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He saw to it that the crew of the vessel was safely taken ashore and took the ship's papers of the steamer Leelanaw on board the submarine.

Under Article 21, number 22 of the German Prize Ordinance as amended by the Ordinance of April 18, 1915 (Reichs-Gesetzblatt, p. 227), flax is to be considered absolute contraband. The Ordinance of April 18, 1915, was communicated to the Embassy of the United States of America by note verbale of April 22, 1915 (IIIa. 8434), with the request that the contents be brought to the knowledge of the American Government. It was possible therefore for the shippers and captain of the steamer Leelanaw to have knowledge of the German contraband regulations. The goods were destined for an English port; thus the contraband was liable to seizure without further formality (vide Article 30 of the German Prize Ordinance; Article 31 of the Declaration of London). According to value and bulk, the contraband formed more than half the whole cargo; consequently the vessel herself was liable to confiscation (vide Article 41, paragraph 2 of the German Prize Ordinance; Article 40 of the Declaration of London). Since the German commander was unable to take the steamer into a German port without exposing the submarine to danger or impairing the success of the operations in which it was engaged, he was justified in destroying the vessel (Article 113 of the German Prize Ordinance; Article 49 of the Declaration of London). He fulfilled his obligation of placing all persons on board and the ship's papers in safety (Article 116 of the German Prize Ordinance; Article 50 of the Declaration of London).

The Commander therefore acted in conformity with the principles of international law. The legality of the measures taken by him is examinable by German prize jurisdiction according to Article 1, number 2, of the German Prize Ordinance (article 51 of the Declaration of London). The ship's papers have already been sent to the Prize Court at Hamburg. This Court will have to decide the questions whether the destruction of the vessel and cargo was legal, whether the property sunk was liable to confiscation, and to whom and in what amount indemnity is to be awarded, provided any claim therefor is before it. It is true that in the present case, as in the case of the William P. Frye, the special provisions of Article 13 of the Prussian-American Treaty of July 11, 1799, are to be considered, pursuant to which property belonging to citizens of the United States of America may only be confiscated when its value is restored.

It appears from information received from the Prize Court that the

American shipping interests have already entrusted a Hamburg attorney with the representation of their rights before the Prize Court. The Foreign Office begs to reserve a note concerning the outcome of the prize proceedings.

Ambassador Gerard to the Secretary of State.

[Telegram.]

AMERICAN EMBASSY, Berlin, October 30, 1915.

The following note has just been received 10 a. m. from Foreign Office: Ambassador Count Bernstorff has now reported about the negotiations conducted in Washington, D. C., with reference to the Arabic incident, and also communicated to me the text of the letter he addressed to the Secretary of State, Mr. Lansing.

From the ambassador's report I see with satisfaction that a full understanding has been reached between our two Governments.

As Count Bernstorff, acting under instructions of the Imperial Government, has already pointed out, the commander of the submarine that sank the Arabic was convinced that the Arabic intended to ram his boat. I have since transmitted by mail to Count Bernstorff the evidence on file here that is, a legalized copy of the report made by the commander of the submarine on September 2, as well as legalized copies of the hearing of the witnesses, conducted on September 21, in the matter of the sinking of the English steamer Arabic by a German submarine, together with the diagram and English translations—and have requested him to bring this evidence to the knowledge of the American Government.

I beg to transmit herewith also to Your Excellency copies of the abovementioned documents, for I trust that Your Excellency's Government will gain from them the conviction that the circumstances as explained in the statements of the witnesses give the commander of the submarine justified reasons for his above-mentioned supposition.

The German Government, on the other hand, as Count Bernstorff has already informed Mr. Lansing, does not want to refuse to credit the affidavit of the English officers of the Arabic, according to which no submarine was seen from the Arabic. The German Government therefore admits that whereas the commander personally was convinced that he acted in self-defense, there was in fact no attempt made to ram the submarine. I may therefore repeat Count Bernstorff's statement that the attack of the submarine, to our regret, was not in accordance with their instructions issued, and that the commander has been notified accordingly.

* *

As it has been the intention of the Imperial Government to settle the incident in a friendly manner, Count Bernstorff has also been instructed, as you know, to declare to the American Government our readiness to pay, out of friendly consideration and leaving aside the question of the liability resulting from international law, an indemnity for the loss of the American lives which the German Government deeply ( *).1 In giving again expression to my satisfaction that Count Bernstorff's negotiations with the Secretary of State, Mr. Lansing, have led to a settlement of the incident, I avail myself of the occasion to renew to Your Excellency the assurances of my highest consideration. (Signed) VON JAGOW.

The Secretary of State to Ambassador Gerard.

[Telegram-Paraphrase.]

GERARD.

DEPARTMENT OF STATE,

Washington, November 30, 1915. Ambassador Gerard is directed to inform the German Foreign Office that the owners of the Leelanaw are not represented before the Prize Court and that for the same reason given by the United States Government for refusing to submit the question of the amount of indemnity to be paid in the William P. Frye case to the Prize Court, the United States Government desires that the question of the amount of indemnity to be paid in the Leelanaw case shall be adjusted by diplomatic negotiations.

Communication from German Government delivered by German
Ambassador, under instructions.

GERMAN EMBASSY,

Washington (Received January 7, 1916).

1. German submarines in the Mediterranean had, from the beginning, orders to conduct cruiser warfare against enemy merchant vessels only in accordance with general principles of international law, and in particular measures of reprisal, as applied in the war zone around the British Isles, were to be excluded.

1Apparent omission.

2. German submarines are therefore permitted to destroy enemy merchant vessels in the Mediterranean-i. e., passenger as well as freight ships as far as they do not try to escape or offer resistance-only after passengers and crews have been accorded safety.

3. All cases of destruction of enemy merchant ships in the Mediterranean in which German submarines are concerned are made the subject of official investigation and, besides, submitted to regular prize court proceedings. In so far as American interests are concerned, the German Government will communicate the result to the American Government. Thus also in the Persia case if the circumstances should call for it.

4. If commanders of German submarines should not have obeyed the orders given to them they will be punished; furthermore, the German Government will make reparation for damage caused by death of or injuries to American citizens.

J. Nr. A. 1601.]

Memorandum from the German Embassy.1

MEMORANDUM.

GERMAN EMBASSY,

Washington.

The Imperial German Government, on account of the friendly relations which have always existed between the two great nations and earnestly desiring to continue them, wishes to explain the U boat question once more to the American Government.

At the outbreak of the war the German Government, acting upon the suggestion of the United States, immediately expressed its readiness to ratify the Declaration of London. At that time a German prize code had already been issued, which was entirely—and without modification— based upon the rules of the Declaration of London. Germany thereby proved her willingness to recognize fully the existing rules of international law which ensure the freedom of the sea for the legitimate trade of neutral nations, not only among themselves but also with belligerent countries.

Great Britain, on the other hand, declined to ratify the Declaration of London and, after the outbreak of the war, began to restrict the legit

1 Received by the Secretary of State March 8, 1916.

imate trade of the neutrals in order to hit Germany. The contraband provisions were systematically extended on August 5, 20, September 21, and October 29, 1914. On November 3, 1914, the order of the British Admiralty followed, declaring the whole North Sea a war zone, in which commercial shipping would be exposed to most serious dangers from mines and men-of-war. Protests from neutrals were of no avail, and from that time on the freedom of neutral commerce with Germany was practically destroyed. Under these circumstances Germany was compelled to resort, in February, 1915, to reprisals in order to fight her opponents' measures, which were absolutely contrary to international law. She chose for this purpose a new weapon, the use of which had not yet been regulated by international law and, in doing so, could and did not violate any existing rules but only took into account the peculiarity of this new weapon, the submarine boat.

The use of the submarine naturally necessitated a restriction of the free movements of neutrals and constituted a danger for them which Germany intended to ward off by a special warning analogous to the warning England had given regarding the North Sea.

As both belligerents-Germany in her note of February 17 and Great Britain in those of February 18 and 20, 1915-claimed that their proceeding was only enacted in retaliation for the violation of international law by their opponents, the American Government approached both parties for the purpose of trying to reëstablish international law as it had been in force before the war. Germany was asked to adapt the use of her new weapon to the rules which had been existing for the former naval weapons and England not to interfere with the food supplies intended for the noncombatant German population and to admit their distribution under American supervision. Germany, on March 1, 1915, declared her willingness to comply with the proposal of the American Government, whilst England, on the other hand, declined to do so. By the Order in Council of March 11, 1915, Great Britain abolished even what had remained of the freedom of neutral trade with Germany and her neutral neighbors. England's object was to starve Germany into submission by these illegal means.

Germany, after neutral citizens had lost their lives against her wish and intention, nevertheless, in the further course of the war, complied with the wishes of the American Government regarding the use of submarines. The rights of neutrals regarding legal trading were, in fact, nowhere limited by Germany.

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