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I. GENERAL It is proposed to examine shortly, in the following pages, the precise extent to which a neutral's commerce with a belligerent country is liable to interruption by the cruisers of the opposite belligerent, apart from the traditional doctrines of blockade and contraband, and from the practice of reprisals. We shall also eliminate the operation of the dogma of continuous voyage. Needless to say, that dogma is one which introduces utter uncertainty into the realm of prize law, and makes it easy for belligerents to behave towards neutral commerce in a quite arbitrary fashion. When combined with a swollen list of contraband, its application amounts to a complete control of commerce by belligerents; and might best be met by a friendly war being commenced between neutrals, who might thus, perhaps, regain the freedom of which they otherwise stand deprived. But taking the dogma as it stands, we cannot but realize that its true design and justification is to restore to belligerents their old liberty of seizing enemy property withdrawn from them in 1856 by the Declaration of Paris. That, and not the pernicious influence of railways, is its true raison d'être. When Chief Justice Chase, by his casting vote in the United States Supreme Court, laureled the doctrine during the American Civil War, it was with no idea of countering the influence of railways in his mind. Railways were not important in that connection. No railway, at that time, traversed the waters of the Gulf of Mexico. Nassau was on an island. Any influence that railways may have exercised, in making a belligerent territory more accessible from neutral ports, is more than offset by the enormous power of controlling commerce exercised by the modern fast cruiser-a power incomparably greater than that of the old frigate over the old merchantman.

Accordingly, if the continuous voyage dogma be duly anathematized in the interest of a modicum of decent security for neutrals, it will scarcely be possible to avoid the substitution, in some form or another, of liberty to intercept the enemy's goods laden on neutral ships. The neutral in that case will preserve his ship, will even get his freight, and no harm will be done to anybody except the enemy,-a much more satisfactory state of affairs than the present, when by a forced and unnatural series of

1 See, for succinct statistics, the writer's Prize Law and Continuous Voyage (Lon. don), 1916.

fictions, innocent cargoes are treated as contraband, and are held to involve forfeiture of ship and freight,—a virtual return to the brutal old doctrine of la robe ennemie confisque le vaisseau ami. In that event, the question of whether particular goods are really intended for, or are coming from, a particular enemy must always be important. The question we shall examine, therefore, is the position of the importer and exporter in the enemy country. When is he an enemy?

Putting aside the test of political nationality as of doubtful admissibility,” it may, I think, be taken as demonstrated that the test of domicile intends merely the domicile of ordinary private law. The same considerations as are decisive in private law cases were adverted to by Scott as decisive in the leading cases of The Harmony and The Indian Chief. Prize decisions and divorce and testamentary decisions are quoted indiscriminately in prize and municipal cases. Prize domicile is simply civil law domicile. It is adopted as a test, because a person's settled residence is where he normally spends, and may be expected to spend, his money. As Scott explained in The Harmony (2 C. Rob. 325), it is there that his net resources may be drawn on for the prosecution of the war.

His “house of trade," on the other hand, is where he makes his money. To attack it is, in part, analogous to taxation of income at the source. It is really a mode of attacking the numerous small incomes of the small people whom he employs. Their domiciles are where they work; and their employer's “house of trade” embraces them all. Also it attacks the advantage which accrues to the population through the operations of the house of trade, which enables them to exchange their superfluities for more needed commodities.

The idea that "prize domicile” is something different from “civil law domicile," and means “trading residence” is, as I have elsewhere shown, perfectly irreconcilable with the cases and, moreover, attributes a singular imbecility to the courts. Since every trading residence of a kind calculated to attract the imputation of enemy character involves the setting up of a house of trade, the introduction of the test of domicile, if domicile means trading residence, would be entirely superfluous. “House of trade" would be a sufficient conception to include all cases.

For the demonstration of the principle that domicile is not, in the eye of prize law, a kind of watery “house of trade'' in which personal residence supplies the want of substantial business apparatus, the reader is referred to the (Edinburgh) Juridical Review (October, 1909, page 209), and to the Journal of the Society of Comparative Legislation, IX, 157; X, 183 (a discussion between Professor Westlake and the present writer).

2 In Anglo-American law, that is. In most other systems, it is the decisive test. There seems no decisive case or authority against its being recognized in Anglo-American law as an additional criterion of enemy character, though the better opinion is to the contrary. See War and Its Legal Results (Baty and Morgan), pp. 306, 310.

We shall now assume that the criteria of enemy character are two: (1) civil law domicile, and (2) the possession of a house of trade; that is to say, the carrying on of a course of trading, whether in one's own office of bricks and mortar or not, in the enemy's country. We shall not forget that (3) political nationality may perhaps turn out to be another criterion, and (4) the minor fact that the raw produce of the enemy's soil is (at any rate until resold) of enemy character. And we now set ourselves to inquire in detail, as the really central inquiry, what is the possession of a house of trade, referring readers, who may be uncertain as to the true meaning of domicile as a term of prize law, to the articles just cited and to our incidental discussion of the point when dealing with the authorities later.

II. HOUSE OF TRADE The more one looks at this question, the more elusive and baffling it becomes. Nobody takes or sends goods to a given country to dump them on the rocks. Few take goods to a given country to enjoy and consume them there. The purpose of import is, in general, sale, and if every one who sends goods or has goods sent to himself or his agents in a belligerent country, intending to sell them, has ipso facto a house of trade” in belligerent territory, it is difficult to see how it can ever be practically possible for a merchant to send goods as his own neutral property to a belligerent territory at all. If they are to be commercially dealt with, it must be by or on behalf of their owner himself, unless his duties are confined to the mere delivery to a previously ascertained purchaser. General export to the belligerent territory of goods to be marketed there would be impossible. The marketing would be the carrying on of a “house of trade.” But The Anna Catharina (4 C. Rob. 119) shows distinctly that a neutral can export for a market and deal commercially with the goods in the enemy's territory without having a “house of trade” there. But then it becomes difficult, indeed, to say what he may not do. We cannot say that he can only make such imports and sales casually: he may carry on a permanent course of dealing. As Dexter puts it in The San José Indiano (2 Gall. 277): “Though it be true, that a neutral may carry on commerce, in time of war, with our enemy's country, yet he cannot carry it on in that country.

PERSONAL PRESENCE. Nor does there seem to be any reason why the mere fact that the principal or one partner is locally in the enemy country, or is not only there, but actively engaged in the business there, should make any difference. Sir Cræsus Midas is the proprietor of a business which has come down to him from his grandfather, Sir Georgius Midas. He spends all of his time at Monte Carlo and the business is managed by a head clerk in London. It would not make it any the more an English business if Sir Cræsus lived in the Isle of Wight; or if he attended daily

3 See The Jonge Klassina, 5 C. Rob. 297, and our comments, infra.

at the office in Mincing Lane. Of course, if he is domiciled there, it is different. In that case a new and independent ground of confiscation would arisebut we have ruled out domicile for the present. We are speaking of carrying on a house of trade. But this example puts us, perhaps, on the track of the elusive basic ideas: the brain and nerves of the business, in the instance supposed, are in England. Suppose Sir Cræsus began personally to cable his instructions from the south of France, or to assemble around him a little cabinet of central control there; then it might begin to seem less like an English, and more like a French, business.

AGENCY. Certainly it is not the apparatus of clerks and managers which makes the “house." But, on the other hand, it is not the chief directing mind which necessarily makes it. A mere agent, liable at any time to dismissal and control, may quite possibly constitute a nucleus of business, making his dispatch amount to the establishment by his principal of a house of trade in the country to which he is sent. Nor is the greater or less initiative which is left to him apparently decisive, though it must be important. The great test in Stowell's mind, as in Story's, appears to have been the general * or specific nature of the business. If an agent is sent abroad to do general business, then you have probably established a house of trade in the country where he has his center. Presence of the principal or uncontrolled manager 5 is by no means essential.

But then the great difficulty arises,-is not the general business, so carried on, just a part of the one and indivisible business of the neutral house? Stowell never quite grappled with this difficulty. But he did indicate in The Jonge Klassina that if it had not been for the recurrent personal intervention of the proprietor, present on the spot, the trade done by an agent stationed in the enemy country might conceivably have been regarded as not being enemy trade-general in its nature as it was. And in Portalis' case (in The Jonge Klassina, 5 C. Rob. 303) a mere agency established in the enemy's country, of a substantial neutral business, was held not to be an enemy house of trade, though apparently doing general business with full initiative. These are stubborn facts, which prevent us from laying down any real principle that it makes one pro tanto an enemy to carry on a general business in the enemy country. It remains true that the business thus carried on is only part of the proprietor's whole business activity, which may be centered overwhelmingly in a neutral territory.

4 General as regards customers and transactions, that is; not as regards lines of goods.

5 By this term we shall deuote a chief business executive who is technically an agent or servant, but whose principal has no business activities of the class concerned.

6 This can only be surmised. But the surmise is a strong one, as, if the agent had been at all devoid of initiative, the case would hardly have been worth pressing Stowell with, or worth his attention in giving judgment. Nor would such an hypothesis have been in accordance with the circumstances of the time or the exigencies of international commerce.

It is useless to deny, however, that the slipshod aversion from clear thought, which is characteristic of the average civilized human being, has caused a strong tendency to regard those agencies, which are termed loosely “branches,” as independent entities. Thus one bright genius in the City of London devised, some years ago, the idea of a “branch” of a bank drawing a check on another “branch” of the same bank; i.e., of the banker asking himself to be so good as to pay himself or a third person. The courts tore the notion to pieces, but legislation was required to effect a compromise with the hazy ideas of the average citizen. And in the recent hostilities, a similar consideration lay at the root of the British qualified ? exclusion of “houses” or branches” established in the countries by British or German firms from the terms of the proclamation of August 5, 1914, against "trading with the enemy''; and of the official Treasury statement (August 21, 1914) that trade with a neutral or British “branch” of a hostile firm was permissible, so long as "no transaction with the head office" was involved. Since a branch is an agent, if anything, it is obvious that transactions with the branch, qua branch, must inevitably, in law, be transactions with the head office. A transaction with an agent, as such, must be a transaction with his principal. It is doubtful if the Treasury quite knew what they meant themselves; but as they cannot have intended a nugatory statement, they appear by “transactions'' to have meant transactions which ordinarily would not be reported to the head office, but would only affect the net financial account of the working of the “branch." In other words, the branch is envisaged as an independent entity which has an independent balance-sheet and an independent profit or loss.

Is this a characteristic of all “branches” or “agent-houses”. One would be slow to believe it to be necessarily such. The business due to the existence of the branch may never be done directly through its agency: it may be established to collect orders only, or to keep the products of the business before the local public. There seems to be no reason for treating such houses or branches as neutral or allied, when the principal house by which they are established is carried on in the enemy country. And the mere fact of a separate balance-sheet being struck cannot make any difference. A business is not a juridical monstrosity, whose limbs can be lopped off so as to become separate entities at will; nor does its mode of internal organization or of account affect the crucial point of substance, viz.,—that its “branches” are merely modes of its own activity, their gains its gains, and their losses its losses. Probably behind the British proclamations was a lurking recollection that “trading with the enemy'' properly means the transmission of money or goods to or from the enemy's territory—and on that footing, the exemption of agents acting in one's own territory for

7 Banking houses were not fully exempted. Proclamation of January, 1915.

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