PART III. RESTRAINTS ON COMMERCE. (Continuation of correspondence printed in Special Supplements, July, 1915, pp. 55-83, 101-125, 141-146, 153-155, 157-165; October, 1916, pp. 58-158.) Ambassador W. H. Page to the Secretary of State. No. 5021.] AMERICAN EMBASSY, London, October 12, 1916. SIR: With reference to the Department's telegram No. 3578, of July 26, 1916, 10 p. m., and to my telegram No. 5003, of the 11th instant, I have the honor to enclose herewith a printed copy of a note I have received from the Foreign Office concerning the Trading with the Enemy Act. I have, etc., WALTER HINES PAGE. [Inclosure.] The British Secretary of State for Foreign Affairs to Ambassador W. H. Page. YOUR EXCELLENCY: FOREIGN OFFICE, His Majesty's Government have had under consideration the note which your Excellency was good enough to communicate to me on the 28th July last, with respect to the addition of certain firms in the United States of America to the statutory list compiled and issued in accordance with "The Trading with the Enemy (Extension of Powers) Act, 1915." 2. You will recall that shortly after this Act became law, I had the honour, in my note of the 16th February last, in reply to your note of the 26th January, to explain the object of the Act. It is a piece of purely municipal legislation, and provides that His Majesty may by proclamation prohibit persons in the United Kingdom from trading with any persons in foreign countries who might be specified in such proclamations or in any subsequent orders. It also imposes appropriate penalties upon persons in the United Kingdom who violate the provisions of this statute. 3. That is all. His Majesty's Government neither purport nor claim to impose any disabilities or penalties upon neutral individuals or upon neutral commerce. The measure is simply one which enjoins those who owe allegiance to Great Britain to cease having trade relations with persons who are found to be assisting or rendering service to the enemy. 4. I can scarcely believe that the United States Government intend to challenge the right of Great Britain as a sovereign State to pass legislation prohibiting all those who owe her allegiance from trading with any specified persons when such prohibition is found necessary in the public interest. The right to do so is so obvious that I feel sure that the protest which your Excellency handed to me has been founded on a misconception of the scope and intent of the measures which have been taken. 5. This view is strengthened by some of the remarks which are made in the note. It is, for instance, stated that these measures are "inevitably and essentially inconsistent with the rights of the citizens of all nations not involved in war." The note then proceeds to point out that citizens of the United States are entirely within their rights in attempting to trade with any of the nations now at war. His Majesty's Government readily admit that the citizens of every neutral nation are free to trade with belligerent countries. The United States Government will no doubt equally readily admit that they do so subject to the right of the other belligerent to put an end to that trade by every means within his power which is recognized by international law, by such measures, for instance, as the seizure of neutral goods as contraband, or for breach of blockade, etc. The legislation, however, to which exception is taken does not belong to that class of measures. It is purely municipal. It is an exercise of the sovereign right of an independent State over its own citizens, and nothing more. This fact has not, I feel sure, been fully realised by the Government of the United States of America, for the note maintains that the Government cannot consent to see these remedies and penalties altered and extended at will in derogation of the right of its citizens; and says that "conspicuous among the principles which the civilized nations of the world have accepted for the safeguarding of the rights of neutrals is the just and honourable principle that neutrals may not be condemned nor their goods confiscated, except upon fair adjudication and after an opportunity to be heard in Prize Courts or elsewhere." 6. As I have said above, the legislation merely prohibits persons in the United Kingdom from trading with certain specified individuals, who, by reason of their nationality or their association, are found to support the cause of the enemy, and trading with whom will therefore strengthen that cause. So far as that legislation is concerned, no rights or property of these specified individuals are interfered with; neither they nor their property are condemned or confiscated; they are as free as they were before to carry on their business. The only disability they suffer is that British subjects are prohibited from giving to them the support and assistance of British credit and British property. 7. The steps which His Majesty's Government are taking under the above-mentioned Act are not confined to the United States of America; the policy is being pursued in all neutral countries. Nay, more. With the full consent of the Allied Governments, firms, even in Allied countries, are being placed on the statutory list if they are firms with whom it is necessary to prevent British subjects from trading. These considerations may, perhaps, serve to convince the Government of the United States that the measures now being taken are not directed against neutral trade in general. Still less are they directed against American trade in particular; they are part of the general belligerent operations designed to weaken the enemy's resources. 8. I do not read your note of the 28th July as maintaining that His Majesty's Government are obliged by any rule of international law to give to those who are actively assisting the cause of their enemies, whether they be established in neutral or in enemy territory, the facilities which flow from participation in British commerce. Any such proposition would be so manifestly untenable that there is no reason to refute it. The feelings which I venture to think have prompted the note under reply must have been that the measures which we have been obliged to take will be expanded to an extent which will result in their interfering with genuine neutral commerce; perhaps, also, that they are not exclusively designed for belligerent purposes, but are rather an attempt to forward our own trade interests at the expense of neutral commerce, under the cloak of belligerency ; and, lastly, that they are, from a military point of view, unnecessary. 9. Upon these points I am able to give to the Government and people of the United States the fullest assurances. Upon the first point it is true, as your note says, that the name of a firm may be added to the statutory list of persons with whom British persons may not trade whenever, on account of the enemy association of such firm, it seems expedient to do so. But the Government of the United States can feel confident that this system of prohibitions will not be carried further than is absolutely necessary. It has been forced upon us by the circumstances of the present war. To extend it beyond what is required in order to secure its immediate purpose-the weakening of the resources of our opponents or to allow it to interfere with what is really the genuine neutral trade of a country with which we desire to have the closest commercial intercourse, would be contrary to British interests. The advantage derived from a commercial transaction between a British subject and a foreigner is mutual, and for His Majesty's Government to forbid a British subject to trade with the citizen of any foreign country necessarily entails some diminution of commercial opportunity for that British subject, and therefore some loss both to him and to his country. Consequently the United States Government, even if they are willing to ignore the whole tradition and tendency of British policy towards the commerce of other nations, might be confident that self-interest alone would render His Majesty's Government anxious not to place upon the statutory list the name of any firm which carries on a genuine bona fide neutral trade. If they did so, Great Britain herself would be the loser. 10. As to the second point, there seem to be individuals in the United States and elsewhere whom it is almost impossible to convince that the measures we take are measures against our enemies, and not intended merely to foster our own trade, at the expense of that of neutral countries. I can only reiterate what has been repeatedly explained before that His Majesty's Government have no such unworthy object in view. We have, in fact, in all the steps we have taken to prevent British subjects from trading with these specified firms, been most careful to cause the least possible dislocation of neutral trade, as much in our interests as in those of the neutral. 11. I turn now to the question whether the circumstances of the present war are such as to justify resort on the part of His Majesty's Government to this novel expedient. 12. As the United States Government are well aware, the AngloAmerican practice has in times past been to treat domicil as the test of enemy character, in contradistinction to the continental practice, which has always regarded nationality as the test. The Anglo-American rule crystallized at the time when means of transport and communication were less developed than now, and when in consequence the actions of a person established in a distant country could have but little influence upon a struggle. 13. To-day the position is very different. The activities of enemy subjects are ubiquitous, and under modern conditions it is easy for them, wherever resident, to remit money to any place where it may be required for the use of their own Government, or to act in other ways calculated to assist its purposes and to damage the interests of the powers with whom it is at war. No elaborate exposition of the situation is required to show that full use has been and is being made of these opportunities. 14. The experience of the war has proved abundantly, as the United States Government will readily admit, that many Germans in neutral countries have done all in their power to help the cause of their own country and to injure that of the Allies; in fact, it would be no exaggeration to say that German houses abroad have in a large number of cases been used as an integral part of an organization deliberately conceived and planned as an engine for the furtherance of German political and military ambitions. It is common knowledge that German business establishments in foreign countries have been not merely centers of German trade, but active agents for the dissemination of German political and social influence, and for the purpose of espionage. In some cases they have even been used as bases of supply for German cruisers, and in other cases as organisers and paymasters of miscreants employed to destroy by foul means factories. engaged in making, or ships engaged in carrying, supplies required by the Allies. Such operations have been carried out in the territory even of the United States itself, and I am bound to observe, what I do not think will be denied, that no adequate action has yet been taken by the Government of the United States to suppress breaches of neutrality of this particularly criminal kind, which I know that they are the first to discountenance and deplore. 15. In the face of enemy activities of this nature it was essential for His Majesty's Government to take steps that should at least deprive interests so strongly hostile of the facilities and advantages of unrestricted trading with British subjects. The public opinion of this country would not have tolerated the prolongation of the war by the continued liberty of British subjects to trade with and so to enrich the firms in foreign countries whose wealth and influence were alike at the service of the enemy. 16. Let me repeat that His Majesty's Government make no such claim to dictate to citizens of the United States, nor to those of any other neutral country, as to the persons with whom they are or are not to trade. They do, however, maintain the right, which in the present crisis is also their duty towards the people of this country and to their Allies, to withhold British facilities from those who conduct their trade for the benefit of our enemies. If the value to these firms of British facilities is such as to lead them to prefer to give up their trade with our enemies rather than to run the risk of being deprived of such facilities, His Majesty's Government can not admit that their acceptance of guarantees to that effect is either arbitrary or incompatible with international law or comity. 17. There is another matter with which I should like to deal. 18. The idea would seem to be prevalent in some quarters that the military position is now such that it is unnecessary for His Majesty's Government to take any steps which might prejudice, even to a slight extent, the commerce of neutral countries, that the end of the war is in sight, and that nothing which happens in distant neutral countries can affect the ultimate result. |