PROTEST AGAINST BRITISH BLACKLISTING OF AMERICAN FIRMS AND INTERFERENCE IN AMERICAN TRADE WITH NEUTRALS.

DEPARTMENT OF STATE, WASHINGTON, July 26, 1916.

The Acting Secretary of State to Ambassador W. H. Page.

You are instructed to deliver to Sir Edward Grey a formal note on the subject of the Enemy Trading Act, textually as follows:

The announcement that his Britannic Majesty's Government has placed the names of certain persons, firms, and corporations in the United States upon a proscriptive "blacklist" and has forbidden all financial or commercial dealings between them and citizens of Great Britain has been received with the most painful surprise by the people and Government of the United States, and seems to the Government of the United States to embody a policy of arbitrary interference with neutral trade against which it is its duty to protest in the most decided terms.

The scope and effect of the policy are extraordinary. British steamship companies will not accept cargoes from the proscribed firms or persons or transport their goods to any port, and steamship lines under neutral ownership understand that if they accept freight from them they are likely to be denied coal at British ports and excluded from other privileges which they have usually enjoyed, and may themselves be put upon the blacklist. Neutral bankers refuse loans to those on the list and neutral merchants decline to contract for their goods, fearing a like proscription. It appears that British officials regard the prohibitions of the blacklist as applicable to domestic commercial transactions in foreign countries as well as in Great Britain and her dependencies, for Americans doing business. in foreign countries have been put on notice that their dealings with blacklisted firms are to be regarded as subject to veto by the British Government. By the same principle Americans in the United States might be made subject to similar punitive action if they were found dealing with any of their own countrymen whose names had thus been listed.

The harsh and even disastrous effects of this policy upon the trade of the United States and upon the neutral rights upon which it will not fail to insist are obvious. Upon the list of those proscribed and in effect shut out from the general commerce of the world may be found American concerns which are engaged in large commercial operations as importers of foreign products and materials and as distributors of American products and manufactures to foreign countries and which constitute important channels through which American trade reaches the outside world. Their foreign affiliations may have been fostered for many years, and when once broken cannot easily or promptly be re-established.

Other concerns may be put upon the list at any time and without notice. It is understood that additions to the proscription may be made "whenever on account of enemy nationality or enemy association of such persons or bodies of persons it appears to his Majesty expedient to do so.' The possibilities of undeserved injury to American citizens from such measures, arbitrarily taken, and of serious and incalculable interruptions of American trade are without limit.

It has been stated on behalf of his Majesty's Government that these measures were aimed only at the enemies of Great Britain and would be adopted and enforced with strict regard to the rights of neutrals and with the least possible detriment to neutral trade, but it is evident that they are inevitably and essentially inconsistent with the rights of the citizens of all the nations not involved in war. The Government of the United States begs to remind the Government of his Britannic Majesty that citizens of the United States are entirely within their rights in attempting to trade with the people or the Governments of any of the nations now at war, subject only to well-defined international practices and understandings which the Government of the United States deems the Governnient of Great Britain to have too lightly and too frequently disregarded.

There are well-known remedies and penalties for breaches of blockade, where the blockade is real and in fact effective, for trade in contraband, for every unneutral act by whomsoever attempted. The Government of the United States cannot consent to see those remedies and penalties altered or extended at the will of a single power or group of powers to the injury of its own citizens or in derogation of its own rights. 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 honorable 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. Such safeguards the blacklist

brushes aside. It condemns without hearing, without notice, and in advance. It is manifestly out of the question that the Government of the United States should acquiesce in such methods or applications of punishment to its citizens.

What ever may be said with regard to the legality, in the view of international cbligation, of the act of Parliament upon which the practice of the blacklist as now employed by his Majesty's Government is understood to be based, the Government of the United States is constrained to regard that practice as inconsistent with that true justice, sincere amity, and impartial fairness which should characterize the dealings of friendly Governments with one another. The spirit of reciprocal trade between the United States and Great Britain, the privilege long accorded to the nationals of each to come and go with their ships and cargoes, to use each the other's shipping, and be served each by the other's merchants is very seriously impaired by arbitrary and sweeping practices such as this.

There is no purpose or inclination on the part of the Government of the United States to shield American citizens or business houses in any way from the legitimate consequences of unneutral acts or practices; it is quite willing that they should suffer the appropriate penalties which international law and the usage of nations have sanctioned; but his Britannic Majesty's Government cannot expect the Government of the United States to consent to see its citizens put upon an ex parte blacklist without calling the attention of his Majesty's Government, in the gravest terms, to the many serious consequences to neutral right and neutral relations which such an act must necessarily involve. It hopes and believes that his Majesty's Government, in its natural absorption in a single pressing object of policy, has acted without a full realization of the many undesired and undesirable results that might ensue. POLK, Acting.

SPECIAL ADDRESS

[On the Impending Strike of Railroad Employees, Delivered at a Joint Session of the Two Houses of Congress, August 29, 1916.]

GENTLEMEN Of the Congress:

I have come to you to seek your assistance in dealing with a very grave situation which has arisen out of the demand of the employees of the railroads engaged in freight train service that they be granted an eight-hour working day, safeguarded by payment for an hour and a half of service for every hour of work beyond the eight.

The matter has been agitated for more than a year. The public has been made familiar with the demands of the men and the arguments urged in favor of them, and even more familiar with the objections of the railroads and their counter demand that certain privileges now enjoyed by their men and certain bases of payment worked out through many years of contest be reconsidered, especially in their relation to the adoption of an eight-hour day. The matter came some three weeks ago to a final issue and resulted in a complete deadlock between the parties. The means provided by law for the mediation of the controversy failed and the means of arbitration for which the law provides were rejected. The representatives of the railway executives proposed that the demands of the men be submitted in their entirety to arbitration, along with certain questions of readjustment as to pay and conditions of employment which seemed to them to be either closely associated with the demands. or to call for reconsideration on their own merits; the men absolutely declined arbitration, especially if any of their established privileges werc

by that means to be drawn again in question. The law in the matter put no compulsion upon them. The four hundred thousand men from whom the demands proceeded had voted to strike if their demands were refused; the strike was imminent; it has since been set for the 4th of September next. It affects the men who man the freight trains on practically every railway in the country. The freight service throughout the United States must stand still until their places are filled, if, indeed, it should prove possible to fill them at all. Cities will be cut off from their food supplies, the whole commerce of the nation will be paralyzed, men of every sort and occupation will be thrown out of employment, countless thousands will in all likelihood be brought, it may be, to the very point of starvation, and a tragical national calamity brought on, to be added to the other distresses of the time, because no basis of accommodation or settlement has been found.

Just as soon as it became evident that mediation under the existing law had failed and that arbitration had been rendered impossible by the attitude of the men, I considered it my duty to confer with the representatives of both the railways and the brotherhoods, and myself offer mediation, not as an arbitrator, but merely as spokesman of the nation, in the interest of justice, indeed, and as a friend of both parties, but not as judge, only as the representative of one hundred millions of men, women and children who would pay the price, the incalculable price, of loss and suffering should these few men insist upon approaching and concluding the matters in controversy between them merely as employers and employees, rather than as patriotic citizens of the United States looking before and after and accepting the larger responsibility which the public would put upon them.

It seemed to me, in considering the subject-matter of the controversy, that the whole spirit of the time and the preponderant evidence of recent economic experience spoke for the eight-hour day. It has been adjudged by the thought and experience of recent years a thing upon which society is justified in insisting as in the interest of health, efficiency, contentment, and a general increase of economic vigor. The whole presumption of modern experience would, it seemed to me, be in its favor, whether there was arbitration or not, and the debatable points to settle were those which arose out of the acceptance of the eight-hour day rather than those which affected its establishment. I, therefore, proposed that the eight-hour day be adopted by the railway managements and put into practice for the present as a substitute for the existing ten-hour basis of pay and service; that I should appoint, with the permission of the Congress, a small commission to observe the results of the change, carefully studying the figures of the altered operating costs, not only, but also the conditions of labor under which the men worked and the operation of their existing agreements with the railroads, with instructions to report the facts as they found them to

the Congress at the earliest possible day, but without recommendation; and that, after the facts had been thus disclosed, an adjustment should in some orderly manner be sought of all the matters now left unadjusted between the railroad managers and the men.

These proposals were exactly in line, it is interesting to note, with the position taken by the Supreme Court of the United States when appealed to to protect certain litigants from the financial losses which they confidently expected if they should submit to the regulation of their charges and of their methods of service by public legislation. The court has held that it would not undertake to form a judgment upon forecasts, but could base its action only upon actual experience; that it must be supplied with facts, not with calculations and opinions, however scientifically attempted. To undertake to arbitrate the question of the adoption of an eight-hour day in the light of results merely estimated and predicted would be to undertake an enterprise of conjecture. No wise man could undertake it, or, if he did undertake it, could feel assured of his conclusions.

I unhesitatingly offered the friendly services of the administration to the railway managers to see to it that justice was done the railroads in the outcome. I felt warranted in assuring them that no obstacle of law would be suffered to stand in the way of their increasing their revenues to meet the expenses resulting from the change so far as the development of their business and of their administrative efficiency did not prove adequate to meet them. The public and the representatives of the public, I felt justified in assuring them, were disposed to nothing but justice in such cases and were willing to serve those who served them.

The representatives of the brotherhoods accepted the plan; but the representatives of the railroads declined to accept it. In the face of what I cannot but regard as the practical certainty that they will be ultimately obliged to accept the eight-hour day by the concerted action of organized labor, backed by the favorable judgment of society, the representatives of the railway management have felt justified in declining a peaceful settlement which would engage all the forces of justice, public and private, on their side to take care of the event. They fear the hostile influence of shippers, who would be opposed to an increase of freight rates (for which, however, of course, the public itself would pay); they apparently feel no confidence that the Interstate Commerce Commission could withstand the objections that would be made. They do not care to rely upon the friendly assurances of the Congress or the President. They have thought it best that they should be forced to yield, if they must yield, not by counsel, but by the suffering of the country. While my conferences with them were in progress, and when to all outward appearance those conferences had come to a standstill. the representatives of the brotherhoods suddenly acted and set the strike for the 4th of September.

The railway managers based their decision to reject my counsel in this matter upon their conviction that they must at any cost to themselves or to the country stand firm for the principle of arbitration which the men had rejected. I based my counsel upon the indisputable fact that there was no means of obtaining arbitration. The law supplied none; earnest efforts at mediation had failed to influence the men in the least. To stand firm for the principle of arbitration and yet not get arbitration seemed to me futile, and something more than futile, because it involved incalculable distress to the country and consequences in some respects worse than those of war, and that in the midst of peace.

I yield to no man in firm adherence, alike of conviction and of purpose, to the principle of arbitration in industrial disputes; but matters have come to a sudden crisis in this particular dispute and the country had been caught unprovided with any practicable means of enforcing that conviction in practice (by whose fault we will not now stop to inquire). A situation had to be met whose elements and fixed conditions were indisputable. The practical and patriotic course to pursue, as it seemed to me, was to secure immediate peace by conceding the one thing in the demands of the men which society itself and any arbitrators who represented public sentiment were most likely to approve, and immediately lay the foundations for securing arbitration with regard to everything else involved. The event has confirmed that judgment.

I was seeking to compose the present in order to safeguard the future; for I wished an atmosphere of peace and friendly co-operation in which to take counsel with the representatives of the nation with regard to the best means for providing, so far as it might prove possible to provide, against the recurrence of such unhappy situations in the future the best and most practicable means of securing calm and fair arbitration of all industrial disputes in the days to come. This is assuredly the best way of vindicating a principle, namely, having failed to make certain of its observance in the present, to make certain of its observance in the future.

But I could only propose. I could not govern the will of others who took an entirely different view of the circumstances of the case, who even refused to admit the circumstances to be what they have turned out to be.

Having failed to bring the parties to this critical controversy to an accommodation, therefore, I turn to you, deeming it clearly our duty as public servants to leave nothing undone that we can do to safeguard the life and interests of the nation. In the spirit of such a purpose, I earnestly recommend the following legislation:

First, immediate provision for the enlargement and administrative recrganization of the Interstate Commerce Commission along the lines embodied in the bill recently passed by the House of Representatives