the first months of the year. On 18th December, therefore, he invited the powers at war to state their terms, and, just before the Germans  announced their new campaign, he received replies, which only made the differences between his policy, and that of the entente powers, the sharper. The central powers communicated their conditions secretly; and although there were, in those conditions, some demands that would never have been granted, the German and Austrian governments nevertheless undertook to evacuate the conquered territories of France and Belgium. These conditions might, therefore, have been reduced to an acceptance of the status quo ante, at all events in north-western Europe. Helfferich expressly states that the chancellor and the emperor would not have allowed peace negotiations to fail, by insisting on any condition that would have enlarged the German empire. This may or may not have been known to President Wilson; but, as the German government had pressed him, throughout the year, to begin his mediation, he was tolerably well assured, that the central powers would withdraw any demand that proved to be a serious obstacle. The entente powers, on the other hand, being bound by the promises they had made to states that had allied themselves to them, and having, besides, promised the Serbians enormous compensation, could only demand the cession and liberation of territories, which the armies of the central powers had successfully defended. Much could be said for the abstract justice of those conditions; but as there was no chance that they would be acceded, until the armies of the entente powers either conquered the territories they demanded, or occupied others of equal value (which they had little or no chance of doing), so, the entente's conditions were a far greater obstacle than the German and Austrian conditions to the president's plans for starting a negotiation before the spring campaign opened. The entente's answer to the president's invitation certainly made him very resentful, and Sir Cecil Spring-Rice was persuaded, that there would shortly be a more serious diplomatic conflict between the United States and Great Britain than any previously engaged upon. Even though the danger was less than was imagined, both sides were feeling that things were going ill, and that the future was dark and uncertain, when the sudden announcement of the German government, and the equally prompt reply of the Washington authorities, laid the danger of an Anglo-American conflict, and gave all who anticipated it the relief that follows when a great anxiety is dispelled. [Emphasis added by Scriptorium: promises of "enormous compensation" - to the nation whose truculence had triggered this war!!]
There was thus an incentive to discuss delicate questions with a freedom and openness that had been impossible for many months, and it would seem that the high officers of the American administration were particularly conscious of this new liberty. These officials were practically all persuaded, that the president would not be able to keep the country neutral; and, early in February, Mr. Polk felt obliged to discuss with Sir Cecil Spring-Rice the contingency of an American declaration. This first conversation was followed by others, and, by the middle of March, the state department had undertaken, that their own orders for munitions and equipment would not be allowed to conflict with orders placed in America by the entente powers. Also, they received suggestions from us for bringing all wireless messages under censorship and control, and for keeping the financial transactions of enemy firms under inspection. More than this, the state department encouraged our plan for establishing an examination service at Halifax. We, on our part, undertook to put no more American firms upon the black list.
But although Mr. Polk and Mr. Hoover, who were the principals in these conversations, contemplated a declaration of war, almost as soon as Bernstorff was given his passports, and made such preparations for it as they were able, the president continued on his old course. It is difficult to say for certain what he hoped to do; the negotiations that he himself initiated during the following weeks suggest that  he entertained a vague plan for persuading the German government to abandon their campaign against commerce, or so to modify it, that diplomatic relations between Berlin and Washington could be restored. As soon as the breach was declared, at all events, the United States representatives in Sweden, Switzerland, the Netherlands, Norway, and Denmark, were each and all instructed to invite the governments to which they were accredited to break off relations with Germany. The American representatives were also instructed to assure neutral governments: that the invitation to break off relations with Germany was in harmony with the president's project of a world league for peace; and that, if neutrals would follow the American example, it would make for the peace of the world. This invitation was therefore issued in the hope, that a general negotiation for peace might be set afoot by the United States government, who were to act as the primus inter pares of a neutral league. It was, of course, absurd to imagine, that the northern neutrals would recall their ambassadors from Berlin, at the very moment when they most needed their services; apart from this, all these neutral governments, that of Sweden in particular, had previously asked, that American diplomacy should support their resistance to the economic campaign, and had always been refused. They therefore declined to subscribe to this writ of outlawry against a powerful neighbour.
The president's next manoeuvre was better conceived. At the beginning of the year 1917, the indications that the Austro-Hungarian government were contemplating a separate peace had become so persistent, that Sir Francis Hopwood was despatched to Copenhagen, on 1st February, to get into touch with some gentlemen, who were thought to be emissaries of the Austrian court. In Washington, the indications were of a different kind, but they were equally strong. During their deliberations upon submarine warfare, the German authorities hardly consulted Vienna at all, and the sudden, bald, announcement that the new campaign would be begun, was ill received by the Austro-Hungarian ministers, who were, at the time, determined to encourage the president's mediation, and to give it all the support in their power. The Austrians so far associated themselves with their allies, that they announced unrestricted submarine warfare when the Germans did so; but they very much tempered this in their interviews with the United States representatives. Count Tarnowski, the ambassador designate at Washington, most earnestly asked the secretary of state not to break with his government; in Vienna, Count Czernin called on the American ambassador, and asked him to assure the Washington government, that the Austrian authorities would continue to support the president's peace proposals, if diplomatic relations could continue unbroken.
On receiving these assurances, President Wilson endeavoured, and not unskilfully, to revive his negotiation for a general peace, by separating the Austro-Hungarian government from that of their allies. He therefore instructed the American ambassador in London, to communicate his intentions to the leading members of the British government. The message that the American ambassador was thus ordered to deliver is very explicit as to the president's hopes and intentions, and ran thus:
The president knows that peace is intensely desired by the Teutonic powers, and much more by Austria than by any of her allies because the situation is becoming for many reasons much graver for her than for the others. He is trying to avoid breaking with Austria in order to keep the channels of official intercourse with her open so that he may use her for peace. The chief, if not the only, obstacle is the threat apparently contained in the peace terms recently stated by the entente allies that in case they succeeded they would insist upon a virtual dismemberment of the Austro-Hungarian empire. Austria needs only to be reassured on that point, and that chiefly with regard to the older units of the empire. It is the president's view that the large measure of autonomy already secured to those older units is a sufficient guaranty of peace and stability in that part of Europe so far as national and racial influences are concerned and that what Austria regards as the necessities of her development, opportunity, and security to the south of her can be adequately and satisfactorily secured to her by rights of way to the sea given  by the common guaranty of the concert which must in any case be arranged if the future peace of the world is to be assured. He does not doubt that Austria can be satisfied without depriving the several Balkan states of their political autonomy and territorial integrity.
On receiving this instruction, the United States ambassador sought out the British prime minister, who refused to give the assurances asked for, and answered, cautiously, that the Austrians were becoming more a burden than an assistance to their German allies, and that it was by no means certain, whether it would be to the advantage of the entente powers, that the Austro-Hungarians should retire from the war at that moment. Replying to the questions specifically put to him, Mr. Lloyd George said:
That the British government could not receive a specific and concrete proposal of peace from Austria, without risk of weakening the entente's military and economic pressure and also,
That the British government could not give any assurance to the Austrians that the older units of the empire would not be taken from them, as the Slavs, Rumanians, Serbs and Italians within the Austrian empire were to be freed from Austrian rule.
When he gave his reply, Mr. Lloyd George was labouring to perfect the war plan for the coming year, and was so persuaded that the Austrian resistance was weakening, that he was revolving a project for launching a particularly powerful assault against the Austrian positions on the Isonzo. His confidence in the plan may have influenced his first reply; but he was soon obliged to modify it, for, soon after, the United States ambassador was able to telegraph, that the prime minister had so completely changed his opinion, that any proposal for detaching Austria-Hungary would be considered on its merits, and that the president's efforts would be fully and generously appreciated.
During the month following upon the breach with Germany, the president therefore pressed on with his plan for negotiating a general peace; and, as this was his dominant preoccupation, it was natural that he should proceed very cautiously in all matters connected with the submarine campaign. This, however, rather separated him from the mass of the people, to whom the campaign at sea was the one urgent, pressing matter; for the paralysis of shipping was fast beginning to disturb the daily habits and occupations of ordinary men. The paralysis was unrelieved during the whole month, in consequence of which there was an immense accumulation of stationary freight wagons at the great ports of shipment, and a corresponding shortage inland. A fortnight after the campaign began, coal supplies were short in a number of districts, and in the third week of the campaign, food riots were reported in five states. It was believed, that the rioters had been incited to disorder by political managers; but even if this were true, it was a circumstance of extraordinary significance, that men and women should be demonstrating for  food, in the towns of the wealthiest and the best provided country in the world. [Scriptorium comments: and after such a short time! Consider that it had taken the Germans more than a year of deprivation to get to this point.] The submarine campaign was thus forced upon the president's attention, and in no uncertain manner; for hundreds of representative bodies, and most of the chambers of shipping, demanded that measures be immediately taken to relieve the terrible congestion that was turning New York, and the great harbours of the Atlantic seaboard, into blockaded ports. On 26th February, therefore, the president answered the universal outcry, by requesting congress to empower him to arm American merchantmen.
The president's negotiation with the Austrian government was not, however, then broken off, and it was probably because he regarded it as the last support to his plan for negotiating a general peace, that he was careful to say nothing inflammatory about the submarine campaign. He therefore opened his address to congress with an elaborate explanation, that the recent sinking of two American steamers was not an overt act, after which he continued:
The situation we find ourselves in with regard to the actual conduct of the submarine campaign, and its effects upon our own ships and people is substantially the same as it was when I addressed you on the third of February, except for the tying up of shipping in our own ports because of the unwillingness of our shipowners to risk their vessels without insurance or adequate protection, and the very serious congestion of our commerce - a congestion which is growing more serious every day.
The debate upon this message only served to show how far congressional opinion still lagged behind the views held by those officials of the state department, who were, even then, preparing for a war that they considered certain. A year previously, the senators had made a great parade of their learning and scholarship, when this same question of arming merchantmen was presented to them; on this second occasion, they again engaged in a searching examination of the legal issues. Even as the president was reading his address, news came in that the Cunarder Laconia had been torpedoed, with American citizens on board; but this by no means excited a warlike spirit among the senators. The first question examined was whether the power to resist unlawful attack, which was to be conferred upon American merchantmen, would be construed by the captains as a commission to resist visit and search by the British blockading squadron: an enormous number of historical precedents were quoted to show that visit and search had often been resisted by arms. This was answered by Senator Lodge, who was at great pains to explain that visit and search was not an unlawful attack, but a recognised belligerent right, and that, although resistance to it was no crime, it was nevertheless admitted to be resistance to a right recognised by the law of nations. The next point examined was whether an American merchantman, armed at public expense and by public authority, could commit the nation to war by resisting and sinking a German submarine. The lawyers in the senate strongly denied that a merchant captain, who resisted submarine attack, would be committing an act of war, but the other senators were not satisfied; for it was patent to all, that, if American merchantmen were repeatedly engaged in armed conflicts with German submarines, war with Germany would soon be an accomplished fact. This contingency made the senators very timid, and they flinched; the text of the bill was still not agreed to by the senate, when congress adjourned.4 The lower house was more decided, and, by a large majority, passed a bill for giving the president the necessary powers; but in the house of representatives, as in the senate, there was unanimity, that the powers given to the executive were additional powers for preserving neutrality and no more.
 The congressmen rose on 4th March. The executive were evidently persuaded, that the peaceful sentiments of the parliamentary managers were not the sentiments of the nation at large, and that the policy recommended by the two houses was fast becoming impossible; for, in the fortnight following, conversations between the embassy and the state department became more intimate. During the month, the state department were given lists of the firms in South America whom we knew to be working in the enemy's interest; on receiving these, the American officials asked for copies of our war legislation, and for papers upon the administrative machinery by which it was enforced. In addition, the American authorities established a rigid censorship of all mails that were being sent overseas, and assured Sir Cecil Spring-Rice, in a general way, that they were determined to prevent goods of American origin from reaching the central empires, and that German subjects, and German firms, should be debarred from using their credits in American banks, or from transferring them to other countries.
The policy of the president and of congress was, indeed, fast becoming unworkable. First (which must, to him, have been very important) the president's negotiation with the Austro-Hungarian government failed, owing to the strong pressure that the Germans exerted upon their allies. On 10th February, the German emperor arrived at Vienna, and the consequences of the visit were at once perceptible. At Copenhagen, Sir Francis Hopwood's negotiations were immediately brought to a stand: in Vienna, the United States ambassador received written intimation from Count Czernin, that the Austro-Hungarian government would not negotiate for peace, unless their allies were associated in the negotiation. Nevertheless, the president still tried hard to bring the Austrians under his influence. Five days after he asked congress to give powers for arming merchantmen, he again appealed to the Austro-Hungarian authorities, saying that he might still secure them advantages which might be lost, if they delayed. Count Czernin refused the offer, so that, by the middle of the month, the last strut to the president's policy of negotiating a general peace by remaining neutral was knocked away. Secondly, while the congressmen were still deeply engaged in a debate upon the law of armed merchantmen, the state department published a discovery which roused the nation. The discovery was, that, even before the president broke off relations with Germany, Herr Zimmermann was urging the Mexican government to invade the United States, and was promising:
Generous financial support, and an understanding on our part that Mexico is to recover the lost territory in Texas, New Mexico and Arizona.
This excited great anger, and the congressmen were quick to see how much it discredited them before their constituences; for an influential group of senators at once challenged the authenticity of the message. Thirdly, the paralysis of shipping was almost unrelieved, and was still felt far inland, on the railways, and in the country towns. If any had hoped, that the arming of merchantmen, and a revival of the practices of armed neutrality, would restart the flow of trade, they were soon undeceived. Armed neutrality had seemed attractive to several senators and congressmen, as being a subject which invited another display of their scholarship; to the ordinary people it was a terrible failure, as may be seen from the following figures. (See Table LXX.)
It was therefore inevitable, that the mass of the people should become convinced of what the high officials had realised several weeks before: that the president's peaceful policy could only be adhered to if it gave some relief, and that it was giving none. The eastern coasts of the United States were still half blockaded, and, as this was the outcome of the submarine campaign, it followed that the  particular incidents of the campaign excited far more indignation than they did when trade was still flowing freely. In his last address to congress, the president made an elaborate excuse for the sinking of the two American vessels, the Housatonic and the Lyman M. Law; but he did not have time to consider what should be said about the sinking of the Cunarder Laconia, for the news only came in as he was making his speech. Large sections of the American press called this new sinking an open challenge, a proclamation that the one restraint upon which President Wilson had insisted was now cast aside. During the next few days, it became known that a Belgian relief ship, the Storstad, was sunk; and as soon as this unpalatable news was digested, the American steamer Algonquin was destroyed. Within the next four days, the American steamers Illinois, City of Memphis and Vigilancia were sunk. The press of the whole country received the news with a roar of indignation, and the editors of over a hundred newspapers repeated, at regular intervals, that while the United States remained neutral, Germany was making war upon them. In several of his speeches during the previous year, President Wilson warned those present how difficult it was to discover exactly what was being said and thought in the countless farms, hamlets, and village towns, where the great mass of the population lived; and how easily a public man might be deceived about the national sentiment. In this particular case, there was no difficulty. The American nation was thoroughly roused.
But the president, though highly intelligent, was a very stubborn man, and was, on that account, reluctant to admit, even to his most intimate friends, that he would be obliged to change his course. He presided at a meeting of his cabinet on 20th March, and gave none of his ministers the slightest intimation of what he proposed to do. He did not even let them know that he intended to convene congress. The summons, which was issued on the following day, was a great surprise to them. On 24th March, the secretary of state called upon him, and the president refused him any information. On 27th March, President Wilson started composing his address to congress; but, even then, his ministers did not know what it would contain. In the evening of 2nd April, however, he appeared before congress, and in the most stirring, eloquent language announced that the United States were, in fact, at war with Germany, and that the nation had no option but to accept the challenge, and to wage war, by land and by sea, with all the resources at their disposal, and with all the strength in their power. The congress men, who had been warned, during the short recess, that the sentiments recently expressed by them were not in harmony with the sentiments of their constituencies, now made warlike speeches, and passed  resolutions declaratory of war with Germany. The senators, who, a month before, had thought the arming of merchantmen too dangerous to be attempted, voted for war by a majority of 76; the house of representatives gave a majority of 323.
From this long preamble, it will be patent, that no plan of concerted action between America and the allies could possibly have been presented to the authorities at Washington, during February and March; preparation, which is only to be effected by close consultation and conference, would only have been possible, if the head of the executive had himself desired to confer with us. Apart from this, during the two months following upon the breach of diplomatic relations with Germany, Sir Cecil Spring-Rice appreciated the position as one in which a single false step, or a single tactless suggestion, would revive all the controversies that had been temporarily overlaid by the far graver differences that had arisen between the United States and the central empires. For this reason, he repeatedly urged that suggestions should only be made to the United States government, if they invited them; and the only matters upon which they desired information related to the postal and telegraph censorship, and the control of wireless messages. In reply to the enquiries of the state department, Sir Cecil contrived to give Mr. Polk and Mr. MacAdoo, the president's son-in-law, an unofficial justification of our black list, and a fair idea of the financial operations which the enemy were conducting on American soil, and of their magnitude. Nothing beyond this was discussed during February and March, nor did Sir Cecil receive any undertaking from the state department, except an assurance that firms working in the enemy's interest would be wound up. The officers of the state department were, moreover, very cautious in asking for information; for they knew that the whole matter under discussion related to black lists, which, even then, had a bad reputation in America: also, they knew, when they said, in private, that war was inevitable, that they were detaching themselves from the president, who obstinately refused to admit that his negotiations for a general peace had become diplomatic wreckage, since the submarine campaign started. The conversations between the embassy and the state department were therefore significant only as illustrations of that sudden improvement in Anglo-American relations, which, almost in a night, changed a guarded coldness, and suspicion of three years standing, into a friendly intimacy. The points agreed to upon such matters as financial control, black listing and the like, did not constitute anything that could have been called a plan of concerted action.
What, however, is more important to remember is that, when the United States declared war, their assistance was most needed at sea; for the enemy's campaign was then an urgent danger to the whole alliance. In the month of March, the Germans sank three hundred and fifty thousand odd tons of British, and two hundred and twenty thousand tons of allied and neutral shipping, at the cost of only four operating U-boats. At the end of the month, the first sea lord circulated a paper to the cabinet, in which he freely admitted that the situation was getting out of hand; for he reported that these gigantic losses would soon be exceeded, and that the attack had far outstripped the defence. Some days after this paper was presented, Admiral Sims arrived at the Admiralty, and to him Admiral Jellicoe represented the danger without palliatives or reserve. During the month following upon America's entry, the gloomiest forecasts of the preceding weeks were exceeded; for the German attack rose to a zenith of efficiency and vigour.
The patrolled routes (runs the official naval history) were almost as severely attacked as during the previous month, and on the outer routes the situation was worse than it had ever been before. One trail of destruction spread fanwise into the Atlantic from the south-west point of Ireland, and another from Land's End. During the month efforts were made to concentrate shipping on a route which approached the coast of Ireland along the latitude of Galway bay, but quite  fruitlessly. Sinkings were thickest in a rough quadrilateral between the parallels of 51° and 53° N. and the meridians of 12° and 15° W. The central point of this zone of devastation was about one hundred and seventy miles due west from Berehaven, in the open waters of the Atlantic, where permanent patrolling was impossible. The hope that the German submarine commanders would be less destructive when compelled to depend upon torpedoes instead of gun-fire proved to be ill-founded. It seemed rather that they now torpedoed vessels by deliberate choice, in order to lose no time. Over thirty vessels were sunk within the area to the west of Berehaven, and every one of them had been torpedoed at sight. The use of the torpedo had increased with the rising list of sinkings. In January about eighty vessels had been sunk by gun-fire for every thirty ships torpedoed; in April the proportion was entirely reversed, and about 60 per cent. of the total sinkings were done with the torpedo.
Warnings of a disaster without precedent in British history were therefore coming in, day by day, and week by week, during the months when active co-operation between the entente powers and the United States was first examined in conference; and it can easily be understood, that the American authorities considered, that everything must be subordinated to rendering that immediate assistance at sea, which alone could check the tide of disaster. The first projects considered were, therefore, projects for relieving the British cruisers that were patrolling the outer routes, and so releasing them for the defence of trade; and projects for strengthening the destroyer forces in the western area. On these two matters the United States authorities acted with great promptitude; for, as soon as the first conference of flag officers at Hampton roads was over, the necessary orders were given to the American cruiser squadrons, and, early in May, strong American reinforcements arrived in Queenstown. Over and above this, the Americans naturally paid most attention to our suggestions for putting more merchant shipping into service. These suggestions were made by Mr. Balfour's mission, which reached Washington on 24th April; within a week of their arrival, the American authorities empowered a board of experts to report how enough shipping to make good the losses could be built in American yards.
By the end of the first month of war, the American departments of state were thus called upon to make all the preparations necessary: for arming and equipping the first levy of five hundred thousand men, which congress sanctioned; for constructing and manning a fleet of destroyers and anti-submarine craft; for constructing a merchant fleet of four million tons in American yards; and for seeing to it, that the execution of these plans did not clash with orders that were already being executed for the  allies within the country. It will readily be understood, that projects for co-operating in the economic campaign were considered secondary to these schemes of co-operation; nor had we, on our side, any inclination to press these projects unduly; first, because it had been recognised, at the beginning of the year, that the major part of the operation had been completed; and secondly, because the submarine campaign, terrible and menacing though it was, continued to administer our economic war plan for us. For, during the summer and autumn of the year, when projects for completing the blockade of Germany with American assistance were being deliberated, trade between America and northern Europe was so reduced, that the rations imposed upon neutrals during the previous year were never received by them.
But if America's co-operation in the blockade of Germany was considered as a matter of less importance than her co-operation in relieving the more pressing dangers of the moment, at least it was grasped at once, and by all concerned, that America's entry offered a fair chance of closing up what had been notified as the one big gap in the blockade. Reducing neutral exports to Germany was no longer an operation that could only be effected by the long and tedious process of reducing rations by negotiation, or by schemes of purchase. The oil, corn, and foodstuffs that were being despatched from America to Europe were American produce, and could therefore be delivered on America's own terms. The implications of this were obvious, and it needed no study of statistics to make them clear: the tentative plan submitted, at the beginning of the year, of diverting neutral produce from Germany by seizing opportunities might, if the American government so willed, be converted into a consistent and embracing plan for completing Germany's economic isolation. This was grasped, automatically, by all who were concerned in the operation; for within a few days of America's declaration, our ministers in Scandinavia were asking, whether it was not possible to press the negotiations then entrusted to them (the Norwegian pyrites dispute, and the Kogrunds rannan settlement) by persuading the Americans to withhold their oil supplies. On their side, the American authorities grasped that their exports to Europe would have to be severely controlled; for, a week after the president had made his address to congress, a war trade committee presented a draft bill for stopping trade with the enemy, and recommended that an exports control committee should be created, to administer those sections of the bill that related to export licences. The members of this war trade committee were: Mr. Charles Warren, the assistant attorney-general, Mr. L. H. Woolsey, the solicitor to the state department, and Mr. E. E. Pratt, a high official in the department of commerce. It was these gentlemen who examined the proposals that were made to them by the allied governments, and who reported upon them to the American ministers of state.
These proposals were already complete in every detail; for, during the last month of America's neutrality, the Foreign Office prepared a set of memoranda upon the economic campaign, which were to be presented, if the United States declared war. These papers were given to Mr. Page on 10th April, and were examined by the state department during May. It was not disguised that the most effective assistance that the Americans could give was in the matter of shipping; detailed proposals were therefore made for putting American ships into allied services, and for establishing a system of bunker control. For the rest, these papers were mainly intended to reconcile the Americans to our black listing practices, and to persuade them to institute a similar system themselves. The essence of what we suggested was contained in the following passages:
As the United States government naturally and rightly desire themselves to assume control over the trade of their own citizens and as it is to the interest of the allies that, as in other belligerent countries, such control should be based upon the exercise of national sovereignty rather than on  the less certain application of international law, it is hoped that he United States government will give early consideration to the advisability of prohibiting the export of all important commodities except under licence. As a complement to such a list, and as a guide to the licensing authorities, it will no doubt be necessary for the United States to adopt also, in one form or another, a list of consignees in neutral countries who are to be regarded as undesirable recipients of American goods. For obvious reasons, which have already been recognised by all the allies, it is desirable that both the list of prohibited exports and the lists of suspects should be as nearly as possible identical with those adopted by the allied countries, and consultation and collaboration for this purpose with the allies will, no doubt, recommend itself to the government of the United States.
The French government presented a similar set of papers a little later; but whereas we had been content to make our memoranda explanatory of the general position, the French outlined a plan of assistance. After describing the receiving agencies in Denmark, Holland, and Switzerland, the French gave a sketch of the rationing system, and of the difficulties of enforcing it. Then, after giving such figures as were available about the exports from the border neutrals to Germany, the French memorandum concluded:
We have enumerated above the obstacles encountered by the allies in their attempt to isolate Germany. These obstacles can now be removed by the United States who are, as a matter of fact, producers of materials, without which Holland, Denmark and Sweden can maintain neither their agriculture nor their raising of stock. America can therefore now demand, as a belligerent, that the goods she produces shall go only to neutral consumers and, even after undergoing transformation, shall not serve to feed the enemy and maintain his powers of resistance. In laying down as a condition of the delivery of oil cakes, fertilizing and other agricultural raw material, and petroleum oils, that the importing country shall not re-export to the enemy the products of their soil, America would only be applying the generally admitted rule of international law, viz., that a belligerent is bound to prevent the production of his soil from being used for the benefit of the adversary. This principle has been recognised by the neutrals themselves, Switzerland having admitted that coal supplied to her manufacturers by Germany, could not be used in the fabrication of goods intended for the allies, even if the other elements of the manufactured object were of neutral or allied origin.
The American authorities received these recommendations cautiously, for they well realised, that although each proposal presented to them was, in itself, unobjectionable, those proposals, taken as a whole, were an invitation to assist in an operation which they had acclaimed illegal. They were therefore determined to subject all our propositions to the most searching scrutiny, before they adopted them, even in part. Secondly, the American civil service, upon whom would fall the duty of administering whatever measures were approved, had their own reasons for going warily. The civil service in America has never enjoyed that independence of popular and parliamentary control, which is enjoyed by the civil services of such countries as Great Britain, France and Germany. Congressmen are jealous of any check, or counterpoise, to their influence and power, and have never granted funds generously to the administrative departments of the state, fearing that, if they endowed them too well, there would grow up a corps of high officials in Washington, who could exert more influence upon ministers than they could themselves, and who would eclipse them in the public estimation, and in society, by their knowledge and attainments. The American civil service, upon whom it rested to devise an economic policy, were thus very sensitive to criticism from congress, and were inclined to wait upon events, and to see with what temper the congressmen examined the draft bills presented to them, before they themselves recommended any general plan. Also, they were by no means inclined to endorse a plan for putting severe pressure upon Sweden (which was being recommended by our embassy) as they thought that Americans of Swedish birth were numerous and powerful enough to make a commotion in congress, if the country of their birth were severely treated. This does not mean that the high officials of the American civil service were disinclined to co-operate in the economic campaign: on the contrary, Lord Eustace Percy, who was then attached to the embassy, reported that the American civil service was anxious to help, but that they were determined to go circumspectly.
What probably weighed even more than this with the state department was that all the governments of the border neutrals grasped, as quickly as we did, that America's declaration of war was a matter of great moment to them, and at once informed the American ministers, that specially selected envoys would shortly be sent to Washington to negotiate. The state department thought it wise to await the arrival of these gentlemen; for, as the United States had not been seriously in treaty with any of the Scandinavian countries since the war began, so, their ministers had not established that close and intimate contact with the peoples and their governments, which would have enabled them to undertake negotiations of great importance, without preliminaries of any kind. It may also have weighed with the state department, that the only report they received from Scandinavia, during this initial period, was a warning from Mr. Egan, their minister in Copenhagen, not to co-operate in the British system without careful enquiry. In Mr. Egan's opinion, control of foodstuffs was then quite satisfactory; but British policy had alternately been too severe, and not severe enough. At the moment, the Danish committees were carrying out the British government's wishes; but it seemed  probable, that, after the war, the Danish commercial system would be engulfed in the German; and that an American prohibition of wheat would put the onus of explanation which was then borne by the British upon the United States.
Seeing that they had so many reasons for hesitating, the state department are more to be congratulated on the firmness of their final determinations, than reproached for delay; for, by the middle of May, they had decided on the following conduct:
(i) In the matter of black listing, the state department decided to co-operate in the system, in so far as it was part of bunker control and navicerting; and to decide for themselves what firms in South America and Mexico were to be posted. The reason for this reservation was that the American government were anxious to cause no irritation in South America which might thwart, or retard, the president's invitation to form a neutral league. This invitation was much better received in South America than in Europe: the Brazilian, Bolivian and Guatemalan governments broke with Germany a fortnight after the United States declared war; and, from every part of the South American continent, the American ministers reported, that the president's note was being respectfully and seriously examined. It was therefore natural, and indeed extremely wise, that the American government decided not to proclaim firms in South America, until their consuls and representatives were satisfied that it could be done safely; for it is notorious, that the political managers in the South American republics are mostly men, who have a heavy stake in the financial and trading houses in their countries.
(ii) In the matter of naval assistance, our high naval command asked only for assistance in combating the submarine campaign, and this was at once granted. The American authorities were, however, very careful that the aid thus given should not be construed as assistance for enforcing a British order in council. Prize instructions were issued to the fleet in June; they contained no concession to British practices, and it was upon these instructions that officers in the cruiser squadrons acted, when they examined neutral vessels. Although the American government had approved the plan of examining vessels at Halifax and Gibraltar, no commanding officer in the cruiser squadrons ever obliged neutral vessels to call for examination at a British port. In the words of the secretary to the navy: Mandatory routeing has not been practised by our navy. As a further precaution, the United States government declined to be a party to the allied convention for the adjudication of joint captures. This convention was submitted in November, 1917, to the navy department, who reported that some of its provisions conflicted with the obligations undertaken by the United States in their commercial treaties with Italy and Sweden; and that (which was more important), the convention could not be adhered to without:
Giving a seeming approval of certain practices and principles against which the United States have protested.
(iii) There remained the third group of proposals, which was, that the United States should revise the rationing of neutral Europe, and force the border neutrals to give new and more comprehensive undertakings with regard to their trade with the central empires. As America's participation in the economic campaign became her participation in this group of measures, it will be as well to see by what positive decisions, and after what hesitations, the government of the United States determined to pursue the policy that the allies recommended to them.
The first report on this group of measures was made on 14th May by the war trade committee, to whom the French and British state papers were referred for an opinion. The report was an exceedingly long and prolix document of which it is difficult to give a satisfactory review; nevertheless, the substance of it was certainly that the United States could co-operate in this part of the French and British system, without  withdrawing any of the objections they had previously lodged against it. The rationing of neutral Europe was the important part of the report, and, with regard to this, the war trade committee reported:
That whereas, in the past, in view of the fact that the enforcement of rationing was, of necessity, based upon international maritime law, and not on sovereignty, the allied governments have not felt able to introduce as a factor in fixing rations, the idea of putting pressure upon neutral governments to render services in the form of shipping or otherwise, and have been obliged to take into account the necessity of reaching an agreement with neutral countries, in each case, as to the amount of the ration, it will now be possible, should the United States so desire, to fix rations without obtaining the consent of neutral countries, and to reinforce the rationing system by requiring that in exchange for exports from the United States, the neutral states should perform certain services such as employing a reasonable percentage of their shipping in certain trades.
The language is very involved, but there is in this an unequivocal recommendation, that the United States shall strengthen and complete the existing system of control. More than this, the war trade committee recommended, that an attempt should be made to stop even the domestic exports of neutrals by the severest pressure:
In order to attain this last object there must be a definite diplomatic agreement with the government of the neutral country concerned that it will prevent such export, since without such agreement, however low the ration of imported goods may be, the native products will inevitably seek the market where they can find the highest prices, and that market will, under the present circumstances, always be Germany. In order to reach such an agreement, the first thing that has to be done is to restrict exports to the neutral countries for bargaining purposes, and such restrictions must be made on diplomatic rather than on statistical grounds.
For the rest, the committee recommended, that the American government should send representatives to those allied committees and boards which were operating the existing system; and that letters of assurance should continue to be granted, until the government had established an exports control board for issuing and refusing licences. On the matter of black lists, the United States authorities continued to be very queasy; but the committee admitted, that all the information collected by the war trade intelligence department would have to be put at the disposal of the exports board, and account taken of it, before a single licence could be issued. Some three days after this report was signed, Mr. Woolsey explained it to the secretary of state, and to several other officials, who all accepted it; for the few reservations made by them were no obstacle to the policy finally pursued. The substance of the government's opinion was thus recorded:
Great Britain has heretofore attained the objects set forth above through her exercise of belligerent maritime measures, depending upon the prize court to condemn property violating those measures. The United States regards certain of the measures in question as illegal; but that does not prevent the United States from controlling their exports as a purely domestic measure for the conservation of supplies and tonnage, and for preventing indirect trading with the enemy.
It is significant that Mr. Woolsey thought that this general sanction was given even to the contested doctrine of derivative contraband or produits similaires, for his notes of what he thought had received full government approval contained the following entry:
The United States is willing to assist, on the above-mentioned grounds, in preventing its exports from reaching the enemy, or from being used by neutral countries to replace produce exported by them.......
Although Mr. Woolsey thought that the matter was virtually decided when he drafted this paper, it is clear that some retarding influence was still exerting itself strongly. Negotiations could, indeed, have been started in mid-June; for the Scandinavian envoys were then in Washington; the export prohibition act became law on 16th June, and simultaneously, an exports council was established to  administer it.5 We, on our side, had presented numerous documents, in which we explained, with great elaboration, how we thought the approaching negotiations should be conducted. The substance of what we recommended was that a complete stoppage of exports from the border neutrals to Germany was not to be hoped for; but that, if it were demanded at the outset, and if the demand were upheld, until the neutrals had exhausted all their stocks of food, fodder, lubricants, propellants and textiles, then, neutral governments would agree to reduce their exports to Germany by something like half, and would give their undertaking under such duress, that it could be enforced ad literam. Nevertheless, just when everything was thus ready, either the American cabinet, or some ministers, or the president, had serious misgivings about following the course of action recommended. Mr. Hoover told Sir Cecil, rather enigmatically, that matters could not go too quickly, as there was opposition; shortly afterwards, a high official of the state department had a conversation with Sir Cecil, in which he did not disguise, that the neutral ministers were making some impression by representing, that they would be driven into the arms of Germany, if the United States pressed them too hard. The doubts thus expressed conversationally were soon afterwards marshalled in a paper, which Mr. Polk transmitted to Mr. Page in London, after previously communicating the substance of it to Sir Cecil Spring-Rice and Sir Richard Crawford. In this document, the United States government stated, that, before any embargo could be imposed, they must know from us: What undertakings were required from neutrals; whether the United States were expected to secure them by a complete or a partial embargo; what were the agreements between the allies and neutral trading associations; whether those agreements would be cancelled or revised to reinforce the American embargoes; whether Great Britain would go on a footing with the United States in the matter of embargoes; and finally, if the German government attacked the border neutrals for complying with what the United States demanded, what assistance was the British government prepared to give them, and what assistance would be required of the United States.
The enquiry was a staggering surprise to the contraband department; and the reply to it was largely a repetition of what had already been said in so many despatches and telegrams. We answered, that we did not anticipate that the German government would attack any of the border neutrals; but that the danger, if it existed, was greatest in the case of Denmark. The safeguard against this contingency was, however, that the Germans would not, in our opinion, embark upon an invasion of their neighbours, unless a complete stoppage of all German trade were ordered, which we considered impossible; and that the severe reduction, which we thought the United States could actually secure, would not provoke the Germans to an adventure that would turn all Scandinavia against them. On the further question that was put to us by the American authorities, we answered, that we were prepared in a general way, to go on a footing with them in the matter of export embargoes, but that, as we could not endanger the supplies of food, munitions and materials for making them, which neutrals had agreed to deliver, so, our exports of coal, and margarine materials, must be excepted. On the matter of agreements we undertook, specifically:
That if the existing agreements between any allied and neutral country hinder the adoption of this policy, steps will be taken to modify or terminate those agreements.
It would be interesting to know more than we actually do know about the origin of these last American hesitations. There is a family likeness between the paper drafted by Mr. Polk, and Mr. Egan's warning despatch from Copenhagen; but as the minister's despatch was not answered, and as no enquiries were ordered to be  made upon it, this one report can hardly have been the origin of these belated hesitations. More probably, the enquiry was ordered by the president: it was issued in his name, and it is certain, that, although he was never greatly interested in the niceties of the law of contraband and continuous voyage, he yet detested economic warfare, and would have tempered the conduct of it, had he been able.
The British government's reply was delivered early in August, and it appears to have allayed the last misgivings of the American government, for they raised no further objection, but pursued the course of conduct recommended to them, with set-backs and deflections from it, which will be described hereafter. This may, therefore, be taken as the approximate date at which the United States authorities determined to close up the blockade of Germany, as far as it could be closed, and to replace the existing system of control by a new and more rigorous one. It will therefore be convenient to make a brief survey the economic and the military theatres, which the United States had thus decided to enter totis viribus.
The plan of assaulting the central empires on all fronts, which had been agreed to at the beginning of the year, had been tried and had failed. The assault could not be begun in February, as was first intended; it was further delayed by the retirement of the German armies in France, for they were withdrawn to better positions in March, and could not be attacked across the muddy desert that they left behind them. The French commander-in-chief was, therefore, unable to open his assault until April, and when he did so, his armies were utterly defeated, and mutinied as a consequence. Our contribution to the assault was more successful; for our armies captured the Vimy ridge in April, and made an advance at Messines soon after; but no great strategical advance was possible, after the French armies had been so severely checked. The Italians made their contribution to the plan in May, when they attacked on the Isonzo: their armies advanced for a few kilometres; but, by the beginning of June, the battle was over, with nothing achieved except a little anxiety inflicted upon the Austrian high command. The worst check was, however, suffered in the eastern theatre: in March, the imperial government of Russia was overthrown, and was replaced by a republic, which proved quite incapable of checking the commotions that ruined the old order. The republican leaders, Prince Lvoff, and, after him, Kerensky, honourably endeavoured to perform their part of the war plan; and, at the end of June, the Russian troops were ordered to attack. The armies disobeyed the order, and retired; so that, by the end of the month, the Germans had enlarged their conquests in the country, by occupying great territories in south-western Russia. There was not the slightest hope that the Russian armies would fight again; for the soldiers were infected with the popular doctrines, and it was openly said by millions of men, who, until then, had always fought bravely, that political liberty was of no use to corpses. It was, however, hoped, that the Russian armies would maintain some order and cohesion, which would detain large numbers of German troops in the eastern theatre. By the end of June, therefore, the whole war plan had crumbled, and nothing more was hoped for from it. A piecemeal substitute for it had, however, been found and was being attempted. In July, the British government sanctioned a new attack in the Ypres area: the strategic object of the attack was to drive the Germans from the Flanders coast, and so to capture the naval base at Zeebrugge; but, as it was being delivered against German armies relieved of all anxieties from the French, and easily reinforced from the eastern theatre, so, it was no real substitute for the general plan that it superseded. Actually, this new attack was agreed to for a number of reasons, of which the most cogent were that it would  occupy the Germans, and so, give the French time to recover; also, it was thought unwise to stop attacking on the western front, and merely to wait upon events. The Italian high command undertook to assist the British and French, by continuing the battle that had been broken off in May, on another part of the front, the Bainsizza plateau. The British assault had actually opened, and the Italian one was about to begin, when the Americans decided to wage economic warfare with their full strength.
The war on land had, therefore, been nothing but a series of checks and disasters; but the war at sea had turned in our favour, in that the submarine campaign, though by no means mastered, was at least so checked, that the danger from it was much diminished. First, the emergency measures that were enforced, when the campaign began, had been replaced by regular shipping agreements, whereby the British government secured the services of 930,000 tons of Danish and Norwegian shipping. These agreements enabled us to loose the first paralysis, and to re-start the flow of Anglo-Scandinavian trade; also, they gave the Allies a reserve of shipping, upon which to draw. Even if these agreements had been unsupplemented by other remedial measures, they would have postponed the decision at sea for many months. More important than this, however, was that the system of defence had been changed, by putting trade on the more important routes under convoy. This new system was a complete reversal of the old, which had consisted in a futile endeavour to subject submarines to a more or less continuous attack, and so, to keep them away from shipping. If there had been any known means of harassing submarines without respite, for so long as they were in their zones of operation, this system of defending trade by attacking the attackers might have been the best: actually, it was a deplorable failure, for over two million tons of shipping, and only seven U-boats, were destroyed, during the first three months of the campaign. The results obtained from the new system sufficed to convince the naval staff, that any trade route that could be put under convoy would be satisfactorily protected. The fortunes of the campaign at sea had thus turned strongly in our favour: it was now patent that, whatever might be the losses elsewhere, a block of shipping that would be sufficient to maintain commercial communication between England and America could be protected; the danger was therefore no longer the urgent, pressing danger that had threatened in April, for the threat of industrial paralysis through lack of supplies had been parried. There was still a risk that the quantity of tonnage that could be adequately protected would not suffice to maintain all our overseas expeditions; but this risk was being faced with rising confidence, in that the naval staff were convinced, and rightly, that a victory at sea was at least possible. Statistics are often unreliable guides, but the inferences proper to be drawn from the statistics of trade defence were not even disputable: during May, June and July, 354 vessels had been convoyed, on their eastward voyages across the Atlantic, and of these only three had been lost. It followed therefore, that, if enough forces could be collected to cover every trade movement that needed protection, the battle for the control of the ocean highways would end in a crushing victory. The great difference between the campaign on land and the campaign at sea was therefore, that, whereas there was no prospect of a victory that would expel the Germans from France, there was a good prospect that the German campaign at sea would be defeated.
If it had been possible, at the time, to arrange these facts, and the inferences that they supported, into the logical system that can now be constructed out of them, when they are surveyed in retrospect, then, it would certainly have been grasped, that the immense disappointment of the German people, when they learned that the campaign at sea had failed, would combine with the divisions and discords engendered by economic warfare, and would make a compound that might fairly be called national desperation. These calculations and forecasts were not, however, possible in the circumstances, and the appreciations then circulated about the economic campaign  did not differ materially from those circulated for months past. It was estimated, that the Rumanian supplies would maintain a slightly better bread ration, until the German harvest was gathered; and it was thought, in a general way, that the approaching winter would be slightly better for the German people than the last. The blockade of Germany was thus still regarded as an unimportant auxiliary to the campaign on land: nothing decisive was hoped for from it; for nothing had occurred to raise any hope in those responsible for the conduct of the war, that the economic campaign would ever prove a counterpoise to the military disasters that beset us in every theatre. Reports upon the blockade of Germany were from time to time received by the war cabinet, but practically no recommendations were ever made upon them; nor did the consideration of these reports ever occupy an appreciable portion of the cabinet's time. The economic campaign had come to be regarded more as a matter of administration, than of military policy.
To the contraband committee, and those other experts who may be called the headquarters staff for the economic campaign, the entry of the United States was regarded more as a circumstance that made the operation regular and orderly, than as anything of decisive importance. The need for some better regulation of neutral trade was everywhere recognised; for the great revelation of the past few months had been, that neutrals had accumulated large stocks under the rationing system. The case of Denmark was typical: since the beginning of the year, her principal imports had been:
The balance of lubricants and propellants due to the country under the rations fixed by agreement, was about forty thousand tons.
Notwithstanding this great fall off in Danish imports, the population of
Denmark, though slightly pinched in their supplies, still lacked nothing
essential. Our experts were forced to conclude from this, and from the great
array of facts which justified a similar inference, that the border neutrals
were more nearly self-supporting than a study of their statistics had justified
us in believing. American co-operation was thus looked upon as the only
means of effecting that general revision of imports, rations, and domestic
exports, which the extraordinary circumstances demanded.
1The resolution was worded as follows:
2See Naval Operations, Vol. IV, pp. 341, 342. ...back...
3The estimate made was as follows. The war trade intelligence department thought that the central empires would extract about 5,000,000 tons of cereals from Rumania, and that Germany's share would be 1,200,000 tons of wheat and 1,800,000 tons of barley - 3,000,000 tons in all. The department considered that this would slightly increase the bread ration of the people; but they also reported that 1,800,000 tons of fodder corn would bring but slight relief to the German fodder situation, which is so desperate that the authorities would not improbably take the Rumanian wheat to replace the inferior grain and potatoes at present used for making bread, in order that these might be utilised as fodder. Supposing this course to be taken, the bread ration would remain at its present level of quantity, though the quality would be somewhat improved, while the fodder situation would be eased; but, at the best, Germany would still only receive about 50 per cent. of the quantities of fodder which are urgently required to maintain her present herds of live stock in good condition. ...back...
4It should be stated that if the question had been put to the vote, the senators would have given the president the necessary powers. But it would be quite wrong to call the minority who obstructed the bill a pro-German clique. They were no more and no less than conscientious neutralists. ...back...
5Consisting of Mr. Hoover and four secretaries of state with a permanent administrative committee of civil servants. ...back...