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Part III: The Rationing System and the American Embargo   (cont'd.)

Chapter 33: The Agreement with Sweden

Swedish domestic politics after M. Hammarskjöld's retirement. – How the legation and the Foreign Office appreciated the position. – What matters were important to the Swedes. – The negotiations with the Swedish delegation. – The Swedish government's deliberations upon the agreement. – The German government raise no insuperable objections and the British government slightly modify the original agreement. – The United States misgivings: their peculiar anxieties about shipping. – The agreement signed; general observations upon the closing operations of the economic campaign. – General observations upon the American contribution to the economic campaign.

If by diplomatic negotiation is meant that kind of bargaining in which allowance is made for political influences and reasons of state, then, it will be patent from what precedes, that the negotiations between the United States and the northern neutrals hardly deserve the name. The neutrals did, it is true, make rough calculations about the fortunes of the campaign, and their conduct seems to have been guided by their calculations; but the negotiations were more an exercise in obstinacy than a negotiation properly speaking. Each side adhered to its first propositions, until the neutrals' stock of corn and oil, or the patience of the war trade board, was exhausted. The negotiations with the Swedish government were more intricate, for reasons which must be briefly reviewed.

i) Swedish domestic politics after M. Hammarskjöld's retirement

When driven from office, M. Hammarskjöld conscientiously tried to find successors, who would continue to strive for the things that he had striven for when in power: depressing parliament, upholding and raising the royal influence, and so, preparing the way for a court ministry, sufficiently powerful to defy parliament and the popular parties. Hoping that these objects were still obtainable, he advised the king to appoint a conservative government, but the persons he selected were not capable of discharging so great a task: M. Swartz was a banker, with a fortune in the snuff trade; M. Lindmann was a company promoter, and a newspaper owner, with a doubtful reputation, who had only been given the title of admiral, and the right to wear the uniform, in order that his appearance at court on ceremonial occasions might be impressive. Actually, he retired from the navy as a sub-lieutenant, and was thus hardly qualified to take a watch at sea, and wholly incapable of commanding a squadron. These men had attached themselves strongly to the court (as they were well received there, the baseness of their occupations was in a sense disguised); but they had neither the talents, nor the knowledge, nor the position in society, which would have qualified them for the task of raising the royal influence in Swedish affairs. In point of fact, they did little but manoeuvre as their newspaper editors suggested, and their credit was never great.

M. Swartz and his colleagues were hardly settled into office when the tsar's government fell, the tsar abdicated, and a government of ordinary political managers became, for the time being, the rulers of all the Russias. It would be difficult to explain adequately by how much this excited the common people in Europe. The deposition of a tsar would not, in itself, have made much commotion, as palace revolutions had been fairly common in Russia, and more than one tsar has been murdered by the heads of a court faction. The replacing of a tsar by a ministry of politicians was another matter. It was a proclamation that the popular forces in the country had broken barriers that had seemed unbreakable for centuries; for to the common people (who judged the Russian system of government by its external splendours), the great palaces of the tsar and of his nobility; the treasures of the [652] Kremlin; the glittering regiments of cavalry that surrounded the tsar's person; the hordes of cossacks who assembled in arms, in obedience to an imperial command; the splendid ritual of the churches that were part of the imperial system; the great country houses and estates of the territorial nobles, all seemed parts of an unshakeable and enduring system, against which the popular managers in Europe had directed their invectives and denunciations for more than a century. The fall of the tsar's government was, moreover, quite unexpected. Only a few privileged observers knew about the corrosions that had for long been making the whole structure rotten; and the strict censorship, which had been imposed since the war began, had virtually screened Russian affairs from any observation at all. When, therefore, the common people in Europe learned that this old system, Asiatic in its magnificence, had been destroyed, almost in a night, and that the wreckage of it was being irresistibly swept away, week by week, and day by day, every shop steward, every workman's official, every artisan who attended the weekly meetings of his guild, every soldier and sailor with a grievance against his officers, felt himself a more powerful man than he had ever dreamed he would become.

The downfall of the tsar's government therefore started commotions that threatened all constituted authority; but the menace was greater in those countries where authority was showy and ceremonious, than in countries where it was merely respectable. Sweden was more shaken than Norway and Denmark, for, whereas in these countries, the courts had assimilated themselves to the establishments of wealthy merchants, and had not opposed the spread of popular doctrines, authority in Sweden was still attached to a uniformed court, an army, and a nobility; and the court party in the country did not conceal their hatred of the popular managers. The common people in Sweden were thus exceptionally restless when the Russian republic was proclaimed, and, for several days, the government were taking extraordinary precautions against an outbreak. Soldiers wearing red rosettes were arrested, inflammatory placards were torn down by the police, crowds in the streets were dispersed. Moreover, it was not only the government that were alarmed: Baron Palmstjerna, and M. Branting, the two great leaders of the popular party, were much disturbed at the effervescence, and told our minister, in private, that the people had not been so agitated since the revolution of 1809. The court party and the political managers of the opposition were, in fact, temporarily united; for M. Branting and his colleagues disliked government by street riot as strongly as anybody, and did not attempt to obstruct measures for maintaining order. The disturbances subsided after a few mass meetings had been held, and a few resolutions passed; but the popular parties emerged from them very much strengthened. The American embargo was soon afterwards in operation, and the Swedes were immediately pinched. The popular leaders were now able to discredit the government on two grounds. First they argued, with some force, that a system of government which gave greater opportunities to the parliamentary leaders, and more influence to parliament, was the best check to the violent commotions that were then shaking all Russia; and that the blind obstinacy of the court party was facilitating those sudden changes that all sensible persons wished to avoid. Secondly, they urged, that, as the American restraints upon trade were now declared, and were likely to be of grave consequence to the country, an alleviation of them would be more easily and rapidly secured by a government that was in no way associated with opposition to the maritime powers. An incident now occurred which gave much force to these contentions.

It will be remembered, that, in the year 1915, the Swedish government admitted (by declining to deny it), that the Swedish diplomatic ciphers had been improperly put at the disposal of a German minister; but that they promised the abuse would never again be repeated. Now M. Wallenberg, who gave the promise, and Admiral Lindmann, who was responsible that the undertaking should be honoured while [653] he was in office, were both business men, very ignorant of diplomatic procedure, and therefore easily imposed upon. Beneath them, was the corps of Swedish officials and diplomats, composed of highly qualified and talented men, who were contemptuous of the bankers and company promoters then temporarily their masters, and who were animated by a strong sentimental attachment to Germany. Some high official in the Swedish service seems to have persuaded his colleagues and subordinates, that the promise given to the entente powers need not be respected; and that, if it were broken, neither M. Wallenberg nor Admiral Lindmann would discover it. The abuse therefore continued. It will always be very surprising, that men so well informed as the Swedish diplomatic corps should have imagined, that they would protect themselves sufficiently, if they concealed the fraud from the minister of foreign affairs; for the recent disclosures about Herr Zimmermann's instructions to the German minister in Mexico ought to have warned every expert, that the entente's intelligence was very good, and that their scrutiny of cipher messages was very searching. The abuse was, in fact, carefully observed, until a good opportunity was found for disclosing it: on 11th September the United States government announced in the press, that the Swedish minister at Buenos Aires had telegraphed a message from his German colleague, in the Swedish cipher, for retransmission to Berlin, and that the message was a recommendation that some Argentine ships, sailing with corn to France: Be sunk without trace. The discovery was, therefore, that the German minister was recommending that ships of the country to which he was accredited be destroyed, and their crews drowned; and that the Swedish minister was transmitting this odious advice.

This disclosure did immeasurable harm to the Swartz government; for everybody at once saw that their explanations were the merest chicanery: they alleged that the United States authorities had permitted similar abuses, and, when this was proved to be untrue, they contended that the promise given to the entente powers applied only to cipher telegrams between north America and Europe. This second defence was as easily refuted as the first, and the opponents of the government then inflamed the people against them by saying, that the ministry and its system were now utterly discredited; that neither the entente powers nor the United States would ever treat with such a government; and that the restraints upon trade would continue, until a ministry untainted by these partisan practices was established in power. It was equally damaging to the government that the incident excited great mistrust in Norway and Denmark. As has been said, a plan of economic aid had been laid at the Scandinavian conference in May; and it was then being operated by the three governments. The Danish and Norwegian cabinets had, however, been rather doubtful about the plan; for they were anxious to do nothing that could be construed as a concerted resistance to the maritime powers. The disclosures showed them, that, if this ill construction of their acts of mutual assistance was the thing to be avoided, then, all co-operation with Sweden was dangerous, as the political sympathies of the Swedish government were so strong, that they influenced ordinary daily business. The Norwegian minister in London did not disguise his misgivings; and it may be assumed that the heads of the great mercantile houses in Norway freely communicated their dislike of these practices, when they were in conference with their Swedish customers. In official conversations the Danes were more reserved; but, when the political managers and commercial magnates of the country met our minister privately, they freely gave out the opinion, that the discovery had damaged the Swartz government so severely that they could not survive for long.

The Swedish people were still agitated by these excitements, when the political parties in the state faced one another at the elections for the upper chamber. The success of the popular party was never doubtful; for, whereas they could offer the voters something in return for their votes - a new electoral law for granting more [654] political power to the common people, and a government better qualified to negotiate for an alleviation to the restraints on trade - the court party could offer nothing but an appeal to old prejudices, supported by old-fashioned catch words and invectives. With the Russian revolution fermenting and bubbling at the gates of Sweden, M. Trygger, the court manager, still obstinately proclaimed, that his party would never:

      Facilitate government by the tribunes of the people, and would for ever combat the notion of giving unrestricted authority to a majority dependent upon elections.

As was to be expected, the court party lost seats, and although conservative ministers had previously maintained themselves in power without a parliamentary majority, the majority against the government was now so much strengthened, that M. Swartz declined to remain in office any longer. After long preliminary manoeuvres, therefore, M. Eden succeeded in forming a government, which was sure of a majority in both chambers on all party votes and divisions. M. Hellner, who had conducted the last negotiations for a trading agreement, was made foreign minister.

When M. Eden took office, the country was outwardly calm, but the effervescence was by no means settled, as he let our minister know, that, whatever government was formed, it would have to suppress riots during the coming winter. According to our minister, M. Eden's apprehensions were by no means groundless: the country was still thoroughly disturbed, for the confusion in Russia was spreading its infection among a growing number of poor people, who were losing their employment, as the textile factories reduced their hours of work, and then closed their doors. In addition, the court party had only been incited to greater exertions by their check at the recent elections; and their press had become so violent, that the allied ministers wondered whether the furious denunciations then circulated daily were not heralds sent out to announce, that the old plan of dissolving the government, and of ruling by decree, was again being considered. Whether this were so or not, every competent observer was satisfied, that the court party would gather recruits from ail sections of society, if they could show that the new government were not alleviating the growing distress.

M. Hellner never disguised that the fortunes of his ministry would be determined by the success or failure of his negotiations with the entente powers. He seems to have imagined, at first, that he would be able to negotiate a special agreement with Great Britain, but on this point he was immediately undeceived. The arrangement agreed to was that the negotiations should be conducted in London, with Mr. Sheldon and Mr. Gunther attending them as American representatives, and that the agreement should be submitted to the war trade board for their approval. It should be added, that, although we feared it would be very difficult to persuade the Americans to abandon the conduct of the negotiations to us, the Americans readily agreed. Their negotiations with M. Lagerkranz had been the most unfruitful of all their negotiations with northern neutrals: the Americans opened them with the demand we had advised them to make in the first instance, a stoppage of all trade with Germany; when M. Lagerkranz told the war trade board that this would be impossible, negotiation virtually ceased; for the Americans did not invite the Swedish envoy to make counter proposals, and never suggested that their first demands might be modified. In the circumstances, M. Hellner was entitled to say, that the negotiations at Washington had failed, and were terminated.

ii) How the legation and the Foreign Office appreciated the position

The Swedish mission reached London early in December, and it will be as well, for the sake of clearness, to review the direct and indirect objects that each party hoped to secure. First, our negotiators were agreed that the advantages of an [655] agreement were political rather than economic; but they were persuaded of this in varying degrees. From Stockholm the allied ministers sent the strongest recommendations that an agreement be facilitated, for reasons purely political.

      So long as it was possible for us (wrote Sir Esme Howard) to maintain that our refusal to allow imports to come into Sweden was due to the unpractical policy of M. Hammarskjöld, and to the fact that Messrs. Swartz and Lindmann, for all their assertions that they favoured an agreement, never once began discussions on the subject, the liberal-socialist majority in the country believed that once a more practical and open-minded liberal-socialist government came into office, they would doubtless be able to overcome the difficulties, which had hitherto lain in the way of an agreement. In spite, therefore, of the fact that, before the present government came into office, America was known to be imposing very severe conditions as to exports to Sweden, the public at large no doubt entertained great hopes that the goodwill of the liberal-socialist majority towards the allies would count for something, and enable the new government to help Sweden to obtain her most urgent needs.
      Should, therefore, conditions now be presented to Sweden by the allied governments, which, in the eyes of the Swedish public, and even of the socialists, are not compatible with the maintenance of Sweden's position as a neutral country, and should, in consequence, the present rigorous blockade against Sweden be maintained, the present government will undoubtedly suffer great loss of credit, as being no more able than their predecessors to get what Sweden wants, although they had previously laid the blame for Sweden's lack of necessary imports on their political adversaries, Messrs. Hammarskjöld, Swartz and Lindmann. It may, perhaps, be argued that this is a matter of Swedish internal policy, with which the allies, engaged as they are in a life and death struggle, need scarcely concern themselves. I venture to think, however, that, on looking closer into the matter, it will be found that the internal situation in Sweden is not so uninteresting as this.... I pointed out, that, with the present friendly government in power, we can probably obtain certain distinct advantages by means of an agreement, provided we do not ask for the impossible, in the shape of total cessation of Swedish commerce with Germany, or even complete stoppage of all iron ore exports to that country. If we insist upon this, we may be sure that we shall get nothing at all; on the contrary, exports to Germany and imports from Germany will inevitably increase, in proportion as Swedish wants become greater, and Sweden is prepared to pay higher prices for having them supplied. Germany and Austria are already to a certain extent supplying Sweden with, inter alia, coal, sugar, wines, both strong and moderately strong, some mineral oils and lubricants, fresh and dried fruits, and have made an offer to supply a considerable quantity of cereals, said to amount to 100,000 tons. If this process is allowed to continue, Sweden must inevitably be bound economically to the German chariot, the result of which will be without doubt that she will, both now and in the future, maintain a close political connection with Germany. It is certain that the liberals and socialists do not desire this, and that they are prepared to go far to meet our requirements, in order to avoid such a contingency, which will probably entail a revulsion of feeling in favour of their political opponents. It cannot be too often repeated that conservatism in Sweden must mean a pro-German policy, while the democratic parties will, if they remain in power, gradually bring this country, in spite of its official classes, on the side of the western powers. By this I do not mean that they will enter the war on our side, for they are determined not to come into the war. But there will be a benevolent neutrality during the war and we shall be able, I hope, to count on Sweden's goodwill after the war, which is very important.

These opinions were endorsed, in a general way, by the Foreign Office, but there was a sharp difference between the opinions of the legation and the opinions current at headquarters; for Sir Eyre Crowe and the contraband department doubted whether there was such a thing as the goodwill of a neutral government, and expected that the Eden-Hellner combination would be as obstinate as its predecessors:

      We have felt all along (wrote Sir Eyre Crowe, at a later stage) that we have, in practice, little to expect from the change of government that has brought the liberals into power in Sweden. The friendliness of the small countries towards England, both during the war and before the war, could never be translated into practice on account of Germany's predominance, and the danger to which that predominance exposes and has exposed any state having relations with her.

Lord Hardinge, however (possibly because his temper had not been stiffened by four long years of bargaining about contraband), viewed the matter much as the legation viewed it:

      At the present moment (he wrote) the Swedish government is, on the whole, well disposed and particularly the minister for foreign affairs. It is of the utmost importance, not merely for the present, but for the future that good relations with Sweden should be consolidated. The first condition to achieve [656] this result is the conclusion of a satisfactory agreement with Sweden, in the immediate present, and if we fail to do this, our whole future position in Scandinavia may be compromised. In fact we have got to support the present government and not drive them into the German camp....

This was treated by the negotiators as their general instructions; but scepticism at headquarters was strong enough to make the contraband department determined to grant no preliminary alleviation of restraints upon Swedish trade; for they were persuaded that any release of the cargoes then being held would make the Swedes more obstinate in negotiation, no matter whether the government they represented were conservative or democratic.

It seemed, moreover, as though the points to be secured would be more easily reached, than had hitherto been imagined. The explanation of this is curious. Since the war began, it had been assumed that the Swedish exports of iron ore were of immense importance to the enemy; but the chances of stopping or checking the export had always seemed so remote, that no proposal had been seriously considered, until the United States had entered the war. Then, at last, it seemed as though the embargo imposed by the United States would so pinch the Swedes, that the export might be reduced by negotiation. The war trade board had, therefore, been advised to ask that all exports of iron ore to Germany should cease. As has already been explained, they did this with so much insistence, and with so little intimation that they would ever abate the demand, that M. Lagerkranz thought all negotiation useless. The new Swedish government were as firm as the old, that the point could not possibly be conceded, and, in his first conversations with the allied ministers, M. Hellner was careful to say that a reduction of the export might be agreed to but no more. Realising from this, and from warnings sent by Sir Esme Howard, that the conditions about iron ore would be very hard to negotiate, the contraband department engaged a special expert of their own, Dr. Louis of Newcastle-on-Tyne, and asked him to supply them with a report upon the whole matter.

As everybody concerned had, for four whole years, thought it beyond all doubt that Swedish supplies of iron ore were essential to Germany, Dr. Louis's report was something of a surprise. He answered, to the enquiries made of him, that the Swedish ore contained very little phosphorus (all iron ore contains some) and that it was, on this account, very important to the German industries, as it was from this ore that they made their steel. But he qualified this by adding, that, by the latest electrical processes, steel of as good quality as any could be made from ore with a tolerably high phosphorus content; and that any quantity of this kind of ore could be extracted from Lorraine and the Herz. Doctor Louis then explained, that the German steel industries had certainly been established on the assumption that ores containing little or no phosphorus would be obtained from Spain and Sweden, so that, if these supplies were cut off, there would be a commotion in the industry. But Dr. Louis had no doubt whatever that the Germans would overcome the difficulty, by enlarging the plant that can prepare good steel from phosphorous ores, and by using their reserves of low phosphorus ores during the transition. Dr. Louis was convinced that there would be no reduction in the output of German munitions, while the new arrangements were being made. With regard to the Swedish ores containing a high percentage of phosphorus, Dr. Louis reported, that they could be replaced by increasing the output of the Lorraine mines, and that there was no difference between the fertilisers that are obtained from the by-products of the Lorraine, and of the Swedish, ores. According to this report, therefore, a regulation of the Swedish exports of iron ore was no longer a matter of military importance. It will readily be understood by how much this expert investigation eased the negotiation.

For a different reason, free transit of goods to Russia was not a matter that concerned us any longer. The Russian armies were disintegrating, and we had no further interest in supplying them; the matter changed complexion still further [657] while the negotiations were in progress; for on 6th December, the Finnish authorities declared their country an independent republic, and soon afterwards, asked for German aid to establish themselves. As a consequence, all stores, food and equipment despatched to Russia fell into the hands of a government nominally neutral, but strongly attached to Germany. Our concern in Swedish transit of goods to Russia therefore became rather a concern that it should be restricted, than that it should be facilitated. Circumstances had thus altered the relative importance of the points to be secured, by diminishing the importance of points which would have been cardinal a year previously, and by raising the importance of securing more shipping. It was estimated that some four hundred thousand tons of Swedish freighters were lying idle when negotiations were begun: the use of these ships, not iron ore, or transit to Russia, was, so to speak, the strategical position that was to be reached at all costs.

iii) What matters were important to the Swedes

The Swedish side of the matter was that the German offer of food and cereals had been examined and found to be valueless; that the lubricants received from Austria were insufficient; that the assistance given by other Scandinavian powers had delayed an acute shortage of fertilisers and foodstuffs; but that it was no substitute for American supplies. An agreement with the allies was therefore acknowledged to be highly desirable; but the danger of coming to an agreement with them had increased, rather than diminished, since the last negotiations had been undertaken. Although very anxious to maintain intimate and cordial relations with Germany, the governments of M. Hammarskjöld and of M. Swartz had, nevertheless, always been in a position to make a firm stand, if the German government assumed too much upon the traditional friendship between the two countries. It would appear, indeed, as though M. Wallenberg had been very stiff when the Germans threatened to dislocate the Baltic trade by declaring sawn wood to be contraband. M. Eden's government was not in so good a posture; for the German fleet then swept the Baltic, and it will be shown, later, that the exceptional influence that the Germans had thus acquired in Baltic affairs was a great embarrassment to the Swedish cabinet.

Apart from all this, the Swedish economic system was still attached to Germany's by links that could not be severed without danger. By freeing themselves of the British, and depending entirely upon the German, coal supplies for their industries, the Swedes had put themselves in some difficulties; for, with output falling, and a coal shortage exasperating the common people in the German towns, the Germans had not been able to maintain their exports to Sweden at the level promised, and were very much tempted to reduce their foreign shipments severely. As the Swedes had little hope, that they could again draw upon the British coal mines (the offer we made later was a great surprise to them), so, the Swedish government were compelled to consider proposals for reducing their exports to Germany most carefully, as any reduction agreed to hastily might give the Germans the excuse for which they were waiting. Also, the Germans had a great advantage over the Swedes in being their sole suppliers of drugs, chemicals and dyes.

iv) The negotiations with the Swedish delegation

The general heads of agreement were agreed to by the allied delegates at a meeting on 12th December, when it was decided: to adhere to the system of control established in the draft agreement of February, 1917; to demand, at the outset, that no further exports of iron ore with a low phosphorus content be allowed; but to withhold these conditions until the Swedes had presented theirs. The Swedes did so, in a very guarded way, at the first meeting, which was assembled on 13th December; and from these first proposals it was patent that the Swedes would be easier about [658] tonnage than we had imagined; but that, even if we regarded the regulation of iron ore exports as a matter upon which our pride in negotiation was alone engaged, it would still be very difficult to come to an agreement upon it, for the Swedes undertook only to increase their exports to us. On another matter, however, we changed our course from the outset: for reasons that have already been given, the contraband department were, at first, disinclined to give the Swedes a temporary relief; as it appeared to them that they would thereby relieve the Swedes of the very anxieties that were forcing them into a negotiation, and receive nothing in return. At the first conversations upon the matter, however, the Swedes promised to charter shipping to us for a short period in return for a temporary concession. This was so good an equivalent, that the whole matter at once changed complexion; more than this, it appeared, that the exceptional exportation of horses to Germany (of which we were then complaining) could only be checked by allowing the Swedes to make good some of their forage shortage. On inspection, therefore, a provisional arrangement seemed far more advantageous to us, than it had appeared when it was first suggested, and the negotiation of it was entrusted to a sub-committee. As the Swedes offered, at once, to charter one hundred thousand tons of shipping to us, if we would release some cargoes of maize, oil, artificial fertilisers, and coffee, this sub-committee completed its work very rapidly. Sir Eyre Crowe insisted, however, that this temporary agreement was not to be operated until the general agreement was tolerably well advanced, and the negotiation of this latter was much delayed.

As has been said, our first proposal with regard to iron ore was that Germany should receive no ores with a low phosphorus content, and that those with a high content should be divided between the allies. In addition, we demanded that the export of steel hardening substances should be stopped. The Swedes, who grasped at once that these conditions could never be agreed to, promised merely to communicate them. This was done on 19th December, and nearly a month went by before we received the Swedish answer, which was that our proposal could not be accepted; but that an equal division of iron ore exports between the allies and the central powers might be arranged. This proposal, however, provoked long discussion between the allied governments; for the French experts had never agreed with Dr. Louis's opinion, and thought, that, if Swedish exports of ores containing little phosphorus could be stopped, then, the disturbance to the German steel factories would be far greater than our metallurgist imagined. The Americans were also dissatisfied with the Swedish offer. They had, by then, determined to be exceptionally firm upon the doctrine of derived products, and it was not contested, that American oils and lubricants were used in the Swedish iron mines. This, in the American view, made it incumbent upon the allies to be stiff about Swedish exports of iron ore to the enemy.

In spite of these delays, however, both sides were fast approaching an accommodation, because each had so much to offer. Having realised from our first investigations, that the Swedes were anxious about their supplies of German coal, our negotiators stated, that considerable assistance could be given, if the Swedes would give us a good equivalent in shipping. Rather to the surprise of our negotiators the Swedes offered 500,000 tons. This offer was so good, that we now pushed on with the first provisional arrangement, which gave us 100,000 tons of shipping for three months; it was signed on 29th January and put into operation at once. The Swedes received 25,000 tons of phosphate rock; 15,000 tons of oil; 15,000 tons of maize, 3,000 tons of oil cake, and a large amount of coffee and cork. After a considerable amount of subsidiary negotiation with the French and the Americans, a counterproposal on the matter of iron ore exports was agreed to: that those to the enemy should be reduced to 3,000,000 tons, and that the reduction should be effected proportionately in all grades.1 When the Swedes informed us that this arrangement [659] would be accepted by them, one point only remained over, our black-listing practice. On this the Swedes showed themselves very unyielding, and maintained, that, if they set up the associations required under the agreement, and gave the guarantees asked for, then, those associations must be free to distribute rationed goods to traders who complied with all the conditions imposed. We agreed, therefore, to revise our black lists in consultation with the Swedes, and agreed, further, not to refuse British goods to Swedish traders, merely because they were known to have transacted business with enemy firms. In return for this we insisted, that the Swedes should give us the names of the second consignees of all rationed goods, notwithstanding that the war trade law forbad it. A draft agreement containing these various provisions - 3,000,000 tons only of iron ore was to be sent to Germany, and 500,000 tons of shipping was to be chartered to the allies - was completed by the end of January, and at once despatched to Sweden.2

v) The Swedish government's deliberations upon the agreement

The Swedish ministers were very reserved about the draft, and said that no answer could be given, until the handleskommission [sic] had reported upon it. We were suspicious about this committee, as it was largely made up of those high Swedish officials who had so strong an inclination for Germany, but it cannot be said that these gentlemen allowed their sympathies to influence their recommendations. They reported, that, as the entente powers alone could supply the country with what was necessary to feed the people, and to keep the industries productive; and that, as Sweden would continue to draw essential supplies from those countries when the war was over, the agreement ought to be ratified. As against this, however, the handelskommission reported:

      Because of the geographical position of Sweden, and especially considering recent occurrences, and Germany's increased power in the Baltic, the agreement ought not to be ratified until a preliminary negotiation had been undertaken with Germany.

M. Trolle was, therefore, despatched to Berlin in order to reconnoitre the strength of the German objections.

This decision caused great misgiving among our negotiators, but it can hardly be questioned that it was a wise one. Shortly after the handelskommission presented their report, the Germans launched their great onslaught on the western front, and severely defeated the British army opposed to them. No neutral observer imagined that the long series of German victories in the field was now coming to its term: our resistance was so weak, that it seemed, rather, as though the Germans were dealing the last blow to armies that had been consistently checked, or defeated outright, for four successive years. At sea, the German campaign was certainly checked, and several influential Germans had admitted it; but the check was not so decisive as to relieve neutrals; for the convoy system, which had proved the decisive manoeuvre, was giving more relief to allied than to neutral vessels. More than this, the German press were loudly proclaiming, that, if a neutral government allowed their country's shipping to be chartered to the allies, with the submarine campaign raging, then, that government were acting as unneutrally as they would be, if they supplied military transport to armies in the field. The latest German prize regulations, therefore, contained a threat that the ships of all powers that had signed these agreements would be treated as enemy vessels.3 This meant, that even vessels [660] carrying supplies through the approach routes and safety zones might be sunk, unless some preliminary understanding were reached with the German authorities.4 More important than all this, however, was the position in the Baltic to which the handelskommission had referred. This position was one of great difficulty for the Swedes, and must be explained, briefly, as it influenced their deliberations upon the agreement.

On 6th December, the authorities of the grand duchy of Finland declared the country independent, and, almost at once, large sections of the country became the theatre of a fierce civil war. The Russian government raised no objection to the Finnish declaration of independence; but they did not remove the Russian garrison from the country, or withdraw that squadron of the fleet which was stationed at Helsingfors. For some time previously, these troops and sailors had been under no discipline, but they had done no harm to the country, other than that which is done by the marauding and thieving of hungry men. Towards the end of the year, however, when news of the Bolshevik revolution came into Finland, the Russian garrison abandoned all self-control, and began to loot, plunder, and murder, in the manner of an Asiatic horde. Instead of being indignant at seeing their country thus maltreated, a great number of poor people in the southern towns joined the Russians, and having formed executive committees at Helsingfors, Viborg, and other towns, attempted to set up a government on the Russian model. The Russian garrison gave, sold, and bartered their arms, ammunition, and artillery, so that, by the beginning of the year, these revolutionary troops, called the red guards, held most of that part of Finland, which is served by the railway between Hango and the Russian frontier. Naturally enough, all Finns of property, education, and good feeling rose to protect their country, and formed themselves into an army under General Mannerheim, an old Russian officer; but, at the outset, the red guards had great advantages over any forces that the Finns could bring against them: they were armed, and had artillery; they had a fortress under their control; and they could command the services of a nucleus of Russian officers and soldiers.

Nevertheless, General Mannerheim soon got the upper hand in the northern parts of the country, for here the Russian troops wished only to return to Russia, and gave up their arms. It was evident, from the first, however, that General Mannerheim's army would not recover the southern towns, until it was properly equipped, or unless the assistance of a trained and disciplined corps of troops could be obtained. The Finnish authorities therefore asked the Swedes to send them arms and munitions, and, if possible, an auxiliary corps: simultaneously a deputation of Åland islanders reached Stockholm, begging that they might be protected against the Russian garrison, who were plundering them unmercifully. These petitions from the Finns and the Ålanders were not considered on their merits; for no concern was ever dispassionately examined, in a country where every issue was distorted and misrepresented by the contending factions. A small section of the persons upon whom the Swedish government depended for their majority maintained, that the red guards in Finland should be assisted rather than thwarted. Another, and larger, section of the government's majority, though no friends to riot and tyranny, were yet so dependent upon the votes of the common people, that they thought it politic to speak unctuously of any popular movement, and insultingly of whatever is effected by force of arms. These persons and their representatives in the Riksdag therefore clamoured loudly, that, if Swedish troops were sent to Finland, then, generations of Finns would remember them with hatred. Another section of the government's majority wished to help the Finnish authorities in some way or another; but they disliked the notion of despatching a military corps, as its exploits in the field might raise the credit of the Swedish army with the people, and so revive the court's policy [661] of a coup d'état. As it was only the domestic enemies of the Swedish cabinet who desired, unanimously, to send help to Finland, M. Eden's government refused the Finnish petition, and severely controlled the export of arms and munitions to the country. They did, however, despatch half a battalion of infantry to the Ålands, to protect the islanders against the Russian troops, and to keep the peace between the factions that were distracting even this small community of fishermen. Meanwhile, however, a Finnish deputation visited Germany, where they were well received. The German authorities at once promised help, collected a force of infantry and artillery, and placed it under the command of General von der Goltz. Shortly after M. Trolle reached Berlin, an advance force of German troops established a base at the northern end of the Ålands, and it was publicly announced, that a bigger force was rapidly assembling.

The Swedish government's perplexities were therefore very great. Although they had refused the Finnish government's petition, they had done so because their domestic distractions made them powerless, and not because they desired to withdraw from Baltic politics. On the contrary, they were particularly anxious, that the old treaty about the Åland islands should be respected by the Finnish government, and that the new government should not turn the field fortifications erected by the Russians into a permanent fortress.5 More than this, the delegation of Ålanders had not disguised that they desired to come under Swedish rule at the final pacification. The Swedish government well realised that this would be difficult, as the Finns were not likely to cede territory of such strategic importance; but, even those Swedes who openly encouraged the revolutionary bands of Russian soldiers maintained, that any Swedish government, no matter what its political complexion might be, was bound in honour to act as patron to the Åland islanders at the final settlement. Further, as the Swedes had always done a brisk trade with Russia through Finland, they were anxious that the new state should not erect artificial barriers between the two countries. Finally, even the best friends of Germany in Sweden were apprehensive at rumours of a projected treaty of trade and commerce, whereby German companies and commercial concerns were to be given exceptional and extraordinary privileges in the new Finnish state.

The Swedish government therefore still desired to be heard and consulted upon Baltic affairs; but it was patent, that the Germans could exclude them entirely from the final pacification, by virtue of the exceptional influence they were acquiring with the new Baltic states. It was, moreover, very doubtful what the final determinations of the Berlin authorities would be. They had stated, at Brest Litovsk, that the final settlement of Europe was a matter which concerned the belligerents alone; thereafter, Kühlmann had admitted, very guardedly, that the Swedes must at least be heard about the Åland islands. This proved, however, to be a manoeuvre to induce the Swedes to send a representative to Brest Litovsk, and, when the Swedes declined to do this, saying that they could only present their case to a conference at which all the signatories to the treaty of Paris were represented, the German attitude became more ambiguous. Latterly there were indications, that the Germans intended to admit the Swedes to the final pacification of the Baltic provinces, on condition that the agreement with the entente powers was either abandoned or very much revised. In view of what occurred later, it may be doubted whether the Germans ever decided to connect Baltic policy so closely to the trading agreement; but at least our minister and M. Hellner were satisfied, that the German minister was encouraging the court party who were then protesting:

      That the Swedish government had resigned Sweden's right to be heard in Baltic affairs; and that the right could only be reasserted by a new government, which was not suspected of giving surreptitious aid to the enemies of Germany.

[662] There were thus good reasons why the Swedish cabinet sent an envoy to Berlin, to discover what the German government intended; and, as M. Hellner's difficulties were so well appreciated, the entente powers did not object to M. Trolle's mission. It has to be admitted, however, that there was some force in the French contention, that we were thenceforward negotiating the blockade of Germany with the German government itself (the Swedes acting as go-betweens), and that this was a very singular refinement.

vi) The German government raise no insuperable objections and the British government slightly modify the original agreement

M. Eden and M. Hellner never disguised from our minister, that they would resign if the agreement were not concluded, and that, if they did so, a government of the court party would at once replace them, which was an admission that their political career was virtually under German control. As the union between the German minister and the court party was, at this time, very intimate, it wall always be surprising, that the Germans insisted only on a few modifications, and that these were demanded only as a satisfaction on the point of pride. After a long negotiation at Berlin, M. Trolle reported that the Germans asked: that the shipping chartered to the allies should not exceed four hundred thousand tons, and that the exports of iron ore to Germany should be raised to four million tons. On one point only do the Germans appear to have been unyielding: they would not agree that the Swedes should forbid the export of steel hardening substances. It may well be asked, therefore, why the Germans were so easy. Their compliance about iron ore confirms what Dr. Louis had reported, that these supplies were not so important to Germany as had been imagined; but why did the Germans agree that four hundred thousand tons of shipping should be put into the allied service, when the submarine campaign was still raging, and when every newspaper in Germany was still proclaiming that it would be decisive? Any German staff officer could have told the German foreign office, that this new reinforcement of shipping would, in itself, delay the decision at sea for many weeks. As no intimate details of M. Trolle's negotiation have ever been divulged, nothing certain can be stated; but at least everything suggests, that, even at this date, the German authorities had lost heart about the submarine campaign, and were admitting among themselves that it had failed.

It is striking, also, that the contraband department, who had been so sceptical about the political advantages of an economic agreement, when the negotiation started, advised, unreservedly, that these modifications should be agreed to, as the rejecting of them would overthrow the Swedish cabinet. The explanation is that we then had our own special reasons for keeping the Eden government in power. At the beginning of the negotiation, when M. Eden refused to help the Finns, we could raise no obstacle against German domination in Baltic affairs; latterly the position seemed not so hopeless. The Finns were very short of food, and our minister thought it possible, that we could reassert our influence, and depress that of the Germans, by undertaking to send food to Finland, on condition that the German troops evacuated the country. The first negotiation to this end was to be entrusted to the Swedish government, and it was an essential condition of the plan that M. Eden and M. Hellner should remain in power. Apart from this, when M. Trolle returned from Berlin, our military fortunes were very low; for, after pressing back our armies to the gates of Amiens, the Germans attacked them further north, and at no point were our forces able to withstand them. It was therefore an ill moment for overturning the one neutral government in Europe that seemed uninfluenced by these disasters to our arms, and for allowing them to be replaced by a government whose leaders were confident that we were virtually defeated. More than this, shipping was then more needed than ever; for the defeat of the submarine campaign did not supply us with the tonnage for transporting American reinforcements, and it was upon these that the allies were counting to hold the German onslaught.

vii) The United States misgivings: their peculiar anxieties about shipping

The Americans were, however, doubtful whether these modifications should be accepted; and refused to agree to them, until it was certain, that we should not get more tonnage by requisitioning Swedish shipping than by agreeing to their conditions. Over and above this, the Americans desired, that the rations allowed to the Swedes be revised; for they argued, that, as those rations had been calculated for a whole year, and as the agreement would only come into operation in June, the Swedes would be receiving a year's supply in six months, and would therefore accumulate stocks. This intervention, made at the last minute, very much exasperated the contraband department, possibly because they did not appreciate why the Americans were so apprehensive. The truth is, that, if we were anxious to secure shipping, the Americans were even more so, for reasons which can only be explained by making a brief retrospective survey of their military policy.

On 14th June, 1917, General Pershing landed in France; and during the months immediately following, he sent a number of appreciations to Washington, of which the substance was, that the fighting spirit of the French and British armies was declining, and that the French people were disheartened; but that these demoralising influences might be checked, if American assistance were made a visible, tangible thing, patent to everybody, at the earliest possible moment. The American general thought that this could most expeditiously be done, by forming an American army in the Verdun-Lorraine part of the front, and by undertaking a major operation with it in the early part of the summer. The American government endorsed these recommendations, and made all the preparations necessary for placing twenty divisions at General Pershing's disposal by the early spring; and, if the allies had been able to hold the Germans in March and April, General Pershing's military policy would have been executed without hitch; for the transport fleet under Admiral Gleaves was then carrying some fifty thousand men across the Atlantic every month. The German victories, however, put all in jeopardy; for the allied generals refused General Pershing's offer to take over a section of the allied line, and asked that the Americans should only transport infantrymen, and that these should be scattered in detachments, all along their fronts. More than this, the allied generals intimated, that, if the entente supplied the tonnage for carrying American reinforcements, then, those reinforcements ought to be incorporated in the allied armies. This arrangement would, of course, have debarred the American troops and their generals from acquiring any military reputation, and would, in addition, have debarred the American government from exerting that influence over allied counsels which they hoped to exert, by reason of having placed a great army in the field, under the command of their own generals.

As the American government were labouring hardest to adjust what their general demanded to what the allies were requiring of them, during those very weeks when the Swedish proposals were being considered, it is small wonder that they were very watchful, and even suspicious, of tonnage agreements that were negotiated in London, with the allied representatives negotiating in chief. For although American representatives were present at every meeting, the negotiation was one in which British and French influence predominated. There was, at the time, a large block of Swedish tonnage lying in the American harbours, which the Americans would have secured for their own use, if requisitioning had been resorted to; they therefore stood to their objections, until the advantages to be secured by chartering, or by requisitioning, had been better compared. The ministry of shipping's investigations were, however, decisive, that, by requisitioning Swedish shipping, we should certainly not secure more, and would probably secure less, than was promised us under the agreement. As the American preoccupations about tonnage were stronger than their preoccupations about the cereal imports of neutrals, the state department withdrew all their objections, after they had examined the ministry of shipping's [664] report. Nevertheless, their misgivings remained; and their doubts are a curious illustration of the American government's perplexities. The war trade board first reminded Mr. Sheldon,6 that, when the allies had invited the American government to co-operate in the economic campaign, they had described Sweden as a country very nearly self-supporting in the matter of cereals and forages. The United States had, therefore, conceived that their embargo ought to be so administered, that the Swedes should receive just so much cereals as would allow them to reach harvest time without suffering privations. Why then, had the allies allowed them a hundred thousand tons of cereals? Again, in the draft plan of negotiations, which the allies had communicated, the stopping of Swedish exports of ore had been indicated as the first object of policy. Why had the allies agreed to a reduction that would cause no inconvenience to Germany? As the contraband department were at this time, thoroughly exasperated with the war trade board, it is as well that these objections were not communicated. They are interesting, however, as illustrating the differences which then divided the two governments. Our authorities were contemptuous of a diplomatic method that seemed little but an obstinate repetition of propositions previously asserted: the Americans were distrustful of a diplomacy, which, as far as they could see, was for ever changing the ends pursued, without reason or explanation given.

viii) The agreement signed; general observations upon the closing operations of the economic campaign

The agreement was signed on 29th May, 1918, and its principal provisions were those stated in the course of this narrative. In addition to these, however, the Swedes undertook to forbid the export of all foodstuffs, textiles, ores and metals. The exceptions to this were, that the Swedes were allowed to complete a contract for exporting fifty tons of molybdenum; and that an export of 1,500 tons of ferro silicon should be permitted, which had been insisted on by the Germans. There were, in addition, some rather novel and interesting provisions about wood pulp. At the beginning of the negotiations, the military authorities admitted, for the first time, that these substances were being used by the Germans as substitutes for cotton cellulose. The contraband department had, therefore, attempted to secure a total prohibition of these exports, and, on the Swedes obstinately refusing, a compromise was reached whereby the Swedish exports were reduced to 177,000 tons in the course of the year. If they exceeded this, the Swedish textile rations were to be reduced in proportion. Finally, the Swedish government undertook that we should be given a monthly credit of 6,250,000 kroner, which was to be spent exclusively in Sweden. This loan was very much needed to maintain the rate of exchange in the country. As the agreements with Norway and Denmark were concluded more by pressure of circumstances than negotiation proper, these negotiations with Sweden may be called the last of those calculations of economic and political advantages, which constituted the blockade of Germany. It will therefore be convenient, at this point, to review what was effected by these various agreements, and by the economic policy of which they were the instruments.

This narrative will have been written to no useful purpose, unless it has made it clear, that the blockade of Germany was an operation of war, and that currents of trade, and particular commodities, were the strategic points in the theatre. It is not, therefore, inappropriate to speak of the allied embargo, and of the agreements consequent upon it, as the last assault upon a position that had hitherto been very tenaciously held: the domestic exports of the border neutrals. The attack upon this position was begun in 1916, soon after the blockade ministry was established. The object of the operation, as it was then conceived, was to reduce the domestic exports [665] of the border neutrals to their pre-war volume; and, if this had been the end pursued in the second attempt, it could be said to have been reached, for the following figures prove that the domestic exports of Norway, Denmark and Sweden were reduced to something considerably less than their normal volume:

Table LXXI:
Effect of agreements with Norway, Sweden and Denmark.

   Commodity    Normal Export
to Germany
   Export per-
mitted under

Norway Fish and fish products 71,000 tons of fish and fish products.
156,000 barrels salted herring.
48,000 tons
Calcium carbide
Ferro silicon
Calcium nitrate
Iron ore


Cream and meat



Export of all food-
stuffs prohibited.
Iron ore 4,563,638    " 3,500,000 tons


Butter, bacon, eggs, milk and cheese




Fish and fish products 29,507    " 25,000    "
Cattle 156,985 head 226,000 head
Horses and foals 52,395    " 30,000    "

The published statistics do not allow any comparison to be made for the other limited exports: sulphite, pulp, ferro alloys, pyrites, etc.

It was certainly a great achievement to reduce these exports from the prodigious volume to which they had expanded during the previous year to about half their normal size, yet it is doubtful whether even this satisfied the contraband department. When this second attempt upon the exports of the border neutrals was launched, with the United States assisting, the officers of the contraband department did not define the ends to be reached so precisely as they did on the former occasion: they did not hope to stop those exports outright, for they expressly stated that this was to be demanded only as a stimulant to negotiation; but, from the language they used, it would certainly appear as though they hoped for a great and striking reduction in the trade then running towards Germany from Norway, Sweden and Denmark. Whether what was actually effected was above or below the expectations of the contraband department is a matter upon which none of its officers has ever pronounced in writing. Their recollection of the matter, which has been dimmed by twenty years of occupation in other concerns, is that they were disappointed, because they doubted whether the reductions agreed to would add materially to the distresses of Germany. These doubts were well grounded. Under the agreements, a trade in highly important metals and ores was allowed to continue, and Mr. Fayle has shown that a country can severely reduce nearly all its imports of these substances, and yet supply the industries essential to war. It may be presumed, therefore, that the quantities of calcium carbide, ferro silicon, calcium nitrate, and the rest, which were still allowed to be exported to Germany, would have sufficed for industries that had practised every shift and economy for four whole years. Iron ore is the only substance of which a country needs more in war than in peace, and of this, the Germans had enough.

[666] All this, however, is more an estimate of what these agreements would have effected, than of what they did actually effect, for a glance at the dates on which they were signed shows that they were not in operation for long. It was otherwise with the American and allied embargo, which was in full operation for nine months, and in partial operation for thirteen. According to French statisticians, who were better informed than ours about continental commerce, the embargo was a powerful instrument of war. The French estimate is, that the value of the goods that Germany imported from the border states during 1915 was four and a half milliards of francs; and that, during the following year, when the allies first attempted to reduce them, the figure was roughly the same. In 1917, however, there was a tremendous fall to 2,720 millions of francs: the quantities imported must have fallen in an even greater proportion, as the prices of all materials was then very much higher. In the last year of the war, the decline continued, and the value of all the goods imported was only 1,663 millions of francs. This must be attributed to the embargo, and to the great deflection in the trade of Scandinavian countries which it occasioned. It is regrettable that we have no means of reviewing this deflection in detail: its extent and importance can, however, be estimated by the few indications that Scandinavian economists have given:

      The total value of foodstuffs imported from Denmark in 1917 (writes Herr Heckscher) amount to 50,000,000 kroner - about $13,000,000 representing half the total imports of foodstuffs to Sweden during that year - and in 1918 to 97,000,000 kroner. These imports consisted principally of the following things: in 1917, 7,000 tons of butter, 6,300 tons of pork, 550 tons of cheese, and 30,000,000 eggs; in 1918, 7,000 tons of grain, 5,000 of butter, 6,000 of meat, 3,000 of sugar, and 75,000,000 eggs, to which there must be added considerable imports of potatoes, and about 47,000 tons of turnips and other root crops. Among Danish exports to Sweden, seed, hides, bones, animal fats, glycerine, and scrap iron may be mentioned. Among Norwegian imports to Sweden the most important was salted herring, amounting to some 54,600 tons during 1918, which met all the requirements of Sweden in their foodstuff. Of great value to Swedish economic life were also some 18,000 tons of nitrate fertilisers. Among other commodities imported from Norway to Sweden may be mentioned 102,000 tons of pyrites in 1917, and 110,000 in 1918.
      In exchange Sweden exported to Denmark and Norway large quantities of commodities needed in the industries of both countries. During 1917 and 1918, when the supply of iron from belligerent countries fell to an insignificant percentage of the normal, Sweden exported iron and steel to Denmark to the value of kr. 16,000,000 in 1917, and kr. 42,000,000 in 1918 - or in American money $4,300,000 and $11,300,000 respectively, and to Norway the same exports to the value of kr. 32,000,000 and kr. 43,000,000. Among other Swedish exports may be mentioned dressed lumber and woodwork, firewood, pulp, spinning paper, turpentine and wood tar, glassware and fireproof bricks.

As it was this great deflection of the Scandinavian trade, which reduced the volume of exports to Germany, it may well be, that the agreements signed during the last year of the war would have eased the Germans; for, when the last agreement was signed, the American embargo was ended, and the deflection consequent upon the scarcities in Scandinavia was no longer necessary. This, however, is pure speculation, and the Americans may justly claim to have added to the shortages in Germany by adhering inflexibly to their plan; for it will be shown, later, that this fall in the German imports coincided with a tremendous fall in the production of foodstuffs in Germany, and that the two were of decisive effect. As the Americans must in justice be given the credit of having closed the blockade of Germany, as far as it could be closed, it will not be improper to add a few words about their achievement and method of executing it.

ix) General observations upon the American contribution to the economic campaign

It is curious, and illustrative of the misunderstandings that may arise between men of high character, if they are well separated, that, while the state department were thus executing the policy that the allies had invited them to pursue, the British officials were very distrustful of them. The Foreign Office archives are packed with judgements upon American conduct, which are either contemptuous, or loaded with [667] suspicion. Thus, when Lord Eustace Percy reported that the embargo was in full operation, and that the northern neutrals were cautiously approaching the state department, Sir Eyre Crowe wrote:

      I am afraid we shall never get the Americans to deal with these problems on any reasonable lines, and it is quite clear that our embassy are powerless to do anything.

Again, when the French government suggested measures for a closer union between the Americans and the allies (October, 1917) Sir E. Crowe wrote:

      It becomes more and more evident that the United States do not want to co-operate with us; they only want to see our cards, and get us to make every concession to the United States in the way of our controlled exports.

Indeed, Sir Eyre Crowe was at one time so convinced that there could be no union between the American and the allied authorities that he wrote:

      I am disposed to think that, eventually, we shall have to decide on our course of action not only towards Sweden but towards all neutrals for ourselves, apart from anything the United States may do (November, 1917).

The American decision to send a Christmas gift to the neutrals provoked even stiffer comments. The state department were, at once, credited with the most artful intentions; and, when they explained, that they did not intend to give these Christmas gifts unconditionally, and that the goods sent would not relieve the embargo, an official of the contraband department wrote:

      This looks as if they were trying to shift on to us, the odium of breaking a promise which they ought never to have made....

Even after the United States had sent a representative to the inter-allied blockade committee, these angry suspicions continued. When they appointed their representative, the Americans formally notified us that the state department could not be bound by his decisions and recommendations; so that they were only acting consistently, when they communicated their doubts about the Swedish agreement. Indeed, considering their own peculiar preoccupations in the matter of shipping, and when it is remembered what good reasons they had for being surprised that the Swedish ration of cereals was so much increased, the state department may be said to have presented their criticism very temperately. Furthermore, the American authorities allowed their doubts to be resolved by the ministry of shipping, a body composed of British government servants, and would have been well within their rights, if they had withheld their consent, until their own experts had conducted an independent investigation. Nevertheless, Lord Robert Cecil at once wrote:

      The action of the war trade board in this matter is really intolerable. It was formally agreed that the Americans were to have the conduct of the Danish and Norwegian negotiations, and we that of the Dutch and Swedish. Much as we disapproved of their methods of dealing with Norway, we left them to decide what should be done. Now at the last minute they try to upset our Swedish negotiations and jeopardize 400,000 tons of shipping in defiance of all the opinions of their advisers here.

These suspicions are not supported by facts. The papers published by the state department are state papers only; and contain no private correspondence from official to official, nor any of those departmental minutes, from which the temper and inner motives of a department can be appreciated. But the collection proves, sufficiently, that the state department never wavered, and never entertained any plan of acting independently of the allies, far less of thwarting them, and seeking an economic advantage at their expense. In all major questions they may be said to have loyally deferred to us. Their representatives came to Europe with a draft agreement for Switzerland, which had been prepared entirely by their officials and experts. Upon our advice, they abandoned their plan altogether, and allowed an entirely different agreement to be signed. When negotiating with Dr. Nansen, the war trade board received several warnings from us about the importance that we [668] attached to the Norwegian exports of pyrites. They abated many of their conditions; but never the condition that no pyrites should be exported to Germany; and their negotiations would have been much sooner terminated, if they had made some small concession on the point. They adhered without reserve to the Swedish agreement, notwithstanding that they thought it not a good one. Finally, they agreed, that an allied blockade committee should be established, and instructed Mr. Sheldon to become a member of it, well realising that this was virtually a decision that the executive administration of the blockade should be done from London. Apart from all this, the statistics of American trade are the record of a policy implacably pursued; and are a crushing refutation to any who suspected at the time, or have since suspected, that the government of the United States will ever subordinate their military policy to their commercial interests. It would be well for us, if our own record was as honourable.

United States of America: Tonnage movements, February, March and April, 1915 and 1917.

One point remains to be examined. Did the United States lend us their aid in the economic campaign without departing from the principles they enunciated in their state papers? It has been shown, in the course of this narrative, that the lawyers and officials of the state department decided, after deliberation, that the assistance asked of them could be given, without making the United States government a partner in acts of coercion that they had previously pronounced illegal. They were asked only to supply American goods to the border neutrals on such conditions, that those goods would not be re-exported to the enemy, and would not stimulate any trade in which the enemy had an interest. As these conditions were to be attached to goods produced on American soil, so, the imposing of them was judged to be the exercise of a sovereign right, which was quite distinct from the rights that the allies had previously exercised over commerce from neutral to neutral.

These conditions were imposed in all the agreements signed with neutrals, and were embodied in clauses which asserted the doctrine of similar or released products, more stiffly than it had ever been asserted by the allies.7 Moreover this clause is expressly stated to apply only to goods produced directly or indirectly from materials despatched from the United States, so that in the main the United States may be said to have been consistent. Nevertheless, an impartial court would probably judge that the United States did, in the end, swallow and digest more of the allied doctrine and practice, than they had at first intended. The goods supplied to neutrals [669] by virtue of the agreements signed with them were not only goods of American origin and manufacture, for each agreement contained stipulations encouraging the border neutrals to secure as much of their rations as they could from purely neutral sources. Quite clearly then, the United States asserted a general right of supervising neutral trade, and even of fixing the quantities of goods that could be allowed to pass from neutral to neutral. More than this, they attached a particular condition to rationed goods of neutral origin, which was not so severe as the condition attaching to goods of American origin; but which was explicit enough. The condition was:

      No article imported into Norway/Denmark under the provisions hereof shall be exported by Norway/Denmark to other than allied destinations nor shall any article released by such importation be exported to other than allied destination.

It is difficult to reconcile the doctrine thus asserted and upheld with the contention advanced on a previous occasion:

      When goods are clearly intended to become incorporated in the mass of merchandise for sale in a neutral country, it is an unwarranted and inquisitorial proceeding to detain shipments for examination as to whether those goods are ultimately intended for the enemies [sic] use. Whatever may be the conjectural conclusions to be drawn from trade statistics, which when stated by value are uncertain evidence as to quantity, the United States maintains the right to sell goods into the general stock of a neutral country, and denounces as illegal and unjustifiable any attempt of a belligerent to interfere with that right on the ground that it suspects that a previous supply of such goods in the neutral country, which the imports renew or replace, has been sold to an enemy....

1The exports to Germany during 1916 and 1917 had been in the neighbourhood of 5,000,000 tons. ...back...

2The provisions about receiving trusts, etc., were virtually a repetition of the conditions on that head inserted in the previous agreement. (See Chapter XXVI.) ...back...

3It should be added that these regulations were minatory only. They were to the effect that a tonnage agreement between a neutral and the entente set up a presumption that any vessel flying the flag of the neutral signatory was in the enemy service. The circumstances in which the vessel was found were, however, to be taken into consideration. ...back...

4In the last German proclamation, the Sperrgebiete, or zones of operation were so defined that all neutrals were allowed an approach route. See map in Michelsen. U-bootskrieg. ...back...

5See Chapter XVI, Section V. ...back...

6The American government's representative on the allied blockade committee. ...back...

7See Article II, sub-sections 5 and 6 of the Norwegian agreement. ...back...

A History of the Blockade of Germany
and of the countries associated with her in the Great War:
Austria-Hungary, Bulgaria and Turkey.

by A. C. Bell (Historical Section, Committee of Imperial Defence).